House of Representatives
26 November 1941

16th Parliament · 1st Session

  1. House of Representatives
  2. 16th Parliament
  3. 1941

Mr. Speaker (Hon. W. M, Nairn) took the chair at 2.30 p.m., and read prayers.

page 891

NEW AND OPPOSED BUSINESS AFTER 11 P.M

Motion (by Mr. Cuetin) - by leave - agreed to -

That Standing Order No. 70 - Eleven o’clock rule - bc suspended for the remainder nf this week.

page 891

QUESTION

AUSTRALIAN IMPERIAL FORGE

Christmas Leave - -TRANSPORT Arrangements - Mails fob Malaya - MOVEments of troops.

Mr HOLT:
FAWKNER, VICTORIA

– I ask the Minister for the Army whether members df the Australian Imperial Force whose homes are in Tasmania and Western Australia are experiencing great difficulty in securing transport to their States in order that they may avail themselves of the proposed Christmas leave? Does not the honorable gentleman consider that these men have first claim on the transport facilities of Australia, in preference to civilians who are able to take their ‘holidays at other periods of the year?

Mr FORDE:
Minister for the Army · CAPRICORNIA, QUEENSLAND · ALP

– I agree that every consideration should be given to the members of the Australian Imperial Force in order that they may be enabled to travel to their homes for their Christmas leave. With that end in view, the Government decided to pay their fares on this occasion ; formerly they paid either the whole or a portion of the amount. Great difficulty has been experienced in regard to transport. After honorable members from Tasmania had waited on me and made representations in the matter, I directed that, at whatever cost, extra shipping should be provided in order to transport Tasmanian members of the Australian Imperial Force to their homes. I also made arrangements with the civil aviation companies to provide additional machines in order to fly the boys to King Island and Flinders Island. I believe that honorable members from Tasmania appreciate that. The difficulty in respect of Western Australia is greater, because of its distance from the Eastern States. Nevertheless, an instruction has been issued that everything possible be done, to enable members of the Australian Imperial Force from that State to visit their homes for the Christmas holidays. I shall be able to make a definite decision in this connexion when I have received from the Adjutant-General, Military Board, a reply to a communication that I have addressed to him.

Mr MARTENS:
HERBERT, QUEENSLAND

– Can the Minister for the Army say what are the chances of soldiers on duty at Thursday Island getting home for Christmas leave?

Mr FORDE:

– There are physical difficulties to be overcome, but I shall discuss the matter with the chief of staff as soon as possible, and sympathetic consideration will bc given to the request.

Sir GEORGE BELL:
DARWIN, TASMANIA

– In reference to the action taken by the Minister for the Army to ensure that Tasmanian soldiers in training on the mainland shall be transported to their homes at Christmas time by special services, both sea and air, will the Minister confer with the Minister for Commerce (Mr. Scully) in order to ensure that a crew will be available to work the ship which the Government proposes to put on? I undera stand that this ship, the Nairana, has run infrequently lately because it has been unable to get a crew.

Mr FORDE:

– The shipping company concerned said, when approached, that it would be able to put an additional ship on the run; apparently it did not expect to encounter any difficulty regarding a crew. However, if any difficulty arises, the honorable member may rest assured that it will be overcome as promptly as possible.

Mr LAWSON:
Minister Assisting the Postmaster-General · BRISBANE, QUEENSLAND · ALP

– Yesterday the honorable member for Hume (Mr. Collins) asked the following question, without notice : -

Will the Milliliter representing the PostmasterGeneral investigate the report from ita Singapore correspondent published to-day in the’ Sydney Morning Herald that the Australian Imperial Force in Malaya is complaining bitterly at the irregular arrival of air mails from Australia, which they attribute to their being deliberately held up at this end, for censorship reasons, when convoys are departing from Sydney.

I am informed by tin: PostmasterGeneral that certain delays in the delivery of mail which are attributed to army cenorship have caused the department some concern over a period of months, including the period for which t lie honorable member for Hume was Postmaster-General; in that matter lie will be well versed. Representations are being made to the Minister for the Army (Mr. Forde) with the object of facilitating the despatch and delivery of mails for Australian soldiers abroad.

Mr HUTCHINSON:
DEAKIN, VICTORIA

– Two days ago, an army spokesman issued a warning to the public not to refer to the movements of troops. Among the instructions that he gave were the following : -

Do not mention the impending or past departure of troops or any individual soldier, sailor, or airman.

Do not refer to any one being on official or pre-embarkation leave.

T)o not mention going to or being present at a farewell party.

How does the Minister for the Army reconcile those instructions with his broadcast to the world recently that the Australian Armoured Division would shortly proceed oversea?

Mr FORDE:

– Any broadcast that I made was consistent with advice which was tendered to me by the military authorities. That the Armoured Division will not leave for abroad immediately is well known. Some time will elapse before its departure.

page 892

QUESTION

PORT COMMITTEES

Mr CONELAN:
GRIFFITH, QUEENSLAND

– I ask the Minister for Labour and National Service whether a decision has been made in respect of the appointment of port committees, which was promised several months ago by a previous government? If so, what, is it?

Mr WARD:
Minister for Labour and National Service · EAST SYDNEY, NEW SOUTH WALES · ALP

– In response to the strong represents tiona of the honorable member for Griffith (Mr. Conelan), the honorable member for Melbourne (Mr. Calwell), thi: honorable member for Brisbane (Mr. George Lawson), the honorable member for Melbourne Ports (Mr. Holloway), and other Government members, the Government has given earnest consideration to this matter, and hopes to be able to announce its intention within a few days.

page 892

JOI XT COMMITTEE ON RURAL INDUSTRIES

Mr. FRANCIS, as chairman, brought up the second progress report of the Joint Committee on Rural Industries.

Ordered to bc printed.

page 892

QUESTION

EASTERN GROUP SUPPLY COUNCIL

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

– Has the Minister for Supply and Development seen in to-day’s Sydney Daily Telegraph the statement that he has submitted to Cabinet a report on the work of the Eastern Group Supply Council, with special reference to Australia’s representative, Sir Bertram Stevens; that the report was not critical of Sir Bertram’s work, and that no recommendation for his recall has been made? Has such a report been prepared by the honorable gentleman for consideration by the Cabinet? If so, has the Sydney Daily Telegraph given an accurate version of its contents? If that is the case, how has the leakage of information occurred?

Mr BEASLEY:
Minister for Supply and Development · WEST SYDNEY, NEW SOUTH WALES · ALP

– At the. direction of Cabinet, I submitted to it a report, which it has not yet considered. The press references to the nature of its contents are pure speculation.

page 892

CANBERRA OFFICE AND HOUSING ACCOMMODATION

Mr LAZZARINI:
Minister Assisting the Treasurer · WERRIWA, NEW SOUTH WALES · ALP

– On the 21st November, the honorable member for Melbourne (Mr. Calwell) asked the Minister representing the Minister for the Interior whether he would make a statement before Parliament went into recess showing the steps taken by this Government to increase accommodation in Canberra for office staffs, and to provide homes for public servants in order that this capital should be in fact as well as in name the seat of Government.

The following reply has now been received from the Minister for the Interior: - Shortly after its assumption of office, this Government transferred to Canberra the central office staffs of the Pensions Branch and the Department of Home Security. The provision of accommodation for the transfer of additional departments depends upon the funds that can be made available by the Treasurer. As the honorable member is aware, the needs for the successful prosecution of the war must have first call on the moneys available to the Treasury. Tenders are now being called for the completion of Melbourne Buildings at Civic Centre. This work was recommended by the Parliamentary Standing Committee on Public Works. The buildings when completed will be used for office accommodation. The staffs to be transferred to .the new buildings will be decided upon when- the work is nearing completion about niue months hence. The buildings will accommodate about 350 officers. There has been a steady programme of house construction in operation for the last four or five years. This year there will bc a revote of £S7,000, and an additional sum of £200,000 appears on the estimates of the Department of the Interior, which hu ve yet to be considered by Parliament, ft has been stated publicly that it is the intention of the Government to transfer to Canberra as many of the Government departments as possible, with the exception of the service departments which in existing circumstances must remain in Melbourne during the war. The honorable member may rest assured that the Government will do everything within its power to bring to Canberra the central staffs of as many departments as possible, subject to funds being available for the purpose.

page 893

QUESTION

COMPULSORY MILITARY TRAINING

Rural Labour Requirements - k n liistment of trainees in alr, force.

Mr GUY:
WILMOT, TASMANIA

– I have just received urgent advice from Tasmania that many primary producers are unable to carry on harvesting operations owing to the acute shortage of labour. When application is made for the temporary release of men who are undergoing compulsory military training, the applicant is told that in each case information must be supplied in respect of the name of the trainee, the unit to which he is attached, and the location of the camp in which he is being trained. The farmers have pointed out that it is absolutely impossible for them to have this information. Hay is rotting, and cannot be pressed. I know of one farmer who has had 500 tons of hay destroyed by caterpillars, simply because he is unable to obtain the necessary labour to harvest it. Will the Minister for the Army investigate the position, and arrange that men engaged in farming occupations shall not be called up during harvesting operations? Will he also inquire as to the possibility of releasing temporarily from training, men who are already in camp, in order that harvesting operations may be continued?

Mr FORDE:
ALP

– I have every sympathy with the farmers who are experiencing these difficulties. The matter has been considered by me and by the Military Board and, in fairness. I may add that it also received the sympathetic consideration of my predecessor in office. A recent amendment to the list of reserved occupations provides that rural workers singly employed are exempt from military service at 21 years of age and upwards, instead of 25 years as they formerly were, and leading hands in charge of three or more men at 25 years. Fa I’m hands who are not seasonal workers are exempt at 30 years of age. Now that camps have been extended for new recruits to a duration of six months, the Military Board is giving consideration to regulating the attendance of rural workers in camps in two periods, at times of the year when the least inconvenience will be caused to the particular industries concerned. For those men whose occupations do not come within the provisions of the list of reserved occupations and whose calling up for military training would cause hardship, individual claims for exemption on the grounds of great hardship may be made to the area officer, or in the case of a serving soldier, to the commanding officer of the unit, to which he has been allotted, when full consideration will be given to the application.

Mr CLARK:
DARLING, NEW SOUTH WALES

-Is the Minister for Defence aware that the Array is refusing to release compulsory military trainees who wish to join the Royal Australian Air Force? In those circumstances, how does the Minister expect the Royal Australian Air Force to be able to obtain recruits when all men in the lower age groups are now compelled to undergo military training?

Mr FORDE:

– If the honorable member cares to see me afterwards, I shall have an explanation for him.

page 894

QUESTION

WOOL AGREEMENT

Appraisement at Albany - Conditions of Sale.

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

-I have received the following telegram signed by the Mayor of Albany, the chairman of the Albany Road Board, Mr. Stacey for the Australian Labour party, and the president of the Albany Chamber of Commerce : -

State Wool Committee intimates Central Wool Committee decided not to alter existing arrangements send Albany wool Fremantle undumped. Have made full inquiries and ascertained all interested parties including brokers favorable Albany dump used fullest capacity. Railways keen wool should be dumped Albany before transport Fremantle.

I ask the Minister for Commerce whether his department authorized the Central Wool Committee to rail the undumped wool to Fremantle after appraisement. If so, doeshe not think that, by centralizing the dumping operations at Fremantle, he is depriving men resident in Albany of much-needed work?

Mr SCULLY:
Minister for Commerce · GWYDIR, NEW SOUTH WALES · ALP

– I am not aware of the directions given by the Central Wool Committee in regard to this matter, but the action taken was not with the concurrence of the Department of Commerce. At the earliest moment I shall take the matter up with the Central Wool Committee with a view to having the wool dumped at Albany, if possible.

Mr SCULLY:

– Last week the honorable member for Dalley (Mr. Rosevear) asked me a question regarding the procedure adopted by the Government of the United Kingdom in the resale of Australian wool. The honorable member will appreciate that the wool is acquired f.o.b. Australia, and the grower is paid within fourteen days of appraisement. It is therefore the property of that Government at the time of resale for use in countries other than the United Kingdom.

Mr Abbott:

– Is the Minister correct in saying that wool is acquired f.o.b. Australia by the British Government? Is it not acquired on appraisement?

Mr SCULLY:

– The position is that the wool is acquired by the United Kingdom Government f.o.b. Australia, and the grower is paid within fourteen days of appraisement. The issue price is fixed according to a formula laid down by the United Kingdom Government to recoup itself in respect of the costs incurred. These include - (a.) the flat rate price of 13.4375d. per lb. (Australian) ;

  1. the charge of3/4d. per lb. (Australian) paid to meet the costs in Australia from store at port of shipment to the ship ;
  2. landing charges, port dues, handling, &c, at the port of discharge in England, and transport to Bradford ;
  3. warehousing and handling at Bradford ;
  4. war risk and fire insurance in store at Bradford;
  5. general overheads of control, contingencies, &c.

Those calculations form the base of an “ issue price “ for wool sold out of stocks in the United Kingdom.

The “ issue price “ for wool for shipment to other countries, out of the United Kingdom Government’s stocks in Australia, is determined by an adjustment of the charges (c), (d) and (e), to conform to the fact that the wool is issued f.o.b. Australia, and the eliminationof the charges (/), (g) and (h). As the net results of the United Kingdom purchases of Australian wool and the resale thereof cannot be ascertained on a seasonal basis and must await the winding up of the scheme as a whole, it is not practicable to exercise a check, season by season.

The United Kingdom Government has on its hands much unsold wool at the end of each season in respect of which storage charges are mounting up. It is also taking the responsibility for any losses on lots resold during the war and afterwards, and has agreed that the Commonwealth Government shall receive for the benefit of Australian growers “ 0 per cent, of the profits mad°. on wool resold for use outside the United Kingdom. The Commonwealth Government will make a complete investigation with a view lo safeguarding the interests of A ustralian wool-growers.

page 895

QUESTION

HOUSING

Mr MORGAN:
REID, NEW SOUTH WALES

– Does the Minister for the Army know that families of men away on war service find difficulty in getting suitable homes owing to the housing shortage in city areas, and that the children of men on service have to live in surroundings wholly unsuitable for their upbringing? In view of the fact that there are a great many vacant dwellings in country centres because of enlistments and the drift of munitions workers to the cities, will the Minister consider making these dwellings available for the use of families of service men for the duration of the war? Will the Minister collaborate on this subject with the Decentralization Committee appointed by the Government of New South Wales with a view to evolving a comprehensive scheme to meet the situation?

Mr FORDE:
ALP

– Every consideration will be given to the suggestion of the honorable member.

page 895

QUESTION

NEW BOMB SIGHT

Mr DRAKEFORD:
Minister for Air · MARIBYRNONG, VICTORIA · ALP

– On the 29th October, the honorable member for Griffith (Mr. ‘Conelan) asked the Minister for the Army, without notice, whether he would take steps to discover what happened to a new bomb-aiming device which had been submitted to the Minister’s predecessor about fourteen months previously. The question was referred to me for consideration as a matter coming under my administration. There is no record in the Department of Air of this matter having been referred to air force head-quarters. Further inquiries are proceeding, however, and, in the meantime,

I have communicated with the inventor, Mr. M. E. Duggan, of Wynnum, Queensland, asking him to submit his suggestion, with relevant details, and when they are received they will be fully investigated.

page 895

QUESTION

REPATRIATION

Mr HOLT:

– Is it a fact that, soldiers who enlisted with the Australian Imperial Force, but who have been discharged owing to some physical defect developed while in training, after serving some time in camp, and before leaving Australia, are not at present entitled to repatriation benefits, and that no special provision is made for placing them in employment after their discharge? Has the Minister for Repatriation given any consideration to such cases, and can be say what steps are being taken to deal with them?

Mr FROST:
Minister for Repatriation · FRANKLIN, TASMANIA · ALP

– We have that matter under consideration, but any men who have b en discharged after returning from service abroad have been paid sustenance until they find employment, and efforts are made to place them in positions.

Mr Spender:

– On the same basis as had been arranged by the last Government ?

Mr FROST:

– Yes. We have not deviated from that policy, except that we arc a little more liberal in our treatment. As for men discharged before going abroad, their position is at present receiving consideration.

page 895

QUESTION

COMMONWEALTH BANK STAFF

Mr BAKER:
MARANOA, QUEENSLAND

– As considerable dissatisfaction arises from the present method of making permanent appointments to the staff of the Commonwealth Bank, will the Treasurer issue instructions that in future all candidates for such appointment shall submit themselves to competitive examination, or, better still, to competitive examination and personal interview by some responsible board ?

Mr CHIFLEY:
Treasurer · MACQUARIE, NEW SOUTH WALES · ALP

– The method of appointing persons to the staff of the Commonwealth Bank is entirely within the jurisdiction of the institution. However, I shall inquire into the matter, and supply to the honorable member as early as possible an answer to his question.

page 896

QUESTION

CONSCRIPTION REFERENDUM

Dr PRICE:
BOOTHBY, SOUTH AUSTRALIA · UAP

– Will the Minister for Munitions say whether Sydney and Adelaide newspapers correctly reported him as having stated recently iti Adelaide that during the last war the Australian Imperial Force pronounced against conscription? Has the Minister observed that, according to official documents, the Australian Imperial Force pronounced in favour of conscription by a majority of approximately 13,000 votes in the referendum of 1916, and approximately 10,000 votes in the referendum of 1917? Will the Minister examine those official records for the purpose of making an appropriate correction, with the same amount of publicity as that which was given to the original statement?

Mr MAKIN:
Minister for Munitions · HINDMARSH, SOUTH AUSTRALIA · ALP

– If the honorable member had read with equal diligence later news items, he would have noticed a. correction of the statement.

page 896

QUESTION

WESTERN AUSTRALIAN INDUSTRY EXPANSION COMMISSION

Mr JOHNSON:
KALGOORLIE, WESTERN AUSTRALIA

– Does the Government propose to set up the necessary machinery to give effect to the recommendations contained in the report of the committee that surveyed the economic position of Western Australia, as affected by, and in relation to, Australia’s war effort?

Mr CURTIN:
Prime Minister · FREMANTLE, WESTERN AUSTRALIA · ALP

– The Government has already taken action regarding the matter. By arrangement with the State Government, the Western Australian Industry Expansion Commission, the establishment of which was recommended by the special committee, has been appointed. The members ave: - Professor F. R. E. Mauldon (chairman), and Messrs. H. B. Sturtevant (Commonwealth Deputy Director of Works, Perth), J. W. Hallam (Area Officer, Board of Area Management, Department of Munitions), R. J. Dumas (Director of Works, Western Australia) and J. H. Ellis (Commissioner of Railways). The committee, which is about to hold its initial meeting, will make special recommendations to the Common weal th Government.

page 896

EXCISE ON ALCOHOLIC BEVERAGES

Mr BEASLEY:
ALP

– Yesterday, the honorable member for Darling (Mr. Clark) asked me whether breweries were permitted to issue invoices stamped with the condition, “ Subject to alteration in price owing to increase in excise “. The Minister for Trade and Customs (Senator Keane) referred the matter to the Prices Commissioner, who stated that under the present order fixing the price of beer, breweries are not permitted to make sales on such conditional terms. If the honorable member will supply to the Prices Commissioner information as to any transaction of that kind, which has come to his notice, suitable action will be taken.

page 896

QUESTION

SUPERPHOSPHATES

Mr MARWICK:
SWAN, WESTERN AUSTRALIA

– Will the Minister for Commerce immediately investigate the possibilities of obtaining supplies of superphosphates from within Australia and adjacent islands in order to obviate the reduction by 30 per cent, of supplies in the coming season?

Mr SCULLY:
ALP

– Knowing that the shortage of superphosphates will be acutely felt by primary industries, I am examining every possibility of obtaining supplies from within Australia or places near Australia.

page 896

QUESTION

PETROL RATIONING

Mr BREEN:
CALARE, NEW SOUTH WALES

– I have received from the Young Branch of the Farmers and Settlers Association of New .South Wales a communication which contains the following passage: -

Several instances have been reported, when breakdowns occur in tha harvest fields, local farmers have not sufficient petrol ration coupons to enable them to get to town and secure the necessary replacement parts. In cases such as these, applications have been made to the local police transport officers, who, unfortunately, do not possess the authority to issue special allowances to meet such cases.

I now ask the Minister for Supply and Development whether he will give to the Liquid Fuel Control Board a direction whereby farmers so placed will be enabled to receive sufficient petrol ration tickets to tide them over immediate difficulties?

Mr BEASLEY:
ALP

– I regard that request as one that should receive immediate attention, and I shall be pleased to take it up with the Liquid Fuel Control Board in order to ascertain what can be done to give the police such powers as the honorable member suggests should he given to them.

page 897

QUESTION

BUTTER ACQUISITION

Mr ARCHIE CAMERON:
Minister for Aircraft Production · BARKER, SOUTH AUSTRALIA · ALP

– I ask the Minister for Commerce whether certain regulations dealing with pastry and second-grade butter have been gazetted and what steps he has taken or proposes to take to hear the case against those regulations prepared by the producers and the manufacturers in South Australia.

Mr SCULLY:
ALP

– The Commonwealth Government has taken action in regard to the acquisition of second-grade and pastry butter in order to prevent the utter collapse of the butter industry, especially so far as choicest and firstgrade butter are concerned. The Government has taken cognizance of the position in South Australia and two members of the Dairy Produce Control Committee will soon leave for South Australia to confer with representatives of the butter industry in that State.

page 897

SALES TAX

Mr BEASLEY:
ALP

– Yesterday, the honorable member for Dalley (Mr. Rosevear) asked whether it was permissible for country storekeepers in New South Wales to charge .sales tax on the landed cost of goods reaching country shops. The normal practice is for sales tax to be added by the wholesaler to the invoice at the point of sale by the wholesaler. This does not normally include any tax on freight on orders delivered to country storekeepers. If the honorable member will report to the Commonwealth Prices Commissioner any cases of the practice to which he referred, suitable action will be taken.

page 897

PROFITEERING

Mr BEASLEY:
Minister for Supply and Development · West Sydney · ALP

– by leave - On Friday, the 21st November, the honorable member for Bass (Mr. Barnard) asked me, as Minister representing the Minister for Trade and Customs, how many firms had been declared since the outbreak of war for making excess profits on goods sold to the public. He also asked what additional penalty, if any, had been imposed on such firms. The Minister for Trade and Customs (Senator Keane) has now advised me that early in the history of price control the Commonwealth Prices Commissioner issued a general order setting out the procedure under which increased costs of a certain list of declared goods could be passed on in prices. Considerable publicity was given to this formula and traders were advised to apply the same principle to undeclared goods. Later a systematic check of the operations of traders was undertaken for the purpose of ascertaining whether the principles of price control were being observed. A feature of the general instruction was that gross profit margins were not to be increased without the approval of the Commissioner. Investigations disclosed that in many instances this principle had not been followed ; in some cases the increased gross profit margins did not return to traders a net profit that could be regarded as unduly high; in other cases the net profit was higher than would have been allowed by the Commissioner if applications had been made for permission to increase gross profit margins. Nevertheless, in those cases where there was evidence that the traders concerned had not observed this important requirement of price control all goods sold by those traders were declared and brought under strict price control. The procedure then followed by the Commissioner was -

  1. to determine a reasonable gross profit margin for the trader concerned ; (£>) to ascertain the excess gross profit obtained over the margin so determined ;
  2. to fix a gross profit margin for future trading that would ensure that the excess so calculated would be returned to consumers.

This detailed explanation is necessary to make it clear that the declaration of a trader is not in itself evidence that a trader was profiteering in the most objectionable sense in which that word is used. Nevertheless the declaration of a trader for non-observance of price control principles is regarded as a grave step and one that reflects little credit on the trader concerned. Up to the present the following traders have been declared for nonobservance of price control principles: - Richard Allen and Sons (1919) Proprietary Limited, 164 Flinders-lane, Melbourne.

  1. Barbier,805 New South Head-road, Rose Bay, New South Wales.

The Bay Butchery, 241 Coogoe Bay-road, Coogee, New South Wales.

Campbell’s, 871 New Canterbury- road. Hurlstono Park, New South Wales.

  1. Chaleyer and Co., 353 Flinders-lane, Melbourne.
  2. Cumbley, 117a Avoca-street, Randwick, New South Wales.
  3. L. and R. F. Clarke, 316 Bronte-road, Waverley, New South Wales.

Debenhams (Aust.) Proprietary Limited, 153 Flinders-lane, Melbourne.

  1. Furbank, 265 Miller-street, North Sydney, New South Wales.

General Paint Company of Australia Proprietary Limited,68 Caledonia-street, Paddington, New South Wales.

Gilroys Meat Service, 420 Victoria-avenue. Chatswood, New South Wales.

  1. A. Grubb Proprietary Limited, 88 Darlinghurstroad, King’s Cross, New South Wales.
  2. W. Hayes, 10 Willoughby-road, Crow’s Nest, New South Wales.’

Lane’s Meat Service, 189 Oxford-street, Bondi Junction, New South Wales.

Lane’s Meat Service, 38 Willoughby-road. Crow’s Nest, New South Wales.

  1. C. Matthews (trading as Burns Johnson and Company),64 Albert-street, Brisbane.

  2. Med way,63 Penshurst-street, Willoughby, New South Wales.

    1. and W. Murray Limited. - All branches throughout Australia.

Mosley and Kemp Proprietary Limited. 172 Flinders-lane, Melbourne.

  1. W. Nicholas (Chatswood Butchery), 445 Victoria-avenue, Chatswood, New South Wales.

Alfred Ernest Osborne, North-terrace, Bankstown, New South Wales.

John Payne (trading as Payne Bros.), 34 Ormonde-parade, Hurstville, New South Wales.

  1. L. Perry and Company, 119 Auburn-road, Auburn, Now South Wales.

Robert Reid and Company Limited, 341 Flinders-lane, Melbourne, Victoria.

  1. R. Rideout, 184 Penshurst-street, Willoughby, New South Wales.

Sargood Gardiner Proprietary Limited, 01-73 Flinders-lane, Melbourne.

Sydney Meat Company No. 10, 88 Millerstreet, North Sydney, New South Wales

Vaccari and Company (Gualtiero Vaccari), 90 Queen-street, Melbourne.

Leonard Cadman Vidler, 38 Macquariestreet, Parramatta, New South Wales

page 898

GIFT DUTY ASSESSMENT BILL 1941

Report of Special Committee.

Mr CHIFLEY:
Trea surer · Macquarie · ALP

– by leave - I lay upon the table the following paper : -

Gift Duty Proposals - Report of Special Committee.

The recommendations have been agreed upon unanimously by the committee and they have been adopted by the Government. The deliberations of the committee resulted in valuable and helpful discussion, and a number of amendments have been agreed upon. These will be brought before the House when further debate upon the bill takes place to-day (vide page 899).

page 898

ASSENT TO BILLS

Assent to the following bills re ported : -

Sales Tax (Exemptions and Classifications) Bill 1941.

Sales Tax Bills (Nos. 1 to 9) 1941.

Customs Tariff Validation Bill (No. 2) 1941.

Customs Tariff (Exchange Adjustment) Validation Bill (No. 2) 194.1.

Customs Tariff (Special War Duty) Validation Bill (No. 2) 1941.

Customs Tariff (Canadian Preference) Validation Bill (No. 2) 1941.

Customs Tariff (New Zealand Preference) Validation Bill (No. 2) 1941.

Excise Tariff Validation Bill 1941.

Invalid and Old-Age Pensions Bill 1941.

page 898

BILLS RETURNED FROM THE SENATE

The following bills were returned from the Senate without amendment or requests : -

Australian Soldiers’ Repatriation Bill 1941. War-time (Company) Tax Bill 1841.

page 899

WAR-TIME (COMPANY) TAX ASSESSMENT BILL 1941

Bill returned from the Senate with an amendment.

In committee (Consideration of Senate’s amendment) :

Senate’s amendment -

After clause 5 insert tlie following new clause -. -

*’ 5a. After section thirty-seven of the Principal Act tlie following section is inserted: -

This act shall continue in force until six months after the end of the financial year during which the present war between His Majesty the King- and Germany terminates, and no longer.’ “.

Motion (by Mr. Chifley) proposed* -

That the amendment be agreed to.

Mr SPOONER:
Robertson

.- The Opposition appreciates the Government’s decision to accept the Senate’s amendment, which adds to the bill a clause declaring that its operations shall cease six months after the end of the financial year during which the war ends. This is a just provision and the .Government deserves credit for accepting it.

Question resolved in the affirmative.

Resolution reported; report adopted.

page 899

GIFT DUTY ASSESSMENT BILL 1941

Second Reading

Debate resumed from the 29 th October (vide page 54), on motion by Mr. Chifley -

That the bill be now read a second time.

Mr SPOONER:
Robertson

.- This bill will be another addition to the already long list of taxation laws which are in force in Australia to-day. It is the first all-Australian measure designed to impose a tax on gifts. However, similar legislation is in operation in the State of Queensland and the Dominion of New Zealand. In certain respects this bill follows the lines of such legislation, but it makes departures in other respects. Some of the departures are necessitated by the conditions which must govern the application of such a tax throughout the Common weal ti. The Opposition does not propose to oppose the second reading of the bill, although ‘in ordinary circumstances, the wisdom of introducing a new form of tax to supplement”””” existing systems, thus further complicating our method of raising, revenue, might reasonably be questioned ^ In- his secondreading speech the treasurer (Mr. Chifley) told the House that the Government desired to enact this measure, first, for the purpose of raising approximately £500,000 per annum, and secondly, for the purpose of protecting the revenue against persons who seek to minimise their liabilities in respect either of estate duty or income tax, by dispossessing themselves of estate. To-day, when the rates of income tax and estate duty are very high, it is important that people should be prevented from so rearranging their affairs as to reduce their financial responsibility to the Commonwealth. The bill is important to the taxpayers as well as to the Government because, in these days, everybody is expected to pay large sums of money to the Crown for the prosecution of the war, and it is advisable that individuals should be prevented from creating distinctions in their own favour. For this reason, the Opposition agrees that the passage of this legislation is desirable at the present time. Under normal conditions, however, the Government could achieve its objects more effectively and more efficiently by means of amendments to the income tax laws or other laws, and by introducing new forms of administration; these would probably produce the same amount of revenue and have the same effects as this bill. Whilst the bill will not be a great revenue raiser, it will have the effect of compelling people, who transfer their estates, to compensate the Crown for the revenue which otherwise they would avoid contributing. So far as I am aware, nothing in the bill prevents anybody from transferring assets, or dispossessing estate, by means of transfers to third parties. But anybody who does so will be obliged to pay the appropriate rates of tax set out on the graduated scale in the schedule to the bill. I have nothing more to say concerning the principle of the bill, but I believe that its administration will make one more addition to the cost of government. It cannot be administered easily; it will necessitate the establishment of another branch of an already overworked department; it will require another set of returns to be furnished by taxpayers; and it will provide an extra cost to appeal1 in the Treasurer’s next statement of receipts and expenditure. Extra obligations and liabilities will thus be placed upon the administration and the people generally.

Mr Calwell:

– Therefore the measure might hasten unification.

Mr SPOONER:

– I arn in entire agreement wilh the honorable member on that subject; we see eye to eye in respect of it. My difficulty in that regard is that .1. cannot discover why it remains for me to advocate the reduction of State powers and the expansion of Commonwealth powers, for I was taught to believe that this is the policy of the Labour party.

Mr Rosevear:

– The honorable gentleman is a recent convert.

Mr SPOONER:

– Oh, no! Since we all are in school together, I may tell honorable members that while I was a minister of a government in another sphere I occasionally found myself in very hot water for making statements similar to some that I have made in this House on this subject.

Mr SPEAKER (Hon W M Nairn:
PERTH, WESTERN AUSTRALIA

– Order! That issue has nothing to do with the subject-matter of the bill.

Mr SPOONER:

– Although the administration of this measure will add to the already heavy work of the Treasurer, I trust that he will find that as time goes on it will be possible to lubricate the administrative machinery so that it will move sufficiently easily to yield’ the revenue which he anticipates from this source.

The Opposition will vote for this measure, but I desire to make a few observations upon it. [During question time, the Treasurer informed the House that a committee of honorable members appointed to give consideration to the details of the bill had made a number of recommendations which would result in the introduction of a schedule of amendments by the Government. That committee was representative of both sides of the House, and it thoroughly examined the measure, as the Treasurer, who was a member of it, is aware. However, there’ will still remain some provisions of the bill which will not completely satisfy everybody. I do not desire to anticipate the amendments to be introduced, and 1 am therefore in some difficulty in discussing certain points to which I desire to devote some attention. I may, therefore, be forgiven if, in the course of my remarks, 1 indicate the effect likely to follow the adoption of some of the major recommendations of the committee. Since this bill was introduced some weeks ago copies of it have travelled far and wide, and its provisions have caused a good deal of misunderstanding and fear as to their probable effects.

Some of the amendments to be introduced will have important results in respect of gifts to relatives by blood or by marriage. The Treasurer has also agreed to release from the ambit of the measure as originally introduced quite a number of persons other than relatives by blood or by marriage, and also some organizations in respect of which gift duty could not reasonably be charged.In the framing of these amendments, care has been taken, I believe, to ensure that in giving exemption to donees other than relatives by blood or by marriage, evasion by subtle means shall not be possible by the making of gifts through agencies, and private or proprietary companies. The position in this regard, has been amply protected. In its original form the bill did not, in my view and in that of a number of other persons, provide foi the normal procedure of writing off debts. I understand that the Government’s amendments will cover that point. Provision is made in the measure for what is known as an “aggregation period “. This was fixed at five years in the measure as drafted. It was provided that gifts were to be grouped with similar gifts made during the last two and a half years, and gifts that may be made in the next two and a half years, for the purpose of calculating the rate of duty to be applied. I am glad that the Treasurer has agreed to reduce the aggregation period from five years to three years ; hut I wish that it had been reduced to two years. Even the three-year period will cause some administrative difficulties that could be avoided with a shorter period. Provision is being made, also, for appeals. This aspect was not covered completely in the original draft. The right of a donor or donee to make appeals to the Land Valuation Court in respect of the v.’i lue of gifts of veal or personal property or to the Board of Review or to the Supreme Court in respect of administrative decisions of the Commissioner, will, 1 think, provide reasonable protection for the taxpayers. lt was indicated in sections of the press that adequate provision had not been made in the bill to cover certain important and necessary transactions iu relation to alimony payable by an order of the court or by agreement, and that therefore such payments might become subject, to gift duty. Honorable members may rest assured that those dangers have been removed. Under the original provisions of the bill, money paid by an employer to an employee on active service, in order to make up the difference between his military and civil pay, might have been regarded as subject to tax. 1 understand that an amendment will be moved which will ensure that such payments shall not be taxable. There will also be removed any doubt as to whether u taxpayer may insure his life for the benefit of his wife, and pay a premium up to £100 per annum without that payment being made the subject of gift duty.

I have instanced some of the improvements which will appear in the measure, according to the memorandum already circulated to honorable members. There arc others; probably a number of them may more suitably bc mentioned in committee. Those to which I have directed attention give to the House the assurance that after the amendments have been made the bill will be one which can he administered safely and efficiently in the light of present-day conditions. The Opposition will have pleasure in supporting the Government on the motion for the second reading of the bill, as well as in respect of the amendments recommended by the committee which the Government has declared that it will accept.

Mr CALWELL:
Melbourne

.- This measure is a step in the right direction. I have never been able to understand why governments have not stopped the evasion of estate duty, particularly as the methods adopted are perfectly well-known and could easily be prevented. I do not consider that the Commonwealth should issue such negotiable documents, transferable by hand, as debentures or bonds. It is notorious that many wealthy persons purchase debentures and place them in safe deposits, making the arrangement that, in the event of their death, they will be claimed by the surviving members of their families. By this means, estate duty is evaded. The bill proposes to tax gifts and donations made openly in the light of day, not surreptitiously, and in defiance of the law. It has much to commend it. But it would be more to the point if the Ministry were to agree to recall all Commonwealth bonds, and to issue only inscribed stock, the owner of which could be traced and taxed on the interest he had received from the investment. With such securities as bonds and debentures, it is impossible to prevent evasion. Not. all persons who own these Government pieces of paper are dishonest; but the dishonest can always escape taxation if they want to do so.

There is another fruitful source of evasion in the transfer of company shares. Quite a number of persons sign undated transfers of shares to members of their families or others. Upon the death of the owner, an antecedent date is placed on the transfer, with the result that estate duty is evaded, [f the Government really wishes to stop evasion of taxation, it need only promulgate regulations under the National Security Act, first in order to cover the last/ position that I have mentioned, and secondly in order to prevent the issue of debentures in connexion with any of the huge loans that are to be floated from now until the end of the war. The country would be the gainer by such action.

The value of the bill is somewhat discounted by the number of its exemptions, many of which, doubtless, are well warranted. Added to that list is another page containing the exemptions recommended by the committee which investigated the matter.

Mr A kchtx Cameron:

– They have widened the breach.

Mr CALWELL:

– There is as much exemption as taxation in the measure. I do not know how much the Government originally expected to collect, or whether it has decided to forgo a substantial sum by means of these concessions. Such calculations will have to be made later. Exemptions having been begun, it is very difficult to call a halt.

Mr Brennan:

– If Santa Clans does not publish a schedule, the number of gifts cannot be estimated.

Mr.CAL WELL. - I hope that the gifts which Santa Claus intends to bestow this year will be exempt.

Persons who are compelled to make returns might be assisted if the Government were to address itself to the matter of -taking over the whole of the taxation offices of the States, and running them as Commonwealth instrumentalities. It might then be possible to make one set of forms do what several sets are required to do to-day, and that would, in addition, make for unification, which is the desire of every one. The work of the department would be simplified, and relief would be given to those unfortunate persons who have a nightmare as the result of the enormity of the task that confronts them when taxation returns have tobe filled in. It is bad enough if one is only an ordinary working person, and has to fill in only one set of forms, but when one has to fill in weekly, monthly, and yearly forms, giving to the departments all the information they require, it is becoming an art. Simplification of forms is desirable. I hope that the committee will meet during the recess, in order to see what it may do to make considerably easier the lot of those who have to fill in forms.

Mr ARCHIE CAMERON:
Barker · ALP

– There is no doubt that the objective of this legislation is to secure revenue by a cold, calculating method. I do not know why gifts to sporting clubs and associations should be exempt. If I cared to do so, I could name quite a lot of associations which have not been established for the purpose of making a profit. Some of those that are fairly big property owners have a very doubtful record. To my knowledge, a flaw in the Income Tax Act has enabled a number of them to evade taxation for years. It is quite possible that they will become the recipients of gifts under this legislation. That should not be permitted. The members of the committee have shown considerable lack of knowledge of the subjectwith which they dealt, and also weakness. The provisions of the measure should again be examined microscopically. Gifts made to charitable, benevolent or religious institutions should be exempt; but there are many other institutions which are not entitled to any consideration. I have no doubt that the bill will be accepted by this House. Being in a Christmas mood, it will pass anything placed before it, without considering the implications. After two or three years have elapsed, and a return of the exemptions is sought, some very illuminating examples will be disclosed.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– I ask leave of the House to have the report of the special committee of members incorporated in Mansard, for record purposes. [Leave granted.] The report is as follows: - 26th November, 1941.

ToTHEHONORABLETHEPRIME MINISTER:

We, the signatories to this letter, being the members of the committee appointed to inquire into the proposal to impose a duty upon gifts, beg to report that we have examined the Gift Duty Assessment Bill that was printed and introduced by the Treasurer, and. as a result of our deliberations, desire to recommend to the Blouse a number of amendments to the bill, some of a minorcharacter dealing with more or less machinery provisions, and some of an important character which we mention specifically hereunder: -

  1. The statutory period for the aggregation of gifts for the purpose of ascertaining the rate of duty applicable to the particular gift, and for the purpose of ascertaining whether the aggregate value of the gifts exceedsthe general exemption of £500 (which is allowed under the bill), should be reduced to a period of three years extending eighteen months prior to the date of the particular gift and eighteen months subsequent to that date.
  2. Doubt existed as to whether baddebts written off would be exempt from the operations of the bill.Itis recommended that this matter be placed beyond doubt by amending clause 14 of the bill (which deals with exemptions) for the purpose stated.
  3. The provisions of sub-clause (c), clause 14, of the bill limit the exemption of charitable gifts. The clauseas drawn was copied from the exemption clause in the Estate Duty Assessment Act, but it is considered that in legislation of the nature now before the House this provision should be liberalized to embrace gifts to institutions such as -

The Australian Mothercraft Society ;

Bluebird Free Kindergarten;

Children’s Library Movement:

Country Women’s Association :

Welfare Clubs;

Hammonds Pioneer Homes;

Sporting clubs and associations. lt is recommended, therefore, that gifts to all institutions, organizations or bodies of persons not formed or carried on for the profit of any individual should bc exempted.

  1. The exemptions granted by the bill for contributions by an employer to a fund to provide for pensions for his employees and also for direct payment by the employer to employees, should bc widened to include pensions paid to employees’ dependants. The proposed amendment also includes pensions paid to the employee during invalidity while ho continues in employment, and also to provide for thu exemption of pensions paid to dependants upon the death of the employee. thu proviso following this sub-clause limits the exemption for such payments if the payment is made to an employee connected by ties of blood or marriage to the employer. ‘ This proviso should bc deleted from the bill. The committee is of the opinion that this is unnecessary, as the question of whether the payment is a bona fide one is a question of fact and should be easily ascertainable.

  2. The provision in thu bill exempting gifts made by the same donor to thu same doner up to an aggregate of £20 in value during the proposed reduced statutory period of three, years should also be liberalized by increasing the aggregate value to £50. fi. The exemption provided in the bill for the gifts made for or towards the maintenance of the wife, husband or child of the donor, or for or towards the education or apprenticeship of a child of the donor, should also be extended to cover payments of this nature to a ward or any person, for or towards the maintenance or education of whom the donor contributes having regard to the legal and moral obligations of the donor to make such payments. This provision is, however, subject to the commissioner being satisfied as to the bona fide nature of the payment.

    1. ft is recommended that siu exemption bc provided in the case of payments made by an employer to augment the salary of an employee who has enlisted in His Majesty’s Armed Forces. Gifts made for business purposes, i.e., subscriptions, ite., to local sporting and other bodies by companies or firms carrying on business in the district who make these gifts for advertising purposes are also recommended for exemption.
  3. Clause 10 of the bill provides that where the disposition of property is from, say, a father to a son for a small deposit and thu balance of the purchase money is left on mortgage with tlie father, that such balance shall not bc deducted in ascertaining the value of the gift.

The committee was faced with the fact that this would bring within the provisions of the hill many genuine sales, although the bill was designed only to catch what might be termed “ colourable” transactions.

The committee realized that it was impossible in practice to distinguish, the “colourable” from the genuine transaction. However, a large measure of relief can be given to genuine transactions without seriously interfering with the application of the law to the “ colourable “ transaction by providing, that where any payment is made by the donee to the donor in respect of the mortgage debt within five years of the disposition of the property, the commissioner will re-assess the gift duty payable thereon by taking into account such payment, and will refund any gift duty found to have been overpaid as a result of that re-assessment.

  1. Clause 12 which deals with the question of when a gift is deemed to be made, should be amended to obviate the possibility of dispositions, which have been completed as between the parties thereto prior to the commencement of flic act, being deemed under the clause not to bc completed until after the commencement of the act. This might result from the use of the words “ carried out in subclause (1.) and the words “carried out- or completed” in sub-clause (2). These words should be omitted and in sub-clause (3) the words “ is not registered “ should be altered to “ is not lodged for registration “.
  2. ‘The charge imposed upon all property subject to gift duty by sub-clause (3) of clause 25, should be modified so that it will not affect a. bona fide purchaser for value without notice of the charge.
  3. The bill contains a right of reference to a valuation board in connexion with the value of real property, but in connexion with any other question arising in an objection the only right of appeal is to the courts.

Thu committee considered that as amongst other things the bill contains a number of provisions depending upon the opinion of the commissioner, there should be a right of reference to a board of review on such questions to obviate the expense attached to an appeal to the courts. It is recommended, therefore, that a number of new provisions should bc inserted in the bill giving a. right of reference to a board of review on all matters other than the value of property (real or personal). All questions of valuations will be the subject of a reference to the Valuation Board. There will be a right of appeal to the courts on any question of law.

  1. To prevent tlie exemption from duty under this bill of gifts of Commonwealth Inscribed Stock the committee recommends the exclusion of the application of the provisions of section 52a of the Commonwealth Inscribed Stock Act.
  2. The committee also recommends that a clause should bc inserted in the bill to provide for a. reciprocal rebate in the case of double gift duty under this act and under the law of any country outside Australia. This rebate is designed to operate only when the country outside Australia enacts a similar provision. The committee suggests to the Government that thu New Zealand Government should be approached in regard to the enactment of a reciprocal rebate in the New Zealand act.
  3. The committee considered the question as to whether marriage settlements should be exempt from gift duty. It was decided there was no justification for such an exemption.
  4. The committee recommends thai donorsbe exempted from the necessity of lodging returns of gifts which are exempt from duly under clause 14 of the bill. (Sgd.) j. Ii. Chifley. (Sgd.) J. H. Scullin. (Sgd.) A. W. Coles. (Sgd.) A. W. Fadden. (Sgd.) E. G. Menzies. (Sgd.) E. S. Spooner.

I take this opportunity to express the Government’s appreciation of the work done by the committee in connexion with this bill, which in other circumstances would have been the subject of long and probably contentious discussion in this House. The right honorable member for Yarra (Mr. Scullin), and the honorable member for Robertson (Mr. Spooner), devoted a portion of their week-end, as a sub-committee, to the preparation of a report for the main committee. For those additional labours, they are entitled to particular mention. I believe that honorable members, as well as the Government, are appreciative of the way in which the committee has completed the task entrusted to it. I pay special tribute to the right honorable member for Yarra, who at all times is prepared to make available the benefit of his wisdom and experience whenever taxation measures come before this House. On behalf of the Minister who has assisted me in connexion with all of these measures (Mr. Lazzarini), as well as on my own behalf, I thank honorable members on both sides, as well as you, Mr. Speaker, and the Chairman of the Committees (Mr. Prowse), for the courtesy and consideration shown to us.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses I to 3 agreed to.

Clause 4 -

In this act. unless the contrary intention appears - “disposition of property” means any conveyance, transfer, assignment, settlement, delivery, payment or other alienation of property and, without limiting the generality of the foregoing, includes -

the exorcise of a power of appointment of property, including any judgment or order of any court made in default of the exercise of the power by the donee thereof; and

Amendment, (by Mr. Lazzarini) agreed to-

That after the word 11 appears “ the following words be inserted: - “ ‘ Board of Review ‘ means a Board of Review constituted under tho Income Tax Assessment Act 1930-1940;”.

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– I move -

That paragraph (c) bo omitted with a view to insert the following paragraph in lion thereof: - “(e) the exercise of a general power of appointment of property (including any judgment or order of any court made in default of the exercise of the power by the donee thereof) in favour of any person other than the doner of the power; and”.

This amendment makes it clear that subclause e, which provides that the exercise of a. power of appointment of property is a disposition of such property, will apply only ito a general power of appointment, and not to special or Limited powers.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 5 to S agreed to.

Clause 9 (Report by the Commissioner).

Mr JOLLY:
Lilley

– I hope that Parliament will get those reports in time for them to be before honorable members when the budget is being discussed, instead of their being delayed for months, n.s too often occurs. For instance, the reports of the Auditor-General, the Postmaster-General and the Commissioner for Taxation are not yet available.

Mr CALWELL:
Melbourne

.- I support the honorable member’s remarks. For instance, we have not yet had placed before us the Supplementary Estimates for the financial year 1938-39. and for this the Government behind which the honorable member for Lilley sat was responsible. I hope that this leeway in the presentation of documents will be made up early in the New Year.

Clause agreed to.

Clause 10- (4.) Nothing in this section shall prevent the Commissioner, the Second Commissioner or a Deputy Commissioner, or any person thereto authorized in writing by the Commissioner, the Second Commissioner or a Deputy Commissioner, from communicating any information to - (f>) a Valuation Board:

Amendment (by Mr. Lazzarini) agreed to-

That after the words “ Valuation Board “ lbc following words be inserted: - “or a Board of Review “.

Clause, as amended, agreed to.

Clause 11 (Liability to pay gift duty).

Mr SPENDER:
Warringah

.- T should like to know why real property situate abroad is to be brought within the provisions of the act. I can understand why, when a person domiciled in this country disposes of personal property wherever situate, that property should be brought within the gift provisions of this measure, but I find it difficult to understand the inclusion of real property situate elsewhere. I have not had time to study the Queensland act or the New Zealand act, but I understand that the latter provides that no real property, except that situate in New Zealand, shall be levied upon. I suggest that this point should be considered and, if necessary, an appropriate amendment made.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– I understand that this provision has been inserted because of a decision of the High Court in respect of the Queensland act.

Clause agreed to.

Clause 12 - (I.) A disposition of property made or taking effect or carried out in pursuance o: or in performance or satisfaction, whether wholly or in part, of a contract or agreement entered into (whether before or after the commencement of this act and whether with or without an instrument in writing) without adequate consideration in money or money’s worth, shall, for the purposes of this act, be deemed to bc a gift so soon and so far as the disposition has affected the property or any of the property to which the contract or agreement relates. (2.) For the purposes of this act, a gill shall bc deemed to be made after the com mencement of this act when the disposition of property comprised in the gift is made or takes effect or is carried out or completed after the commencement of this act, notwithstanding that a contract or agreement or instrument of title which relates to the property or any part thereof was made or executed before the commencement of this act. (3.) When any gift is made in respect of property comprised in any instrument of gift requiring registration under any law (whether in Australia or elsewhere) and . instrument is not registered until after the commencement of this act, the gift shall, for the purposes of this act, be deemed to have been made after the commencement of this act.

Amendments (by Mr. Lazzarini) proposed -

That, in sub-clause (1), the words “or carried out” be omitted.

That, in sub-clause (2), the words “or is carried out or completed “ bc omitted.

That, in sub-clause (3), the word “registered “ be omitted with a view to insert in Heu thereof the words “ lodged for registration “.

Mr SPOONER:
Robertson

.- I support the amendments, but I desire to make an observation on the clause as it will be amended. The clause provides for taxing certain gifts that may have been made prior to the commencement of the act, though the gift has not been formally completed. The amendment will minimize the risk that will arise from the incompletion of the transaction, but T believe that the scope of the amendment would need to be enlarged in order to give full protection. The principle that should be adopted is that, where the equitable title in the subject of the gift had passed from the donor to the donee, there should not be any possibility of gift duty being payable merely because of the incompletion of some formality which may be delayed for months after the vesting of the property in the donee. The Minister has provided that, where the instrument under which a gift is made is lodged for registration, no duty shall be levied, but I am informed that that will not cover all the circumstances. However, I am obliged for the concession made in this amendment. It is an improvement on tlie original bill, but I suggest that next year the Government might review the provision with a view to amending it in the direction I have indicated.

Mr SPENDER:
Warringah

.- I am not in favour of deferring the necessary amendment until next year, and I ask the Government to consider introducing it. when the bill is before the Senate. There are cases which, I am sure, the Government does not intend to bring within the scope of the bill, but which will be included unless a further amendment be made. These are cases in which the equitable title in a property has passed, but the matter was not ripe for lodgment on the prescribed date. It is not proper that such transactions should be taxed whilst others escape merely because the instrument happened to be lodged for registration at an earlier date.

Amendments agreed to.

Clause, as amended, agreed to.

Clause 13 agreed to.

Clause 14 - (1.) Notwithstanding anything contained in this act, gift duty shall not be payable in respect of -

  1. contributions by an employer to a fund established for the purpose of providing retiring allowances or pensions for his employees or any class or classes of his employees;
  2. payments made by an employer to an employee on the retirement of that employee from the service of the employer, or any gratuity or bonus paid by an employer to an employee, during the continuance of the employment, in recognition of special or faithful services rendered:

Provided that nothing in the foregoing provisions of this paragraph shall apply to exempt from gift duty any such payment, gratuity or bonus where the Commissioner is satisfied that the employee is connected by lies of blood or marriage -

  1. where the employer is a private company within the meaning of Division 7 of Part III. of the Income Tax Assessment Act 1930-1040 - with any director of the company ;
  2. where the employer is an unincorporated association or firm - with any member of that association or firm; or

  3. where the employer is an individual - with that individual;

    1. any gift for religious, scientific, or public educational purposes in Australia, or to a public hospital or public benevolent institution in Australia, or to a fund established and maintained for the purpose of providing money for use for such institutions or for the relief of persons in necessitous circumstances in Australia;
    2. any gift to the Commonwealth; or
    3. any gift to the State, when made for purposes of the defence of the Commonwealth ; (f) any gift to a public institution or public fund established and maintained for the comfort, recreation or welfare of members of the Defence Force;
    4. any gift made in accordance with t he terms of an agreement wherebya person carrying on a business hat undertaken to pay part of the pro ceeds of his business to the trustees of a fund out of which payments may be made by the trustees to persons carrying on a similar business who are on war service; or
    5. any gift concerning which the Commissioner is satisfied -
  4. that the gift, together with all other gifts made by the same donor to the same donee, whether at the same time or within thirty months previously (whether wholly or partly made before the commencement of this act or not) or thirty months subsequently does not exceed in the aggregate Twenty pounds in value and that the gift is made in good faith as part of the normal expenditure of the donor ; or
  5. that the gift is made for or towards the maintenance of the wife, husband or child of the donor or for or towards the education or apprenticeship of a child of the donor, and is not excessive in amount, having regard to the legal and moral obligations of the donor to afford the maintenance, education or apprenticeship. (2.) For the purpose of the last preceding sub-section, “public educational purposes” includes the establishment or endowment of an educational institution for the benefit of the public or a section of the public.
Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– I move -

That the clause be amended as follows: -

In sub-clause (1.) omit paragraphs (a), (b), (c), (d), (e)and(f), with a view to insert in lieu thereof the following paragraphs: - “ (a) contributions by an employer to a fund established for the purpose of providing retiring allowances or pensions for his employees, or any class or classes of his employees, or their dependants; “(b) payments made by an employer to an employee, or the dependants of an employee, in consequence of the retirement of that employee from the service of the employer or in consequence of his death, or any gratuity or bonus paid by an employer to an employee during the continuance of the employment if the Commissioner is satisfied that the gratuity or bonus is paidin recognition of special or faithful services rendered, or any salary, wages or allowances which the employer continues to pay during any period of illness or invalidity of the employee; “(c) any moneys paid by an employer to an employee who is a member of the DefenceForce or of the Naval, Military or Air Force of any other part of His Majesty’s dominions, for the purpose of augmenting the employee’s pay as a member of any of those forces; “ (d) any gift to an institution, organization or body of persons, whether corporate or unincorporate, not formed or carried on for the profit of any individuals; “ (e) any gift to the Commonwealth or a State ; “(f) any gift which is made in the course of carrying on a business, for the purpose, of obtaining any commercial benefit or by way of the writing off of a debt which is irrecoverable, by -

an incorporated company the shares or stock of which are or is quoted in the official list of any Stock Exchange:

an incorporated company the shares or stock of which are not or is not quoted in the official list of any Stock Exchange, if the Commissioner is satisfied that the donee is not a director of the company or is not connected by ties of blood or marriage with any directorof the company; or

a. firm or individual if the Commissioner is satisfied that the donee is not connected by ties of blood or marriage with any member of the firm or with the individual, as the case may be: “ (fa) any premiums, not exceeding One hundred poinds per annum, paid by a person on a policy effected by him on his own life and expressed to be for the benefit of his wife or any of his children;”.

In.sub-clause (1.), paragraph (g) . after the word “business”, wherever occurring, insert the words “trade or calling”.

In sub-clause (1.), paragraph (h) (i), omit the word “ thirty “, wherever occurring, with a view to insert in lieu thereof the word “eighteen”: and omit the word “twenty” with a view to insert in lieu thereof the word “ fifty”.

In sub-clause (1.), paragraph (h) (ii), omit the words “of the wife, husband or child of the donor or for or towards the education or apprenticeship of a child of. the donor “, with a view to insert in lieu thereof the words education or apprenticeship of any person Omit sub-clause (2.).

This clause provides for exemptions from duty. Sub-clausesa and b as amended exempt contributions by an employer to a fund to provide for retiring allowances for his employees or their dependants, and for bonuses to employees. They also provide for the exemption of pensions, bonuses or gratuities paid directly by the employer to the employee or his dependants upon his retirement, or in consequence of his death. Payments made on account of illness of the employee are also exempt. Bonuses or gratuities paid in recognition of special or faithful service, where the commissioner is satisfied that the payment is bona fide, are exempt.

The proviso in the bill excluding from exemption, pensions, gratuities and bonuses paid by an employer to an employee connected by ties of blood or marriage with the employer is being omitted. The question of whether the payment is bona fide has to be proved to the satisfaction of the commissioner, as I have already stated.

New sub-clause c provides for the exemption of payments in augmentation of the service pay of employees who have enlisted.

New sub-clause d extends the exemption for gifts for charitable purposes granted by the sub-clause as printed in the bill. That sub-clause did not provide for the exemption of gifts to many institutions such as the Australian Mothercraft Society, the Bluebird Free Kindergarten, the Children’s - Library Movement, the Country Women’s Association, the welfare clubs, the Hammond Pioneer Homes and the sporting clubs and associations. This has been done by providing for the exemption of all gifts to institutions and organizations not formed or carried on for the profit of any individuals.

New sub-clause e exempts gifts to the Commonwealth or a State. In the bill, the exemption of a gift to a State was limited to gifts for defence purposes. This limitation has now been removed. The special committee recommended that a provision should be inserted to place beyond doubt the exemption of bad debts, and also to exempt gifts made by companies, firms and individuals for business purposes. New sub-clause / gives effect to that recommend’ation.

The insertion of new sub-clause fa. which exempts premiums not exceeding £100 per annum paid by a person on a policy of insurance on bis own life for the benefit of his wife or children gives effect, to a recommendation made by the committee.

Paragraph g exempts such payments as those made to doctors who have enlisted for service, out. of a fund created by their colleagues for the purpose of augmenting their service pay. Thu amendment, ensures that the exemption will apply to such a. calling as the medical profession.

Paragraph h exempts small gifts up to an aggregate of £20 and also gifts made for or towards the maintenance or education of the wife, husband or child of the donor which is not excessive in amount.

The amendment to paragraph h (i), omitting “thirty” and inserting in lieu thereof “eighteen “ is consequential upon the adoption by the Government of the special committee’s recommendation to reduce the statutory period under the bill from five years to three years.

The other amendment no paragraph h (ii), to substitute “fifty” for “twenty”, gives effect to the decision to increase from £20 to £50 the aggregate of the. gifts which a donor may make to any one donee within the statutory period without making himself liable to gift, duty.

Paragraph h (ii), as printed in the bill, exempts gifts made by a donor towards the maintenance of the wife, husband or child of the donor or towards the education of the child of the donor. The amendment enlarges the provision by exempting such gifts to any person where the Commissioner is satisfied that the payment is bona fide and is not excessive in amount having regard to the donor’s legal and moral obligation to afford such maintenance or education.

The omission of this sub-clause 2 is consequent upon the enlargement of tin”-‘ exemption of charitable gifts by the introduction of new sub-clause 1 (h The claude is not now necessary.

Mr. SPOONER (Robertson) [4.3 J.All of these amendments are in accordance with the decisions of the special committee which, after examining the bill, submitted certain recommendations to the Government. .1 propose to make a few observations upon them, because the clause is of the utmost importance in the administration of tlie measure. The scope of this clause, which deals with the exemptions from the payment of gift duty, will be enlarged by the amendments, and I do not desire to repeat any of the observations by the Minister assisting the Treasurer (Mr. Lazzarini) upon their effect. However, 1 desire to express my appreciation of the proposed new paragraph d, which relates to the exemption of any gift to an institution, organization, or body of persons, whether corporate or un incorporate, not formed or carried on for the profit of any individuals. In my opinion, the Government has adopted a correct principle. Many educational, philanthropic and other organizations are working for the public good, and nobody makes any profit out of their activities. They depend, to a large degree, upon tinamount of voluntary financial assistance that they receive from people who, believing in their aims and objects, make contributions to them. Some of the organizations function in regard to country activities; some assist to educate the youthful mind ; and others work voluntarily among the sick and the poor. They would indeed be placed under a severe disadvantage if the imposition of a gift tax discouraged former donors. The amendment which the Minister submitted makes it clear that henceforth a person may, without risk of tux, continue to give to organizations of this description the assistance that he formerly rendered to them

T welcome the amendments that the Minister moved for the purpose of clarifying the position in commercial practiceregarding the writing off of bad debts. Honorable members will notice that in doing so, the Government has been careful to leave no loophole that would enable members of a private company to write off debts which relatives by blood or marriage owed to them.

Another amendment provides the opportunity for a nian, if he desires to make the reasonable and proper provision that he should for his wife to assure his life, pay the premiums, and direct, that the policy be payable on his death to his wife; or, indeed, he may take out the policy on his life in the name of his wife. To a limit of £100 per annum, that will not he regarded as a gift to the wife.

One of the amendments which the Opposition will accept, but concerning which I express a certain amount of regret, is the new provision relating to the aggregation period. In the original measure, the aggregation period was five years. I understand that in Queensland it is two years. I have heard the case upon which the Government, has been advised to extend the period, and I know that it is a substantial one. The contentions which have been put forward in favour of expanding the aggregation period, are founded upon good information. But I am afraid that the aggregation period of three years will bring a good deal of administrative trouble. 1 can only express regret that the period should be so long. My own opinion is that twelve months would have been an improvement, if the Government had been able, by some other means, to tighten up those anomalies which necessitate the introduction of a three-year period. The Government will improve the measure considerably in future if, by the consideration of other means of tieing up those returns, it, is able to reduce the aggregation period to twelve months, on the basis of six months before each gift, and six months after it. The three-year period was approved by the committee, because there appeared to be no alternative in the light of known circumstances. I hope that the administration of the measure in future will make itpossible for the Government to find a means of overcoming this difficulty.

Mr CALWELL:
Melbourne

.- I ask the Minister assisting the Treasurer (Mr. Lazzarini) to explain the amendment relating to His Majesty’s Armed Forces. Does it. mean the Australian Military Forces, and the Australian imperial Force, or only the Australian Imperial Force? Does it comprehend all of the forces which are being, or which may be, raised for the defence of Australia as well as those forces designed for participation in the Avar overseas.

Mr Chifley:

– It applies to all of them.

Mr CALWELL:

– I am grateful to have that, assurance on record, because a number of governmental and semigovernmental instrumentalities are making up the difference between the service pay and civil pay of their employees who have enlisted. Those bodies should be protected, in view of the fact that the Government is granting protection to sporting clubs and associations.

L notice that the Country Women’s Association is instanced as a charitable or philanthropic organization. I assume that that body is distinct from any Country Women’s Party Association, and that it, comprises ladies who, in the country districts, perform useful public service. Honorable members on this side of the chamber desire an assurance from the Minister that the activities of these bodies are non-political and that they do not adopt a partisan attitude upon matters of public moment. If it were possible, under cover of this provision, for a country women’s party association to obtain exemption in respect of gifts, the Government, would miss a considerable amount of revenue. As you, Mr. Chairman, aru aware, the Country party is now owned and controlled by the big grazing organizations of Australia.

The CHAIRMAN (Mr Prowse:
FORREST, WESTERN AUSTRALIA

– Order! This clause contains no reference to the Country party.

Mr CALWELL:

– I referred to the graziers who own the Country party and who, by making those gifts to it, may escape their taxation obligations to the Commonwealth. For once, 1 join with the honorable member for Barker (Mr. Archie Cameron), who declared that the exemption which has been granted to sporting clubs and associations is a farcical provision in a measure the express purpose of which is to raise additional revenue in order to supplement war finance. I see no reason in the world to justify that exemption.

Mr MORGAN:
Reid

.- The effect of the exemptions will be to divert considerable wealth which is now in the hands of well-to-do persons to useful channels such as educational and. philanthropic purposes. For that reason, the special committee which examined the bill has performed excellent work. Whilst the purpose of the bill is to increase revenue for war expenditure, that object, in my opinion, will not be realized to any great degree. The outcome will be a reduction of gifts in order to evade this tax. The Government has erred in deciding to wait before collecting the tax until wealthy people either give away portions of their property or die. The only way in which to extract money from rich accumulators is to impose a capital levy, or a graduated tax on wealth. Before the war concludes, the Treasurer (Mr. Chifley) may have to adopt this suggestion.

Mr JOLLY:
Lilley

.- I desire the Minister assisting the Treasurer (Mr. Lazzarini) to enlighten me upon the effect of the proposed new paragraph d which reads -

Any gift to an institution, organization or hotly of persons, whether corporate or unincorporate, not formed or carried on for the profit of any individuals.

Bodies such as the Young Men’s Christian Association, the Young Women’s Christian Association and the Salvation Army conduct a certain amount of trading business which is not carried on for the profit of any individual. They should be granted exemption. But the extension of the privilege to sporting clubs and associations is unjustified.

Mr Lazzarini:

– Only a few small country clubs are affected.

Amendments agreed to.

Clause, as amended, agreed to.

Clause 15 -

Where a gift of property is liable to gift duty and that property is also included as a gift inter vivos . . .

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– I move -

That the words “as a gift inter vivos” be omitted.

This clause provides for a rebate of gift duty where the gift also becomes liable to estate duty by reason of the section in theEstate Duty Assessment Act which provides for the inclusion in the estate of a deceased person of all gifts inter vivos made within the twelve months preceding the death of the deceased. However, property which has been the subject of gift duty may be included in the estate of a deceased person for other reasons than that it has been also the subject of a gift inter vivos. The amendment will ensure that the rebate shall be granted in such cases as well as in those cases in which the property was the subject of a gift intervivos. The amount of the rebate will equal the amount of the gift duty or the amount of the estate duty attributable to the property comprised in the gift, whichever is the lesser.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 16 (No deduction from gift in respect of benefit to donor).

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– I move -

That the following sub-clause be added to the clause: - “ (2.) Notwithstanding anything contained in the last preceding sub-section, where the disponor’s interest is by way of mortgage or charge and the mortgage or charge is wholly or partly satisfied by payment within five years of the making of the disposition, the Commissioner shall treat that payment as part of the consideration for the disposition and shall re-assess the gift duty payable and make any refund which is necessary in consequence of the re-assessment.”.

Clause 16 provides that where, in any disposition of property by any person connected with him. by ties of blood or marriage and the disponor retains any interest in that property or acquires any interest in. any other property by way of mortgage, annuity, contract for the benefit of the disponor, power of revocation or other disposition or other similar interest, no deduction shall be made therefor in determining whether the disposition is a gift or in computing the value of such gift. Frequently, the head of a family will distribute real property owned by him amongst the members of the family for consideration which purports to be fully adequate but which is paid in the form of merely nominal deposits, and the balance is secured by mortgage to the head of the family on such terms and conditions as leave the recipients of the property without any real obligations to their father and which involve no intention of the money secured by the mortgage ever having to be. paid. The transactions, in fact, represent absolute gifts, camouflaged by colourable arrangements which it is never intended shall be fulfilled. But for the provisions of section 16, these gifts would entirely escape the provisions of the bill.

Although the clause is designed to cover colourable transactions it will also, in the form in which it is printed, render liable genuine transactions, as it is impossible to distinguish between the colourable and the genuine. The purpose of the amendment is to afford relief to these genuine transactions by inserting in the bill a provision that where the disponee pays any amounts to the dis.ponor in reduction of the mortgage within five years of the disposition such amounts will be taken into account by the commissioner who will re-assess the duty and refund the amount of duty applicable to such payment.

Mr SPOONER:
Robertson

.- I support the amendment. This clause is evidence of the difficulties that are brought upon the community by comparatively few people who seek loopholes by which they may evade the spirit of the law of the country.

Mr Calwell:

– There are many of them.

Mr SPOONER:

– I do not know that there are many of them. I shall go so far as to say that there may be more than there should be. I realize, from what the Minister assisting the Treasurer (Mr. Lazzarini) has told us about the administration of similar legislation elsewhere, that it is necessary that there should be some means of preventing a man from selling property to a relative and taking as security, which will in clue course be repaid, moneys given by the mortgagee to the mortgagor. The amendment provides that, if within five years, the mortgage, or a portion of the mortgage, is repaid, the donor, who becomes the mortgagee under the transaction, will receive a refund of a part or the whole of the gift duty which he originally paid. But. in regard to transactions which are perfectly bona fide - and I venture to think that there are great numbers of them - in which a nian does in truth actually sell the property to the relative and receives a mortgage for the unpaid purchase money, and where there is no attempt at evasion, it is unfortunate that he should be penalized because of the misdeeds of other people who are not so honorable. However, that is the position. Because there are a few people who break the spirit of the law and enter into arrangements calculated to defeat the ends of justice in the collection of duty, these “ blanket “ provisions are necessary to cover alike the just and the unjust.

Amendment agreed to.

Clause, as amended., agreed to.

Clause 17 agreed to.

Clause 18-

For the purpose of computing the value of a gift -

the Commissioner may, in his discretion, adopt as the value of any shares of stock in any company comprised in a gift such sum as the holder thereof would receive in the event of the company being voluntarily wound up on the date when the gift was made.

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– I move -

That paragraph (d) be omitted with a view to insert in lieu thereof the following paragraph: ” (d) where a gift includes any shares or stock in any company the shares or stock of which arc not or is not quoted in the official list of any stock exchange, the Commissioner may, in his discretion, adopt as the value of any such shares or stock such sun as the holder thereof would receive in the event of the company being voluntarily wound up on the date when the gift was made.”.

The purpose of the amendment is to confine to private companies the power given to the Commissioner of Taxation in this matter. In the case of public companies the shares of which are quoted on the stock exchange the value is already ascertainable from such a source, and there is no better criterion of the value of such shares than the price at which they change hands on a stock exchange.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 19 - (1.) Any person who makes, and any person wlm receives, any gift the value of which, together with the value of all other gifts made by the samedonor to the same or any other donee whether at the same time or within the immediately preceding thirty months . . .

Amendment (by Mr. Lazzarini) agreed to-

That, in sub-clause (1.), the word “thirty” be omitted with a view to insert in lieu thereof the word “eighteen”.

Amendment (by Mr. Lazzarini) proposed -

That the following sub-clause be added to the clause - “ (4.) For the purposes of this section, gift’ shall not include any gift in respect of which gift duty is declared by section fourteen of this act not to be payable.”

Mr SPOONER:
Robertson

.- I support the amendment. There will be no onus on members of the public to make a return in respect of gifts which come within the ambit of clause 14 and are thus not taxable. The public will be relieved to know that, because it appeared at one stage possible that whether a gift was taxable or not, returns would have to be made.

Amendment agreed to.

Clause, as amended, agreedto.

Clauses 20 to 24 agreed to.

Clause 25- (3.) Gift duty shall also constitute a first charge on all property (other than money or negotiable instruments) comprised in the gift.

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– I move -

That, in sub-clause (3.), after the word “ gift,” second-occurring, the following words be inserted : - “, but any such charge shall not affect the title of a bona fide purchaser for value without notice of the charge”.

The sub-clause as contained in the bill provides that gift duty shall constitute a first charge on all property, other than money or negotiable instruments, comprised in the gift, but it is considered that such charge should not extend to and affect the title of a bona fide purchaser for value without notice of the charge, and the amendment achieves this object.

Mr SPOONER:
Robertson

.- This bill introduces a principle which could be dangerous and unfair, unless its provisions were administered with great care. If a donor makes a gift to a donee, both the donor and the donee are liable to make a return, and are jointly and severally liable to pay duty. The donor is primarily liable and I suppose that in actual practice and experience,the donor in 99 cases out of 100 will pay the duty and that will he the end of it. Where he does not do so, either deliberately or inadvertently, the donee will be liable to pay the duty. As the Minister has said, the liability for the duty becomes the first charge on the subject of the gift, unless it be money or a negotiable instrument. The public must be made aware of that. A man could quite innocently be holding an asset which is surcharged with gift duty and not be aware that it carries this automatic charge. The Government has agreed, and the Minister has moved an amendment, to minimize that provision in an important respect. Where this asset, whatever it may be, has passed into the hands of a third person who has acquired it, without notice of the fact that there is a charge attaching to it, he is not liable for the duty. I think that that is the fairest way in which this provision can be administered. If a person buys something without means of knowing that there is a surcharge upon it, surely he should not be liable for the payment of duty. The amendment will give substantial relief from harsh operation of the law.

Amendment agreed to.

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– I move -

That the following sub-clause be added to the clause: - “ (7.) ‘Where the donee is a trustee he shall notbe personally liable for the payment of any gift duty in respect of any trust property unless the Commissioner, ‘by notice in writing, advises him that gift duty is due and payable in respect of that trust property, and then only to the extent of the value of so much of that trust property as is heldby him on the date upon which the notice is served upon him.”.

The purpose of this amendment is to limit the personal liability of a trustee to the value of the trust property held by him on the date upon which he receives notice of his liability under the bill.

Amendment agreed to.

Clauses, as amended, agreed to.

Clauses 26 to 30 agreed to.

Clause 31 - (4.) If the objector is dissatisfied with the decision of the Commissioner he may, within thirty days after the service by post of notice of that decision -

  1. in writing, request the Commissioner to refer so much of the decision as relates to the value assigned to any real property included in the gift to a valuation board for review of that value; or

Amendment (by Mr. Lazzarini) agreed to -

That paragraph («) be omitted with a view to insert in lieu thereof the following paragraph : - ” (a) in writing, request the Commissioner -

to refer so much of the decision as relates to the value assigned to any property included in the gift to a valuation board for review of that value; or

to refer so much of the decision as does not relate to the value assigned to any property included in the gift to a board of review for a review of that decision; or”.

Clause, as amended, agreed to.

Clause 32- (1.) Where the objector has, in accordance with the last preceding section, requested the Commissioner to refer a decision to a Valuation Board, the Commissioner shall, if the objector’s request is accompanied by a deposit: of One pound, refer the decision to the Board not later than sixty days after the receipt of the request. (2.) The objector shall be limited on the review to the grounds which he has stated in his objection as being those upon which he objects to the value assigned to the real property. (3.) If the value assigned to the real property included in the assessment has been reduced by the Commissioner after considering the objection, the reduced value shall be the value dealt with by the Board under the next succeeding sub-section. (4.) Subject to the next succeeding subsection, the Board shall give a decision and may either confirm the value assigned to the real property in the assessment or reduce or increase that value. (5.) In default of the appearance of the objector before the Board for the purpose of the review, the Board shall confirm the value assigned to the real property in the assessment:

Provided that upon good cause shown, the Board may, within the prescribed time, re-open the matter and review the value assigned to the real property in the assessment. (0.) The objector may, within thirty days after the Board’s decision, request the Commissioner, in writing, to treat his objection, so far as it relates to grounds not dealt with by the Board, as an appeal and forward it to the High Court or the Supreme Court of a State or Territory of the Commonwealth. (7.) The Commissioner or the objector may. within thirty days after the date of the board’s decision, appeal to the High Court from any decision of the Board in this connexion, which, in the opinion of the High Court, involves a question of law, and the Board shall refer to the High Court any question of law arising before the board, and the decision of the High Court shall be final and conclusive.

Amendments (by Mr. Lazzarini) agreed to -

That before the word “Board” (wherever occurring) and before the word “Board’s” (wherever occurring) the word “Valuation” be inserted.

That the word “real” (wherever occurring) be omitted.

That sub-clause (6. ) be omitted with a view to insert in lieu thereof the following subclause: - “ (6.) The objector may, within thirty days after the Valuation Board’s decision, request the Commissioner, in writing, to refer his objection, so far as it relates to grounds not dealt with by the Valuation Board, to a Board of Review or to the High Court or the Supreme Court of a State or Territory of the Common weal th . “.

Clause, as amended, agreed to.

Clause 33- (1.) Where an objector has, in accordance with sub-section (4.) of section thirty-one of this act or sub-section (6.) of the last preceding section, requested the Commissioner to treat his objection as an appeal and to forward it to the High Court or a Supreme Court, the Commissioner shall forward it accordingly.

Amendment (by Mr. Lazzarini) agreed to -

That, in sub-section (1.), the words “subsection (4.) of section thirty-one of this act or sub-section (6.) of the last preceding section “ beomitted with a. view to insert in lieu thereofthe words “ the provisions of this Part “.

Clause, as amended, agreed to.

Clauses 34. to 44 agreed to.

New clause 32a.

Motion (by Mr. Lazzarini) proposed -

That after clause 32 the following new clause be inserted: - “32a. - (1.) Where the objector has, in accordance with section thirty-one of this Act, requested the Commissioner to refer a decision to a Board of Review, the Commissioner shall, if the objector’s request is accompanied by a deposit of One pound, refer the decision to a Board of Review not later than sixty days after the receipt of therequest. “ (2.) The objector shall ho limited on the review to the grounds which he has stated in his objection. “ (3.) If the assessment has been reduced by the Commissioner after considering the objection, the reduced assessment shall be the assessment dealt with by the Board of Review under the next succeeding sub-section. “ (4.) Subject to the next succeeding subsection, the Board of Review shall give a decision and mayeither confirm, reduce, increase or vary the assessment. “ (5. ) In default of the appearance of the objector before the Board of Review, for the purpose of review, the Board of Review shall confirm the assessment:

Provided that upon good cause shown, the Board of Review may, within the prescribed time, re-open the matter and review the assessment. (6.) For the purposes of reviewing the assessment, a Board of Review shall have all the powers and functions of the Commissioner in making assessments, determinations and decisions under this Act, and such assessments, determinations and decisions of a’ Board of Review and its decisions upon review, shall for all purposes (except for the purpose of objections thereto and review thereof and appeals therefrom) be deemed to be assessments, determinations or decisions of the Commissioner:

Provided that a Board of Review shall not reduce or increase any value assigned in the assessment to any property, but shall accept as final the value assigned to the property by the Commissioner, or, where the value has been reduced or increased by a Valuation Board, by the Valuation Board. “ (7.) The objector may, within thirty days after the decision of the Board of Review, request the Commissioner, in writing, to refer his objection, so far as it relates to the value assigned to any property in the assessment, to a Valuation Board. “ (8.) Where a Board of Review has reviewed any assessment and given any decision thereon and the value assigned to any property in that assessment is subsequently reduced or increased by a Valuation Board, the Commissioner shall vary the assessment to giveeffect to the decision of the Valuation Board. “ (9. ) The Commissioner or the objector may, within thirty days after the decision of a Board of Review, appeal to the High Court from any decision of the Board of Review in this connexion which, in the opinion of the High Court, involves a question of law, and the Board shall refer to the High Court any question of law arising before the Board of Review, and the decision of the High Court shall be final and conclusive.”.

Mr SPOONER:
Robertson

).- Proposed new clause 32a provides machinery for reference to the Board of Review. The Government has acted wisely in providing that persons subject to gift tax shall have the right of appeal to the Board of Review, and, on questions of law, to a Supreme Court. This principle is recognized in income tax law because, under this involved legislation, the Taxation Commissioner must be given wide discretionary powers in regard to many matters. The Commissioner does not desire, and should not be required, to accept full responsibility, and the Government has recognized this by providing that taxpayers shall have the right of appeal. The bill also provides, in another clause, that the taxpayer shall have the right of appeal to the Land Valuation Board in respect of the valuation of real and personal property.

Question resolved in the affirmative.

New clauses 38a and 38b.

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

. -I move -

That, after clause 38 the following new clauses be inserted: - “ 38a. The provisions of section fifty-two a of the Commonwealth Inscribed Stock Act 1911-1040 shall not apply to exempt from gift duty assessed under this Act the disposition of any property to which that section applies. “ 38b. Where any disposition of property is subject to gift duty under this Act and also under the law of any country outside Australia, and the Commissioner is satisfied that the law of that country makes provision for the rebate of gift duty similar to the provision contained in this section, the Commissioner may allow a rebate of the gift duty payable under this Act of an amount equal to one-half of the gift duty payable under this Act or under the law of that country, whichever is the lesser amount.”.

The first of these new clauses will ensure that the provisions of section 52a of the InscribedStock Act will not exempt gifts of Commonwealth inscribed stock from gift duty. The second new clause provides for a rebate of duty in the event of double gift duty being imposed by reason of one gift being liable to duty both in Australia and in another country. The provision will not be effective unless the country outside of Australia has a similar provision in its legislation.

Mr SPOONER:
Robertson

– I support these amendments. The Government satisfied the special committee that gifts of inscribed stock should not be exempted from gift duty. In Queensland, people have on occasions taken advantage of the provisions of the Inscribed Stock Act in order to convert money into inscribed stock, and make gifts of stock in order to escape gift duty imposed in that State. This practice is contrary to the policy of such, legislation, and the Government is wise in: ensuring that it shall not occur in regard to this Commonwealthwide legislation.

Mr Jolly:

– The High Court did not say that the practice was wrong.

Mr SPOONER:

– But it was not definite on the point. There is sufficient room for doubt to justify the inclusion of this provision in the bill. In new clause 38b the Government has conceded the principle that there should not be double taxation in instances where legislation similar to this operates in other countries. The only other country in which such legislation operates, to my knowledge is New Zealand and the Treasurer informed the special committee that he would discuss the matter with the New Zealand Government with the intention of securing, if possible, the passage of reciprocal legislation so that a person making, in Australia, a gift of assets in New Zealand, will not be subject to duty both in Australia and in New Zealand, and vice versa. If the Treasurer can arrange for the New Zealand Government to insert, in its legislation, a clause similar to this new clause, one-half of the duty will be paid to each Government in respect of all transactions, whether the donor is domiciled in this country or in New Zealand.

Mr JOLLY:
Lilley

.- New clause 38b proposes to grant a rebate in the event of gift duty being imposed, in respect of one transaction, both in Australia and in another country. But what will be the position of people within. Australia who will be subject to Commonwealth gift duty and State gift duty? Queensland is the only State which imposes a gift tax. Persons who become subject to the Queensland tax. as well as the Commonwealth duty, should receive the same consideration as those who become liable to Commonwealth gift duty and the duty imposed by another country.

Mr.Chifley. - The tax will be at the very modest rate of 3 per cent.

Mr JOLLY:

– That may be so, but this is another example of double taxation.

Mr.Chifley. - It is not more unfair than the levying of Commonwealth incometax and Stale income tax on one person.

Mr JOLLY:

– But this duty introduces a new principle so far as this Parliament is concerned.

Mr Conelan:

– Does the honorable member stand for the interests of the Commonwealth or the State?

Mr JOLLY:

– I stand for the fair treatment of all taxpayers. Some consideration should be given to residents of Queensland who will be subject to double taxation under this measure.

Question resolved in the affirmative.

Title agreed to.

Bill reported with amendments; report - byleave - adopted.

Bill - by leave - read a third time.

page 915

GIFT DUTY BILL 1941

In Committee of Ways and Means: Consideration resumed from the 29th October (vide page 40), on motion by Mr. Chifley -

That gift duty he levied and paid in respect of every gift made ….

That, for the purposes of this resolution - “ value of all gifts “ means the sum of the value of the gifts in question and the value of all other gifts made, whether at the same time or within thirty months previously (whether wholly or partly before the commencement of this Act or not) or thirty months subsequently, by the same donor to the same or any other donee (vide pages 30-40).

Amendment (by Mr. Lazzarini) agreed to -

That, in paragraph 3, the word “thirty”, wherever occurring, be omitted with a view to insert in lieu thereof the word “eighteen “.

Motion, as amended, agreed to.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Lazzarini and Mr. Chifley do prepare and bring in a. bill to carry out the foregoing resolution.

Bill brought up by Mr. Lazzarini, and passed through all stages without amendment, or debate.

page 915

LAND TAX BILL 1941

In Committee of Ways and Means: Consideration resumed from the 29th October (vide page 38), on motion by Mr. Chifley -

That, in addition to the land tax payable under the Land Tax Act1910-1940 . . (vide page 37).

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr.Lazzarini and Mr. Chifley do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up byMr. Lazzarini, and road a first time.

Motion (by Mr. Lazzarini) proposedThat the bill be now read a second time.

Mr HOLT:
Fawkner

.- The purpose of this bill is to impose a super tax of 20 per cent, on the present rates of land tax on estates with an unimproved capital value of more than £20,000. Our land tax legislation has had a fluctuating history. The tax was first introduced in 1910 by the Fisher Government for the avowed purpose of breaking up large estates. Since that time it has become an admittedly revenue-producing measure. The basic rates were fixed in 1914, and they remained in force until 1918-19, when a super tax of 20 per cent, was imposed on the then existing rates. The su per tax was removed by the Bruce-Page Government in . 1922-23. “Between 1927-28 and 1940-41 substantial reductions of the tax were effected from time to time. In 1940-41, owing to the exigencies of the war and to the need to raise additional money, the then Treasurer (Mr. Spender) introduced a. measure which doubled the rates then in force. This had the effect of restoring the tax to the rates applicable in 1914-15. An impression may have got abroad that the rates now proposed are considerably in advance of any land tax operating in the past, but this is not the case. I may compare the fluctuation? in the landtax to the letter “ N “. Taking the beginning of the letter as the starting point, there followed a. steep increase of rates, then came a substantial reduction, and later again came further heavy increases. The latest increases have been made owing to the pressure of war needs. Even with the proposed super tax of 20 per cent, the rates will be lower than those operating between 1918-19 and 1922-23.

The Opposition recognizes the urgency of the Government’s need to raise additional money for war purposes, and it. therefore will offer no objection to the passage of the bill. I desire, however, to make some general observations on the measure. Taxing bills already passed by the House since the introduction of the budget have been regarded by members of the Opposition as applying emergency rates due to war conditions. I emphasize that the Opposition regards the rates of land tax now proposed as falling definitely within the class of emergency taxation, and it considers that these rates should be reviewed as early as practicable after the emergency conditions have passed. There are some serious objections to the principle of land taxation, which have been recognized since this form of tax was first imposed in 1910. We consider, in the first place, that, in effect, the land tax is a capital levy which discriminates arbitrarily and unjustly between different sections of the community. The land tax is, in effect, a tax on one form of property, and is. not imposed upon other forms of property. Further, when profits obtained from the land are subject to this tax as well as to other taxes the land tax becomes a double tax. This measure pays no regard to the ordinary and generally accepted principle of ability to pay. When the land is mortgaged and the business arising from it is carried on at a loss the effect of the tax is particularly harsh. Unfortunately, the burden of the tax does not always rest upon the owner of the land. In respect of big city properties the burden is frequently carried by tenants in a small way of business who are called upon to pay higher rents in order to enable the landlord to meet, the land tax.

Both the increase of the land tax imposed in 1940-41, and the super tax now proposed are regarded by the Opposition as emergency measures which should be reviewed at the earliest possible moment. I shall therefore welcome an assurance from the Government that it, too, regards these taxes in that light, and therefore subject to review when the present emergency ends. However, in the meantime, we recognize the need of the Government to obtain additional revenue lor war purposes, and as it is estimated that £500,000 will lie received from this tax in a full financial year, the Opposition will not oppose the bill.

Mr FALSTEIN:
Watson

.- It is not strange that this bill to impose a super tax of 20 per cent, on property of an unimproved capital value in excess of £20,000 should be opposed by honorable gentlemen opposite who represent conservative interests.

Mr Holt:

– Who is opposing the bill?

Mr FALSTEIN:

– The honorable member for Fawkner said definitely that he regarded this as an emergency measure which should be repealed immediately our prevailing economic stress passes. I feel justified on that ground-in saying that the honorable gentleman is opposed to the principle of the land tax.

Mr Clark:

– The honorable member’s whole speech was against such a tax.

Mr FALSTEIN:

– That is so. He pointed to what he considered were certain economic disadvantages of this form df taxation. [ remind him and other honorable gentlemen opposite that the tax does not operate except in relation to properties of an unimproved capital value in excess of £20,000. It is probable, therefore, that properties of an improved capital value of £S0,000 or even £100,000 may not be liable to this super land tax. I hold an entirely different opinion from that of the honorable member for Fawkner in regard to this tax. I consider that it is a tax obtained from income resulting from the unearned increment in the value of land. I do not regard it, as a capital tax. The rax is imposed on income derived from properties owned by individuals and companies many of which have done nothing whatever to give to them their enhanced value. We are well aware that many hig banking and financial companies hold properties which have steadily increased in value, over the years, although the owners of them have dom nothing to bring about that result. There fare, I consider that the land tax is a proper impost, which should not be regarded by the honorable, member for Fawkner mid his colleagues as a capital levy. I commend the bill to the House. I am sorry that a higher rate of tax has not been proposed.

Mr HUTCHINSON:
Deakin

.- 1 find it very difficult to work up enthusiasm for this particular tax, whether as an emergency measure or otherwise. As the honorable member for Fawkner (Mr. Holt) has said, it was introduced many years ago in order to effect the subdivision of many of the larger properties in Australia. Throughout its history, it has not succeeded in doing that, but has been maintained purely for the raising of revenue. If it ever had any value in compelling the subdivision of estates, an increase for that purpose to-day would prove disastrous to this country, because the problem at present is not to find land for those who wish to cultivate it but to prevent: those who are on the land from leaving their holdings; consequently, anything which may tend to accelerate the drift from the country to the city should not be encouraged. The Government expects to obtain from this tax additional revenue amounting to . approximately £459,000. That is not, a very great amount. Although the income tax is not. to be raised in respect of many persons who are earning reasonably high incomes, the Government proposes to increase the land tax, which is directly a capital tax.

Mr Holt:

– Irrespective of whether a profit is earned or not.

Mr HUTCHINSON:

– Irrespective of whether any profit is made. We have the peculiar situation that persons with incomes ranging between £500 and £1,500 a year are to be exempt from additional tax, yet the tax of others is to be raised, whether income is earned by them or not. Very little additional tax would need to be imposed on persons receiving between £500 and £1,500 a year in order to raise an extra £459,000. The largest part of the land tax is collected in respect of city properties. Much of the tax is passed on in the charges that, are made for goods and services. Where prices are not controlled and rents are not pegged, the tendency will be still further to increase costs in those directions. An investor in city property will either have 10 apply to tlie rent-fixing authority for permission to increase his rents, or be unable to recoup himself.

I am mainly concerned at the probable effect on primary industries. The land tax is levied, in respect of country properties, almost solely on the wool industry, which is of first-rate national importance. Since the outbreak of the war, an average price of 13-M. per lb. has been received for our wool. In 1932, the Government of the day ordered the very closest investigation to be made of the cost of producing wool in Australia. The findings of the investigating body disclosed that, allowing for a reasonable return on capital invested, the cost was I4d. per lb. As costs are greater to-day, with wool at 13$d. per lb. the industry is not in a flourishing condition. In certain favoured localities, in which rainfall is fairly assured, or where dairying or fat lamb raising is carried on in conjunction with wool-growing, the position of the producer is somewhat better. Costs to-day are tending ever upwards. For example, the cost of shearing sheep by contract has increased bv approximately Ss. 4d. a hundred during the last twelve months, and undoubtedly will go still higher. All other wage costs have the same tendency. Unless arrangements can be made with Great Britain, the price of wool will remain constant. Therefore, this tax should not be levied on certain properties, even for emergency purposes, particularly as much better means could be adopted in order to obtain the amount required. The land tax is graduated. In 1932, the committee found that on some properties, owing to graduation, the tax amounted to no less than 2s. 6d. per sheep per annum. This large tax is paid mainly by the great stud properties of Australia, which have built up the standard of Australian wool to the highest point it has ever reached, and thus have undoubtedly assisted to establish the splendid standard of living which . is enjoyed in Australia to-day. The position, is well exemplified by one of the leading studs of Australia, which will be iu a much worse position when the additional tax is levied. Over a tenyear period, the income of this company has shrunk by £50,000, and it has suffered accumulated losses amounting to £17,000; yet it has paid in land tax no less than £80,000! It is no good saying that the property could be sub-divided, because there are no people waiting to take up land at this time. It is most difficult for production to be maintained even in existing circumstances, but the position will be made definitely worse for our leading studs when the increase is applied.. I fail to understand why, in such circumstances, any honorable member should regard as acceptable this means of raising money. The Government could quite easily exploit a more legitimate field. I hope that what I have said is sufficient to make honorable members realize that an additional burden is to be imposed on an industry which is- the mainstay “of Australia’s economy, and that consequently tlie right way to raise the revenue is not being adopted. The report published in 1932 estimated that 45,000,000 of the 108,000,000 sheep in Australia’ were grazed on properties on which land tax was paid; therefore, a great bulk of the wool production comes from laud which pays the tax. A levy which is imposed without any regard to income earned is based unsoundly and should, not in any circumstances be tolerated. With rising costs and a set price for its product, the wool industry will shortly have to be seriously considered by this Parliament. Unless a higher price can be obtained, for this, our greatest product, considerable damage may be done to the entire Australian economy. There is another line of government action which runs somewhat parallel to this. From time to time, the Taxation Department reviews the valuations of country properties, and in most instances the valuations are subsequently raised. I do not pay land tax, therefore I have no axe to grind ; but many taxpayers will have to pay the higher rate o” increased valuations, despite the fact that their incomes are fixed and their other costs are rising. The Government might very well withdraw the bill, and adopt other means to raise the additional amount required. I suggest that it do so.

Mr MORGAN:
Reid

.- By no stretch of the imagination can this tax be described, as it has been by the honorable member for Fawkner (Mr. Holt), as a capital levy. The rate of tax is altogether too small foi’ that. However, it is a step in the right direction. If anything, the Treasurer (Mr. Chifley) has been too generous in framing this measure. He could have been a lot harder. The tax is, as the bill specifies, a super tax at the rate of “ 20 per centum of the amount of land tax payable under the preceding provisions of this act in respect of that land; or 1 per centum of the amount of the excess of the taxable value of the land over £20,000, whichever is the lesser amount “. This bill will not raise a very great sum of money. Even taxpayers whose land is valued at £50,000 or £.100,000 will contribute only a few hundreds of pounds. I agree with the honorable member for Fawkner that the provisions of this measure should bc reviewed at a later stage, but in my opinion the review should be with the idea of increasing the rate of tax and reducing the exemption. In the present circumstances, an exemption of £20,000 is far too generous. The amount of additional tax will be very small indeed, and I suggest that a reduction of the exemption to £10,000 would be reasonable. That might have the effect of skimming some fat, off wealthy land accumulators who have built up huge reserves in good times. The real effects of this measure will be felt in the post-war period, when, undoubtedly, there will be a loosening of large holdings. On the journey from Canberra to Sydney one passes through what may be described as one of the most land-locked areas in the Commonwealth, namely, the Bungendore district, where the Falkiners and other wealthy landowners hold thousands and thousands of acres of land which is in a comparatively unproductive state. Those people have been treated generously in the past, and now that, our soldiers, sailors and airmen are fighting overseas and possibly sacrificing everything in order to win this war, it is little enough to ask the wealthy landholders to contribute substantially to war funds. After all, such contributions are in the nature of insurance premiums on their properties. I hope also that the bill will be extended not only to land property but also to other property. According to a newspaper report, Sir Joynton Smith recently sold his Imperial Arcade property in Sydney for between £500,000 and £600,000. Apparently he is “ getting out from under “. A capital tax should be imposed to catch these people. I hope that the Treasurer will consider extending the provisions of this bill at a later stage.

Mr DUNCAN-HUGHES:
Wakefield

– The honorable member for Reid (Mr. Morgan) apparently disagrees with the honorable member for Watson (Mr. Falstein), because he refers to this tax as being a capital tax, whereas the honorable member for Watson said that it was not.

Mr Morgan:

– It is not a proper capital tax. I suggest that the rate should be increased in order to make it a real capital tax. It is a step in the right direction.

Mr DUNCAN-HUGHES:

– It cannot be denied that this is a capital tax. It must be paid regardless of whether or not the taxpayer makes a profit from his land. I listened with appreciation to what the honorable member for Deakin (Mr. Hutchinson) said, and he accurately described the position of the man on the land. I repeat that this tax has to be paid regardless of whether or not income is received from the land. A farmer is still liable under this measure even although he makes no profit he has to pay federal land tax, state land tax, district rates, Federal and State income tax, and other dues. For that reason this tax is a bad one. I realize, of course, that we are at war and that it is up to everybody to make the best possible effort. We all have a stake in this land, and I should not cavil even at an unjust tax so long as everybody had to pay a share of it. But this tax will affect only the relatively few people who have land valued at more than £25,000. It is some consolation to know that the tax will produce some revenue for war purposes. In addition, I regard the imposition as so undesirable that it gives me some satisfaction to know that it will apply to relatively few people. However, I shall have a word or two to say about that aspect of the matter later. The tax affects both state and country property, mid three-quarters of the taxpayers who will have to meet this imposition are city landowners. No doubt an endeavour will be made to pass it on in some way or other. When a large concern or a wealthy individual has to pay taxation in any form, an endeavour is usually made to pass on as much of it as possible. Like country property, most city holdings are practically unsaleable at present, and it is rather hard that a man who cannot sell his land should he desire to do so, except at a great sacrifice, should have to pay a tax assessed on a figure which is much more than the true value of the property. The position in the country is very much worse. It is true that a relatively small number of people will be hit by this tax, but to some degree they are the same people who will be hit by the recent heavy forms of taxation, such as the company tax, income tax, &c. I realize that that is the deliberate intention of the Government, and is not something which is merely accidental. I represent a country electorate which is larger than Italy, and nearly as largo as France. I have travelled extensively through my electorate, and I know of few men in it who are making great profits out of their land. There may be a few score, but the number is not very great. The point I wish to make is that few apparently wealthy land-owners are making their money out of their land. They are drawing their incomes from dividends on industrial shares, and so on, and are putting much of that money into their holdings. That is the true position, and it may be verified by any honorable member who chooses to make inquiries. For many years past it has been a popular impression among honorable members opposite that landholders, large or small, derive great wealth from their holdings, and it must come as a surprise to them to learn that many property-owners depend upon income which they derive from other sources. Around such places as Marree, in the north of my electorate, there are many capable farmers who opened up that district years ago and who., it is said, have never been well enough off since to get away from it. And so it goes on from the salt bush country, through the marginal areas to the wheat areas, and beyond. As the honorable member for Deakin quite rightly said earlier to-day, the impact of high costs of production is making the position of the man on the land an impossible one, even although he may have a large property. That is partly the effect of war conditions. The honorable member instanced the case of wool. Since the war began our wool clip has been compulsorily acquired for sale to the British Government, and in contrast to what several honorable members opposite have said, I venture to say that our woolgrowers are profoundly fortunate to be able to dispose of their product so easily as they are doing at present. Undoubtedly they will not make huge profits out of the present contract, but they are fortunate to have some return for their products at all. Very few countries could possibly take it, though Germany would be pleased to do so. The land-owners have been referred to as the section of the community which has the most to lose in this war, but I do not agree with that. Bather would I say that the poorer sections of the community had most to lose, particularly people living in the cities. I cannot understand why the attitude of the Labour party towards our defence has not been more active in the past, because the people who live in the capital cities, particularly on the sea-front, are obviously those who are in the greatest danger. It may well be that, although men are flowing into the cities in increasing numbers, and the country is becoming denuded of population, so that fencing and other improvements are being neglected, the time may come - we hope it will not - when the people of1 the city will, as tlie result of an attack, stream out into the country, and be very glad to find themselves there once more. Honorable members opposite may take pride in our land and fiscal policies since 1910, but I maintain that they have created an entirely artificial and lopsided structure. If those policies are continued there will be nothing to look forward to but a constant and increasing drift of the people from the land because, what with pests and bad seasons, even capable men have the very greatest difficulty in making a success of farming, and a great many fail. Thus they drift to the cities, and that is bad for Australia. If it is desired te make of this an industrial country, why should not all the industries be put down in Tasmania, for instance, and leave the rest of the country for pastoral and agricultural enterprise? It might be objected that this, too, would be a lop-sided arrangement. It. would be huddling people together, perhaps to an even greater degree than is the case to-day. It would render the people, and our secondary industries, more liable to attack than they are now, but at least we should have two compact compartments, so that those who wanted to use the land could do so, whilst the others would be free to huddle in massed communities. I do not oppose the measure, but 1 believe that this is a bad tax. It is not an equitable form of taxation, and I hope u at the time will come when it will be abolished.

Mr HARRISON:
Wentworth

– Honorable members opposite must be somewhat concerned over the fact, that one measure, after another which has been brought before the House has had to be explained by members of the Opposition. We cannot but be struck by the paucity of the information given by the Assistant Treasurer (Mr. Lazzarini). In. fact, he has failed to give any explanation, and we have had instead a variety of opinions expressed by honorable members on the Government side of the House; for instance, the honorable member for Watson (Mr. Falstein) says that this is not a capital tax, whilst the honorable member for Reid (Mr. Morgan) says that it is, and that it should be continued as a capital tax. As a matter of fact, he said that he considered this but the first step of many which should be taken in the same direction. It is because of the controversial nature of this tax that successive governments have varied the legislation, some increasing the tax. and others reducing it, and in the end, the original purpose of the tax has been departed from. It is a controversial tax because it is obviously sectional, and imposes a burden on those who have borne the brunt of developing both the primary and secondary industries. It was introduced in the first place, not to tax big city properties, but to break up big country holdings. Every one who supported the measure when it was first introduced visualized that it would bring about closer settlement, and stimulate primary production. When they found that it was not likely to have that effect - that, in fact, it was likely to strike at the heart of our primary industries by retarding the development of the agricultural and wool industries - they were content to support it as a revenue tax. As was stated by the honorable member for Fawkner (Mr. Holt) the Opposition does not intend at this juncture to oppose the bill. We realize that revenue must be obtained in various ways for financing the war effort; but because of the extraordinary divergence of opinion expressed by the honorable member for Watson and the honorable member for Reid I consider that we have the right to reply, and place the matter in its true perspective. We have frequently heard honorable members opposite express their interest in postwar development and expansion of industry. They have referred to the need for long-range planning. If the suggestions of the honorable member for Reid and the honorable member for Watson be given effect by the Government, they will retard the development of industry, and strike a blow at the big pastoral holdings, and at the breeding of stud stock. The post-war expansion of industry will be rendered impossible. The honorable member for Fawkner only asked that this legislation be reviewed at the end of the war, and surely that is a reasonable request. If we want industry to expand, we must relieve it of some of the taxation that is bearing so heavily upon it mow. The suggestion of the honorable member for Fawkner, instead of being opposed by the supporters of the Government, should be considered very seriously by them, because those they represent will be the first to be affected if the looked-for expansion of industry does not take place. The Government should watch very carefully the incidence of the various taxation measures which it has introduced, especially those which bear heavily upon private companies, and are likely to affect post-war employment and the expansion of industry. If it be discovered that taxation measures are likely to have detrimental effects, they should be reviewed as soon as possible.

Mr SCULLIN:
Ya rra

. Listening to the plaintive speeches of honorable members opposite about the struggling farmers, and the deadly incidence of this tax, which they describe as a capital tax, one would never dream that they themselves, when in office, increased the land tax by 50 per cent.

Mr Harrison:

– We are not objecting to the increase.

Mr SCULLIN:

– The honorable member does not object to what his Government did ; he only objects to what we arc doing. With the change-over from the Government side to the Opposition side of the House, honorable members’ views on taxation change also.

Mr Holt:

– The right honorable member should not misrepresent us.

Mr SCULLIN:

– In what way am I misrepresenting members of the Opposition ?

Mr Holt:

– We reduced the rate of the land tax progressively from 1922 until just before the war. Not until after the war broke out did we increase it. We arc not resisting the passage of this bill now, but merely point out that there is an objection to the principle of this tax.

Mr SCULLIN:

– When the honorable member was a member of the Government which, last year, increased this tax by 50 per cent., he did not raise his voice against, the principle of the tax. nor did the honorable member for Went worth (Mr. Harrison) when he was trying to get into the Government. This has always been regarded as a tax on unearned increment. It has been described as a sectional tax, and so it is. It is a tax on those who own land. Everybody does not own land : every body cannot own land, because there is a. limit to the area of land available in Australia. Those people who are privileged to own land of high value, a value which has been created by the efforts of the whole community, are called on to pay tax, and that is right. I sat behind the first Government which imposed the land tax, and I supported it with pleasure. It was designed to break up big land monopolies, and to give to the sons of farmers an opportunity to settle on the land of their birth. It did not succeed 100 per cent, in achieving its purpose, but it broke up many large estates. I could point to many holdings in the Western District of Victoria which were only a sheep run before this tax was imposed. Now, on that same land, there are homes and crops, and a greatly increased population. The honorable member forFawkner (Mr. Holt) boasts that his Government reduced the land tax. That is nothing to boast of ; that was an offence against progress. The action of the Government which imposed this tax gave to the sons of farmers an opportunity to settle on the land alongside where their fathers had reared them.

Mr Collins:

– It gave them their birthright.

Mr SCULLIN:

– That is so. We are sometimes asked why the people are crowding into the cities. They are being driven from the country by landlordism and land monopolies. The degree to which the land tax has failed to meet that evil may be laid at the door of antiLabour governments which have successively reduced the land tax. Under this proposal an additional £500,000 will be obtained in land tax, yet when the preceding Government raised an additional £1,500,000 last year by means of an increase of this tax no objection was raised by honorable members opposite. We have heard about the struggling farmer, and also about the “big” farmer, but a farmer will need to be engaged in a very big way to be affected by this measure, because the super tax will apply only to those whose taxable balance exceeds the unimproved value of £20,000. No less than 75 per cent, of the tax will fall on the owners of city property, and 75 per cent, of country landholders will be exempt from the tax. Under the Constitution, we cannot impose taxes that discriminate between city and country property holders.

Mr Holt:

– Does the right honorable member suggest that we could not exempt lands used for primary production?

Mr SCULLIN:

– I do not think that we could.

Mr Spender:

– If we can exempt the owners of land up to the unimproved value of £20,000, why cannot we exempt particular classes of land?

Mr SCULLIN:

– I should be glad to have the honorable gentleman’s legal opinion on the matter, and to assist him in adding another 20 per cent, to the tax on city property-owners.

Last year, the Government was compelled to increase the land tax, and prior to that there was another increase of the tax. Both war expenditure and the land tax are progressively increasing, but we have not increased the land tax to the same degree as in the last war in respect of lands below the unimproved value of £20,000.

Mr HUTCHINSON:
DEAKIN, VICTORIA · UAP; LP from 1944

– During the last war, Australia received lod. per lb. for its wool.

Mr SCULLIN:

– If the Government which the honorable member supported, had looked after the interests of the growers, they would have received lod. per lb. for their wool during this war. Whilst this impost may be classed as a capital tax, it is u tax on capital value of a distinct nature, because the value represents the unearned increment, not of the farmers, who are doing the real work of Australia, but of the wealthy city property-owners.

Mr JOLLY:
Lilley

– I do not intend to oppose the bill, because I realize that in the circumstances the increase of the land tax is unavoidable. I have always contended that the taxation of land should be left to the local governing authorities. Owing to the increased obligations of the local governing authorities, they have not been able to finance their operations entirely by means of the revenue which they derive from rates. Therefore, they are obliged to look to the State Governments for financial assistance, whilst the State Governments, in turn, have had to appeal to the Commonwealth Government for help.

Mr ARCHIE CAMERON:
Barker · ALP

– The right honorable member for Yarra (Mr. Scullin) mentioned points that were even more interesting than those raised by the honorable member for Reid (Mr. Morgan) and the honorable member for Watson (Mr. Falstein). From the latter honorable member, we had an entirely new interpretation of economics, for he talked of rent from land as being income. He ought to burn his books on Karl Marx, or give them to the Left Book Club, and take a course in Henry George, in order to learn something about the relative importance of land, capital and labour in production. The honorable member for Watson presented a very confused case, and did not throw any light on the subject at all. The right honorable member for Yarra stepped into the breach and spoke of unearned increment. I should like to know from him what he means by unearned increment. I know what I mean when I use that term, but I am not sure that the right honorable gentleman said exactly what he meant. I cannot understand how we could have an annual unearned increment. Mv interpretation of the tei-m is that it represents the increase that accrues in the sale price of a piece of land due to the expenditure of government money and the natural increase of the land values in the district. That increase is not an annual value, but a total value, and it varies from time to time, according to the value of land and the facilities that happen to be provided. 1 should be interested to hear some members who support the Government dealing with other kinds of unearned increment. I realize that they have not yet become accustomed to sitting on the ministerial side of the House. Some of them, particularly those at the Siberian end, are inclined to think that they are still in opposition. I have never heard them talking of the unearned increment on shares. .Brewery shares and gold shares increase in value from time to time, and I have known government bonds to do so; but those increases occur quite apart from anything that the individual owner may do. I am forced to conclude that there is a singular idea in the minds of the Labour party on the subject of land and land values, and what is sometimes loosely termed unearned increment.

The honorable member for Deakin (Mr. Hutchinson) got right on to the mark when he referred to the wool industry. This is still the most important export industry that Australia possesses, but the Government of the United Kingdom is not so keen as it was during the last war on purchasing Australia’s wool clip. Manufacturers experience difficulties to-day that were not encountered dining the last war, and the transport risks are greater now than they were previously. I have a strong suspicion that if Australia pressed too hard for an increase of the price of wool, it might be told that it could store its clip for a considerable period. The United Kingdom will adhere to the agreement entered into with Australia, but I arn not enthusiastic over the idea that by soma government action Australia could secure up to an average price of lod. per Hi. for its clip. Every primary industry is complaining of increasing costs of production, and that increase is experienced by the wool-grower in common with other primary producers.

The right honorable member for Yarra said that the land tax had been responsible for breaking up many large estates, and had en allied young men to go on land of their own and become good farmers. I should like to hear the views on that matter of the honorable member for Wannon (Mr. McLeod), because I arn not quite in agreement with the right honorable member for Yarra. In practically every State, not only on account of the operation of the Commonwealth land tax, but often owing to the repurchase system adopted by State Governments, perfectly good sheep stations have been broken up in order to make very poor farms. To-day, four out of the six States of Australia are actually engaged, willi Commonwealth money, not in subdividing land to bring about closer settlement, but in aggregating holdings ill certain areas so that settlement will be less close than it is to-day. Canberra was a perfectly good, sheep station before the Federal Capital was established here, and I think that every South Australian will agree that, it is a great pity that it ever became anything else. In the Mount Gambier district of South Australia, land has been sold at £S0 an acre, and in the Mount Barker district £40 an acre is not regarded as a high price to pay for land. At those prices, one does not need to own many acres before being liable to pay Commonwealth land tax. This tax imposes two kinds of discrimination. One form of discrimination is always bad, but, when a second is put into ifr. Archie Cameron. operation, the position is infinitely worse. The first is the granting of exemption from the payment of tax on land, the value of which does not amount to £5.000. That provision immediately creates anomalies. Whilst the value of one property may slightly exceed £5,000, the value of an adjoining property, of similar area, may come just under that figure. The owner of the first will pay federal land tax; his neighbour will not. This line of demarcation forms a “noman’s land “ in administration.

The second discrimination arises from the imposition of a penal tax upon an estate, the value of which exceeds a certain figure. The inference to be drawn from this practice by a visitor to Australia is that it is a bad thing, in this young country, to have men who are prepared to invest large sums of money in big areas of land, and to work them.

Mr Calwell:

– The original “squattocracy “ did not invest very much money in the land.

Mr SPEAKER:

– Order! I ask the honorable member for Melbourne to refrain from interjecting.

Mr ARCHIE CAMERON:

– I am discussing this matter from the agricultural and pastoral standpoint. If it were not for some of the big holdings in each State during the last 100 years, our great wool industry would not have reached its present dimensions. In any new country, somebody must be a pioneer and bear all of the risks that are inherent in pioneering. To designate the pioneers of Australia as the ‘“‘squattocracy” is to ignore their magnificent work in developing our agricultural industry.

Sir George Bell:

– Honorable members opposite describe it as “unearned increment “.

Mr ARCHIE CAMERON:

– Some of the persons who criticize this unearned increment would not be prepared, even in return for the daily payment of three or four times the equivalent of the basic wage, to bear the hardships that the pioneers bore.

Mr Lazzarini:

– All of those pioneers are now dead.

Mr ARCHIE CAMERON:

– If the Minister assisting the Treasurer (Mr. Lazzarini) thinks that the days of pioneering in Australia have passed, he has much to learn. A big discrepancy exists between the ways and methods of life in the country and in the city. Whilst recent inventions have assisted to reduce that margin, the discrepancy still remains. Grit and pluck are still required of a man who ventures into the outback areas for the purpose of engaging in mining, pastoral or agricultural pursuits. The application of the tax to thu metropolitan areas is justified only by considerations of defence, because the buildings, not the land, will be damaged by enemy action. Incidentally, the buildings are not affected by this tax, which is an imposition upon the value of the land.

Mr Calwell:

– That is its virtue.

Mr ARCHIE CAMERON:

– Does not the honorable member for Melbourne realize that an aerial or naval bombardment will damage, not the land, but the buildings? The only justification for this tax, as applied to the metropolitan area, is to provide special protection for the owners of buildings.

Oau other item affects the oversea investor. It has been fashionable in the Parliament of the Commonwealth since I. became a member - I do not know what happened before them hut I Iia ve no doubt that the same policy was pursued - to talk about the necessity for inviting overseas capital to come to Australia. In fact, overseas capital was not only invited but conditions were also made attractive to persons to invest their money in the Commonwealth. But we shall induce no hig manufacturing enterprises to establish factories in Australia unless the ownership of the land is held out, as the attraction. Under the land tax laws of Australia, any property the value of which exceeds £3,000, and which is owned by an investor living abroad, is subject to a double rate of tax.

Mr Calwell:

– Absentee landlordism has been a curse in most countries.

Mr ARCHIE CAMERON:

– Obviously, the honorable member lives in the past, whereas his eye should be fixed upon the future. If we persist with the policy of attracting overseas capital to Australia, the double penal rate will deprive the invitation of much of its hospitable nature. The invitation will not be accepted, even by investors in Great Britain and the United States of America. I do not propose to vote against the bill, because the Government has the requisite numbers to ensure the passage of the measure, and in addition, the time is not ripe to offer active hostility to it. But the hour of reckoning is coming. If federal land tax is to find a place in our taxation economy, the subject will have to be reviewed presently, in order to ensure that justice is done as between landholder and landholder, and city and country.

Mr CALWELL:
Melbourne

.- I should like to know bow many farmers in Australia possess an equity in their land, apart from the value of the buildings, exceeding £20,000.

Mr Holt:

– This does not relate only to equities.

Mr CALWELL:

– Very few people in Australia, even the title holders of landed property, are in that position. The plea which has been made on behalf of the poor farmer is spurious; small farmers are not affected by this legislation. The honorable member for Deakin (Mr. Hutchinson) gave a capable exposition of the difficulties of the man on the land. The average settler is suffering great hardships, because costs are rising whilst the prices of his commodities are determined largely by world values. The remedy for this evil state of affairs is a proper system of price fixation, and measures and methods other than the rejection of a proposal to raise revenue by ensuring that the unearned increment on land and most of it city land shall pay its fair share towards the protection of the country in war-time. The Labour party has always been keen on the land tax; but an antiLabour government, prior to the formation of the Menzies Government, reduced it at the moment when it imposed on the workers a flour tax for the purpose of paying a subsidy to farmers. At the very time when old-age pensions were being reduced, the land tax was also being decreased. The money was returned to the squatter friends of the party which was then led by the right honorable member for Cowper (‘Sir Earle Page), and the difficulties of the poor were greatly increased.

Mr Anthony:

– The honorable member’s statements are wrong.

Mr CALWELL:

– I shall have great pleasure later in informing the honorable member for Richmond of the amount of money that was remitted as land tax by anti-Labour governments before he became a member of this House.

Mr Anthony:

– The remissionswere not made concurrently with the reduction of pensions.

Mr CALWELL:

– They were. When the anti-Labour government reduced pensions to 15s. a week, legally pauperized thousands of people who were pensioners and drove others to forfeit their pensions, it decreased the land tax payable by its friends.

Mr Anthony:

– That is incorrect.

Mr CALWELL:

– I am not relying upon my own recollection of the event. I am fortified by the excellent memory of the honorable member for Herbert (Mr.Martens), who was a member of this chamber in those trying and difficult times, and his information upon the matter is more valuable than that of the honorable member for Richmond who, like myself, was in those days a stranger to these legislative halls.

Mr Harrison:

– And he will be here when the honorable member forMelbourne has departed.

Mr CALWELL:

– If the honorable member for Wentworth desires to don the mantle of aprophet and predict the future, I beg to inform him that as I possess possibly the safest Labour seat in Australia, I shall be here when many other honorable members have departed.

The honorable member for Barker (Mr. Archie Cameron) delivered a dissertation upon his meaning of “unearned increment”. The right honorable member for Yarra (Mr. Scullin)was perfectly correct when he spoke of the interest that accrues annually from the unearned increment created by community settlement. This unearned increment is pocketed by those who own the land. For the information of honorable members, I cite the classic case of the Howey estate in Melbourne. In the 1830’s a block of land was purchased at a sale for less than £200. A few months later the original buyer departed and never again saw the land. His immediate descendants never saw it at all. It was not until nearly 100 years after the purchase of the land by Howey that some of his collateral relatives, probably great-grand-nephews, eventually visited Melbourne in order to view the property from which the family in England were deriving solid benefits every year. The unimproved value of the land in 1900 was approximately £600,000. If all of it still remained in the hands of the estate, it would be worth £1,000,000. The Howey family contributed nothing towards the foundation and growth of the city of Melbourne. The descendants, who resided abroad, were able to live upon the values created by the pioneers who braved the elements to develop this country. Now, the honorable member for Barker complains because overseas investors who put their money into the country have to pay a double rate of tax. I shall supply to the honorable member a pamphlet upon land values inMelbourne. The author, Mr. E. Craigie, is one of his former colleagues, and was, until the last election, a member of the South Australian House of Assembly. When the honorable member reads the pamphlet, he will be better informed than he is at present upon matters of land values and land taxation. South Australia has been the home of Henry George-ism in this country. Most of the great apostles of the theory of the taxation of land values have come from that State. I wonder how the honorable member for Barker has escaped its influence. Certainly he would be better informed about our political economy if he had read a little more of Henry George and dreamt a little less of Karl Marx.

Dr PRICE:
BOOTHBY, SOUTH AUSTRALIA · UAP

– The apostle of Henry George lost his seat.

Mr CALWELL:

– That is often the fate of the reformer. A prophet is not without honour, save in his own country.

Sitting suspended from 6.15 to 8 p.m.

Mr CALWELL:

– I understand that the Government desires that some other business shall intervene. Accordingly, I ask leave to continue my remarks later.

Leave granted; debate adjourned.

page 927

NATIONAL SECURITY (WARTIME BANKING CONTROL) REGULATIONS

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– by leave - Pursuant to statute, I lay on the table the following paper : -

National Security Act - National Security (War-time Banking Control) Regulations -Statutory Rules 1941, No. 272.

These regulations give effect to the Government’s decision as outlined in the financial statement of the 29th October to bring the operations of the trading banks under effective control. The regulations carry out certain recommendations of the Royal Commission on the Monetary and Banking Systems and make other provisions to meet present conditions of war finance. The Government had conferences with the representatives of the trading banks and the Commonwealth Bank before the details of the regulations were finally settled. An exemption from the regulations is being granted for two months to all institutions, other than the private banks specified in the regulations, which are or may appear to be carrying on in Australia the business of banking. This exemption will cover the Launceston and Hobart Savings Banks, also pastoral companies and other institutions which carry on some banking functions. This temporary exemption will give time for inquiry and consideration as to whether any of these institutions should be brought within the regulations.

page 927

LAND TAX BILL 1941

Second Reading

Debate resumed.

Mr CALWELL:
Melbourne

.- The honorable member for Barker (Mr. Archie Cameron) said that the Labour party did not seem to know just where it stood on the subject of the land tax, and he attacked the submissions of the honorable member for Watson (Mr. Falstein) and the honorable member for Reid (Mr. Morgan). He also made, what was for him, a startling discovery, that the stock exchanges can sometimes be rigged. He said that the prices of brewery shares, tobacco shares and even Commonwealth bonds rise and fall. Had the honorable gentleman had the honour to be associated with the Labour party he would have learned a lot about the stock exchanges, those modern temples of high finance. He would have discovered that price fluctuations are not accidental or fortuitous, but are rigged in order to suit the needs of whoever is bulling or bearing in order to make money at the expense of the people outside. The Labour party is no more impressed by fluctuations on the stock exchange than it is by the sham fights which occur in the ranks of the United Australia party. Possibly the present row in that party is designed to delude the Labour party into the belief that honorable members opposite are fighting amongst themselves, whereas, in fact, they are composing their differences with a view to emerging as a unified party under a new name.

Mr SPEAKER (Hon W M Nairn:

– Order ! The subject which the honorable member is now discussing has nothing to do with the Land Tax Bill.

Mr CALWELL:

– No, but it is germane to the arguments of the honorable member for Barker, whose remarks were applauded by honorable members opposite. The people of Australia have nothing to thank the “ squattocracy “ for. The honorable member for Darling Downs (Mr. Fadden), who is titular leader of the Country party, laughs, but the honorable gentleman is a practising accountant and what he does not know about the land would fill libraries. I have no doubt that when members of the United Australia party are re-united he will cease to be Leader of the Opposition. The vast majority of the farmers of Australia are represented in this House by members of the Labour party ; they are hopelessly in debt to the financial institutions of Australia and their plight is grave. It is the banks that ruin the farmers; the land tax cannot be blamed. What this country does need every generation or so is an agrarian revolution which will break up the large holdings that accumulated again after every sub-division. Land in Gippsland, formerly owned by the cattle king, Tyson, which was subdivided into small pastoral allotments, is reverting to its former condition, and either the Commonwealth Parliament or the State Parliament will have to do something about it. After the last war a great many returned soldiers, city-bred men as well as farmers’ sons, who wanted to go on the land, could not procure allotments because the land was locked. Vast stretches of country are still in the same condition, and the owners will have to be forced, either by means of a land tax or by some other means, to subdivide their properties in order that the closer settlement which we need so much shall be achieved. There is, therefore, every justification for the land tax. The anxiety which honorable members opposite displayed when they were in power to reduce theland tax, even in times of financial stringency, showed that they are more concerned in the preservation of the interests of the squatters than in the interests of the country at large. Honorable member? opposite jeered when I said that the squatters had never been of any real use to the country. It is true that they have grown wool, but wool could have been grown in Australia without their aid. Honorable members opposite may jeer as they like, but constitutional, industrial and social reforms have been won in this country despite the intransigent attitude of the squatters. The memorable events of the Eureka Stockade resulted from the actions of a squatterridden Legislative Council in Victoria. The reactionary and stultifying upper houses of Australian parliaments were, until several decades ago, dominated by squatters. The progress achieved by Queensland has been due to the fact that it abolished its upper house, whereas Victoria’s progress has been retarded by the fact that it. has not been able to destroy its second chamber elected on a restricted franchise. At one time one had to possess £3,000 worth of equity in an unalienated freehold property in order to be elected to that house. Honorable members opposite who are the political heirs of the people who put the land to ill use in the past do not like to be reminded of the evils that those people perpetrated. Having delivered a well-deserved lesson to honorable members opposite, I leave the House to resolve the question.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Third Reading

Motion (by Mr. LAZZARINI) proposed -

That the bill be now read a third time.

Mr ANTHONY:
Richmond

.- The opinion of honorable members opposite, especially the honorable member for Melbourne (Mr. Calwell), appears to be that any company, firm, organization, or individual that has developed in a big way deserves, by virtue of that development, to be slated. The honorable member for Melbourne said that the “ squattocracy “, whatever that may mean, deserved all the penalties that could be imposed upon it.

Mr SPEAKER (Hon W M Nairn:

– Order ! The honorable member is not in order in replying to the debate on the second reading.

Mr ANTHONY:

– I understand that the motion for the third reading of the bill entitles me to refer to the whole of the matters contained in the bill.

Mr SPEAKER:

– But not to refer to the second-reading debate.

Mr ANTHONY:

– I do not intend to do so., but I intend to stand by what rights I have on the motion for the third reading of the bill. If .this policy of slating the big companies continues, it must eventually react to the detriment of all those individuals who depend for their livelihood- on the successful management of those concerns. I draw attention to the inequity of the land tax. It was the first tax, apart from excise and customs duties, to be levied by the Commonwealth Parliament. It was imposed, in 1910, for the purpose of breaking up large estates, but it did not succeed in doing so. It imposed very heavy levies on city properties, but it also did much to weaken the financial position of many farmers whose circumstances were already bad. The report of the committee which inquired into the conditions of the wool industry in 1932 states that, in that year, uncollected land tax totalled about £700,000, due to the fact that those upon whom the tax had been levied were not in a position to meet their assessments. The amount of outstanding tax had been increasing from year to year, with the result that many farmers, who in any case had very little equity in their properties, were being forced into bankruptcy by the operation of the act. In order to show the unfairness of the tax, I refer to the statement by the Treasurer that the Government expects this surcharge to produce additional revenue in this financial year amounting to about £500,000.

Mr Lazzarini:

– The Government which the honorable member supported took an extra £1,500,000 from this source.

Mr ANTHONY:

– I do not deny that. The budget for 1940-41 proposed almost to double the existing rate of land tax. But there is a point beyond which the rate should not be increased. That point has been reached. From how many individuals is this extra £500,000 to be extracted? I have read the 22nd annual report of the Taxation Commissioner, which discloses that 2,370 land-taxpayers own land of a taxable value in excess of £20,000. Therefore, that number of individuals and concerns will be called upon to make this additional contribution to the Commonwealth’s revenue. Honorable members should bear in mind that many of these individuals and companies are subject to the highest rates of income tax. The culmination of the Government’s policy must be the extinction of the large corporations. Has the Government considered the economic consequences of its actions? I do not mean the consequences to the big companies, such as the Broken Hill Proprietary Company Limited, the pastoral concerns and the big shipping companies, but the consequences to the thousands of men and women who depend for their livelihood upon the prosperity of the companies. A company which is unable to continue making profits must reach a stage at which it has to discharge employees. No company can continue to operate normally if its profits and its chances of future development are taken away from it. By striking directly at the big pastoral companies and city concerns, the Government will ultimately find itself unable to replace the structure which it is now destroying and upon the security of which thousands of men and women depend for their livelihood. Does the

Government propose to establish a governmentcontrolled concern directed by the workers? If it does not wish to lead this country into communism, socialism or some other political “ ism “, it must abandon its present policy. Otherwise, our democratic system of government can not survive. I believe that the Government and its supporters have not given sufficient thought to the probable effects of its actions. I ask them to do some serious thinking now. Most of them are capable of intelligent thought and have a real desire to promote the welfare of the people who vote for them at the elections and who expect them to safeguard the interests of the community. They will betray their trust if they, allow their actions eventually to destroy the source of the people’s livelihood.

Question resolved in the affirmative.

Bill read a third time.

page 929

JOINTCOMMITTEE ON WAR EXPENDITURE

Mr. Johnson brought up the first progress report of the Joint Committee on War Expenditure.

Ordered to be printed.

page 929

ESTATE DUTY BILL 1941

In Committee of Ways and Means: Consideration resumed from the 29th October (vide page 39), on motion by Mr. Chifley -

That in lieu of the rates of estate duty imposed by the Estate Duty Act 1914-40, (vide page 38).

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr. Lazzarini and Mr. Chifley do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Lazzarini, and read a first time.

Second Reading

Motion (by Mr. Lazzarini) proposed -

That the bill be now read a second time.

Mr HOLT:
Fawkner

.- The purpose of this measure is to increase the rates of estate duty on estates of a value of more than £20,000. Having regard to the long interval of time which elapsed between the imposition of the first rate of estate duty and its revision in 1940, when the honorable member for Warringah (Mr. Spender) was Treasurer, it is appropriate that some investigation be made of the conditions under which this tax was imposed, and of the considerations which have led to the introduction of this bill. The honorable member for Warringah, and the officials of the Taxation Department, will admit that the revised rates which were introduced last year were drafted rather hurriedly, so that there was little opportunity for honorable members to investigate in detail the history of the operation of the estate duty. The original Estate Duty Act was passed during the war of 1914-18. Mr. Fisher, who was then Prime Minister, said, in introducing the bill -

We all admit that the proposal means the super-imposition of a heavy tax on State taxation but it is a class of taxation to which no one can object, because one doubts whether the accumulation of large estates- is- beneficial to a country, or even to the people who inherit them.

Mr. Joseph Cook had this to say about the bill-

In my opinion this proposal is .penal and almost predatory . . . There is no need for this orgy of taxation. It means that we are systematically penalizing success, which cannot be good for a young country like this.

Nevertheless, the act was passed and it remained on the statute-book without any alteration being made to the rate of duty until 1940. In that year the then Treasurer revised the rates in order to raise funds for war purposes, and also placed the method of imposing the duty upon a more scientific basis. That basis is not affected by this measure, except for the fact that the rate on estates of more than £20,000 is increased until a maximum levy of 27.9 per cent, is reached by progression, as the value of the estate rises to £500,000. The average revenue from this duty in past years has been £1,500,000. The alterations effected last year were designed to add another £850,000 to that sum, and the variation which is now proposed will produce, in a full financial year, an extra amount of £650,000. Therefore, the amount of revenue collected will be twice what it was two years ago. Honorable members must bear in mind the fact that estate duty levied by the Commonwealth’ is in addition to taxes imposed upon estates of deceased persons by State governments. It is interesting to note, from the table which has been circulated by the Treasurer, that taxes upon estates in Australia at the present time, both Commonwealth and State, are much more severe, except in the case of very large estates, than those which operate in Great Britain. No doubt that will surprise honorable members who have held the belief that the rates of estate duty in Great Britain are particularly onerous. In order to give point to this fact, I direct - attention to the total collections that would be made from an estate of £30,000 in Great Britain and a similar estate in Australia. In Great Britain an amount of £3,900 would be taken from the estate by way of duty. In Australia, the combined Commonwealth and State duties, in the highest taxing State, would be £5,522. In Great Britain the collections from an estate of £100,000 would be £25,700. In Australia the combined Commonwealth and State levy would be £38,980. It will be seen that the levies are considerably higher than those imposed in Great Britain. Only when an estate reaches a value of £1,000,000, which is a rare occurrence in this country, is the British impost higher than the Australian. I emphasize these points, because we are doubling the Australian impost within a two-year period. It becomes of the utmost importance, in these circumstances, that the incidence of the tax shall be closely examined in order to avoid anomalies or to correct any that may have revealed themselves. In this connexion, I refer to the position in respect of the estates of persons who may be killed on active service. In introducing the original Estate Duty Bill in 1914, the then Treasurer, Mr. Andrew Fisher, said -

We might reasonably consider the point as to whether the estates of persons who are fighting the battles of this country should be taxed. I think that they should be exempted. They are taking exceptional risks on the battlefield while we are stopping at home. Whereas those who remain at home should be called upon to bear the full tax, those who are at the front should, in my opinion, be exempted.

At the committee stage of the bill, the following provision was inserted to meet the point: -

Nothing in this act shall apply to the estate of any person who, during the present war or within one year after its termination, dies on active service or as a result of injuries received or disease contracted on active service with the Military or Naval Forces of the Commonwealth or any part of the King’s Dominions.

That provision operated during the period of the last war and it remained in the act until it was replaced in the act passed last year by a section which is intended to operate during the period of this war. The effect of the new provision is that an estate of a person killed on active service is exempt from duty if its value is not more than £5,000. The anomaly exists, however, that an estate valued at £5,001 would be liable to the full amount of estate duty. Thus, the beneficiaries of such an estate would he in a much less favorable position than the beneficiaries of an estate of slightly less than £5,000 in value. I trust that the necessary steps will be taken to overcome this anomaly.

When the Government considers the subject, I ask it to consider also the system operating in Great Britain in relation to similar circumstances, for I consider that the British method is much more scientific than the system that we have adopted. I think it only fair to state that the relevant provision in our act was hastily drafted and introduced, and was not given the consideration by the House that its importance deserved. In moving the second reading of the bill, the then Treasurer, the honorable member for Warringah (Mr. Spender), made passing reference to it, and the then Leader of the Opposition (Mr. Curtin) merely noted the observation that had been made. The subject was not debated. The relevant provision in the British act provides for the remission of estate duties in respect of property passing to the widow or lineal descendants, or lineal ancestors, including brothers and sisters, and descendants of brothers and sisters, of the deceased, under the following conditions : - (a.) Where the value of the property does not exceed £5,000 - the whole of the death duties leviable in respect of that property.

  1. Where the value exceeds £5,000 -

    1. in respect of the first £5,000 - the whole of the death duties; and
    2. so much of the duties leviable in respect of the remainder as exceeds the sum which, if accumulated at compound interest at the rate of 3 per cent, per annum from the date of death with half-yearly rests would, at the expiration of the period of the normal expectation of life of a person of the age of the deceased at the time of death (calculated in accordance with Tables of Mortality of Government Life Annuitants, 1912), amount to the whole of the duties so leviable.

I do not expect honorable members to follow the meaning of that involved verbiage. Stated in simple terms, the position in Great Britain is that estates of persons killed in action arc exempt from duty up to a value of £5,000, and that estates in excess of that value are exempt in respect of the first £5,000 and on the balance are leviable in accordance with a calculation based on the expectation of life of the deceased person at the time of death. The theory, apparently, is that because a person comes to an untimely end on active service it would not be proper for the Government to receive, much earlier than would normally be the case, the estate duty that would apply to such a deceased person’s property. I suggest that the Government might consider the propriety of including such a provision in the Commonwealth law on this subject.

I asked the officers of the Taxation Department to be kind enough to prepare a statement comparing the duties that would be payable under Commonwealth and British laws respectively on the estates of persons dying while on active service. I was provided with the following table: -

ESTATE DUTY.

Comparison of amounts of duty payable on estates of a taxable balance of £5,000, £10,000 £20,000 and £50,000 in the case of a single man, aged 25 years,at date of death, dying as a result of wounds contracted on active service -

under the existing provisions of the law and at the proposed rates of duty; and

if sections 1 and 2 of the British Death Duties (Killed in War) Act were incorporated in the Estate Duty Assessment Act, and at the proposed rates of duty.

The figures were prepared hurriedly and have not been checked, but they may be taken to be approximately correct.

Mr Jolly:

– Do they take into account only the estate duties levied by the Commonwealth ?

Mr HOLT:

– Yes.

Mr Jolly:

– Then there should be added to them the amount of estate duty levied by the State governments?

Mr HOLT:

– That would be so, if it were desired to arrive at the full amount of estate duty payable; but I have been content to compare the Commonwealth law with the .British law.

Several other points arise in relation to estate duties leviable on the estates of men killed on active service. One pointthat should be considered is the effect of quick succession. There is no provision in the Commonwealth law to vary the estate duty when there is a quick succession in an estate. It happens, at times, that two persons may succeed to the same estate in quick succession, in which case, as the law is, estate duty would be payable in both instances. The diminution of the value of an estate so affected is considerable, and it will become greater under the heavier imposts now being provided. Steps have been taken iu Great Britain, and also, I believe, in Tasmania, to mitigate such hardships. It is provided in the British law that when the Commissioners of Inland Revenue are satisfied that estate duty has become payable on any land or business passing on the death of any person, and that subsequently within five years estate duty has again become payable on the same property, or any part thereof, passing on the death of the person to whom the property passed on the first death, the duty payable on the second death shall be reduced as follows: -

I suggest that the Government consider the desirability of incorporating a similar provision in the Commonwealth law on the subject. It may happen that two brothers on active service may be killed in quick succession, and property which has passed from one to the other after the first death, and subsequently passes to other relatives on the second death, will be greatly diminished in value because of the estate duties levied upon it. I do not think that any of us would desire to embarrass beneficiaries unduly in such circumstances.

In respect of this measure generally, I. remind the Government that the new and heavier rates are being imposed in order to provide money for war purposes, and should therefore be regarded as emergency war-time imposts and not an enduring feature of our estate duty legislation. As the effects of these new provisions are likely to be severe in many cases, I ask that this measure be reviewed as soon as circumstances permit. Should death occur during the period of the war, those who derive an interest as beneficiaries are to be taxed in comparatively greater measure.

The Opposition, whilst not opposing the passage of the measure, asks that the particular points to which I have directed attention shall be sympathetically examined by the Government. I suggest that, in the interval before the next sessional period, when a supplementary budget is likely to be introduced, the Treasurer have a thorough overhaul of the law relating to estate duty, and bring before Parliament provisions adopting principles which apparently are operating satisfactorily in Great Britain.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

[S.47~. - I give to the honorable member the assurance that the points he has raised will be examined. They had not previously been brought to my notice, although attention may have been drawn to them last year when legislation was brought down to increase the rates. The proposed levy will be made upon the higher estates - above £20,000 - consequently it cannot be said that the Government is imposing any greater hardship than is caused at present.

Mr DUNCAN-HUGHES:
Wakefield

– I should like to have more than the mere undertaking from the Treasurer that that the matter will he examined. It is of first-class importance. Immediately the estate duty was introduced, I began to wonder what would be the position in relation to the estates of men serving in the war who lost their lives as the result through injury or disease. The honorable member for Fawkner (Mr. Holt) has excellently stated the position, and his remarks ought to be carefuly studied. During the last war, the estate of any man who lost his life as the result of the war was not subject to any assessment. That provision continued until last year, when, another war having started, it was altered to the effect that estates under £5,000 should not be subject to duty’; but nothing was said in regard to estates above £5,000, with the result that an estate valued at £5,500 immediately became assessable for the full amount of duty, and thus was in exactly the same position as the estate of any other member of the community who had not gone to the war. I regard that, as extremely hard, and doubt very much whether the Parliament so intended. As the matter has now been raised, it ought to be considered by the House, in order that it might decide whether the estates of deceased soldiers, sailors and airmen should be completely free of duty, whether some compromise should be effected, or whether the duty should be the same as that, chargeable against the estates of other persons. The British rule at present is practically identical with that which operated there during the last war. It is not so liberal as was ours at that time, but. it is very much more generous than the provision we are now considering.

Mr Lazzarini:

– This does not alter it.

Mr DUNCAN-HUGHES:

– It does, because the rates rise to a very high figure.. The honorable member for

Fawkner has quite properly pointed out that the rapid rise of rates has made .th<? matter more important. He has also emphasized the provisions which operate in England, where all estates up to £5,000 are free of duty, after which there is a rather elaborate provision, based on the expectation of life, which results in a great difference between their results and ours, according to the figures given by the honorable member.

Sir Frederick Stewart:

– Is the first £5,000 continuously exempt?

Mr DUNCAN-HUGHES:

– There is a straight-out exemption of £5,000 to begin with, after which there is a further exemption which, on figures the honorable member for Fawkner has; results in the amount being six or eight times as much as in Australia. A third provision enables the more liberal of two different, acts to be applied in England in order that the calculation of the duty on an estate may operate to the advantage of the estate of a deceased soldier, sailor, or airman. There is a fourth provision, that if more than one member of a family is killed, and the same property passes, it is assessable only on the first occasion. There is a. most elaborate and thorough method of calculating the succession duty to be paid. What does the House think would be proper in regard to men who have volunteered for active service abroad? Does it think that, in addition to losing their lives, their estates ought to bc assessed at the same rate as the estates of other members of the community; or should not have to pay any duty; or should there be a compromise between complete exemption and full payment? I feel perfectly sure that neither side of the House would say that the estates of soldiers, sailors, or airmen who lose their lives overseas, should be severely raxed. This is a severe tax. It may be said that it will apply only to big estates, which can quite well afford to pay it. According to the figures that we have, an estate of £120,000 would pay something like £40,000 in estate duty to Federal and State authorities.

Mr Riordan:

– It should do so.

Mr DUNCAN-HUGHES:

– Does the honorable member say that the estate’ of a man who gives his life for his country should have to pay one-third of its value?

Mr Riordan:

– I arn concerned about the amount at which the estate is valued. Such an estate should make a fair and equitable contribution.

Mr DUNCAN-HUGHES:

– That appears to suggest that no distinction should be drawn between the man who dies on active service and the man who does not. I dissociate myself entirely from that view. We are carrying on, mistakenly I think, under the voluntary system. Some of those who go to the other side of the world are either killed outright or eventually die of wounds or illness. Should that occur, their estates should either be exempt from duty - that would not be too much - or be given concessional treatment, for the benefit of those left behind. I do not think that the view expressed by the honorable member is held by many persons. It might be better if this matter were reconsidered, and the Government were to introduce an amending bill. We have not before us the Estate Duty Assessment Act, section 9 of which deals with the matter, but only a bill to amend the Estate Duty Act. I would cheerfully vote for the exemption from duty of the estates of deceased members of the fighting services, of whatever size they might be; but the Government may not bo prepared to go to that length. It is not for rae to dictate what a Labour government should do; but I have thought the matter out, and discussed it with others, in an attempt to work out what would be equitable, and the general opinion seems to be that all estates should have an exemption of £5,000, and that only half the rates specified in respect of estates above that figure should be applicable to the estates of soldiers, sailors or airmen who lose their lives as the result of active service in the field or disease contracted while on service. I should like to hear what other honorable members think of this. I have prepared an amendment which I am inclined to move in committee in order to test the feeling of honorable members so that there shall be no question of leaving the question to the discretion of the Treasurer (Mr. Chifley). Parliament should settle the question, the more so because, when it was before Parliament last year, it was apparently not under stood fully, and the measure went through both Houses with practically no debate.

Mr ANTHONY:
Richmond

– I propose to direct my remarks to the provision for the exemption of deceased soldiers’ estates of a value of not more than £5,000. This matter came before me when I held some responsibility in the Treasury, and I felt that an injustice had been done. I am confident that had the last Government remained in office it, would have been rectified.

Mr Lazzarini:

– The honorable member said nothing about it before.

Mr ANTHONY:

– I am saying now that it ought to have been done. If the Assistant, Treasurer (Mr. Lazzarini) does not agree that what I propose is just he will, no doubt, reject it. The exemption of £5,000 ought to apply irrespective of the value of the estate. Under this provision, if the estate be worth more than £5,000, even if it be worth only £5,001, no exemption is granted at all. It is very much as if exemption were granted from tax on income up to £200, but if the income exceeded £200, no exemption was granted at all, even on the first £200. In New South Wales, an exemption of £5,000 is allowed for estate duty purposes, irrespective of whether the total value of the estate is more than £5,000 or not. If it were possible to move an amendment, I should do so, but I understand that there are some difficulties in the way. If it cannot be done, then I appeal to the Treasurer (Mr. Chifley) to recognize this elementary principle of justice. I freely admit that the last Government was in some measure at fault. I regret that the act did not make it clear that the exemption of £5,000 should apply, no matter how large the estate. I thought it did, but apparently, owing to some accident of drafting, the point was not properly defined. However, the time is ripe, now that thousands of our soldiers on the other side of the world are in grave danger of their lives, to put this matter right. It would be most unfair if the wives or relatives of soldiers still overseas had to pay duty on the full amount of estates over £5,000.

Mr Mulcahy:

– Those men who were on the dole before they went away are not likely to be affected.

Mr ANTHONY:

– Those who were on the dole when they enlisted have my respect as much as those who were in possession of a considerable estate. However, I remind the honorable member that many of those who enlisted, and have gone overseas, made a great sacrifice in addition to their enlistment, when they took the risk of their estates suffering because of their absence. Such men are entitled to consideration. Why should we seek to obtain revenue because men are exposing their lives to peril on our behalf? Those men would have had a greater expectation of life if they had remained behind. Any insurance company would have recognized the probability of their living for 30, 40 or even 50 years more. The Treasurer must realize the imperative need to amend this provision, and I hope that he will take action accordingly.

Mr POLLARD:
Ballarat

.- I cannot allow to go unchallenged the arguments of the honorable member for Wakefield (Mr. Duncan-Hughes) and. the honorable member for Richmond (Mr. Anthony), that in respect of men in possession of considerable estates who lose their lives in the war, rights should be created which are not granted to other citizens. The argument implies that a hardship is being inflicted on the men themselves. Actually they are not affected ; the duties would fall only on the beneficiaries of their estates. It is asserted, in effect, that the children of such men should enjoy privileges denied to the children of those who were unable to enlist, or who were not disposed to do so.

Mr Holt:

– Those who remain behind have an additional expectation of life.

Mr POLLARD:

– That is true, but if we investigate the conditions of enlistment, we find that expectation of life was not taken into account by the last Government, nor is it taken into account by this one. The terms of enlistment are that a man volunteers to serve his country overseas or in Australia at so much a day, and that, in the event of the death, his dependants shall enjoy the benefits of the Repatriation Act. The honorable member for Wakefield and the honorable member for Richmond have argued that the dependants of the rich man shall, over aud above their rights under the Repatriation Act, enjoy certain advantages not enjoyed by the children of the poor man. That is an untenable argument. As a matter of fact, I believe that the concessions now proposed are very generous. How do men become rich? Is the rich man a more worthy citizen than a poor one? One man may become rich by inheritance, another by hard work and close application to business, another by gambling. The fact that a man is rich does not always imply the possession of personal merit. Therefore, I cannot accept the argument that the children of a rich solider who loses his life overseas deserve a better deal than the children of the man who, before his enlistment, earned only the basic wage, or was, perhaps, on the dole.

Mr HARRISON:
Wentworth

– Time after time supporters of the Government have told honorable members on this side of the chamber that those who are pulling their weight in this war are drawn principally from the lowerincome groups and do not include, to any marked degree, persons in the higher ranges of income or those whom they choose to describe as “ capitalists “. We have just heard an extraordinary speech by the honorable member for Ballarat (Mr. Pollard). Stating the case on behalf of the rich man who remains in Australia, he asked, in an impassioned address, “ Do you think that the children of a soldier who has lost his life should be placed at an advantage compared with the children of the man on the dole ? “ The children of a soldier who is killed in action will lose not only a portion of the estate, but also the care, love and guidance of their father. But the people for whom the honorable member spoke are really the rich men who stay at home. They will derive advantage from the estate for years, and the children will have the benefit of paternal guidance. From time to time supporters of the Government speak glibly of the advantages of the voluntary form of enlistment, and contend that conscription is not necessary. Under conscription, this provision would be eminently fair, because every person would be placed upon the same basis. The estate of the rich man, who enlists for service overseas, would be subject upon his death to estate duty. The rich man would have no opportunity whatever to stay at home; he would be compelled to do his “ bit “. Under the voluntary system, which honorable members opposite support, he has the choice of enlisting or staying at home.

Mr Calwell:

– The party to which the honorable member belongs has also espoused it.

Mr HARRISON:

– We recognize that an anomaly crept into the legislation. Having made that acknowledgment, wc suggest a method by which it can be removed. Honorable members opposite are welcome to whatever kudos may come from effecting the amendment. We simply ask them to adjust the anomaly. It can be easily done.

Mr Lazzarini:

– The honorable member expects the Government to correct in a fortnight all the mistakes that were made by the Administration of which he was a member.

Mr HARRISON:

– The Minister could easily make the adjustment. If honorable members opposite are sincere in their championing of the voluntary system, they should protect the estates of the patriotic men who are prepared to sacrifice their lives for their country. During the last war the estate of the fighting man was exempt from tax. The point may be taken that that gives an unfair advantage to a man who is prepared to sacrifice his all on the altar of national service.

Mr McEwen:

– The Fisher Government granted total exemption.

Mr HARRISON:

– That makes the matter more pronounced. The Labour party appears, since the last war, to have lost its democratic spirit. Even if honorable members opposite cannot approve entirely the action of the Fisher Government in exempting the estates of soldiers from tax, they should at least support an amendment to bring the law into line with the practice in Great P>ritain. Members of the Opposition would be satisfied with that. Unfortunately, honorable members opposite attempt to defend their attitude by declaring that, although a man may volunteer to fight for his country, his children should be placed at a disadvantage compared with the man who elects to remain at home. Such an attitude cannot be justified.

Mr FALSTEIN:
Watson

.- According to the estimate of the Treasurer (Mr. Chifley), receipts from estate duty during the balance of this financial year will total nearly £500,000. For a complete year the tax which the bill imposes would raise approximately £650,000. The honorable member for Warringah (Mr. Spender), when Treasurer, introduced in May, 1940, an amending bill which would have increased the proceeds from this tax to £850,000 a year. At that period, honorable members opposite sat on this side of the chamber and according to their story they were satisfied with the amendment.

Mr Holt:

– The amendment was not debated in this chamber.

Mr FALSTEIN:

– At that period, the Government of the day was satisfied to introduce that legislation. It must have weighed all of the considerations which honorable members opposite now advance for the information of the Minister assisting the Treasurer (Mr. Lazzarini). The very amendments which the Opposition now suggests to the Minister were either disregarded or rejected by them, even though the war had entered its second year. To me, their protests are merely comical.

In my opinion, the bill will effect substantial progress in the implementation of the policy of the Labour party. Expressed briefly, that policy is, “ Maximum production with the most equi.table distribution “. The increase of estate duty, such as is proposed in this bill, is one method of establishing a more equitable distribution of the national wealth among all who, by virtue of their citizenships, are entitled to participate in it. My only regret is that the measure does not provide for a steeper increase of the rates of estate duty. Few, if any, honorable members on this side of the chamber, or their constituents, will he affected by the bill, but that cannot be said of honorable members opposite. For example, the honorable member for Wakefield (Mr. Duncan-Hughes) and the honorable member for Richmond (Mr. Anthony) are said to possess substantial estates. ‘Consequently, it is not surprising that they should protest against the bill.

Mr SPEAKER:

-Order! Personalities should not be introduced into the debate.

Mr FALSTEIN:

– Although honorable members opposite had ample opportunity during the first two years of the war to effect this amendment, they neglected to do so. Now they urge the Labour Government to repair their omission, despite the fact that the Treasurer had only a few weeks in which to recast the budget.

Mr Duncan-Hughes:

– That is not so; the act was amended in May, 1940.

Mr FALSTEIN:

– Why did the honorable member for Wakefield neglect to bring pressure to bear against the then Government to effect the reforms that he now advocates?

Mr Holt:

– The point is whether the amendment should be made now.

Mr Fadden:

– Is the proposal fair or unfair?

Mr FALSTEIN:

– As I stated in my opening remarks, this tax will raise £500,000 during the balance of this financial year. ‘The Government requires the money for the prosecution of the war. Whether, in considering the budget proposals for 1942-43, the Treasurer will effect the amendment which the Opposition desires will be decided by Cabinet. The physical fact is that the bill does not contain the amendment, and if the alteration were now made, a considerable amount of revenue would be lost.

Mr Harrison:

– In doing justice to the soldiers!

Mr FALSTEIN:

– The honorable member for Wentworth was a member of the previous Government which had ample opportunity to make the amendment.

Mr Harrison:

– If that Government had remained, in office, it would have done so-.

Mr FALSTEIN:

– Those protestations are comical in the light of the actions of the previous Government. I commend the bill to the House and repeat that my only regret is that it does not contain a steeper rate of duty in order to ensure a more equitable distribution of wealth than is possible at present.

Mr ARCHIE CAMERON:
Barker · ALP

– The attitude which has been adopted by some supporters of the Government is hardly in conformity with the statement of the Treasurer (Mr. Chifley) that he is perfectly willing to reconsider the matter. ‘The stand taken by the honorable member for Ballarat (Mr. Pollard) and the honorable member for Watson (Mr. Falstein) is absolutely untenable, and I expect that before the Government introduces next year the budget that will herald the millenium, they will arrive at a different conclusion. If the Government submits such a prepossessing proposal, as part of its fixed policy, to the honorable member for Henty (Mr. Coles) and to the honorable member for Wimmera (Mr. Wilson), the old wagon may stay in the mud and they may not deliver the goods.

Mr Calwell:

– The honorable member is mixing his metaphors.

Mr ARCHIE CAMERON:

– As time goes on, I am impressed by the odd mixture of elements that constitute the Government. We see great changes. Our loquacious friend, the Minister assisting the Treasurer (Mr. Lazzarini), used to rise in his place on this side of the House and heave sheaves of imprecations across the chamber at the previous Government.

Mr Lazzarini:

– Does the honorable member desire mc to repeat the performance to-night?

Mr ARCHIE CAMERON:

– I was about to observe that, whilst the Minister may be a tower of strength to the Government, he is a veritable tower of silence in respect of supplying information to honorable members. This evening, we have been treated to the unprecedented spectacle of the Minister introducing a taxing measure and the Opposition explaining it. One would think that these measures would result in a compromise. Twelve months ago, many matters might have received consideration from the House if it had not been for the unshakeable reluctance of the Opposition to assume the responsibility of office. In those days, the Labour party was prepared to arrive at any compromise - notwithstanding what Myles Standish said about compromises - so as to ensure that it would remain in Opposition.

Mr Pollard:

– Why does not the honorable member deal with the merits of the bill?

Mr ARCHIE CAMERON:

– I shall. A few minutes ago, the honorable member for Ballarat made a definite statement. I think that when he returns to his home and is taking off his hay crop, he will ponder over the utterances he made tonight. Then realization will dawn upon him that they were not so good and he will sigh for an opportunity to amend them.

Mr SPEAKER:

– Order ! These personalities must not be continued. The honorable member must deal with the bill.

Mr ARCHIE CAMERON:

– I am most decidedly dealing with the bill. The honorable member for Ballarat contended that a man who volunteers in this country, in which the voluntary system is almost an article of faith for some people, and loses his life overseas, should have his estate contribute to the Consolidated Revenue before his beneficiaries have any part of it. Neither this Government, nor any other can go on to the recruiting platform and say, “If you volunteer for active service and your life is taken, we shall take your money. If the enemy takes your life we shall take your cash.” That is a position which no Government can take

“P.

Mr Pollard:

– No government suggests doing so.

Mr ARCHIE CAMERON:

– That is the plain English of it. It is always possible that my understanding may be a. little out, but on this it is pretty well down to bedrock. This measure must have an adverse effect on recruiting. I agree with the honorable member for Wentworth (Mr. Harrison) that, if the Government should bring in a conscription law, whereby every man would have to do his job, whether it be on the battlefield overseas, or in the field or factory at home, it would have a perfect right to say, “You do what you are told and we dispose of your assets according to the ordinary law “, but while the Government continues to recruit men for service overseas, it cannot at the same time say, “ You take all of the risks over there and, if you die we shall deal with your estate in the way which this legislation provides “.

Mr Lazzarini:

– This legislation dow not propose to do what the honorable member alleges it will do.

Mr ARCHIE CAMERON:

– Something was said about the men on active service who have not big estates. I agree that, unfortunately, many men on active service have no great estates. Some of them will come back to this country “ stony broke “. That is not the ideal to which we look forward. The Government, on reflection, will not accept the view expressed by the honorable member for Watson that this legislation was designed to bring about a more equitable distribution of wealth in this country. That is not the objective of the taxation proposals. The real objective is to raise revenues with which to finance the war. The Treasurer said that when the Labour Government introduced all of those measures, which will be necessary to reconstruct the earth according to its ideals, it would not do so by subterfuge. The Labour party will say, “ This is the millennium ; take it or leave it “. I think that the honorable member for Watson was quite out of harmony with that pronouncement. The House can well afford to adopt the suggestion made by the honorable member for Wakefield, and, if he moves an amendment in committee, to support it. This is not the kind of legislation which has to be looked at from a party point of view. Questions of ethics and other considerations, which we need not go into now, are at stake, but this is not an occasion when the Government should consider that its prestige will in any way be compromised by its acceptance of the direction of the House. Before the vote is taken I should like to hear the honorable member for Henty on this question.

Mr COLES:
Henty

– I accept the challenge of the honorable member for Barker. Members of the Opposition have very successfully drawn a herring across the trail in regard to this bill. It is merely a bill to increase the rate of the estate duty. So far as I can see it does not embody anything even remotely connected with the question of soldiers’ assets. Nevertheless, I heartily agree with the suggestion made by the honorable member for “Wakefield (Mr. Duncan.Hughes) that special consideration should be given to a relaxation of the duty on the estates of soldiers who lose their lives as the result of war. Not the slightest doubt exists that when the principal act was amended in 1940 the question was not thoroughly thrashed out, but, if the Government can see its way clear to amend this measure so that the obvious intention of Parliament on the last occasion shall be expressed, I think it will be, not rectifying what we call an anomaly, but removing from those people who voluntarily enlist what is now an injustice. The bill is purely a bill to amend the rates of tax, and it will be accepted by the House as being necessary to the war finance. If die Government will give an assurance that it will do what it has been requested to do, either by regulation or by a further amendment, it will be acting wisely.

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– m reply - All of the arguments advanced by the honorable members opposite, particularly the honorable member for Wakefield (Mr. Duncan-Hughes), the honorable member for Wentworth (Mr. Harrison), the honorable member for Richmond (Mr. Anthony) and the honorable member for Barker (Mr. Archie Cameron) could well have been put forward twelve months ago. The honorable member for Fawkner (Mr. Holt) handled this question very reasonably. He pointed out things which the Treasurer (Mr. Chifley) and

Other members of the Ministry agree must bc considered, but it was the height of nonsense for other honorable members opposite to try to pillory this Government for something which is not in this bill. The facts are that this bill does not propose to touch the duty on estates valued at less than £20,000. There is no provision to raise the estate duty by one penny if the value of the estate is less than £20,000. The provisions relating to soldiers’ estates worth £5,000 were embodied in the statute on a previous occasion.

Mr MCDONALD:
CORANGAMITE, VICTORIA

– It is time that those provisions were rooted out of the statute.

Mr LAZZARINI:

– The honorable member was a Minister in the Government which should have rooted them out.

Mr Fadden:

– We were rooted out ourselves.

Mr LAZZARINI:

– I have just received a note from the Treasurer, in which he says that he will give immediate consideration to the matter raised by the honorable member for Wakefield. The honorable member for Bourke (Mr. Blackburn), who, like the honorable member for Fawkner, is a lawyer and should ‘know, tells me that this bill, being a rates bill, cannot be amended to achieve the object desired by the honorable member. I suggest that the bill be accepted as it stands. I am not concerned about the man, whether he be a soldier or otherwise, if his estate is worth £30,000, £40,000, £50,000 or £100,000.

Mr Harrison:

– Will the Minister assure the House that something will be done in the Senate?

Mr LAZZARINI:

– I cannot give that undertaking. The Treasurer is not here, but he has intimated that he will give immediate consideration to the matter. If the honorable member for Wakefield persists in committee in moving his amendment, it will be his business, but I emphasize that honorable members opposite will not be allowed to get away with statements and innuendoes that the Government is doing anything to tax the estates of soldiers overseas, unless those estates are valued’ at more than £20,000. If the provision about the estates of soldiers valued at £5,000 is an anomaly, the anomaly was created by the previous Government. The Government will sympathetically consider that matter, but it refuses point blank to accept the blame which the honorable member for Barker deliberately tried to put on it by talking about the enemy killing the soldier and this Government robbing him.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The CHAIRMAN (Mr. Prowse).Is it the pleasure of honorable members that the bill be taken as a whole?

Honorable Members. - Hear, hear !

Mr FADDEN:
Leader of the Opposition · Darling Downs

– I accept the assurance given by the Minister assisting the Treasurer (Mr. Lazzarini), but if the matter is not remedied consistent with the views of the Opposition during this sessional period, we shall take advantage of the forms of the House when Parliament again meets in order to have the anomaly adjusted. It must be obvious that the English method is fair, and I hope that the Government, in its wisdom, will adopt that method.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– It must be apparent to honorable members that it is not fair to the Government to bring down such a proposal as that made by the honorable member foi1 Wakefield (Mr. DuncanHughes) at this late stage. I assure the House that between now and the next meeting of Parliament, the whole of the matter will be reviewed.

Sir Frederick Stewart:

– If an amendment be proposed as the result of that review, will it be retrospective?

Mr CHIFLEY:

– I do not give that assurance, but when we meet again in March, the whole matter will have been reviewed.

Mr DUNCAN-HUGHES:
Wakefield

– There should be ample time for this matter to be considered and dealt with before this sessional period ends.

Mr Chifley:

– The honorable gentleman’s party has taken since May, 1940, to consider it.

Mr Fadden:

– We intended to amend the act.

Mr Chifley:

– But it took more than twelve months for the Government of which the honorable gentleman was a member to reach that decision.

Mr Fadden:

– We did not find out about the anomaly in time to amend the act before we left office.

Mr DUNCAN-HUGHES:

– I was not a member of .Parliament in May, 1940, and, therefore. I cannot be held responsible for what was done then. Had I been here I might have seen the anomaly then just as I, like others, see it now. At any rate, this is not a matter which should he delayed.

The CHAIRMAN (Mr J H Prowse:
FORREST, WESTERN AUSTRALIA

– Order! The honorable member for Wakefield is not in order in generally discussing this matter. The committee has agreed to take the bill as a whole, and honorable members must refer to clauses within the hill.

Mr Fadden:

– The committee ha3 not agreed to take the bill as a whole.

The CHAIRMAN:

– I understood that it had, but if that course is objected to, I shall put the clauses seriatim.

Clause 1 agreed to.

Clause 2 (Commencement).

Mr DUNCAN-HUGHES:
Wakefield

– I think that I can speak about the matter on this clause, which specifies that the act shall come into operation on the day on which it receives Royal assent. If there is anything in the bill relative to soldiers’ assets, it will obviously come into operation on that day, which will be almost straight away. I realize that the Government is willing to investigate this mat tei1, but this unjust imposition has been operating since May of last year. Now the Treasurer has suggested that it should continue in operation until March, 1.942. The provision was brought into operation months after -many men had volunteered for service and gone abroad. It is not a very fine reward for them that afterwards the act, which then gave them full exemption, should be amended in order to reduce the exemption to estates under £5,000. I do not wish to be obstructive, and I content myself now with urging tie Treasurer to investigate the proposal. It should he decided upon the general feeling of the House, and not by partisan action. The committee should report progress, so that the Treasurer may consider the matter and make a decision before Parliamentgoes into recess.

Mr Chifley:

– The honorable member cannot move to amend this bill.

Mr DUNCAN-HUGHES:

– I had proposed to move for the insertion of a clause which would make an exception in the case of soldiers who are killed.

Mr CALWELL:
Melbourne

.- The Treasurer (Mr. Chifley) should support his assurance on this matter with a further promise that he will take action under the National Security Act in order to cover the case of soldiers, pending a decision by the House. If the honorable gentleman’s assurance is worth anything, remedial action should be taken now ; it has been delayed since May of last year, and there is no excuse for delaying it for another three months. The equity of the proposal is obvious, and the Treasurer should not require such a long time to look into the matter. National Security Regulations are used for many other purposes, and it would not he difficult to gazette one in order to safeguard the interests of soldiers serving in a theatre of -war.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– It is unfair to ask the Government, at a few hours’ notice, to correct the mistake of another government. I accept the assurance of the Leader of the Opposition that the Government which he led intended to remove this anomaly. I give an assurance that the Government will review the situation and, if it finds i ha t injustice is being done, it will make the necessary corrective provision retrospective.

Clause agreed to.

Clauses 3 and 4 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 941

INCOME TAX BILL 1941

In Committee of Ways and Means: Consideration resumed from the 29th October, 1941 (vide page 36), on motion by Mr. Chifley -

That a tax be imposed upon incomes at i he following rates . . (tide page 33).

Question resolved in the affirmative. Resolution reported. Standing Orders suspended; resolution adopted. Ordered -

That Mr. Lazzarini and Mr. Chifley do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Lazzarini, and read a first time.

Second Reading

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– I move -

That the bill be now read a second time.

This bill is designed merely to fix the rates of income tax, the incidence of which has been thoroughly debated on i fie Income Tax Assessment Bill. Any debate on this measure would involve a repetition of what has already been said over and over again.

Mr FADDEN:
Darling DownsLeader of the Opposition

– It is ali very well for the Minister to imply that this bill is not very important because it arises out of the Income Tax Assessment Bill, which has been debated. That is true, but it provides. the means of extracting from the taxpayers the revenue envisaged in the assessment bill. No good purpose would be served by debating the rates of tax at this stage, and the Opposition can do no more than lodge its emphatic protest against the severity of the inflictions upon taxpayers within certain income groups. We contend that one group of incomes has been almost totally ignored, and has not been asked to contribute a fair proportion of the country’s war finances. The Opposition does not intend to submit amendments to this measure, but agrees to its passage only with the greatest reluctance.

Question resolved in the affirmative.

Bill rend a second time, and passed through its remaining stages without inn end ment or debate.

page 941

POST AND TELEGRAPH RATES BILL 1941

Second Reading

Debate resumed from the 25th November (vide page 842), on motion by Mr. George Lawson -

That the bill be now read a second time.

Upon which Mr. McDonald had moved by way of amendment -

That all words after “Bill” bc omitted with a view to inserting the following words in place thereof: - “be withdrawn temporarily and reintroduced with thu provisions of Statutory Rules 1941 No. 201 incorporated therein.

Mr MULCAHY:
Lang

.- As honorable members know, this is a revenue measure designed to augment the nation’s resources in order to finance the war effort, a job with which we should proceed as quickly as possible. The honorable member for Corangamite (Mr. McDonald) has moved an amendment; why the Opposition should endeavour to stonewall-

Mr McDonald:

– I rise to a point of order. The honorable member has just said that the Opposition has stonewalled. I take grave exception to that. As a matter of fact, all that I did was to . move an amendment in order to give to the House an opportunity to debate matters that did not come within the scope of the measure.

Mr SPEAKER (Hon W M Nairn):

– The honorable member’s remark was only a matter of opinion.

Mr MULCAHY:

– I still contend that there was no justification for delaying the passage of this measure. The amendment submitted by the honorable member for Corangamite will not help in any way to increase the Government’s resources for the prosecution of the war. I am pleased that the Government saw fit to bring down a measure of this sort. It proposes to increase revenue without increasing the costs usually associated with such a process. I wish to bring to the attention of the Postmaster-General some suggestions that might improve the service rendered by the Postal Department and, at the same time, increase its income. I should like to see telephones installed in every home in Australia, although I realize that, at the present time, this is not possible owing to the scarcity of telephone cables. In some other countries telephones are installed free of rent, and the only charges levied are for calls made by the subscriber. If this system were introduced in Australia, a considerable amount of additional revenue would be received by the department, and a valuable service would be extended to the public. Many utilities operating in the United States of America supply without charge the electrical equipment necessary for the use of their current, and also maintain globes and units in repair. Only the current actually consumed is charged for. I consider that it would be a good thing for the Government to provide, as soon as practicable, for the free installation of telephones in all homes where the service is desired. .Ample supplies of copper cable and other equipment for this purpose, which is in short supply at the moment because of war conditions, were available during the long period for which the previous Government was in office.

I direct the attention of the Government to the necessity to increase the allowances provided for non-official postmasters. In my opinion, an improvement of the conditions relating to these offices would undoubtedly lead to an increase of revenue from those sources. I also direct the attention of the Government to the desirability of appointing permanent officials to post offices in such localities .as Islington, Cardiff, The Junction, Morisset, Swansea, Sans Souci, Stanmore, Bellevue Hill, Spit Junction, Dee Why, Terrigal and Wickham.

Mr Abbott:

– Would that involve the “ sacking “ of the present non-official officers ?

Mr MULCAHY:

– I believe that the appointment of permanent officials to such places would lead to an increase of revenue, and I therefore advocate such action.

I have made many applications for the establishment of public telephones in places in my electorate, but until the Labour Government came into office very little result was achieved. I have been glad to observe indications of a movement to improve the telephone service in these localities since the change of government. I am. firmly of the opinion that the free installation of telephones in private homes would lead to a substantial increase of revenue. I trust that the bill will have a speedy passage.

Sir GEORGE BELL:
Darwin

. -I support the amendment of the honorable member for Corangamite (Mr. McDonald), the object of which was to provide means for a discussion of telephone charges and services. The honorable member for Lang (Mr. Mulcahy) accused the Opposition of stonewalling, but I point out to him that he would not have had the opportunity to discuss telephone charges and services if the honorable member for Corangamite had not moved the amendment. In the main I am in agreement with the remarks made by the honorable member for Lang concerning the telephone services. Increases of telephone rentals and call charges were brought into effect recently under Statutory Rules 1941 No. 261 ‘which will adversely affect telephone users in country districts. .1. have always considered it to be wrong to make a big rental charge for telephones. I believe that a substantial reduction of that charge would lead to a more extensive use. of the telephone services. I have not such a great objection to the call charges, which 1 regard, in the main, as reasonable. If, however, the rent equipment were reduced, more people would install telephones and even if the husband or wife of the home did not initiate many calls, it is more than likely that they wo.uld receive a good many, and’ so the revenue would benefit. The honorable member for Lang made a gibe at the Opposition because telephone services had not been extended more widely while the previous Government was in office. I have been endeavouring for the last twenty years to encourage a. more general vise of the telephone services. During the nine years that I was Speaker, I spoke from the floor of the House on only three occasions, and on each of them I emphasized the need to develop our postal, telephonic and telegraphic services to country districts. I hope that the errors of policy in this connexion which have persisted for so long will be corrected in the not distant future. If honorable members opposite who represent country constituencies would join with honorable members on this side” of the chamber who also represent such areas, in making united representations to the Government, I am sure that effective action would he rr. ken quickly. . desire to say a few words concerning ii lui -official postal officers. On many occasions, honorable members opposite have expressed’ themselves emphatically on the desirability of ensuring that every body in the community shall enjoy at least the basic wage. In my view, the most sweated people in the Australian community are the non-official postmasters, some of whom receive only 15s. a week for daily attendance at their offices from. 9 a.m. to 6 p.m. Our old-age pensioners will shortly be receiving fi 3s. 6d. a week and, in my opinion, it is absurd and unfair for us to- call upon non-official postmasters, who render such an important service in country districts, to work for the small wages they now receive. Of course, they would not do so unless they had the interests of their various districts at heart. I stress, as I have clone on many previous occasions, the need to improve the conditions of these non-official employees.

I regard some of the increased charges provided for in this bill as unjust, especially to people living in country districts. I do not consider that the new imposts are wise, even from the point of view of the Postmaster-General’s Department. It would not be in order for honorable gentlemen on this side of the chamber to move to reduce the charges, but I sincerely trust that the Minister assisting the PostmasterrGener al (Mr. George Lawson) will use his influence to secure a. rectification of the grave injustices under which residents of country districts will suffer in having to pay increased charges, thus being adversely affected in comparison with the more favoured people who live in the larger centres of population.

Mr ABBOTT:
New England

, - I realize that the Government must find means to increase the revenue in order to maintain and enlarge our war effort. For that reason, I support the proposals of the bill for increases of the postal rate on letters, periodicals and other mail matter referred to in the schedule. At the same time, I point out that, by increasing postal rates, the Government is taking a risk of reducing the business of the Postmaster-General’s Department and thus of diminishing the revenue obtainable from that source. No doubt these increased charges will tend to discourage letter writing. This, in turn, will be reflected in the saving of paper I consider that it would be wiser for the Government to adopt measures to encourage the use of the various services provided by the Postmaster-General’s Department. The increases of postal charges will not lead to increased purchases of stamps, letter-cards, postcards and other articles used in correspondence. These facilities will not be operated to the best advantage so long as those who are in charge of them are (paid starvation wages. I was very pleased to hear the honorable member for Lang (Mr. Mulcahy) mention non-official post offices. Those who are conducting such offices have been underpaid for years;, and in addition have been saddled from time to time with extra duties, such a? the collection of statistics and the making of various statutory payments. If they are not paid a decent salary, and relieved of some of their present duties, they cannot he expected to encourage greater use of postal facilities, and thus increase the revenue. A good deal more would be collected, if justice were done to them. I cannot agree with the proposition of the honorable member for Lang, that non-official postmasters and postmistresses, who for so long have performed such excellent service, should be removed from their positions and replaced by permanent officials.

Mr Mulcahy:

– Only where the revenue is sufficient to justify the change.

Mr ABBOTT:

– It would be a very mean way in which to reward those who have sweated, and expended, time and energy, in the interests of this country. They are the best collectors of revenue the Commonwealth could have. Officers brought from the hurly-burly of the city, without any knowledge of country conditions, would not encourage greater use of the post office, with consequent increase of the revenue. It is extraordinary to hear the honorable member for Lang advocate that the Commonwealth should get rid. of those who have worked hard and done their best in its service, and should put in their places friends of honorable members in city electorates. I am in. agreement wth the increase of the rates, and merely ask that justice be done in this matter.

Mr CONELAN:
Griffith

– I endorse some of the re-marks of the hon.orable member for New England (Mr. Abbott), but with others I entirely disagree. The treatment of non-official pOStmasters was one of my main complaints when he was a Minister and his party was in power. I did not then hear the honorable member take up the cudgels on behalf of these servants of the Commonwealth. I am confident that the Minister in charge of the bill (Mr. Lawson) and the Postmaster-General (Senator Ashley), will see that these officers receive fair treatment when their case is heard by the Public Service Arbitrator. The worst feature of the matter has been left unmentioned by the honorable member for New England; it relates to messenger boys employed at non-official post offices, who have to work 44 hours a week in the delivery of telegrams. If a telegram were lodged at a minute to 1 o’clock or a few minutes before 6 p.m., it would have to be delivered, even though the boy had to travel miles in order to deliver it. Holidays throughout the year also have to be worked, and the remuneration is only 4s. a week. If that is not. child slavery, I do not know what it is. Some of the lads have to provide a bicycle, if the employer does not do so.

Mr Harrison:

– There are no specified rates in respect of non-official post offices.

Mr CONELAN:

– -Tha,t is a very strange statement for an exPostmasterGeneral to make. The remuneration of non-official postal officers is fixed.

Mr Harrison:

– I am talking of messengers.

Mr CONELAN:

– Messengers are included.

Mr Harrison:

– Nonsense !

Mr CONELAN:

– The honorable member does not know what he is talking about. Only yesterday, in Brisbane, t received a. deputation of non-official postal officers, who placed before me in black and white the statement that these lads receive only 4s. a. week. They are supposed to provide, a bicycle, and do not receive any additional remuneration for working overtime, except on Christmas Day, Good Friday, and one other day. The honorable member for Lang (Mr. Mulcahy) expressed the wish that all non-official post offices should be made official, and was called to task by the honorable member for New England. So soon as the revenue reaches a certain figure, a non-official post office become? official.

Mr Harrison:

– It does not.

Mr CONELAN:

– Since this Government has been in power, the status of two offices in my electorate has been changed.

Mr Harrison:

– Many other offices have not been changed.

Mr CONELAN:

– No member of the staff has been thrown out of employment : they have been either transferred to other non-official post offices or included in the staffs of the new official offices. The PostmasterGeneral and the Minister representing him in this chamber will see that every officer connected with non-official post offices shall be given decent treatment and paid a. living wage, not the mere pittance handed out by the previous Government.

Mr PROWSE:
Forrest

.- For a long time, I have held the view that the post office should he a service, and should not be used as a taxing machine. It should not be so heavily bled for the benefit of Consolidated Revenue that the efficiency of the service is impaired. However, this is not the occasion on which to press that view. If honorable members will look at the schedule to the bill they will see that it is loaded against the country districts. As the honorable member for Barker (Mr. Archie Cameron) pointed out last night, the services provided by the PostmasterGeneral’s Department in country districts are of great value to the cities. Although telephone lines are erected for long distances in order to provide a service to the homes of the settlers who produce the wealth that creates the credit of this country, those facilities are not entirely in the interests of the men on the land. Merchants and others who batten on the farmers benefit from that service as much as, if not more than, the farmers themselves. Therefore the proposed increase of the rates will have an adverse effect upon the farming community. Only this month I addressed to the Postmaster.General (Senator Ashley) a communication relating to the Lower Great Southern Inter-district. Conference, held in Western Australia on the 31st August and the 25th October last. At both those conferences the following motion was carried : -

That this conference requests that the Commonwealth Government be asked to place all trunk line calls on a more equitable and fair basis, and with that object in view, the following scheme is recommended for adoption by the Postmaster -General : -

All telephone subscribers to be able to phone by ordinary or trunk line a distance of 25 miles from his telephone or nearest post office. The rate thereafter to be on the basis of Id. extra for every tcn miles.

The following observations were offered with regard to the decision of the conference : -

Concerning trunk line calls you will realize that the metropolitan area is in a much better position than the country district. For example, one can telephone from the outskirts of Midland Junction to the outskirts of Fremantle, a distance of, say, 25 miles, for lid. or 2d. at a public telephone. If one wishes to ring, for example, from Katanning to Badgebup, a distance of only twenty miles, one pays the trunk line charge, and such instances as this could be multiplied without number. “The proposal is not an unreasonable one, particularly in regard to the first 25 miles, when one bears distances in mind. If the primary producer is to be helped over his present financial difficulties, every saving - no matter how small - is of importance, especially when one takes into consideration the cumulative effect of a number of savings.

The conference carried a further motion in these terms -

That the Commonwealth Postmaster-General be requested to extend the facilities for lettergrams to all full-time post offices instead of this convenience being available only at Perth and Kalgoorlie in this State, and at a few post offices only in other States.

I have always been puzzled to know why such conveniences can only be made available over telegraph lines for the benefit of those sections of the people who reside in areas in which the population is centralized. It seems unreasonable that country people cannot enjoy the right to send lettergrams. If they were given permission to use that service, I have no fear that the revenue of the department would be reduced one whit. The effect would be rather to increase the revenue and improve the service provided for the community. Western Australia comprises one-third, of the continent of Australia, yet there are only two places in the whole of that State where the lettergram service is ‘available. The observation of the conference on this matter was as follows : -

The lettergram i.s an inexpensive way of sending a lengthy telegram. In Western Australia it is of no value at all. So far as the Western Australian people are concerned it is only of use to tl,em if they wish to communicate with Kalgoorlie from Perth, or with the eastern State capitals. There surely is no objection to its being extended to ali, or, at least, a substantial number of full-time post offices. where delivery could be effected the same way as that of other telegrams is effected, and the convenience that would be afforded to the public would be considerable.

I hope that the Postmaster-General will not give merely cursory attention to the extension of the lettergram service, but will realize that benefit would be derived from it. Here he has an opportunity, as a. new Minister, to leave his mark on a great institution, the Post Office, which has proved itself to be an efficient organization. I hope that he will give greater consideration than has been given in the past to the claims of country people, whose increasing costs cannot be passed on to the public in the -same way as city merchants pass on additional charges to their customers. I support the amendment, and, notwithstanding the fact that additional revenue is required for war purposes, I hope that much of the revenue of the department; will be used in increasing its efficiency. I agree with those honorable members who contend that officers in charge of non-official post offices should receive more remuneration than they have had in the past. The volume of the work of some of them may be small, but their services are necessary. Although the salary paid to the officers is regarded by some people as sufficient in view of the actual services rendered, it is a mere pittance and should be increased.

Mr ROSEVEAR:
Dalley

.- I can imagine the uproar that would have arisen amongst honorable members opposite had their party been in power, and we had adopted an attitude similar to that which they are adopting now. I have never known a. worse example of stonewalling, nor heard such paltry and meaningless amendments.First, there is the amendment of the honorable member for Wentworth (Mr. Harrison) to limit the period during which this provision shall

Mr SPEAKER:

– That has not yet come before the House.

Mr ROSEVEAR:

– The honorable member for Corangamite (Mr. McDonald) moved -

That all words after “ bill “ be omitted with a view to inserting the following words in place thereof : - “ be withdrawn temporarily and re-introduced with the provisions of Statutory Rules 1941, No. 261 incorporated therein.”

This amendment was moved for no other purpose than to give to certain Country party members an opportunity to indulge in. their annual “winge” regarding telephone communications and postal matters generally. Statutory Rule 261 is already in force, yet the honorable member proposes to delay the business of the House so that it might be incorporated in the bill. This is a war measure designed to raise revenue. It proposes to increase the postal rate by one halfpenny, but to hear honorable members opposite one would think that a very heavy increase was proposed.

Mr Harrison:

– A matter of ?2,000,000 is involved.

Mr ROSEVEAR:

– Perhaps, but it itproposed to do no more than increase the postal rate by one halfpenny. Honorable members opposite are now playing the role of repentant sinners, because they have themselves been responsible for doing the very thing which they are now condemning. Governments of the kind which they supported were responsible for every increase of postal rates that has taken place, but never on any occasion did they follow the virtuous course suggested by the honorable member for Wentworth - never did they repeal the provision when the necessitous times had passed. Before the last war we had penny postage. Then, as a war measure to raise revenue, the rate was increased to 11/2d., and although more than twenty years had elapsed since then, no attempt was made to reduce the rate. During the depression, a national government increased the rate to 2d.

Mr Harrison:

– I think that the Scullin Government did that.

Mr ROSEVEAR:

– Even if that were so, governments supported by the honorable member allowed the rate to remain unchanged for ten years. Honorable members opposite are either merely humbugging the House, or are deliberately placing obstacles in the way of necessary war-time legislation.

Mr SPEAKER:

– The word “humbugging” is unparliamentary.

Mr ROSEVEAR:

– The honorable member for Wentworth said that he did not oppose the present increase for war purposes, but said that, if his Government were in office, it would make clear that the increase should apply only for the period of the war. If his party had been in office, and had done anything of the kind, it would not have been running true to form. I hope that honorable members opposite will stop their stone-walling tactics, and allow the House to get on with the business of the country. The honorable member for Richmond (Mr. Anthony), when he was a member of the Government, never failed to display his patriotism by objecting to members of the Opposition embarking upon any discussion which might delay the passage of Government measures. Now that he is in the cool shades of the Opposition, he is taking his defeat very badly, and is losing no opportunity to place obstacles in the way of the Government. I trust that he and other honorable members opposite will realize rhat this is a serious, deliberative chamber, and will refrain from attempting to turn the proceedings of Parliament into a comic opera.

Mr HARRISON:
Wentworth

. I rise to speak to the amendment, and to discuss some of the matters which have been mentioned by honorable members opposite. I should not have spoken but for the remarks of the honorable member for Dalley (Mr. Rosevear) and the honorable member for Griffith (Mr. Conelan). When the honorable member for Dalley sat in opposition. I do not think that any member so obstructed the then Government in matters relating to the country’s war effort as he did. On many occasions, he criticized Government proposals merely for the sake of doing so, and it. ill becomes him now to attack the Opposition, for drawing attention to things which it thinks should be adjusted. The honorable member for Lang (Mr. Mulcahy) told us with great enthusiasm that his representations to the new PostmasterGeneral (Senator Ashley) were being given attention and that he was getting everything that he asked for.

The statements of the honorable member for Griffith remind me that “a little, learning is a dangerous thing “. The honorable gentleman attempted to enlighten the House on matters connected with non-official post offices, hut he revealed his ignorance of the subject. The honorable member said that unofficial postmasters sometimes engaged messengers at 4s. a week to deliver telegrams and that such messengers had to provide bicycles for their own use. Such a statement is palpably absurd.

Mr Martens:

– I rise to a point of order. The honorable member has already spoken to the second reading, and ho is now making another secondreading speech.

Mr SPEAKER:

– That is not so; but if is true that the debate has degenerated into an exchange of personalities. During the remainder of the debate, I shall rule out of order any honorable member who makes personal references.

Mr HARRISON:

– Non-official postmasters are paid on the basis of the business transacted by them. In many instances the post offices under their control are conducted in conjunction with some other business, and it is for that reason that the remuneration is at a rate which may not appear to be commensurate with the services rendered. It has been said, and I believe with some justification, that the turnover of the other businesses conducted by non-official postmasters is greater because of the post office being on the same premises.

Mr SPEAKER:

– Order ! No further references to non-official postmasters will he permitted.

Mr HARRISON:

– I respect your ruling, Mr. Speaker, and shall say only that the rates which apply to these offices permit the persons in charge of them to engage any labour that they may wish to engage at any rate that they may agree to pay for such, services.

Mr SHEEHAN:
Cook

.- I notice in the schedule that an extra’ -Jd. postage will in future be payable on each copy of Ilansard, -both Commonwealth and State, forwarded through the post. I cannot understand why the Government should impose this extra charge on the reports of Parliamentary proceedings. What advantage will the Commonwealth receive from charging itself more for the postage of Hansard, and what will it gain by collecting additional revenue from the States and returning it to them later as grants? I regard :this increase as a mistake. It will rob honorable members of the opportunity to distribute additional complimentary copies of Hansard, and it will act as a check on the desire of the Government to supply to various organizations reports of the proceedings of Parliament. Hansard has proved to ‘be a most reliable source of information, as was proved recently in connexion with the Smith-Falstein case. I consider that Hansard is a bulwark of our democratic system, and a most important part of the machinery of this Parliament. The Government will not gain anything by imposing higher postal charges on this publication, and I consider that the “Minister will be well advised . to delete the extra charge from the schedule.

Mr ANTHONY:
Richmond

– I cannot allow to pass unchallenged some of the remarks of the honorable member for Dalley (Mr. Rosevear). I do not wish to indulge in personalities, but, in my opinion, the Opposition has a responsibility to examine all of the proposals introduced by the Government. That was a. duty of the Opposition to which the present Prime Minister (Mi1. Curtin) when Leader of the Opposition drew attention from time to time. Members now in opposition have a right to rise in “defence of particular interests, or in furtherance of their views, and it is most improper that when they do so they should be charged with deliberately stone-walling.

Mr Clark:

– Has not the honorable member spoken already?

Mr ANTHONY:

– No; and I should not have spoken hut for the remarks of the honorable member for Dalley, who, upon a number of occasions in this House, although he has professed the greatest sympathy for the man on the land, has to-night accused members of the Country party who spoke upon this bill of making their usual annual “winge” about conditions in rural areas. Any person possessing a knowledge of country conditions and a genuine sympathy for the nian on the land will appreciate that members of the Country party who have participated in the debate are well-informed upon rural subjects. They are gravely concerned about the depopulation of country districts. The exodus to the big cities, which is the result of economic conditions and the lack of adequate water supplies and electrical and telephonic facilities, is alarming.

Mr Frost:

– Whom does the honorable member blame for that?

Mr ANTHONY:

– I. do not charge the Government with being responsible; but I take strong exception to the remarks of the honorable member for Dalley, who accused members of the Country party of stone-walling when they attempted to explain to the House the disabilities under which people in the country live. Having delivered his abusive tirade, the honorable member stalked out of the chamber without deigning to listen to a reply. Thai the speeches which the members of the Opposition have delivered upon various measures to-day have contained constructive criticism is demonstrated by the Government’s adoption of a number of their proposals. In those circumstances, the criticism in which the honorable member for Dalley indulged was unjustified and unfair.

Mr GEORGE LAWSON:
Minister Assisting the Postmaster-General · BrisbaneMinister assisting the PostmasterGeneral · ALP

– in reply - The increased postal and telephone charges proposed by the Government are precisely the same as those which were contemplated by the previous Government. The former Treasurer (Mr. Fadden) referred to them in his budget speech on the 25th September last. On page 14 of the budget, proposals of the previous Government, under the heading “Postal Charges”, the proposal to increase charges for postal and telephone services was outlined thus -

  1. War postage tux of -id. in addition t’> tin; normal rates nf postage on all postal article.* except mail matter to and from monitors of tin; fighting forces, air mail letters to addressees abroad and parcels. Secondly.
  2. .Increased telephone charges, namely, rentals at rates varying from 5s. to 15s. per annum: nml additional farthing per cai! mi local wills : and increases on a sliding sen le on trunk cil I ls exceeding 25 miles.

The additional revenue this year is estimated at £1.500,000. Further information will be supplied later by the Postmaster-General.

It is evident from the debate which has taken place that some confusion exists in the minds of honorable members regarding the methods which are adopted for fixing postal and telephone charge.*. The charges for postal services are fixed by the Post, and Telegraph Rates Act. The bill now before the House amends this act so as to provide for certain increases of rates on the postal article.referred to in that statute. The charges for all classes of telephone facilities have always been fixed by regulation, and not. by an act.

Mr A rgh in Cameron:

– Regulations under that, act!

Mr GEORGE LAWSON:

– No. The regulations are issued under a different, act. as I shall show. The authority for making regulations covering the various forms of telephone service is provided in section 97 of the Post and Telegraph Act, which reads - .

The Governor-General may make regulations not inconsistent with this act prescribed on matters which are necessary or convenient to be prescribed for carrying out or giving effect to this act, and in particular may make regulations for all or any of the following purposes.

The section proceeds to set out in detail the matters which may be covered by regulation. Paragraph m, which indicates the authority for fixing telephone rates by regulation, reads as follows : -

Prescribing the fees, rates and duesto be received for -

any conversation on any telegraph line or on any telephone exchange or private telephone line;

rent or hire for the use of any such exchange or private telephone line:

and generally for the management working and maintenance of any or all such telegraph lines.

The debate has satisfied me that the honorable member for Barker (Mr. Archie Cameron) who was at one period PostmasterGeneral, and the honorable member for Swan (Mr. Marwick) were unaware that the regulations and the bill are separate matters. The regulations are issued, not under the Post and Telegraph Bates Act, but under the Post and Telegraph Act.

Mr Marwick:

– We were aware of that.

Mr GEORGE LAWSON:

– I disagree with the honorable member. When I discussed the matter with him last night, I drew attention to this fact, and he remarked that he was not aware of it.

Mr Marwick:

– I protested against the exclusion of the telephone rates from the Post and Telegraph Rates Bill.

Mr GEORGE LAWSON:

– The honorable member protested against the regulations, which were issued under a different act.

Mr Marwick:

– That is so.

Mr GEORGE LAWSON:

– The practice of fixing charges for postal, telegraph, and telephone services has operated since the inception of the Commonwealth. The bill now before the House does not vary the accepted form of fixing rates for all classes of postal, telephone, and telegraph facilities. Consequently, the Government, does not. propose, at this stage, to make any variation of what has been, for many years, the established procedure.

The honorable member for Barker (Mr. Archie Cameron) referred to postal charges for the transmission of newspapers. I emphasize that no change is contemplated in the basic principle embodied in the existing act for computing the rates for various postal articles. The proposal is to increase by one halfpenny the rates applicable to the various articles enumerated in the schedule.It is not proposed, at this juncture, to review the conditions which have applied in the past to the computation of charges, particularly regarding bulk postage rates. In other words, the conditions respecting postal charges for newspapers and other articles submitted to the post office in bulk will be continued., with the important exception that an increase of one halfpenny will apply to the unit of weight.

In the course of his remarks, the honorable member for Swan commented on the recent, amendments of the telephone regulations that, apply to all call charges to places situated adjacent to the capital cities but, outside the boundaries, in each case, of the metropolitan telephone network. During recent years, there has been continual and marked development in many districts just outside the metropolitan telephone networks. This progress has been most noticeable in Sydney and Melbourne. As a consequence, many th riving communities, which are located between the metropolitan network boundaries for telephone rate purposes, are completely urban in character. Investigations indicate that approximately 75 per cent, of the total calls originated by subscribers connected to the exchanges concerned are for places withinthe boundaries of the prescribed metropolitan networks, and that the bulk of the incoming calls to these outer metropolitan exchanges are originated bv city subscribers.

For technical and other reasons, it is not practicable to include these outer metropolitan district in the capital city network boundaries for telephone tariff purposes. In the circumstances, it was considered that, some other measure of relief should be provided.It was therefore decided that, in the case of Sydney and Melbourne, there should be a uniform reduction of 2d. in the trunk-line call charges for all places located in areas up to 25 miles from the centre of the network, and a reduction of Id. in the intermediate and night rates for places beyond 25 and 30 miles. In respect of Brisbane, Adelaide, Perth and Hobart, somewhat similar reductions were made in the call charges to places up to 25 miles distant from the centre of the network. The reason for differential treatment in the capital city networks is the fact that the network boundaries in .Sydney and Melbourne are fixed at 15 miles, and in the other capital cities at 10 miles, from the general post office. The reduced rates are fully justified and have, to some degree, removed the anomaly which existed, particularly in Sydney and Melbourne, that subscribers situated immediately beyond the boundaries of the network were required to pay 4d. plus the relevant unit fee charge for calls to places within the metropolitan network boundaries, whereas those a short distance away, but within the boundaries of the network, obtained service at the unit fee rate of lid. The .honorable members for Lang (Mr. Mulcahy), Griffith (Mr. Conelan) and Forrest (Mr. Prowse) complained about the remuneration of n on-official postmasters and postmistresses. When the party of which I arn a member was in Opposition I persistently advocated the payment of these people on the basis of the value of the service they rendered. I am pleased that the members of the present Opposition have continued the fight for the amelioration of the conditions under which these people are employed. I am not in a position to add to what I said in answer to questions addressed to me on this subject, namely, that the Government has set up a committee to investigate the remuneration paid to these officers, and that I am satisfied that when the committee has completed its investigations they will be paid a remuneration commensurate with the work which they ave called upon to perform. The honorable member for Cook (Mr. Sheehan) referred to the proposed increase of the postage rate on Hansard by a halfpenny. It is the opinion of the department that if Hansard were deleted from the schedule as suggested by the honorable member, it Would mean that the publica- tions of other governments and of semigovernment instrumentalities would also have to be deleted. It is unnecessary for me to point out that that would involve a considerable loss of revenue.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 4 agreed to.

New clause 5.

Mr HARRISON:
Wentworth

– I move -

That thu following- new clause be inserted in the bill : - “ 5. This act shall continue in operation until a date to lie fixed by proclamation and no longer, but, in any event, not longer than six months after His Majesty ceases to be engaged in war.”.

As honorable members opposite have stated frequently this is a war measure and as such it should be allowed to operate only for the duration of the war. I understand that the Government expects to get approximately £2,000,000 as a result of the proposed amendments of postal, telegraphic and telephone rates. If it be necessary to increase those rates in order to secure additional revenue to carry on the war to a successful conclusion, the Government should be given an opportunity to do so, but only for the duration of the war. As I pointed out in my second-reading speech, unfortunately it is becoming customary for governments to use these essential services as a means to raise taxes. The essential services of this country should be controlled by the Government for the welfare of the people. If honorable members opposite are in accord with that principle surely they should not seek to impose the maximum rates for the services rendered. If the revenues from these essential services were low I could understand the Government making every effort to increase them, but when the yield is high there is no need for the continuance of additional impositions after the war is over. The amendments proposed in this bill have been designed to enable the Government to increase the rates still further, if it so desires.

Mr Lazzarini:

– - They will continue to operate only until the next budget has been implemented.

Mr HARRISON:

– I have no desire to stultify the Government’s efforts to raise additional revenue.

Mr Curtin:

– Since the war started the honorable member has been a member of a government which brought down severe increases of taxation, yet he seeks to impose on the present Government a restriction to which he when .a Minister would never have agreed.

Mr HARRISON:

– It does not necessarily follow that if a former government failed to realize its responsibilities the present Government should also do so. Opposition members may have thought that the principle was wrong, and may think now that, as Government supporters are the champions of Governmentcontrolled essential services, they should not seek to continue to impose the maximum of taxes on the people who use those services. This proposed new clause has not been drafted in order to restrict the Government in the future to further expand its revenues, but there must be a limit. If the purpose of the Government is to prevent the people whom it professes to represent from, enjoying the amenities offered by essential services, it should say so. Otherwise the Government should accept the proposed new clause.

Mr ROSEVEAR:
Dalley

.- Had the honorable member for Wentworth (Mr. Harrison) spoken any longer, lie would have convinced himself of his sincerity in moving the proposed new clause, but not us, and, I should say, not his own colleagues. The honorable member had ample opportunity as a Minister to limit the duration of taxation bills which were introduced by the Government of which he was a member to the period of the war and six months thereafter, which is what he wants this Government to do with this bill. We may find it necessary to meet a post-war collapse by imposing even heavier taxation than is now contemplated. Government officials estimate that after the war at least 600,000 men and women, will be searching for work. They will not be earning money which can be taxed, and will have to be provided for in some way. Whatever be the way, taxes will have to be levied in order to provide for them. After the war the

Government will be faced with the necessity to find huge sums of money with which to pay deferred pay to returned soldiers. Had the Fadden budget been accepted further huge sums would have had to be raised in order to repay the compulsory loans for which it provided. No one can predict what conditions will operate after the war ends, and the Government is justified, therefore, in seeking to obtain revenue in this way. Taxation measures of any kind last only from budget to budget, and from year to year. In the next budget the postage rate may be increased or reduced - no one can tell - and to gay, with the semblance of sincerity, that the operation of this measure should be limited in the way intended in the proposed new clause is ridiculous, and I hope that the Government will stand its ground and refuse to accept the proposal.

Mr CLARK:
Darling

.- The limitation aimed at in the proposed new clause moved by the honorable member for Wentworth (Mr. Harrison) is pointless, because no government would be bound by it. Immediately the legislation on which the limitation was based expired it could be re-enacted. I stress the point made by the honorable member for Dalley (Mr. Rosevear) that post-war problems may make it necessary to impose even heavier taxation than is now contemplated. One of the great problems which will confront the Government after the end of the war will be the rehabilitation of country districts, which have been depopulated by thousands of people going to the cities to work in the munitions industry and other industries owing to their inability to find work in country towns. Some of the new postage rates on advertising pamphlets, catalogues and articles of that description with which rural areas are flooded by big metropolitan stores-

The CHAIRMAN:

– The honorable member will not be permitted to refer any further to the rates. The committee has already disposed of the schedule.

Mr CLARK:

– I am pointing out that the continued operation of this legislation after the war will substantially assist in rehabilitating country districts if it prevents metropolitan wholesale and retail houses from exploiting the country districts by means of the mail order system and mailed advertising. The legislation may in that way help to develop secondary industries in country districts. The honorable member for Wentworth deprecated the use of essential services as taxing mediums. The honorable gentleman was a Minister in a government which taxed the most essential of all commodities, the people’s food. It also taxed clothing, another essential, and conveyances, which provide another essential service.

The CHAIRMAN:

– Order ! The honorable member is not discussing the question before the Chair, which is the continuance of this measure for a given period. The schedule has been passed.

Mr CLARK:

– The honorable member for Wentworth objected to the principle of taxing essential services. I repeat that this measure represents no departure in that respect from our past practice. I have already mentioned several services which are already subject to tax. Even the furniture in the homes of our people is subject to tax. Consequently, no reason exists why a tax of this kind shouldbe restricted on the grounds advanced by the honorable member. I hope that the committee will agree to the bill in its present form and regard it as an essential war measure, in order to enable the Government to obtain a portion of the revenue which it requires so urgently.

Question put -

That the clause proposed to be inserted (Mr. Harrison’s amendment) be so inserted.

The committee divided. (The Chairman - Mr. Prowse.)

AYES: 22

NOES: 27

Majority . . . . 5

AYES

NOES

Question so resolved in the negative.

Title agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 952

LAND TAX BILL 1941

Bill returned from the Senate without, requests.

page 952

STATES GRANTS BILL 1941

Second Reading

Debate resumed from the 29th October (vide page 56), on motion by Mr. Chifley -

That the bill be now read a second time.

Mr ANTHONY:
Richmond

– The presentation of the report of the Commonwealth Grants Commission, in conjunction with this measure, which provides for the payment of certain sums of money to what are known as the claimant States, affords an opportunity to review the financial and constitutional relationship of the Commonwealth and the States. The commission has presented a comprehensive report. Its members are to be congratulated on the thoroughness of their investigations of the numerous facts and circumstances which they were obliged to consider in order to determine the relative payments which should be made to the

States concerned. The report contains a wealth of information and reveals certain factswhich should be brought to the notice of Parliament and of the country generally. A table in the report shows that for the financial year 1939-40 an amount of £54,386,000 was collected in State taxation. In addition, out of the £90,000,000 revenue which the Commonwealth received the States received £18,691,000. Therefore, out of Commonwealth and State revenue from taxation in that year totalling £144,000,000 the States received over £73,000,000, or more than half of the total collections by the Commonwealth and the States. The report of the commission reveals that in the period from 1930-31 to 1.939-40, the Commonwealth Government paid to the various States, from its revenue, no less a sum. than £167,417,000. Payments to the States by the Commonwealth began, of course, at the inception of Federation ; but since the appointment of the Commonwealth Grants Commission in 1933, the claims of the States of “Western Australia, South Australia and Tasmania have been placed on a more scientific basis. In the seven-year period 1928-1934, before any of the commission’s recommendations became operative, Western Australia, South Australia and Tasmania received £9,388,000 in Commonwealth grants, whereas in the following seven-year period under the Commonwealth Grants Commission they received £16,020,000. The annual average in the first seven-year period was £1,335,000 and in the second sevenyear period £2,288,000. I mention this not because I am opposed to the payment of grants by the Commonwealth to the States mentioned, but because I am anxious to bring the situation into proper perspective. I believe that the time has arrived for a reexamination of the functions, responsibilities and burdens of the States and of those of the Commonwealth, particularly since the beginning of the war. In my view it is necessary in the interests of the whole community, that the relations of the Commonwealth and the States should be re-examined. I offer two reasons in support of this contention. First, the Commonwealth is now exercising, under the National Security Act, so many functions which cut across the peace-time interpretations of the Constitution, and has invaded so many fields formerly occupied exclusively by the States, specially in relation to primary products, that it will probably be impossible to revert to pre-war conditions after the war ends, especially in respect of marketing. Unless some decisive move is made during the war period to revise the Commonwealth Constitution, it is likely that people engaged in primary industries will find themselves facing almost insuperable constitutional difficulties in relation to their marketing organizations after the war. We should therefore consider the substitution of our present constitutional machinery, by some other machinery which will permit of the preservation after the war of the marketing organizations established under national security regulations.

My second reason for suggesting that we should at this juncture re-examine our Constitution is that the duplication of taxation by Commonwealth and State Governments has developed to such an oppressive degree that it must ultimately retard the progress and prosperity of the people of the Commonwealth as a whole. The burden of taxation must be considered not only in relation to its complexity in varieties, but also in relation to its difficulties in respect of the preparation of returns. Nowadays, it is almost impossible for an ordinary individual to prepare, in proper form, all the returns he is expected to submit to the taxing authorities. Confusion is added to confusion because different methods of assessment in respect of income tax and other forms of taxation are employed by the Commonwealth and the States. The list of the variety of taxes is impressive. It includes -

Commonwealth and State income tax.

Special income tax.

Unemployment relief taxes.

State development taxes.

Wage taxes in one form or another.

Commonwealth and State land taxes.

Sales tax.

Commonwealth and State probate and estate duties.

Entertainments taxes.

Gold taxes.

Flour tax.

Payroll tax.

Commonwealth and State company taxes. Commonwealth and State gift duties. Customs and excise duties. Inspection fees of various kinds. Licence-fees in respect of wireless, motor vehicles, dogs and other matters.

The history of Commonwealth taxation is interesting. It would appear that it was not intended at the inception of federation that the Commonwealth should duplicate fields of taxation to any great degree by the States. For the first ten years of federation the Commonwealth collected only customs and excise duties; then the land tax was added. In 1914, estate duties were imposed by the Commonwealth, and in 1915 income taxes were levied. The Commonwealth enter.tainments tax followed in 1916, and the war-time profits tax in 1917. I do not believe that the framers of the Commonwealth constitution nor those who voted for it3 adoption, contemplated that the Commonwealth would ever enter so many fields of taxation which circumstances have compelled it to do, or that the duplication of taxation would occur to the degree it has. It is frequently beyond the physical and accounting capacity of many taxpayers to prepare their returns, let alone submit them within the prescribed times, and failure to do so brings upon them fresh additional penalties.

Mr Calwell:

– What is the honorable gentleman’s solution of these difficulties?

Mr ANTHONY:

– I believe that an increasing number of people in Australia are coming to the conclusion that a revision of the constitution is essential in order to eliminate overlapping in Commonwealth and State administrations. This conclusion has been forced upon them because so many demands are being made upon the same purse. Circumstances over which we have little control - the circumstances of war - are leading us steadily to the conclusion that the days of absolute sovereignty of the States must come to an end if the people of Australia are to fashion for themselves an effective organization of government necessary to .meet the changing needs of society, rapidly being revolutionized by war. I- am speaking straight for a unified system of government for Australia; I am faking advantage of the fact that many members of the present Government, and T believe the policy of the party to which they belong, favour unification. A number of members on this side of the House hold the same view. The time is appropriate during the consideration of a States Grants Bill to call attention to this particular matter. In order to revise the Constitution, a new federal convention may be necessary to formulate definite proposals for a referendum of the people, and to secure a majority of the electors voting in a majority of the States. Attempts to secure constitutional revision on previous occasions failed because it was made a party question. I hoped that might he avoided. Although there might be a majority of electors voting in favour of any proposals submitted, there might not be a majority in a majority of the States. Even if an overwhelming majority of the electors of, for example, the States of New South Wales, Queensland and Victoria, voted in favour of unification, if the support of one of the other States could not he secured, the toad would be barred.

Mr Marwick:

– Western Australia can always be relied on to do that.

Mr ANTHONY:

– That leads me to my next point. The grants recommended by the Commonwealth Grants Commission, based as .they are on the principle that the higher the taxation in the eastern States, the higher should be the grant paid to the claimant States. It has been such easy money that the claimants will have little incentive to favour revision of the Constitution. So long as heavy automatic grants are made to Tasmania, South Australia and Western Australia, those States will stand in the way of a unified Australia, despite all the reasons that may be advanced in favour of it; and the report of the commission contains some very good ones. The people of Australia may have been complacent in past years in regard to the inefficiency and expense of governmental machinery, but the mounting burden, of taxation and the pressure on private purses must compel everyone to try to seek a way out of the mire. The grants for which thi= bill makes provision have a. per capita basis, which is calculated according to the rate of expenditure in the most extravagant States. For example, the taxation per capita in Queensland, which is a highlytaxed State, is ?8 4s. In Victoria, it is £<3 1.4s, 6d., and in New South Wales, £8 13s. 3d. After attempting to compare the social sendees of the different States, the commission struck an average of the per capita taxation in the three eastern States, in order to arrive at what ought to be paid to the three claimant States. Thus Western Australia, South Australia and Tasmania relatively get the benefit of the average of New South Wales, Victoria and Queensland, which amounts to approximately £7 17s. 3d. per capita. Therefore,, by reason of the system adopted, there is retained all over Australia the implementation of very high taxation ; because the taxation imposed by Queensland and New South Wales is automatically repeated in Tasmania, South Australia and Western Australia. Since the last war the taxation per capita, Commonwealth and State, as revealed by the figures quoted in the report, has more than doubled. In 3918-19, the combined Commonwealth and State taxation was £8 14s. 6d. per capita. The report reveals that for the year 1939-40 it was £20 12s. per capita. It is rapidly rising, and I cannot conceive what the present figures would reveal. In suggesting that steps be taken with a view to securing a unified system of government to replace the federation, I do not wish to convey the idea that the entire difference between State and Federal taxation would necessarily be saved to the taxpayer. Every one realizes that the services performed by the States have to be carried on by means of the money provided. Hospitals, police, education, justice, agriculture, irrigation, public works, and sundry other functions would have to be continued, and the money for them would have to be raised. But I believe that if one Parliament imposed taxation there would be greater hesitancy on the part of that single authority to levy crippling taxes in any particular direction. Under the present system of double taxation, neither the Federal nor the State authority realizes the disastrous effects of the taxes imposed. Some relief must bc granted to the taxpayers, and one of the greatest measures of relief, apart from reductions of taxes, would be the simplification of taxation returns, which at present, present a problem to almost every individual whose income is more than a few pounds a week. If we are te- solve our problems of the future, we must improve our system of government, and when we are considering a -report of the Commonwealth Grants Commission is a fitting occasion to express our ideas on this subject. I believe that the members of this Parliament are too few. The House of Representatives consists of only 74 members with a vote> although the parliaments of countries with comparable populations have several hundred members. The Parliament of the Union of South Africa has over 150 mem’bers, who represent a population of about 2,000,000. If the Commonwealth Parliament had a larger number of members than at present, many of our political problems could be solved, because the voting on important public questions would not be so close as it has been in the last few years.

Mr SPEAKER (Hon W M Nairn:

– The honorable member should not go deeply into the subject of constitutional reform, but should confine his remarks to the bill.

Mr ANTHONY:

– We are discussing a measure providing for the payment of large grants to certain States by constitutional means. If I cannot speak on. this matter now, no other opportunity may be provided.

Mr SPEAKER:

– This is not an appropriate tune for a discussion on constitutional reform. The question is whether the payments provided for in the bill shall be made to the claimant States.

Mr ANTHONY:

– I have endeavoured to show that the very fact that those payments are to be made to those States in such a generous measure is a barrier to constitutional reform. I emphasize the necessity for such reform, even in the interests of the States to which the payments will be made, because, after all, our destiny is interwoven as Australians rather than as residents of States.

For the benefit of Australia it is necessary to have a system of government that will meet the changing needs of the times. We are living under an out-moded constitution. The Commonwealth Grants Commission has been set up merely as a means of solving many of the problems that have arisen under the Constitution. I do not intend to labour this matter further. My intention was to draw the attention of the Parliament to it. I may not have influenced the minds of some honorable members, but I may have provided a germ of thought for others. I do not expect any immediate change as a result of my remarks,yet members should have regard for the future interest of Australia, and give their attention to the matters to widen I have directed attention, because they will constitute major problems after the war. Under the present system of government we cannot have standard railway gauges as we desire them, and we cannot organize our transport services in the manner that is necessary. Nor can we provide for decentralization of the population and of industries, or develop our country districts to the best advantage, while hindrances are imposed by State boundaries and other constitutional limitations. I believe that all important powers should he transferred to the Commonwealth which could delegate back to the States their proper and limited functioning.

Sitting suspended from 1.2.2 to 12.30 a.m. Thursday.27November,1941.

Mr PROWSE:
Forrest

– I intend to support the bill, but I want to dispel any idea that the honorable member for Richmond (Mr. Anthony) was speaking for the Country party when be gave us his dissertation on the subject of unification. He must have been speaking entirely off his own bat. As bad as things are under the unbalanced representation by which our federation is governed to-day, unification would make thingsa great deal worse for the more remote parts of the continent which are in need of development. Taxation in Victoria is low largely because of the trade which that State does with Western Australia. Australia’s exports, which in reality produce Australia’s income,are valued at. £16 per head of population, but Western Australia exports goods to the value of £38 per head. Therefore, the people of Western Australia are doing a great deal more than those of any other part of Australia to maintain Australia’s credit abroad. Melbourne and suburbs have ten members in this chamber, yet. the people whom they represent do not produce 6d. worth of goods per head for export. Nevertheless, they have in this chamber twice the voting power of the representatives of Western Australia.

Mr.Calwell. - The people whom they represent consume more than do the people of Western Australia.

Mr PROWSE:

– We have to rely upon the world’s markets to absorb our products. It can bo shown that Western Australia purchases each year approximately £10,000,000 worth of goods from the eastern States, principally from Victoria. In return, the people of the eastern States buy £1,000,000 worth of goods from us, leaving us with an adverse trade balance of £9,000,000. If Western Australia were free to develop in its own way, and could expend that £10,000,000in the world’s market purchasing goods that it required, it would save £3,000,000 in the process, and establish friendly relations with other nations in. the course of that trade and receive better reciprocity. I have heard much talk about a new order after the war, but I have never heard a reasonable proposition as to how it is to be brought about. I have an idea that the only way to achieve a. better order, to develop this wonderful continent and to occupy it effectively, is to develop our trade with other countries. Western Australia is as far away from the eastern States as is New Zealand. It costs as much to ship goods to Western Australia by sea as to ship them to New York or London. In fact, the freight from Melbourne to Fremantle is higher than from Melbourne to London. Because of these restrictions on our trade we are placed in a position where we must hold out our hands to the Commonwealthfor assistance. Our voting strength is not enough to enable us to do anything which the highly commercialized States do not want us to do.

Mr Calwell:

– Western Australia is represented in this Parliament bythe Prime Minister, the Speaker and the President of the Senate.

Mr PROWSE:

– Could one listen to any greater idiocy than the suggestion that our representation by those persons could enable us to achieve anything against the wishes of the representatives of the big commercial States? What does the honorable member for Melbourne know of the needs of a State like Western Australia ?

Mr Calwell:

– Western Australia was peopled largely by settlers from Victoria.

Mr PROWSE:

– We recognize that some very fine people came to us from Victoria, but it was the brave ones who came; the others were not plucky enough to leave Victoria. I can assure the honorable member for Richmond that he will have to continue preaching his doctrine for a long time before it will have any effect on the people of Western Australia, who are thoroughly familiar with this question and have already voted upon it. They know that they are in a hopeless minority, but they also know that they are of greater value to the Commonwealth than any similar number of people in Australia. They are as loyal as are the people of any other part of Australia. It is all very well for honorable memhers to say that, after the war, room can be made for our returned men in the factories. If we are to produce goods in the factories to sell abroad so as to bring new money to the country we shall be doing something that we have never been able to do before. Let us manufacture, if we can, but let us do it off our own bat as do the primary producers. Just after this war broke out, the Commonwealth Government negotiated the sale of an enormous quantity of primary product..; to the United Kingdom. In what position would Australia ha vo been if that sale had nor been made - if we were without the credits with which it is providing us? Let us remember that it was only primary products that we were able to sell. Why did we not sell clothing, hoots, nails or galvanized iron? I am sure that this new order cannot be attained by any tinkering with our present fiscal policy. We must effectively occupy this country if we are ro hold it. If we employ our people in an uneconomic way. so that we cannot dispose of the goods we make, and thus retain our population, we shall inevitably fail. I believe that by producing more plentifully, living more economically, and by developing such natural industries as the iron and steel, implements, and wool in all its phases, we should employ more people than by trying to develop unnatural secondary industries in competition with the rest of the world. Unless we proceed along those lines, I have little hope that by preaching the doctrine of social reform, or by obtaining uncontrolled credit from the Commonwealth Bank, we shall establish a “ new order “. We must produce goods to feed and clothe the people if we are to hold this country for the white race.

Mr CALWELL:
Melbourne

– The honorable member for Richmond (Mr. Anthony), on behalf of the Opposition, made a splendid contribution to the discussion of the important subject of constitutional reform. He analysed the report of the Commonwealth Grants Commission, and stated his views in relation to the expenditure by the various States on social services and other matters. In doing so, he elaborated the policy of the Labour party on the subject of unification, the increase of the membership of this Parliament in order to make it truly representative, and the way in which the existence of State Parliaments tends to frustrate the national will in tin]e of war. It was not until the honorable member for Forrest (Mr. Prowse) rose that there was any sign of repudiation in the ranks of Tuscany. Even the honorable member for Barker (Mr. Archie Cameron) remained silent; and X. remind him that silence gives consent. Most honorable members opposite listened to their spokesman in silence, although some of them have been ungenerous enough to object to the way iti which he announced what 1. assume was the case for the Opposition, because if the honorable member for Richmond did not speak for the Opposition, why was he put up to speak at all? I remind the House that he spoke from the leader’s place at the table, and that his speech had been carefully prepared. It was not an ex tempore address by any means.

Mr Anthony:

– It was a personal statement of belief..

Mr CALWELL:

– It was an excellent speech. One of the greatest misfortunes which have befallen Australia was the separation of Victoria from New South “Wales in 1851, and of Queensland from New South Wales in 1859. The setting up of sovereign States in Australia was a bad beginning. Half a century passed before the establishment of a federation of States undid some of the harm. If we had in operation the Canadian system, or that of South Africa, we could truly say that we were a unified nation ; but although we are unified in the sense that we have one flag, one language, and one destiny, we have, in time of peace, six sovereign States, frustrating the Commonwealth, and, in time of war, six sovereign States, which are a nuisance aud may be a danger. Not only have the States separate taxing powers, which are exercised differently, making it extremely difficult for the Commonwealth to achieve uniformity in anything, but they also have a different outlook on almost every question of public importance. The desire of the Commonwealth Government to do the best for the nation is not assisted by the existence of separate sovereign States. Until such time as we get a unified nation, Parliament will have to pass a Commonwealth grants bill every year. There is inherent in the Constitution a power which if properly exercised would bring us nearer to unifformity ; I refer to the financial power. If this Parliament would exercise that power to a greater degree, it would eventually reduce the States to the point at which they would all be the recipients of assistance from the Commonwealth, and we should probably have to tax at the rate of £.1 3s. 6d. in the £1 and then give back to the States, in consequence of the recommendations of the Commonwealth Grants Commission, what Parliament thought was fair in order- to enable them to carry on certain services. Concurrently, we should have to take over some of their responsibilities for social services. In that way, this Parliament would become more and more important, and the States less important.

The desire of the honorable member to increase the membership of this Parliament finds support on all sides. In 1933, the present Minister for Air (Mr. Drakeford) made a great contribution to the literature upon the subject. I. have discussed this matter with members of all parties, and it seems to me that it should be easy to pass a bill to increase the membership of the Senate to 72, and to double the number of members of this House. A House of, say, 150 members would be none too large for the responsibilities that it has to discharge both in peace and in war. Part of the argument against greater powers being given to Parliament is that there are only 75 members in. this House. People say: “Paney governing Australia from one centre by that small number of members!” I can understand some of the objections of the le3s populous States to being governed by so few members. If this Parliament contained sufficient mem hers to be really representative of the nation, a lot of that feeling would disappear and public opinion would force a reduction of the number of members in State parliaments, and that would eventually result in the elimination of overlapping as well as in considerable savings. I do not think that the less populous States should be placed in the position of being mendicants at the door of this Parliament. If we had a more representative Parliament, and consequently a better one, and gave to it greater powers, the necessity to give to the less populous States sufficient money to enable them to extend social services would disappear almost automatically.

Mr Prowse:

– All that they want is a chance to earn their own living.

Mr CALWELL:

– As I understand the position, Western Australia, South Australia and Tasmania desire only to be given their rights and to develop in common with the other States of the federation. Unfortunately, the Commonwealth Parliament does not control the whole of the economic life of the community. Its powers are limited in a number of directions. For instance, the difficulties which confront Western Australia in the matter of shipping freights are not the product of this Parliament or, indeed, of the Australian nation; they are difficulties imposed on Western Australia by the owners of the various shipping lines.

Mr Prowse:

– The difficulties have been caused by this Parliament.

Mr CALWELL:

– I suppose that the honorable member refers to the Navigation Act?

Mr Prowse:

– Of courseI do.

Mr CALWELL:

– The provisions of that act were suspended in respect of Tasmania. If it were right to adopt that course in one case, I cannot understand why the honorable member has failed to secure a similar suspension in respect of Western Australia. The solution is to be found in the re-establishment of an Australian Commonwealth Line of Steamers to serve distant parts of Australia. In this country, there are two economic centres, one in Sydney and the other in Melbourne. Until the power of the rings that control economic centres is broken, the distant parts of the Commonwealth will never develop as they should.

Mr SPEAKER (Hon W M Nairn:

– Order! The honorable member’s remarks are not related to the bill.

Mr CALWELL:

– Then I shall return to the subject by discussing the position of the less populous States, and the matter of grants. I have supported the remarks of the honorable member for Richmond generally, and there is not a great deal more that can be said, except that so long as we allow the present position to remain, we shall have to provide annual grants of this nature. The solution that the honorable member for Richmond suggested is the correct one. I do not agree with the action of the Government in reappointing Sir George Pearce to the Commonwealth Grants Commission. In my most charitable mood, I think that it was an outrageous blunder to appoint a man who has so antagonized the workers of this country that hardlya trade unionist in any part of Australia has a good word to say for him. When the right honorable member for North Sydney (Mr. Hughes) half-redeemed his fame by destroying the Bruce-Page Government, Sir George Pearce supported Mr. Bruce’s attempt to abolish the Commonwealth Arbitration Court.

Mr SPEAKER:

– Order ! References to Sir George Pearce do not come within the scope of the bill.

Mr CALWELL:

– But Sir George Pearce was recently reappointed ‘ a member of the Commonwealth Grants Commission. When can I speak my mind about him if I am prevented from doing so on this bill? I repeat that 1 strongly disagree with the appointment. There are hundreds of men who are in every way better fitted than he to serve on the commission. In fact, any one of hundreds of good supporters of the Labour party should have been preferred to Sir George Pearce. However,he will remain a member of the commission for a period of three years, and the principal work of that body will continue to be done by the chairman, as it was done in the past. In that capacity, Sir Frederic Eggleston rendered excellent service, as did his predecessor; and probably Professor Mills will be equally efficient. I can see no virtue in the reappointment of Sir George Pearce, and I deeply regret that the Government acted as it did. The reappointment of the right honorable gentleman will be repudiated by many thousands of Labour people, and for my part I, too, disown it.

Question resolved in the affirmative.

Bill read a second time and reported from committee without amendment or debate.

Bill - by leave - read a third time.

page 959

QUESTION

ESTIMATES 1941-42 (REVISED)

In Committee of Supply:Consideration resumed from the 13th November (vide page 429).

The CHAIRMAN (Mr Prowse:

– Is it the wish of the committee that the schedule be taken as a whole?

Mr Calwell:

– No .

The CHAIRMAN:

– Objection having been taken, the schedule will be considered in departments.

Remainder of proposed vote - The Parliament, £155,400 - agreed to.

Prime Minister’s Department.

Proposed vote, £745,000.

Mr.RIORDAN (Kennedy) [12.56 a.m.]. - I take advantage of this opportunity to ask the Prime Minister (Mr.Curtin) to devote particular attention to the third interim report of the Commonwealth Man-power and Resources Survey Committee, which deals with the economic position of Queensland. The city of Cairns has a population of 15.000, and the hinterland a population of 50,000. Cairns possesses modern railway workshops and . well-equipped, privately-owned “workshops, which, if given the opportunity, could make a valuable industrial contribution to Australia’s war effort. Unfortunately, the only work which has been allotted to that district is that of timber-cutting. The failure to utilize the industrial resources of the district is creating serious unemployment problems, liven in the sugar-cane cutting season, the unemployed in the district numbered between 400 and 500 persons, and as that avenue of employment will be closed for a period unemployment is becoming a serious problem there. Approximately 2,000 men from Cairns have enlisted in the fighting services, and thousands of others have travelled to the southern parts of the State in quest of work.

The CHAIRMAN:

– To which item in the Prime Ministers Department is the honorable member referring?

Mr RIORDAN:

– My remarks refer to the report of the Man-power and Resources Survey Committee.

The CHAIRMAN:

– The honorable member’s speech must be relevant to the expenditure of the department.

Mr DUNCAN-HUGHES:

– I rise to order. The report of the Man-power and Resources Survey Committee, to which reference has been made, is a confidential document. As its contents have not been divulged to Parliament, it is impossible for honorable members to be aware of the nature of the recommendations. I submit, therefore, that the report cannot be discussed by Parliament until the report has been made available to honorable members.

The CHAIRMAN:

– Although the point of order raised by the honorable member for Wakefield (Mr. DuncanHughes) is sound it could be taken more appropriately by the Prime Minister.

Proposed vote agreed to.

Remainder of Estimates - by leave - taken as a whole, and agreed to - “Motion (by Mr. Chifley) agreed to -

That the following resolution be reported to the House: - That, including the several sums already voted for such services, there be granted to His Majesty to defray the charges for the year 1041-42 for the several services hereunder specified, a sum not exceeding £107,164.000.

Resolution reported.

Standing Orders suspended; resolution adopted.

In Committee of Ways and Means:

Motion (by Mr. Chifley) agreed to -

That, towards making good the Supply granted to His Majesty for the services of the year 1941.-42, there be granted out of the Consolidated Revenue Fund a sum not exceeding £64,226,000.

Resolution reported and adopted.

Ordered -

That Mr. Chifley and Mr. Lazzarini do prepare and bring in abill to carry out the foregoing resolution.

page 961

APPROPRIATION BILL 1941-42

Bill brought up by Mr. Chifley and read a first and second time.

Incommittee:

The bill.

Mr MULCAHY:
Lang

.On Tuesday last I asked the Minister for Health (Mr. Holloway) if, in view of the report in the daily press that a deputation of refugee alien doctors asked him to be allowed to practise medicine in Australia., would the Minister take adequate steps to ensure that their credentials would be examined so that the people of this country would be safeguarded from being exploited by incompetent or unskilled medical practitioners. I now ask the honorable gentleman to give to the committee an assurance that before any decision is made in connexion with this matter he will afford an opportunity for those who oppose the granting of permission to refugee doctors to practise in Australia to place their views before him. Many millions of pounds have been expended in this country in erecting universities at. which students are trained for the professions. It is our proud boast that some of the most eminent medical men in the world were trained in Australian universities. During the last few years we have given sanctuary to many alien refugees. Because of the treatment to which they were subjected in their native lands we were glad to be able to welcome them to a country where they would be permitted to live in comfort and security; but we did not think, that those of them who had been trained in the science of medicine would be permitted to compete with our own medical men. The qualifications of a large number are open to doubt. I have met some of them. A few weeks ago, one arrogant fellow came to me and said that he demanded the right to practise his profession in this country. “I was brought here “, he said, “ and the practice of my profession is the only way in which I can earn my living”. I asked him, “ What would happen to an Australian doctor in Germany? Would he be allowed to practise his profession there ? “ To his affirmative reply, I gave the rejoinder, “ Yes - in a concentration camp “. Many of these people in the larger cities of Australia are putting up nameplates advertising themselves as consultants. An injustice would be done to Australian medical men who, at considerable sacrifice, financial and otherwise, have gone overseas with the fighting forces, if these men were allowed to take their livelihood from them. For that reason, I hope that the Minister will seriously weigh the consequences before allowing these men to practise. At all events, he should consult the British Medical Association about the matter. Many of these refugee doctors have been before our courts for having illegally practised their profession. If I had my way, those who have found sanctuary in our country, but are not prepared to abide by our laws, would be put into a concentration camp until the war ended, when I would send them back to the countries whence they came. I protest against any move that might be made to endanger the position of Australian doctors in the fighting forces, and I also impress upon the Minister the necessity to safeguard the health of the people by ensuring that only men whose qualifications are as high as those demanded from doctors trained in Australia shall be allowed to practise. I believe that in Australia we train the best doctors in the world.

Mr RYAN:
Flinders

– I direct the attention of the Minister for the Army (Mr. Forde) to the disadvantage of married men in the Permanent Forces as compared with married men in the Militia Forces. As an example, I cite the case of a married sergeant with a wife and three children. A first-grade sergeant in the Australian Imperial Force called up for tlie duration of the war receives the following daily rates of pay and allowances: Pay, lis.; wife’s allowance, 4s. 6d. ; allowances for three children, 5s.; and subsistence allowance, if not messing with, the regiment, 3s. 5d.; total, ?1 2s. lid. That represents ?16 Os. lOd. a fortnight. A sergeant in. the Permanent Forces receives as pay ?13 13s. 6d. a fortnight, from which is deducted 16s. a fortnight for superannuation, which leaves him ?10 l’7s. 6d. compared with ?16 0s. lOd. for a sergeant in the Militia. Since the Commonwealth child endowment scheme has been in force, the sergeant in the Permanent Forces has lost the child allowances which he formerly received from the Department of the Army in respect of which he used to pay to the Army ?12 a year and receive in return from the department 5s. a week in respect of each child under the age of sixteen. He now retains that ?12 a yea.r, but it is included in the figures which I have cited. He receives child endowment but so does the man in the Militia, who also receives an allowance for dependent children. A difference of nearly ?5 fortnightly between the wages of two sergeants doing similar work can hardly be regarded as just. The sergeant in the Permanent Forces is one of the nuclei of the Military Forces of this country.

Mr Spender:

– The Army provides sergeants with permanent, employment, whereas sergeants in the Militia are employed merely for the duration of the war.

Mr RYAN:

– Yes, but the discrepancy is too great. I concede that the sergeant in the Permanent Forces does receive advantages which are not received by Militia sergeants. For instance, his wife and family receive medical attention.

Mr Spender:

– He also receives the benefit of cost of living adjustments.

Mr RYAN:

– Grounds seem to exist for reducing the difference between the two rates of pay. The number of married men in the permanent forces cannot be large and therefore the burden involved in increasing their rates of pay could not be great. The Government should look into the matter, and see whether some small increase should not be made in order to bring the pay of the sergeants and other married men in the Permanent Forces more into line with that of similar ranks in the Militia…

Mr MORGAN:
Reid

.Perusal of the last annual report of the War Pensions Entitlement Appeal Tribunal more than bears out “my contention during the debate on the amending repatriation legislation that the tribunal interprets the Australian Soldiers’ Repatriation Act to the disadvantage of returned soldiers and their dependants. When I spoke on the bill I said that 90 per cent, of the appeals to that tribunal which had come to my notice had been, rejected. I did not exaggerate the position because the only case in which the appeal was upheld resulted in the War Pensions Assessment Tribunal reducing the amount to which the applicant was entitled. After having fought his case before the tribunal for two years this returned soldier found, after winning his appeal, that his pension had actually been reduced. Therefore, to say that 95 per cent, of the cases were decided against the returned soldiers was an understatement of the facts. The figure should have been 100 per cent. All of the cases with which I was concerned involved constituents of mine, and, although I suspected that their experiences with the tribunal were common to ex-service men all over Australia I had no means at my disposal of proving that, to be the case. As a member of the Printing Committee, I came across the typewritten report of the Waa- Pensions Entitlement Tribunal, which does not form a part of the report of the Repatriation Commission. As I have already said, the figures in that report bear out the truth of my contention about the way in which the War Pensions Appeal Tribunal treats returned soldiers and their dependants. Of 502 appeals by dependants of deceased ex-soldiers, 450 were disallowed, and only 52 allowed. Approximately nine out of ten applications are rejected. The figures for the respective States are as follows: Queensland, disallowed 65, allowed 6; New South Wales, 155, 19; Victoria, 155, 15; South Australia, 27, 5; Western Australia, 45, 4; Tasmania, 12, 3. Appeals by ex-soldiers totalled 1,337, of which 1,120 were disallowed and only 217 allowed, the figures for the respective States being: Queensland, disallowed 192, allowed IS; New South Wales, 434, 93; Victoria, 325, 54; South Australia, 60, 14; Western Australia, 75, 28; and Tasmania, 34, 10. A total of 450 appeals by dependants of ex-soldiers were disallowed, and only 52 allowed, whilst of 82 applications under section 45k seven were disallowed and only 42 allowed. Thus of a grand total of 1,935 appeals by returned soldiers or dependants, 1,652 were disallowed, and only 2S>3 allowed. Coming to appeals in cases arising out of oversens service in the present war I find that all of the four appeals dealt with were disallowed. Included in the figures I have just given were 132 appeals from exsoldliers and their dependants, arising out of the first year of this war, and of these 22 were allowed, and HO disallowed. Those details reveal a sorry state of affairs. They show that something is radically wrong with the present position. I come now to the main report of the Repatriation Commission, which shows that applications for service pensions, that is, applications by returned soldiers who become unemployable before reaching the age of 65, at which age they would become entitled in the ordinary course to the old-age pension, are constantly increasing. The total payments in respect of service pensions increased from £111,840 in 1936, to £533,622 in 1941, the amounts for the intervening years being: 1937, £263,279; 193S, £360,815; 1939, £43-9,552; 1940, £4S4,4S2. Whilst applications for service pensions, that is, applications by men who suffered no actual disability during the war, are increasing, payments to men who actually sustained disabilities, or injuries, during the war are decreasing. The only conclusion” to be drawn from that fact is that the repatriation authorities are entirely unsympathetic towards this class of applicant. The total amount paid in respect of war pensions to exsoldiers and their dependants totalled £7,440,901 in 1936, and increased to £7,599,599 in 1937, reaching the peak of £7,725,963 in 1938, after which they declined to £7.534,677 in 1940, and to £7,346,265 in 1941. These figures showthat the treatment meted out to the exsoldiers who actually sustained injuries during the war and their dependants is not so sympathetic as that given to exsoldiers merely on the ground that they are unemployable. The latter have only to prove that they served in a theatre of war. and that they have become unemployable. Medical evidence that they are unemployable is sufficient proof. One wonders whether the unsympathetic treatment meted out to applicants for pensions on the ground of injury received during the Avar is due simply to the unsympathetic attitude of the Repatriation Commission or to lack of evidence in support of the claims of applicant.;. Obviously, much of the evidence which would have been available to the ex-soldier some years ago had he then decided to apply for a pension, has since been lost; bis claim is further weakened by the fact that many witnesses have died. Section 45w (2) of the Australian Soldiers’ Repatriation Act reads -

Subject to this act an Appeal Tribunal and an Assessment Appeal Tribunal shall not. in the hearing of appeals, be bound by any rules of evidence but shall net according to substantial justice and the merits of the case and shall give to an appellant the benefit of the doubt:

Provided that if the appellant or a representative of the appellant shall make out. a prima facie case in support of his claim that the incapacity from which he is suffering or from which he has died was caused or aggravated by war service, the onus of_ proof that such incapacity was not in fact so caused or aggravated shall lie with the commission.

Judging from the figures which I have just given it would appear that this principle has not been applied. Certainly, that fact is clear from the cases which have been brought to my personal notice. I submit that the principle should be applied in respect of not only appeal tribunals but also the commission itself in the first instance. We know, of course, that an appeal tribunal is naturally inclined to lean towards the opinion of the body from which the appeal is made. The section continues -

Provided further that in the case of the death caused by an accident of a member of the forces, who is wholly or partially incapacitated as the result of war services, th» burden of proving that such incapacity did not contribute to a material degree to the death of the member shall lie upon the commission. (3.) Tlie hearing of any appeal under this part shall not bc open to the public. (4.) For the purposes of sub-section (2.) of tills section an appellant shall bc deemed tt> have made out a prima, facie cage when he avers that thu incapacity or death of tin; member of the forces resulted from an occurrence happening during the period he was a member of the forces or from his employment in connexion with naval or military preparations or operations or is directly attributable to his employment as a member of the forces.

In order to make out a prima facie case an applicant need only show that death or incapacity occurred during the period when the ex-soldier was a member of the forces or as a result of such service. All that is required is an averment to that effect. However, that principle is not observed in actual practice. On the contrary, appellants are put to much trouble to adduce evidence, much of which is unobtainable owing to the death of witnesses, or the loss of records. In practice, the onus of proof rests on the applicant and not on the tribunal as stipulated by the act. That is proved by the fact that 90 per cent, of appeals are rejected. I have a summary of every case that has come to my notice during the time I have been a member of this Parliament and that information shows that in each instance the tribunal rejected the appeal although the evidence adduced was sufficient to convince any intelligent person that the disability was due to war service. . Modern conditions of war are severe on the human frame and lay it open to almost all of the diseases to which flesh and blood are prone. In wars men become weakened physically and constitutionally, and contract diseases that in other circumstances they would be able successfully to resist. Our repatriation machinery is due for a complete overhaul and I trust that the Government will heed the requests of honorable members of all parties for the appointment of either a select committee or a joint committee to investigate the position with the object of recommending measures to ensure that justice will be done to our ex-soldiers and their dependants.

Dr PRICE:
BOOTHBY, SOUTH AUSTRALIA · UAP

.I” direct attention to the proposed vote of £435,960 for the Northern Territory.

Recently the Minister for the Interior (.Senator Collings) announced that he intended to usher in a new deal for the aboriginal and half-caste population of Northern and Central Australia. I notice, however, that an amount of only £13.900 is provided under the heading “ aboriginal affairs - maintenance of and £4,250 under the heading “ assistance to missions “. Apparently, these small sums are intended to provide for the needs of about 15,000 half-caste anc! aboriginal people in the Northern Territory. This works out at an expenditure of a little more than 20s. a. head per annum on these people. It is proposed, however, to expend more than £150,000 on services required for the white population. I do not, at the moment, urge any additional expenditure on the aborigines of the Northern Territory, but. I hope that the Government will seriously review Australia’s policy in respect of these unfortunate people. There are in the Northern Territory at present about 15,000 aborigines and halfcastes, and a resident white population of about 6,000, excluding the military population which may be regarded as more or less temporary.

Contrary to the general belief, the aboriginal and half-caste population of the Northern Territory is of very great, value to the Commonwealth. I assert that, all Christian and humane considerations apart, the few cattle stations in the far north would not be able to operate without this native coloured labour. Every one who travels through North and Central Australia is impressed with the importance of the native coloured labour and, I believe that, if for any reason this labour were to become unavailable, it would be impossible for us to maintain operations on our cattle stations. Unfortunately, this native labour is often detribalized, debased, and exploited. We often, and rightly, in my opinion, praise our White Australia policy, for which I personally give very great credit to the Labour party; but we are apt to forget that the main and possibly the only permanent industry that can be maintained over a great deal of our northern country rests on the capacity of the native coloured labour which has been so badly treated for a century and a half, and in respect of which Australia, in recent years, lias been pilloried at the Assembly of the League of Nations.

We cannot run away from the problems associated with aborigines and half-castes, even if we desired to do so. The pure aboriginal population is declining in numbers and only about 50,000 are left; but the half-caste population is increasing at the rate of 1,000 a year and now numbers about 25,000. In less than a century we may well have over 100,000 half-castes in Central and Northern Australia, who, like the present generation of aboriginals and half-castes in the area may become magnificent cattle workers, even allowing for the fact that they may be the offspring of the worst type of white fathers and degraded and detribalized native mothers. Great difficulty is being experienced in dealing with the problem of miscegenation in outback and remote Australia. Tor an authoritative statement on this subject I refer honorable members to the Blakeley report on the Northern Territory, which was made only a few years ago.

Briefly, we have three main needs. First, we require a federal policy for the control of the aboriginal and half-caste population, similar to that which has been applied in the United States of America. During the last six years President Roosevelt has instituted “a new deal “ for Indians and has achieved excellent results. I was working on this problem in the United States just prior to the outbreak of the war. Many of our Australian tribes are migratory and require federal supervision. The State Governments, however, are somewhat nervous of Commonwealth control, for they rightly consider that the handling of the native population problem by the Commonwealth has not been inspiring. In the second place, we need an up-to-date and scientific policy for our aborigines, similar to the American policy for Indians. At present there is a conflict of cattle men, some of whom desire still further to detribalize and exploit the natives; the missionaries, who emphasize religious motives and who, in many places, have done fine work; and the scientists who, in some instances, would make the natives museum specimens in isolated reservations. Recent work in the United States of America shows that the best results in dealing with natives are obtained by training them in industries which they like, and which are suitable to the environment that they need. The government of the United States of America tried to train Mescal leroApache Indians to work on sheep stations. The policy succeeded with the Navaho Indians, who are now the most rapidly increasing racial group of the United States of America, but it totally failed with the Mescalero Apaches, who become dole-supported hangers-on in the reservations. The Government then tried to train the Mescalero Apaches to work on cattle stations and that policy is succeeding. From what I have heard in Australia, particularly of successful aboriginal cattle stations in Western Australia, I have formed the opinon that a final and successful solution of aboriginal problems may be achieved in this direction.

Our third need is a continuous and long-term policy. This applies, not only to the aboriginal problem, but also to almost all of the problems of the Northern Territory. How can we expect any real and -continuous success, when each Minister for the Interior merely visits the Northern Territory, proclaims that he will introduce a progressive policy which will be the salvation of the area, and then, within a few weeks, relinquishes his portfolio? The new Minister for the Interior (Senator Collings) has proclaimed a “ new deal “ for the unfortunate aborigines, but it will not be carried through on the basis of the vote proposed in this Appropriation Bill. I trust that the honorable gentleman will make a thorough investigation of the methods tha t have been developed for dealing with native peoples in the United States of America, Canada and New Zealand, and in some of the Australian States. I hope, also, that he will learn something from these methods which will be applicable to the aboriginal and half-caste population of Australia. Successful reforms may not prove expensive, but may result in a real “ new deal “ for these unfortunate people, and remedy a state of affairs which has been a scandal through 150 years of Australian history, and which other civilized countries regard even to-day as a disgrace to the Commonwealth.

Mr RIORDAN:
Kennedy

– Briefly, I wish to bring to the notice of the Minister for Civil Aviation (Mr. Drakeford) an injury done by the last Government to the residents of Cape York Peninsula and the Gulf of Carpentaria. Until August, 1940, two air services catered for the requirements of those areas, one being run by MacDonald North Queensland Air Services and the other by Air Lines of Australia. I hold no brief for either service., but I am concerned about the residents of the far north of Queensland. Statutory Rules 1937, No. 81, Regulation 79, provided -

Aircraft shall not bc used by any person in the operation of a regular public transport service except under the authority of, and in accordance with, a licence issued to that person by the board.

The following amendment was made to that regulation in August, 1940, for the express purpose of curtailing the activities of the MacDonald North Queensland Air Services.

For the purposes of this regulation, a public transport service shall be deemed to bc a regular public transport service if it is operated on two or move occasions within any period of four weeks between any two places situated more than 50 miles apart.

MacDonald was doing charter work; but when that regulation came into force, he was able to visit centres in the Cape York Peninsula only once a month. He had commenced his service in August, 1939, but for ten years previously had been operating aircraft in the far north. He was the pioneer airman, and was responsible for making air-minded the people of that part of Australia. In August, 1939, having had two years’ rest from aviation, he started this fresh service. It was not a regular service: he had no fixed, schedule, but did charter work, whenever required, to any part of the Peninsula. He was well known and very popular throughout the Peninsula, and down through the Gulf country, and the people had great confidence in him. On one occasion, the elements caused damage to his plane, valued at £1,000, at Wenlock, a mining centre. Overnight, the miners subscribed sufficient to enable him to purchase another plane, in order that he might continue to give to them the service that they so badly needed, being 400 miles north of Cairns., high up in the Peninsula. He has rendered great sei’ vice, and has saved the lives of many miners and employees on cattle stations, from the manager down to the humblest stockman. He has landed his plane under all sorts of weather conditions, and brought patients back to hospital. His charges have never been exorbitant, and he picked up whatever freight offered along the route in order to reduce to a minimum the cost to the charterer. His services were in great demand. The regulation which forced him out of the air was the result of a conference which was attended by representatives of the major companies. I quote the following from Tha Inta.ua World, volume 3, No. 1, page 21 : -

A three-day conference of representatives of twelve airlines and of the Department of Civil Aviation was arranged in May last by the Director-General of Civil Aviation. The subjects discussed were, “ Methods for increasing public interest in air transport for mails, freight and passengers; combined advertising and booking; combined action to reduce overhead costs; mutual assistance in maintaining time-tables; prevention of irresponsible and unreasonable competition to ensure the best results from subsidized services “.

That conference was designed to eliminate competition. The Civil Aviation Department claimed that it welcomes competition, and that the service rendered is the best obtainable. My concern is, not for MacDonald or Air Lines of Australia, but for the people up there who have been denied a service which they had enjoyed for some considerable time, and to which they are entitled. MacDonald has been permitted, by the good grace of the Civil Aviation Department, to do an occasional ambulance job. Since petrol rationing was enforced, he has had to apply to the Civil Aviation representative for his ration of petrol whenever anybody has required him to do ambulance work; and if Air Lines of Australia can undertake the job, he is not permitted to do it, although its charges are much higher than his. The people who live in these far northern parti have sent to the Civil Aviation Department petitions protesting against the treatment meted out to

MacDonald. There was a conflict between the two services. Before MacDonald came into the field, there was a fortnightly service in the Peninsula, but since his advent the service has been somewhat improved. It was said, that if he presisted in running a service, the work would be made unprofitable. Air Lines of Australia is subsidized, whereas MacDonald is able to make his service pay without any subsidy. It was said that he had contravened regulation No. 79 by carrying on an air service. The general complaint was that he was operating his planes over the routes of subsidized services, but the Civil Aviation Department would not supply him with a licence. Had he obtained such a licence he would have been prepared to carry on an air service. From August, 1939, to August, 1940, his business grew enormously, because of the confidence of the people in him as a pilot, and because of the service which he rendered to them. In the wet season, in the early part of the year, it happened that Air Lines of Australia was not able to get through to the mining settlements, whereas MacDonald succeeded, and landed certain foodstuffs and mining machinery that were urgently required on the fields. He had purchased two aircraft for the purpose of carrying on his charter work, in order to give to the people the service to which they were entitled, but, sin.ce the promulgation of the amended regulation No. 79, his planes have been grounded except on rare occasions. He has made application for permission to provide a service from Cairns to Port Moresby via Thursday Island. At the present time, W. B. Carpenter and Company Limited operate a service from Sydney to New Guinea by way of various towns in Queensland, and carry passengers, freights and mails for these towns in Queensland as well as New Guinea. MacDonald seeks permission to do the same. “When the. Minister for Civil Aviation gives consideration to this application, I hope that he will allow MacDonald to carry passengers, freights and mails to the Peninsula as well as to New Guinea. The people in the north are complaining of the curtailment of the air services. They do not enjoy the rail and steamship services that are available to people in the southern portion of Australia, and, as they are almost entirely dependent on air services, 1 urge the Minister to give favorable consideration to MacDonald’s application.

Mr ROSEVEAR:
Dalley

– I have not received complete replies to several questions that I have asked regarding price fixation and munitions. I shall refer first to the methods adopted by the Prices Commissioner and to the manner in which commodities used freely by the public are being cornered for the deliberate purpose of securing increases of prices. On the 5th November, and again on the 14th November, I drew attention to the fact that an artificial scarcity of matches had been created in the suburbs of Sydney. Since then I have received communications from other parts of New South “Wales, and from other States, which indicate that the shortage was Commonwealthwide until the Prices Commissioner saw fit to increase the price of matches. In the reply furnished to me I was informed that the rationing of matches had been voluntarily undertaken by the Federal Match Company, of Sydney, and by Bryant and May Proprietary Limited, of Melbourne, on account of the shortage of raw materials, principally potassium chlorate; but it is remarkable that the shortage of chemicals ceased at the time when the price of matches was increased. I was informed by the Minister for Trade and Customs (Senator Keane) that the Prices Commissioner had made inquiries into the supply of matches in order to ascertain whether traders were withholding supplies with a view to building up stocks in the event of an increase of the price, but that no instance had been disclosed of traders having withheld stocks with a view to obtaining unjustifiable profits. Any housewife knows that, whilst supplies of matches were rationed before the increase of the price, no rationing of that commodity occurs to-day. This fact seems to indicate that hoarding has taken place. The Prices Commissioner also reported that new stock was generally stacked in front of old stock, and that, as a few gross of boxes of matches were generally held on hand, old double-striker stock might only be utilized when stocks were almost exhausted. According to the

Prices Commissioner he would have us believe that the reason for the reappearance on the market of the doublestriker matchboxes was that new stocks had been stacked in the warehouses in front of the old stocks, and that only when the new stocks had been got rid of did the supply of the old stocks come to light. But it seems remarkable that the new stocks became exhausted and the double-striker boxes appeared on the market immediately the match combine struck the people for an extra 2d. a dozen boxes. If the Prices Commissioner is going to fall down on his job, as he did with regard to tobacco and other commodities that are essential to the public, the operations of his department should be overhauled, and searching inquiries should be made before manufacturers are allowed to exploit the public, as they did with regard to the price of matches.

I now draw attention to questions asked by me regarding the leasing of machine tools and the conduct of the Director of Machine Tools in the matter of controlling their sale. Colonel Thorpe, I notice, has repudiated all suggestions that any influence has been exerted by him in that direction. I admit that it is difficult to get people to make statements because they fear victimization at the hands of those interests which control the Munitions Department. However, I have sufficient proof that this “ racket “ is going on. I challenge Colonel Thorpe to deny that what I have said in regard to certain tools applies to some in which his firm is interested, tools which it manufactures on licence from overseas countries. The fact that the tools are not available is not due to a shortage of dollar exchange, because tools of that kind are manufactured in Great Britain. Firms requiring them have obtained quotations for deliveries from Great Britain at a date in advance of that on which Australian manufacturers have been able to promise them. Australian firms should not be allowed to put their private interests before the war effort.

I have asked in this House, but have received no satisfactory reply to my question, whether it is a fact that certain firms working on a cost-plus basis are being paid an extra ls. an hour of machine time for machines which they have rented from the Commonwealth. If this racket is going on the Commonwealth is being fleeced for perhaps hundreds of thousands of pounds every month. Early in the war, engineering shops were anxious to get machines of any kind. They were prepared to buy old machines and renovate them, and to pay any price for new ones. Now, the majority of those who want machines prefer to lease them from the Government at .10 per cent, of the price per annum, which amounts to fi 18s. 6d. a week for a machine costing £1,000. Unless the war lasts for ten years that machine will never be paid off. In my opinion, the firms are ‘pretending for their own benefit that it is not desirable for them to buy the machines. They know that, when the war is over, the Government will have no use for the machines, and will sell them as junk to those in whose shops they are. Under the cost-plus system firms are allowed 5s. an hour of machine time irrespective of the value of the machine. Then they are allowed an extra ls. an hour for every £1,000 value of the machine, provided it is under ten years of age, whilst on those over ten years of age they are allowed an extra 6d. an hour. Thus, for a machine worth £1,000, they receive 6s. an hour if it is less than ten years old, and 5s. 6d. an hour if it is more than ten years old, regardless of the amount of wages paid for tending the machine. Whatever justification ‘there may be for paying a firm ls. an hour over and above the ordinary 5s. an hour for working its own machine, there is certainly no justification for doing so if the machine is leased from the Government. Here is how it works out: The rent for a machine which cost £1.000 is about £1 18s. 6d. a week. If it is worked two long shifts, the firm charges for .133 hours at ls. an hour a total of £5 13s., thus making a profit of £3 14s. 6d. a week after paying the lease instalment on a machine that does not belong to it. Next comes the profit which it makes on the operator. The firm is paid 5s. an hour, plus 10 per cent., a total of 5s. 6d. an hour for the operator. Although this would be ample to pay adult skilled labour, or a technical trainee, most of the large firms have adopted the attitude that the lower the wage, the greater the margin of profit. Over and above the 5s. an hour, they receive an extra payment of ls. an hour according to the value of the machine, and above that again they receive administrative costs. A lot of the work is semi-repetitive, and if a lad can be used at a shilling an hour, the margin of profit will be 4s. 6d. an hour gross, which allows the firm a profit of ?9 I83. a week of 44 hours out of the work of one boy. This is a serious matter. I have made inquiries from people who are working under the scheme, and I am informed that the firms are paid an extra shilling an hour on machines owned by the Government. I have made inquiries from inside the Munitions Department itself, and this information appears to be correct. If this kind of thing is going on, it could be stopped within five minutes by a telephone communication to the department. It is true that the matter is to be inquired into, but in the meantime hundreds of thousands of pounds will probably be paid unnecessarily to these racketeers. For the sake of the Treasury, I hope that the information which I have conveyed to the committee is wrong, but I have checked the information to the best of my ability, and the only reason that I have not given names is my fear that my informants will be victimized.

Mr Morgan:

– Does this practice apply generally, or is it confined to certain favoured firms?

Mr ROSEVEAR:

– It is significant that, whereas in the early days of the war these people were willing to pay almost any price for machines, they now prefer to lease them from the Government. [Extension of time granted.] After a machine has worked for 40 hours, the rent is covered and for the rest of the time that the machine works - and it may be in use for three eight-hour shifts or two twelve-hour shifts a day - the firm makes a profit on a machine which belongs to the Government

Mr BAKER:
Maranoa

.During recent years numbers of refugee doctors, some of them highly skilled, have taken sanctuary in Australia. As many Australian doctors have been called up for military service, there is a scarcity of medical men in this country, and I suggest that, subject to proper safeguards, the refugee doctors be allowed to practise. Some weeks ago I received a telegram from the clerk of the local shire council urging that a refugee doctor be appointed to Quilpie, which is west of Charleville^ in Queensland. I brought the matter before the Minister for Social Services (Mr. Holloway), who said that he would see what could be done in the matter. Many of these doctors came here to escape dictatorship; they should not be treated as enemies merely because they have German names. I remind the committee that in the last war many men with German names fought on our side, and that in the present war also that is happening. I ask that something be done in this matter promptly.

The honorable member for Boothby (Dr. Price) referred to the work of aborigines and half-castes on cattle stations, but there is another side to this question. In my opinion, no coloured man is the equal of a white man. About 40 years ago we were told that white men could not work in the canefields It is true that they were not prepared to work there for black man’s wages, but when paid a proper wage they proved to be better workers than the Kanakas.

The Government is to be commended on its intention to establish a mortgage bank, which should afford much needed relief to deserving sections of the community. I hope that loans will be made available on easy terms, and that mortgagors will be given sympathetic treatment. In the meantime, a moratorium should be brought in. In this connexion I bring before the committee the following letter : -

During the past few weeks I have had many requests from business people, farmers and small graziers to put before you and the federal authorities, a proposal to bring in a moratorium so that small business men, farmers and graziers will be protected, as, no doubt, you are aware that at the present time due to the effects of the war and droughty conditions, many people are being persecuted by the banks and other financial institutions. I have had many cases put before me just recently where farmers and small business men are being forced out of business due to unfair treatment by the bank and business houses, and Ifeel that something must be done by way of a federal moratorium to protect these people, if not we will have a great number of cases where hardship is being inflicted, and in many instances people will be put off their properties or out of business by the financial institutions.

I would be pleased if you would take this matter up with the Federal Cabinet and advise me if something cannot be done to protect these people, as suggested, for the duration of the war, and at least twelve months after the war, as, no doubt, you will agree with me, that something along these lines should be done immediately if we are going to see thatour people, particularly in country districts, are going to receive fair and reasonable treatment.

I might mention that it is in the country districts that the small business man and farmers are suffering more than those in the city areas, due to the fact that a great number of enlistments and military call-ups are affecting small country towns more than they are the city, and I would be very much obliged if you would treat this matter as very urgent, and deal with it as soon as possible, as I can assure you that I have, as stated previously, seen many cases which I consider have not been fairly treated by the financial institutions. Hoping to hear from you on this matter after you have discussed same with the Federal Cabinet.

I shall not give the name of the -writer of that letter for fear that he may be victimized should he have an overdraft, at his bank. The matter has been placed before the Treasurer (Mr. Chifley), who is now dealing with it. In normal times bank managers endeavour to induce property owners to mortgage their holdings, and as an inducement low rates of interest are offered. Later, however, the interest rate is raised gradually, and then should difficult times arise as the result of drought, floods, wars or other calamities, the overdrafts are called in, bringing ruin to the borrowers. In my opinion, the private trading banks are the Hitlers and Mussolinis of industry and commerce. Merely by acquiring the right to direct and control the credit and financial resources of the country and obtaining possession temporarily of the savings of the people, the trading banks exercise a virtual dictatorship over the economic life and welfare of the people. A small number of persons draw tribute from every country district, township and hamlet. Through the control of the credit of the community they are able to determine what things shall be produced, and in what quantities.

The trading banks, through the quantity of money they issue, exert a decided influence upon the value or purchasing power of currency, whether it be gold, silver, copper or paper.

On the outbreak of war, following their usual technique, the financial institutions began to call in overdrafts, because new opportunities for investment offered higher rates of interest. When the Fadden Government was defeated, the financial institutions increased their technique fourfold, in order to prove to the people of Australia what happens with the advent of a Labour government. I make an appeal on behalf of persons who are hard-pressed by the financial institutions. Relief can be given to them only in one way, namely, by a moratorium.

Bill agreed to and reported from committee without amendment; report adopted.

Bill read a third time.

page 970

ESTIMATES 1941-42 (REVISED)

Additions, New Works, Buildings, etc.

In Committee of Supply: Consideration resumed from the 29th October (vide page 19).

Estimates - by leave - taken as a whole and agreed to.

Motion (by Mr. Chifley) agreed to -

That there be granted to His Majesty to the service of the year 1941-42 for the purposes of Additions, New Works,Buildings, &c., a sum not exceeding £3,831,000.

Resolution reported.

Standing Orders suspended; resolution adopted.

Resolution of Ways and Means, founded on Resolution of Supply, reported and adopted.

Ordered -

That Mr. Chifley and Mr. Lazzarini do prepare and bring in a bill to carry out the foregoing resolution.

page 970

APPROPRIATION (WORKS AND BUILDINGS’) BILL 1941-42

Bill brought up by Mr. Chifley and passed through all stages without amendment or debate.

page 971

SUPPLEMENTARY ESTIMATES 1939-40

Messages from the Governor-General reported transmitting Supplementary Estimates of Expenditure and Supplementary Estimates of Expenditure for Additions, New Works, Buildings, &c., for the financial year ended the 30th June, 1940, and recommending appropriations accordingly.

Ordered to be printed and referred to Committee of Supply forthwith.

In Committee of Supply (Consideration of Governor-General’s messages) :

Motions (by Mr. Chifley) agreed to-

page 971

SUPPLEMENTARY ESTIMATES 1939-40

That the following further sums be granted to His Majesty to defray the charges for the year 1939-40 for the several services hereunder specified, viz.: -

Part I. - Departments and Services - Other than Business Undertakings and Territories of the Commonwealth.

page 971

SUPPLEMENTARY ESTIMATES FOR ADDITIONS, NEW WORKS, BUILDING, ETC., 1939-40

That there be granted to His Majesty to the service of the year 1939-40 for the purposes of Additions, New Works, Buildings, &c., a further sum not exceeding £126,145.

Resolutions reported.

Standing Orders suspended; resolutions adopted.

Resolutions of Ways and Means founded on resolutions of Supply reported and adopted.

Ordered -

That Mr. Chifley and Mr. Makin do prepare and bring in bills to carry out the foregoing resolutions.

page 971

SUPPLEMENTARY APPROPRIATION BILL 1939-1940

Bill brought up by Mr. Chifley, and passed through all stages without amendment or debate.

page 971

SUPPLEMENTARY APPROPRIATION (WORKS AND BUILDING) BILL” 1939-1940

Bill brought up by Mr. Chifley, and passed through all stages without amendment or debate.

page 971

LOAN BILL (No. 3) 1941

Message recommending appropriation reported.

In committee (‘Consideration of Governor-General’s message) :

Motion (by Mr. Chifley) agreed to -

That it is expedient that an appropriation of moneys be made for the purpose’ of a bill for an act to authorize the raising and expending of a certain sum of money.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Chifley and Mr. Lazzarini do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Chifley, and passed through all stages without amendment or debate.

page 971

PRINTING COMMITTEE

Report No. 4 of the Printing Com mittee brought up by Mr. Conelan, read by the Clerk, and - by leave - agreed to.

Sitting suspended from 2.41 a.m. to

page 972

INTERNATIONAL AFFAIRS

Ministerial Statement

Dr EVATT:
Minister for External Affairs · Barton · ALP

– by leave - It is by no means easy to present a picture of the international situation which will be fair, accurate and valuable. There are almost daily changes of some kind on the diplomatic as well as the military front. Even while I speak fierce fighting in Russia and in Libya may turn the balance of decisive battles. In time of war strategy and diplomacy necessarily go hand in hand. In both fields we have sustained setbacks and reverses. But the great thing is to destroy the spirit of complacency and over-confidence, to learn from our setbacks, to be resolute until we achieve our final objective. lt would be interesting to indulge in speculative debate on the war in general and on our relations with this country and with that - interesting, but unsafe. I do not intend to suggest any inferences where the knowledge that is necessary is incomplete. All I attempt to do is to refer to significant features of the international position, especially those in which Australia has a direct concern.

At the outset I take the opportunity to state that the recent change of government in this country does not imply any vital change in Australia’s foreign policy. Indeed, through the instrumentality of the Advisory War Council, continuity of external policy is assured to a substantial degree. All political parties in this country, every member of this Parliament, all of our citizens, are determined to resist Germany’s mad ambition, which is nothing less than that of governing the entire world by either force or the threat of force. Those who have read Hitler’s Mem Kampf will be strikingly aware of the fact that its author has finally abandoned the deceptive modesty of his claim for a revision of the Treaty of Versailles and for a reasonable amount of living space for all those of German blood. His present ambitions parallel the desperate attempt of Napoleon to bestride both Em-ope and Africa. His plan, as Mr. Sumner Welles has said., is one “ for universal conquest, for the cruel and brutal enslavement of all peoples, and for the ultimate destruction of the remaining free democracies”.

That this is Germany’s objective has become clearer as the theatres of war have extended. We are far better able to form a just judgment to-day than we were a year ago. Even then Hitler seemed to have subjugated a large part of Europe. British strategy was almost entirely on the defensive. The first air battle for Britain had gone well, but almost everywhere else the strategic initiative seemed to lie with the enemy. On the political and diplomatic side also there was much uncertainty, much ambiguity. Few then appreciated the extent of the resolve of the people of the United States of America to defend the western hemisphere against Nazi aggression, either direct or indirect. The countries of the Middle East were doubtful in their sympathies. The Pacific situation had not crystallized. Above all, the intentions of Russia were shrouded in the mystery of propaganda and counterpropaganda.

We are far more certain to-day of the intentions of the countries which doubted and which hesitated. I think we have come to see our own dangers far more clearly; we know far better where our enemies are; we are more certain of our friends. As a result, we are able to handle our external relations with a greater degree of assurance and responsibility than was possible twelve months ago.

What are Australia’s responsibilities? They are measured by its powers. Of recent years there has been a far greater understanding and appreciation of the status which the self-governing British dominions have attained, not only in their internal affairs but also in all their external relations. Most other countries have recognized that status to the full. Perhaps its most striking public recognition has been the exercise of the right of legation, which is a mark of sovereignty in international law. Within the- past two years this country has been, accorded full diplomatic representation in the United States of America, in Japan and in China, with reciprocal representation here by distinguished Ministers from all three countries. In this way the Commonwealth has attained the means of intervening directly in all matters affecting our contacts with the powers concerned. This right of direct intervention is now exercised by us not occasionally, but from day to day and every day. When the history of this war comes to be written, it will show that recent interventions by this Commonwealth in international matters have played an important part in decisive phases of the struggle.

Whatever it may be in point of legal form., the British Commonwealth is in fact an association of free nations possessing equal status in every aspect of their internal and external affairs. So much has been declared by authoritative imperial conferences. But the recognition of status is one thing. The practical problem, of effective co-operation is another. Even in peace-time, when .common action is required, difficulties arise because of the constitutional status of tb<? Dominions. In peace such difficulties are occasional, and time is seldom of the essence of the contract. In wartime all is changed. Decisions have to be made quickly. Without personal consultation, or even with personal consultation, occasions must arise when it is not possible to give effect to the wishes of all of the Dominions. But there is no short-cut solution of these difficulties. Similar difficulties arose during the war of 1914-18 and were gradually overcome. To-day, also, the administrative problems must be solved as we go along. Fortunately, there is no rigid formula which controls or limits the extent of our cooperation in the common cause. If things are not going so well as they should, we can and shall make changes in the method of consultation. In the supreme essential Great Britain and her Dominions are as one. We are all pledged to secure victory in the present war. Every step in diplomacy should be applied and is being applied to achieve that end

Without doubt, the outstanding feature of the war in 1941 was Germany’s sudden attack on Soviet Russia in June last. This act of aggression merely added Russia to the long list of European victims. But serious miscalculations as to Russia’s power of resistance were made, not only by Germany, but also by so-called experts throughout the world who forecast that the Panzer divisions would occupy Moscow within two, or perhaps three, weeks. Mr. ‘Churchill did not share the opinions of the apostles of gloom. He immediately offered military and economic assistance to Russia. Shortly after, Britain made an agreement with Russia by which the two countries became allies for the purpose of prosecuting the war against Germany. It was a further condition of the alliance that neither side should make peace without the consent of the other.

Mr. Churchill’s refusal to accept Germany’s opinion as to Russia’s power of resistance has been borne out by subsequent events. Russia has been pushed farther and farther back, but the resistance of the Russian armies and the Russian people will prove to be one of the epics of modern history. One of the chief features of the defence of the country has been the adoption of what is called the “ scorched earth policy “. In principle, such a. policy is self-explanatory. Its application, however, depends upon whether a. nation is prepared to prefer its liberty to its property, and to sacrifice for liberty all the material possessions within its territories. One of the most striking features of the battle of France was the decision of the vacillating French Government to declare Paris an open city. This meant, in effect, that a great bastion of freedom, a great centre of industrial production was to be surrendered to the enemy without a blow. The people of England refused to follow this example. Similarly, the Russian policy has been the exact reverse of that of France. Its policy is based upon the postulate that nothing whatever matters if an alien dictator is to be at liberty to impose slavery and serfdom. As was well stated by Dr. W. G. Goddard at Brisbane on Armistice Day -

Wi! seu in this “scorched earth” policy the sign of the determined will and spirit of the Russians. Cities can be rebuilt, gardens can bc remade. But this spirit rises triumphant over all, and like a hero facing material ruin, defies the threat of the invader. This defiance is a voice that will ring down the ages, and brave mcn will hear its echo in the time to conic, and hearing it will take fresh courage. . . . It is not any “ ism “ that inspires this courage, but an essential human will to be free. . . Tt is humanity aflame and alive.

I make no attempt to forecast the capacity of the Russians to maintain their resistance in the future as they have maintained it during the past five months and more. Stalin has declared his belief that Russia will resist at any rate right throughout the winter until the months of spring. Let us hope that he is right. A duty devolves upon our country and upon us all to do all we can to assist our ally. “With our own heavy commitments there are many difficulties in the way, but we are doing our best to overcome them. We are providing certain medical equipment, and permission has been given to raise funds for Russian relief. Our predecessors contemplated an exchange of consuls with Russia, and the present Government has had under consideration the advisability of despatching a small delegation to Russia. Inquiries were made as to the feasibility of the proposal, but advice has recently been received from the British Ambassador in Moscow which recommends that, owing to the intense concentration of Russia in its fight to the death against Hitler, the despatch of a mission from this country might better be deferred for the time being. However, I place this on record as evidence of the great importance which we attach to our alliance with Russia in the present struggle.

Russia is also at war with Finland, Hungary and Rumania. It is now established that, on the northern front, Finnish troops have gone far beyond the frontiers as they existed between Finland and Russia prior to 1939. In short, Finland is helping the Germans in operations, the object of which is a complete severance of the supply line which runs into Russia through Murmansk. The strongest representations were made to Finland both from the United Kingdom and the United States of America, urging that country to make a separate peace -with Russia upon the basis of the frontiers of 1939. These representations have been treated with something like contempt, and indicate that the large concentration of German forces in Finland before Germany invaded Russia in June last was part of a joint plan of attack. The subservience of Hungary and Roumania to Germany in the war against Russia has been even more complete. Hungary and Roumania are not only fighting against Russia, but for months before the present war, allowed a free passage through their territories to German troops, giving the bland explanation that they were partners in Germany’s “ new order “ in Europe. It is a strange feature of the present struggle that, while we are allies of Russia in the fight against Germany, we are still at peace with these three eager satellites and accomplices of Germany.

Illustrations from other quarters support the opinion that, under certain conditions, strong and decisive action is the only common-sense method of preventing deterioration of diplomatic and political relations. First I take Iraq. Over a year ago the Prime Minister of that country, while continuing to pay lip-service to the British connexion, embarked on a policy fundamentally opposed to British interests. He continued to intrigue with the Axis. He refused to break off diplomatic relations with Italy, and was about to resume diplomatic relations with Germany. German gold was freely spent by German agents and, finally, Rashid Ali seized power .by a coup d’etat, while still impudently professing loyalty to the alliance embodied in the Anglo-Iraqi Treaty. The usurper finally ordered his troops to attack the British forces. Fortunately, the strongest action was taken, the deposed Regent was reinstated, and the new Prime Minister and his Government are faithfully carrying out the treaty with Britain, having severed all diplomatic relations with governments whose loyalty to Great Britain he suspects.

Syria is another illustration of the success of a firm policy. The local French authorities increasingly complied with Germany’s wishes. There was marked evidence of German infiltration into the country. Its aerodromes were used by Germans to assist Rashid Al i’, revolt in Iraq. Attempts to convey Great Britain’s protests to Marshal Petain through diplomatic channels had no result. Finally, it was evident that the French in Syria were ready to acquiesce in the use of Syrian territory by the Germans for the purpose of their Middle East campaign. In this impossible situation, the only satisfactory course for the protection of our own fighting forces was to occupy Syrian territory. Despite courageous .resistance, the campaign succeeded in a little over a month. As the result, the military situation in the southeast of the Mediterranean littoral immediately improved. Satisfactory guarantees have been given by Great Britain as to the future independence of Syria and Lebanon, together with a declaration that we have no wish to detract from France’s predominant position as against other European countries.

The third example of drastic, but timely, preventive action has occurred in relation to Persia. A large number of Germans had entered this country in the guise of technicians. Without a doubt, their real purpose w.as fifth column action. In July, the Governments of the United Kingdom and Russia jointly requested a drastic reduction of the number of these so-called “ technicians “. Diplomatic pressure did not succeed. The United Kingdom and Russia immediately concentrated forces on. the Persian frontiers and entered the country in AugustIn September, the Anglo-Soviet terms were accepted. Subsequently there was a deliberate breach of the terms. Teheran was at once occupied, the Shah abdicated, and the Crown Prince succeeded him. All that was done was in substantial accordance with the firm treaty obligations of Persia to Russia. It is expected that an Anglo-Soviet-Persian treaty of full alliance will shortly be signed. Had it not been for this bold but necessary action the situation in Persia would have become out of hand. As it is, we are now at liberty to organize measures to counteract the serious dangers likely to result from German penetration of the Caucasus. The consolidation of the position in Persia will be of incalculable value if Germany violates the neutrality of Turkey. Further, the clearing up of the Persian position has opened the way to the passage of essential supplies into Russia itself.

The great political line of the Middle East includes not only Persia, Syria and Iraq, but also Turkey and Egypt. Axis pressure upon Turkey has become stronger since the beginning of the year. German military successes provided the requisite backing for subsequent diplomatic pressure in the Turkish capital. However, it is clear that Turkey did not expect that Russia could resist Germany for any length of time, and the spirit of that resistance should have .some effect in encouraging Turkey’s determination to defend its territories against any German invasion.

Something should now be said about the position of France. Nearly eighteen months have elapsed since Germany dictated the conditions of the ‘German and French armistices. On the evening of the signing of the armistice, Mr. Churchill said that His Majesty’s Government had heard “with grief and amazement “ that the terms dictated by the Germans had been accepted by the French Government, then at Bordeaux. “They cannot feel”,, he added, “that such or similar terms could have been submitted to by any French Government which possessed freedom, independence and constitutional authority.” None the less, the very obscure and difficult international position created by the Bordeaux Government, which subsequently became the Vichy Government, has been faced by the British people with forbearance and patience. Similarly the policy of the United States of America towards France has been based on its special and traditional sympathy with the French people. Indeed, .the United States of America has done everything possible to demonstrate its practical friendship with the French people. Food and medical supplies have been sent to unoccupied France, and to the North African colonies which were administered by General Weygand, who refused to become a willing tool of the Axis. Point by point, however, the French Government has yielded, or been compelled to yield, to the insatiable demands of Germany. French industries and commerce have been regimented into the German economy, and many Vichy administrators have connived at the importation into France, from the French colonial territories, of commodities known to be destined for Germany, thereby helping Germany to evade the British blockade. In May last President Roosevelt pointed out that Marshal Petain had assured the United States of America that it was not intended by Vichy to agree to any collaboration with Germany extending beyond the requirements of the armistice agreement. This was, said the President, “ the least that could be expected of a France which demanded respect for its integrity”.

The attitude of the United States of America towards France has been governed not only by its deep sympathy with the sufferings of the French people, hut also by the primary American policy of protecting the western hemisphere against any Axis aggression, whether direct or indirect. As late as the 27th May last, the French Ambassador assured the Under Secretary for State in Washington that the French fleet would never be surrendered, and that France would not allow Germany or Italy to occupy any French base in North Africa or on the Atlantic seaboard.

It now seems possible that some of these solemn undertakings will be broken. The post of Delegate-General, occupied in North Africa by General Weygand, has been abolished by Marshal Petain. It seems certain that this action is the result of the threat that German forces will march into the French possessions of North Africa. Weygand seems to have done his best to keep to the letter and spirit of the undertakings of the Vichy Government, but the pressure on that government has been powerful and unscrupulous. It is pitiful to reflect upon the pass to which the great people of France has been temporarily reduced. In truth, history has no parallel to this sort of defection on the part of a great and long-standing ally which has been defeated by the common enemy. The increased burden thus imposed upon Britain has been incalculable. I need nol stress the significance of the present Libyan offensive in relation to the French and Spanish possessions in North A’frica.

I now turn to recent events in the Pacific. A year ago Japan entered into formal association with the Axis powers, proclaiming ite national policy as the establishment of a “co-prosperity sphere “ in greater East Asia.. Early in the present year it signed a. non-aggression pact with Russia. In July it made a fateful military incursion into French Indo-‘Ohina. Both the United States of America and the British nations regarded this incursion as an unequivocal act of aggression which directly menaced their vital interests. They at once took counter measures against Japan in the form of stringent economic and financial restrictions. Next came the intervention of President Roosevelt after his return from his Atlantic talks with Mr. Churchill. It was then proposed that both IndoChina and Thailand should be neutralized under the joint guarantee of the Pacific powers, provided that Japan withdrew forces from Indo-China. What was called a. “ moratorium “ period then commenced, and preliminary conversations between Japan and the United States of America took place. They have been continued at Washington, and are now known as the Hull-Kurusu talks. It should be emphasized that the talks are confined to the United States of America and Japan, although, of course, they are of very great concern to the British, Australian. Netherlands and Chinese Governments. We are content to allow the leadership and initiative in this matter to be retained by the United States of America, which is very directly affected by any armed aggression in the south-east corner of the Asiatic continent. At the same time, I must express the hope that the talks will result in an agreement. If so, a new chapter might commence in the history of the relations between tinleading Pacific powers. It is to be remembered that the occasion of the imposition of the economic restrictions upon Japan was that nation’s military advance into French Indo-China at a time when the Government of France was under the direct domination of the Axis. I do not see why it should be impossible for Japan to retrace its steps and make possible the easing of the present economic restrictions, while Japan restores the status quo by withdrawing its fighting forces and equipment from French Indo-China. But all this would be of no avail if aggression in one particular quarter were to be abandoned only to be succeeded by aggression elsewhere. Obviously, Great Britain could not look on with equanimity if Japanese forces attacked Russia in the north-west Pacific, or if the pressure against China were to be redoubled in intensity. But an honorable arrangement with Japan might be of value to all

Pacific countries as an augury of a long period of peace.

This Government’s objective is to preserve the peace of the Pacific, if that can be done without sacrifice of principle, without prejudice to national security, and without endangering the solidarity of the democratic powers. Within the limits of this broad objective, there are many difficult problems as to the manner and form of approach. In all of these respects the Commonwealth is ready and willing to co-operate to the limit of its powers. lt is essential to bear in mind that our attitude takes account, not only of our own interests, but also of those of other Pacific countries, such as the Netherlands East Indies, Thailand, and the far eastern provinces of Russia. There is solid basis for the dictum that the peace of the Pacific must be indivisible. In all these matters we arc in daily contact with our diplomatic representatives in Washington and Tokyo, and we have had the assistance of Sir Earle Page, and especially that of Mr. Bruce, the High Commissioner in Great Britain, who has given us valuable advice. In these very difficult times, I consider it to be my duty to pay tribute to the frank and friendly attitude of the Japanese Minister in this country.

I desire now to make several shorter references. First. there is Portuguese Timor. The Commonwealth Government has a very direct concern in the preservation of the complete political independence of Portuguese Timor. Indeed, Portuguese Timor may fairly be regarded as one of the main points of entrance to the Commonwealth. The capital town, Dilli, has been made a regular stopping place on the Empire Airways route from Darwin to Singapore. At Dilli we have now an official representative of the Commonwealth Government. It if. proposed to confer full consular rank upon him, just as Japan has been represented at the same town for the last few weeks by a career consul. It, is obvious that Australia cannot regard with equanimity any development which threatens the integrity of this portion of the Portuguese empire. I am certain that Portugal, as Britain’s “ ancient ally”, shares this view.

In recent months our relationship with the Netherlands East Indies has become closer because of the obvious need for consultation and collaboration in the problems of mutual defence. The Netherlands East Indies Administration immediately came into line with Great Britain and the United States of America in imposing economic restrictions upon Japan, and the Netherlands Minister in Washington is being kept informed of the progress of the American talks with Japan. We have had visits from several important delegations from Batavia, and the value of these visits is appreciated by the Commonwealth. There has been unavoidable delay in completing the arrangements for an exchange of Ministers between the Netherlands Government and the Government of the Commonwealth, but an agreement has been readied in principle. This agreement will ensure adequate representation of Australia in the Netherlands East Indies, and the appointment of a Dutch Minister at Canberra.

Australia has a supreme and special interest in preventing forcible aggression in the Pacific. The Commonwealth Government has recently, had valuablediscussions with Mr. Duff Cooper, a member of the Churchill Ministry, who was specially appointed to Singapore. In consultation with members of the Advisory War Council, the War Cabinet discussed with Mr. Duff Cooper ways and means for improving the political organization of the defence effort which is centred at .Singapore. Experience shows that the Commonwealth has a great and increasing interest in that organization, and that it is entitled to join, on a footing of equality, with the United Kingdom in any body which is constituted to deal with political matters of Pacific concern. We were impressed with Mr. Duff Cooper’s appreciation of the nature of the problems of Pacific defence. His recommendations will shortly be considered by His Majesty’s Government in the United Kingdom, and will subsequently he considered by the Commonwealth Government.

The increase of inter-dominion consul- tation on matters of war policy has brought the Commonwealth into closer contact with the Union of South Africa. Mr.Blackwell, a member of the South African Parliament, has recently visited us, and we hope that it will be possible, early next year, to send a small mission to represent the Commonwealth on a return visit to the Union.

Australia is, at the present time, without representation in South America, whereas the Dominion of Canada has recently established legations at Buenos Aires and Rio de Janeiro, and the Union of South Africa has a consul-general in Argentina. Australia has a number of important problems in common with Argentina, and we are about to consider the desirability of an exchange of consuls-general with that country.

In mid-Pacific, the Government of the Commonwealth, in collaboration with the Governments of the United Kingdom and New Zealand, have continued to assist the French colonies which have adhered to the Free French cause.

At this difficult time in our history, Australia is fortunate in having the friendship and co-operation of the President and the people of the United States of America. The policy of that country has been governed in the main by its determination to safeguard against all forms of aggression in the Western Hemisphere and its important Pacific territories.

But something more than the doctrine of self-defence emerges from President Roosevelt’sgreat speeches and declarations. Of course, he has realized from the first that German dictatorship, if supreme over Europe, must extend its thrall throughout the world and make it impossible for free democracies anywhere to live in peace and quietness. But he has gone further, and in the Atlantic charter he and Mr. Churchill have suggested, not obscurely, the necessity for all free countries of the world to cooperate in the post-war period. Already this positive ideal is being realized in one important sphere of internationalcooperation. Australia was represented at the recent conference of the International Labour Organization in New York, and a resolution sponsored by the American delegation was adopted. That resolution foreshadowed further conferences with the object of rebuilding international relationships on a basis of improved labour standards, liberal economic adjustments, and social security.

Thus, the objectives of the United States of America and Britain are similar. In both countries there is a sure and certain hope, first, that in the long run it will not be possible for Germany to impose permanent serfdom upon great nations and great peoples such as France, Holland, Belgium, Norway, Poland, Greece, Yugoslavia and Czechoslovakia, and, secondly, and more positively, that international peace can be maintained only through international justice, and that the four great freedoms - freedom of speech, freedom of religion, freedom from fear, and freedom from want - are meaningless unless they be enjoyed, not in one or two or three countries, but, as President Roosevelt insists, “ everywhere in the world “.

I lay on the table the following paper : -

International Affairs - Ministerial Statement. and move -

That the paper be printed.

Debate (on motion by Mr. Fadden) adjourned.

page 978

JOINT COMMITTEE ON BROADCASTING

Motion (by Mr. George Lawson) - by leave - agreed to -

That the time for bringingup the report of the Joint Committee on Wireless Broadcasting be extended for three months from the 3rd January, 1942.

page 978

SUPERPHOSPHATE BOUNTY BILL 1941

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. Scully) agreed to -

That it is expedient that an. appropriation of revenue be made for the purposes of a bill for an act to provide for the payment of a bounty on production of superphosphate, and for other purposes.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr. Scully and Mr. Drakeford do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Scully, and read a first time.

Second Beading.

Mr SCULLY:
Minister for Commerce · Gwydir · ALP

– I move -

That the bill bo now read -i second time.

This measure is introduced for the purpose of granting and applying out of the Consolidated Revenue fund moneys sufficient to provide for the payment of a bounty of 25s. a ton on superphosphate produced in Australia and sold by manufacturers on and after the 1st July, 1941.

Honorable members are probably aware that superphosphate is manufactured from raw rock phosphate and that Australia, is dependent on outside sources for its supplies of this rock. Since the outbreak of th« war, freight and other charges incurred in importing rock phosphate from Nauru, Ocean Island and, following damage by enemy action at Nauru, other sources of supply, have consistently risen, and the British Phosphate Commission has from time to time found it necessary considerably to increase the landed price of the rock to superphosphate manufacturers. The Commonwealth Prices Commissioner, who has been in close touch with the superphosphate position throughout, has approved on three separate occasions of increases of the prices chargeable by manufacturers of superphosphate to users of this fertilizer. The first increase of 10s. a ton, which took effect from the 1st January, 1.940, applied to all of the States. The second increase, which operated from the 1st July, 1940, varied among the States. In New South Wales, Victoria, Queensland and South Australia, excepting Eyre Peninsula, it was 14s. a ton; in Western Australia and Eyre Peninsula, 16s.; and in Tasmania, 9s. The latest rise of 32s. a ton in all of the States has been in operation since the 1st July, 1941. Our primary producers bore the cost of the first two increases. It was obvious that, unless action were taken to cushion the impact of the further rise of 32s. a ton, the use of this fertilizer in Australia would be curtailed to a minimum, and,, as superphosphate plays such an important part in the agricultural economy of our country, this would have constituted a serious menace to the efficiency of our farming industries. The Government of the day decided to grant a bounty of 25s. a ton as from the 1st July, 1941, which meant that the net increase of price to the consumer from that date would be 7s. a ton instead of the full 32s. a ton approved by the Prices Commissioner. This is now operating, although the enabling legislation was not passed by the previous Government. The bounty is payable to manufacturers of superphosphate, who are required so to adjust their prices that the consumers will receive the full benefit of the bounty. The bill provides means for imposing an adequate check on all transactions. Honorable members will appreciate that it is not possible to say exactly what amount will be involved in the payment of the bounty. The quantity of superphosphate that can be produced in Australia is dependent upon the quantity of rock phosphate available, and on the phosphate content of the rock. Imports of rock phosphate cannot be predicted with any certainty; but if they should continue at the present rate, probably 400,000 tons of rock will be imported during the twelve months ending the 30th June, 1942. In terms of superphosphate, this should represent about 600,000 tons, which, if taken by consumers, would involve bounty payments totalling about £750,000.

The Australian Agricultural Council, at its recent meeting, adopted unanimously a scheme for the rationing of superphosphate, submitted by the Department of Commerce. That scheme was the result of a consultation with the British Phosphate Commission and the manufacturers, and is based on the use by each producer of 65 per cent, of the quantity of superphosphate used in the year 1939-40. Despite the reduced production of superphosphate, consequent upon the reduction of imports of rock phosphate, this allocation to each producer will leave a reserve sufficient to enable crops of flax, vegetables for canning, &c, to receive special attention. The rationing system will work very simply, from the Phosphate ‘Commission to the manufacturers, from the manufacturers to the merchants, and from the merchants to the producers. Special cases, and those that are in doubt, will be referred by the manufacturers to the Department of Agriculture in the State concerned, and it will decide the relative merits. Supplies in such cases will come from a contingency pool of 5 per cent., which each manufacturer will be asked to hold. I commend the bill to honorable members.

Mr ANTHONY:
Richmond

– I congratulate the Minister upon the introduction of this measure, which, as he has stated, gives effect to a promise made to the producers by the previous Government. That Government assessed the increased cost of superphosphate at 25s. a ton, although it was known that a further rise was expected ; as the honorable gentleman has announced, that rise has since occurred, and amounted to 32s. a ton.

Increases of the price of superphosphate since the beginning of the war serve further to illustrate the heavy burden of costs which the war is placing upon primary producers. The appropriation under this measure will probably amount to approximately £750,000. The bill is a tardy recognition of the difficulties which primary producers all over the Commonwealth are encountering. Some relief from the financial burden under which they are suffering will thus be afforded; but the producer will still be left to bear 30s. a ton of the amount by which the price has increased since the beginning of the war. I forecast that, as the war progresses, whatever government is in office will find it necessary by means of bounties of this character to deal with the financial problems that beset primary producers as the result of increased costs. I am not enamoured of subsidies or bounties, but our important industries cannot, be allowed to go to the wall because of the impossibility of carrying the costs which the war has imposed on them. I commend the bill to honorable members, and trust that it will have a speedy passage.

Mr PATERSON:
Gippsland

– I welcome this bill, the provisions of which will he of great benefit to the primary producers. Before the war, the prevailing price of superphosphate was £3 10s. a ton, from which the large cooperative manufacturing company in Victoria used to give substantial rebates to farmer shareholders. From £3 10s. a ton the price has risen to £6 lis. That is the price fixed by the Prices Commissioner. Deducting the amount of this subsidy, 25s. a ton, the price is reduced to £5 6s., which is still 36s. a ton more than the pre-war price.

I hope that, in the New Year, the Government will vary the present method of paying the subsidy. Clause 6 of the bill states that the bounty shall be payable to the manufacturer upon the sale of superphosphate. When a sale is made, the manufacturer makes out an invoice showing the price of £6 lis. a ton as fixed by the Prices Commissioner, and then deducts 25s. a ton, representing the amount of the subsidy. Thus, the primary producer can see from his account what the Government is doing to assist him. However, the subsidy of 25s. a ton is not paid to the manufacturer until the fertilizer is sold. Manufacturing is carried on during nine or ten months of the year, but 90 per cent, of the sales are made during February, March and April. This makes it necessary for the manufacturers to carry very heavy seasonal overdrafts, because the rock must be paid for as it is used. The price of Nauru rock has advanced from 28s. a ton, delivered to any part of Australia by the British Phosphate Commission, to 100s. a ton. Some cheaper rock is being obtained from North Africa, in small quantities, and the manufacturers are compelled by the commission to use a proportion of it. It is of inferior quality, having some vegetable matter in it which, when sulphuric acid is applied, giv.es off bad fumes. However, its use has kept down the price of rock to manufacturers to something less than £5 a ton. The co-operative manufacturing companies are not in the business to make profits, but to supply cheap superphosphates to the farmers, and they are suffering now because of the high price of the rock. They must pay for the rock on the 10th of the month after it has been made into fertilizer, hut they may have to keep the fertilize)’ for six, eight or even ten months before it is sold, and they are able to claim the bounty. It would be simpler, and in all respects more desirable, to pay the bounty on manufacture, and not on sale. The benefit would then be passed on to the primary producer when the fertilizer was sold. This would remove some of the difficulties under which the manufacturing companies, particularly the cooperative companies, are at present labouring. It would also benefit the primary producers, because the price which they pay is largely determined, at any rate in Victoria, the Riverina and Tasmania, by the operations of the Phosphate Cooperative Company, which returns to its shareholders the whole of its profits in the shape of rebates. A major rebate is paid in accordance with the quantity of superphosphate purchased, and the number of shares which the purchaser owns, but there is also a minor rebate on the price charged, and this compels the proprietary companies, which are in competition with the co-operative companies, to give a similar rebate. Thus, anything done by the Government to reduce the expenses of the co-operative fertilizing company will be reflected in the rebate which it gives to its shareholders, and this, in turn, will govern the price at which the proprietary companies supply fertilizer.

Silting suspended from 1 p.m. to 2.15 p.m.

Mr PATERSON:

– I have the best, of reasons for believing that the adoption of my suggestion would create no administrative problem, because the payments for the rock, which has been converted into fertilizer, are made to the British Phosphate Commission, upon the tenth day of the month after purchase. The commission, which is an entirely disinterested party, could supply to the department exact figures of the quantity of rock which had been paid for by each fertilizer company month by month. From that information, it would be simple to calculate the amount of fertilizer that had been manufactured. Consequently, the department could easily be placed in possession of indisputable figures which would render it relatively easy from the administrative standpoint to pay the bounty when the rock is converted into fertilizer.

The reason underlying the proposal is that the price of rock has increased from 28s. a ton delivered in Australia before the outbreak of the war, to 100s. a ton, and it does not require much imagination to appreciate how much additional capital is required to pay for the rock; and how much larger the seasonal overdraft must be during the period between the time when the rock is purchased and the sale of the fertilizer. I ask the Minister to give sympathetic consideration to this constructive suggestion which I make with the object, not so much of assisting the .manufacturer, although it will do that, as of helping primary producers. Anything that we can do to reduce the cost of production, even if it be only the amount of interest paid on the seasonal overdraft, will be reflected in the price to the producer. There is a safeguard that that will happen because the practice of the great co-operative company which I mentioned earlier has been, and will be, to return to primary producers the whole of its profits in the form of rebates. That competition will compel proprietary manufacturers to follow suit, and the reduced price will be of considerable benefit to the man on the land.

Mr McLEOD:
Wannon

.- Whilst I welcome the bill, I consider that, the Government could not have avoided the payment of this bounty on superphosphate without jeopardizing the future of the primary producing industries. Honorable members are well aware of the immense improvement that the application of superphosphate has wrought during the last twenty years in the lighter soils, which have become more and more dependent upon the yearly application of this fertilizer. Primary producers could not, afford to meet the whole of the increased cost, which is prohibitive, and without the bounty, a collapse of production would occur, with grave, results to the economy of Australia. If superphosphate he not applied annually to many pastures, especially in the lighter class of country in Tasmania and Victoria, the soil will deteriorate rapidly. During the last twenty years, settlers, by the use of superphosphate, have converted what was virtually waste land into splendid pastures, and have revolutionized various districts. Without rh, constant application of the fertilizer, those soils would probably revert in three years to their original condition, and that would involve the settlers concerned in serious loss. The honorable member for Gippsland (Mr. Paterson) has brought to the notice of the Minister, a suggestion that deserves serious consideration. Even if economies be effected only in interest payments, the result will be reflected in the reduction of the price of the fertilizer.

Since the outbreak of war, the price of superphosphate has increased from 28s. to 100s. a ton. I do not know whether the inquiries of the Prices Commissioner begin with the landed cost of the fertilizer, but in my opinion, this extraordinary increase should be thoroughly investigated. The first rise of 10s. a ton occurred on the 1st January, 1940, only a few months after the outbreak of war, and so far as I am able to ascertain, a big proportion of that increase was due to higher shipping charges. If that he correct, freights are excessive. They are higher than the prewar cost of the rock. For twelve months after the outbreak of war, shipping in these waters was not subject to interference by enemy raiders, but the shipping companies increased their freights abnormally. On appearances at least, one is justified in concluding -that profiteering has occurred there.

In future, supplies of superphosphate will be rationed. Each purchaser will receive only 65 per cent, of the quantity that he used in 1939-40. This will deprive the primary producer of a freight concession that he hitherto enjoyed. Previously, he purchased consignments of ten tons or twenty tons, and those large orders enabled him to obtain truck rates.

The bill will assist, in some degree, to lighten the burden on the primary producer, but the Government, by vigorous measures, should effect a reduction, of costs. If not, the nation will have to bear the added cost. That may be an incentive to the Government to take action against shipping companies for the purpose of securing a reduction of freights.

Mr ABBOTT:
New England

. I see in this bill an old friend, because in happier circumstances I might have introduced it. The Government has done a fair thing in fixing the bounty on superphosphate at 25s. a ton. I am fully aware that the Government of New Zealand bears the whole of the increased cost, but I expect that the troubles of the Minister for Commerce (Mr. Scully) were similar to my own. All Treasurers, regardless of the party to which they belong, cling as tenaciously to money as some people cling to their wisdom teeth. Ministers experience the utmost difficulty in prevailing Upon them to make money available for various purposes. The bounty of 25s. a ton is the best that we can hope for at the present time.

Like other honorable members who have spoken on this bill, I desire to emphasize the absolute dependence of Australian soils upon the application of adequate supplies of superphosphate. During the last 40 years the fertility of the eastern soils of New South Wales has decreased by from 40 per cent, to 50 per cent. Now, that fertility is being restored by the use of superphosphate. If the fertilizer be not made available in adequate quantities, the soils will begin to deteriorate.

The Minister mentioned, as a matter of interest to honorable members, that the recent meeting of the Australian Agricultural Council unanimously adopted a scheme submitted by the Department of Commerce for rationing supplies of superphosphate. The plan is based upon the use by each producer of 65 per cent, of the quantity of superphosphate used during the year 1939-40. In my opinion, it would be more equitable if the ration were determined on the hase year 1940-41. Many settlers have been carrying on a continuous programme of pasture, improvement and the laying clown of pastures, and their requirements of superphosphate have progressively increased. If their requirements be reduced upon the basis of the year 1939-40, they will suffer a substantially heavier rationing pro rata than other people who put down their pastures years ago. Even if the alteration of the base year entails a decrease of the 65 per cent, by a decimal, the suggestion is worthy of adoption. In addition to being appreciated by users of superphosphate, it would enable areas which were laid down in that year to be preserved, instead of deteriorating to natural pasture. This is not a big matter, and I feel confident that if the Minister discusses it with the department, means can be found for adopting the proposal.

I was pleased to notice that the Minister intends to establish a reserve so as to enable special crops, such as flax and vegetables for canning, to receive special attention. Anxiety has been expressed by growers of beans for canning, in the northern areas of New South Wales, that the system of rationing might inflict hardship upon them, but I know that the Minister, during the last two or three weeks, has allayed their fears. The new special crops which we are growing may play an important part in Australia’s future agricultural development. The more we diversify our crops the greater will be the safety of our primary producers. Hitherto we have worked within a very narrow orbit. The reserve of 5 per cent, of manufacturers’ stocks of superphosphate will do much to enable the continued production of those special crops. I congratulate the Minister upon having introduced this bill. The Government could not be expected to carry the whole of the burden of the increased cost of superphosphate, but I hope that it will accept the burden of further rises because the position of the user is becoming increasingly difficult. The Council for Scientific and Industrial Research should be asked to make a thorough investigation of any available supplies of phosphatic rock in Australia, or in neighbouring islands, especially the Abrolhos islands off the north-west coast. In the past a great deal of superphosphate has been manufactured from phosphatic rock taken from those islands. It would be much better to exploit Australian resources to the full than to send to the Red Sea and other distant places for supplies. I hope that this bill will go through quickly and that the primary producers will not receive less superphosphate than it envisages that they will receive next year.

Mr RYAN:
Flinders

.- I rise to support the suggestion made by the honorable member for New England (Mr. Abbott) that the basic year be changed from 1939-40 to 1940-4L I do so because under the flax production scheme large areas of former pasture land have been sown with flax, which requires 1 cwt. of superphosphate to the acre. Probably 60,000 acres of pastures have been converted to flax-growing, and, when the flax has been cropped, the land must again be sown with grass, which will require additional applications of superphosphate in order to make it produce good turf. There is every reason, therefore, to make the basic year the year subsequent to that proposed. The future of the primary industries is, as was said by the honorable member for Gippsland (Mr. Paterson), bound up with the proper application of superphosphate, and it is essential that, as far as possible, .supplies shall be available during war-time, because pastures rapidly deteriorate if not treated with fertilizers, which are also necessary to keep the new crops in production. I, therefore, urge the Government to exploit all known sources of phosphatic rock and to search for other sources in order that essential supplies shall be maintained. As a primary producer representing other primary producers in this Parliament I join with other similarly placed honorable members in commending the Government for having brought down this bill.

Mr COLLINS:
Hume

.- I also congratulate the Minister for Commerce (Mr. Scully) upon having introduced this measure in order to ratify a decision made by his predecessor, the right honorable member for Cowper (Sir Earle Page). Supplies’ of superphosphate are vital to the development of the land. The right honorable member for Yarra (Mr. Scullin) yesterday described how the imposition of a land tax had resulted in the breaking up of large holdings of land, with consequent closer settlement. However much the land tax may have done in that respect, the most important contribution .to closer settlement in this country has been the application of superphosphate to the land, as the result of which men who formerly needed large areas of land in order to make a living found that they could make a much greater income from smaller areas. The amount of the bounty is acceptable, but I hope that the Government will give full consideration to adjusting its rate in such a way as to guard against the cost of superphosphate rising beyond the means of the users.

Mr PROWSE:
Forrest

.- Whilst I congratulate the Government upon having endorsed the decision made by the previous Government to subsidize the manufacture of superphosphate, I cannot agree with the satisfaction expressed by the honorable member for New England (Mr. Abbott) with the amount of bounty provided. Ninety-five per cent-, of the wool-growers of Australia produce 50 per cent, of the wool grown ; the other 50 per cent, is produced by 5 per cent, of the wool-growers, the squatters. In Western Australia, I had the honour, a3 first chairman of the Discharged Soldiers Land Settlement Board, of placing a number of returned soldiers on blocks of land which were capable of carrying enough sheep to provide them with a decent living at prevailing wool prices. When this war broke out, however, the Commonwealth Government entered into an arrangement whereby the whole of the Australian wool clip, was sold to the Government of the United Kingdom on a basis which would presumably provide a fair living to the woolgrowers. The trouble is that the wool agreement is static, whereas the cost of producing wool is certainly not static. For instance, the price of superphosphate has increased by about £3 5s. a ton in Western Australia, imposing a heavy burden on the small wool-growers who either have to find the wherewithal to buy necessary quantities of superphosphate or allow their stock to deteriorate. The small wool-growers are doubly suffering; they have to contend with increased costs and cannot a afford to buy sufficient superphosphate to maintain the quality of their stock. Consequently, their yield of wool seriously declines. The Government, must either ensure that growers receive an increased return, or, as the New Zealand Government has done, meet the growers’ increased costs. As a private member, the Minister for Commerce (Mr. Scully) himself urged the then Government to do what I now urge him to do.

Mr MARWICK:
Swan

.- I welcome the assurance given to me by the Minister for Commerce (Mr. Scully) that all possible sources of superphosphate and other fertilizers within Australia and at places near to Australia would be investigated with a view to their exploitation. I am pleased that, the Joint Committee on Rural Industries intends- to investigate the whole of the factors associated with the manufacture and distribution of superphosphate in Australia. It is most likely that substantial quantities of fertilizers can be obtained locally. For instance, I refer to vast quantities of live and dead guano. Dead guano can very successfully be mixed with superphosphate, but not, I think, live guano. At least 250,000 tons of guano has already been removed from Western Australia, and I think that many more tons is available. From 1916 to 1918 about 100,000 tons of phosphatic rock was mined in South Australia. The phosphatic rock is fairly well scattered throughout South Australia, and it is within the realms of possibility that mining operations could be extended in areas where the rock is high grade. Phosphatic rock is also to be found in Victoria and in New South Wales. In the last war New South Wales produced 60,000 tons of superphosphate from local phosphatic rock. It is imperative that supplies of superphosphate be available to protect the pastures -which have been created as the result of encouragement given by this Parliament by way of the fertilizer subsidy. Guano would be quite suitable for the top-dressing of pastures, although ii would not be of much use in wheatgrowing because its action is slow. I hope that the Minister will instruct his officers to commence immediately the investigation of local resources.

Sir GEORGE BELL:
Darwin

– I appreciate the provisions of this measure and, although its introduction was contemplated by the previous Government, I congratulate the Minister for Commerce (Mr. Scully), upon having brought it down. It will relieve the primary producers of the obligation to bear at least some of the excessive cost of superphosphate. The importance of this commodity need not be stressed, because it is well known that the stability of primary production, and, in fact, the stability of the whole economy of Australia, depends largely upon the supply of superphosphate. I should like the Minister, when he replies to the debate, to inform the House, if it bc possible for him to do so, of the prospects for future supplies of superphosphate from Nauru and Ocean Islands. A large part of the increase of the cost of phosphatic rock is the result of enemy action which destroyed the cantilever machinery that was used for loading ships at those islands. I have heard it said publicly - and I was not in a position to deny the statement, although I expressed doubt of its accuracy - that the increase was due largely to the fact that the British Phosphate Commission had raised the price for the purpose of financing the installation of new machinery. I should like to know whether the machinery is, in fact, being replaced. The present method of loading involves the use of baskets and barges, with the result that the cost has increased and the process has become slower. There are no sheltered ports at those islands, and, in bad weather, ships cannot be loaded by the present method. I urge the Minister to inform the House of the prospects regarding supplies from those sources. Farmers want to know the facts, because the rationing of superphosphate and the increase of price affects their plans.

Mr SCULLY:
Minister for Commerce · Gwydir · ALP

.’ - in reply - The honorable member for Gippsland (Mr. Paterson) has suggested that the bounty should be paid upon manufacture. The bill contemplates that it will be paid upon sale to consumers. The honorable member contended that payment on manufacture would obviate the necessity for co-operative companies to pay interest on overdrafts. I shall investigate that suggestion, and if it be possible to accede to it, I shall give favorable consideration to it. The honorable member for Wannon (Mr. McLeod) referred to freight charges. I realize that the rationing of superphosphate supplies has indirectly affected the rates of railway freight charged to consumers. I know of many landowners who normally would buy a 10-ton truckload of superphosphate. Under rationing, however, they are able to purchase only 7 tons. Nevertheless, the railway freight systems of the various

States make it necessary for them. to pay freight for a full 10-ton truckload. This relative increase of the freight charges is of serious importance to consumers. 1 shall discuss the matter with the railways authorities of the different States in order to see whether the situation can be relieved. The honorable member for New England (Mr. Abbott) and the honorable member for Flinders (Mr. Ryan) questioned the wisdom of fixing 1939-40 as the base year for the computation of ration allowances. The honorable gentleman said that many producers had undertaken pastoral improvement only recently, so that the allocation of supplies according to sales in the year 1939-40 might react unfavorably to them. I do not know whether it will be possible to select a different basis of calculation, but if individual applications be made to me in regard to unfair treatment under this system, I shall discuss them with the representatives of the States and endeavour to overcome any disabilities. Both the honorable member for Swan (Mr. Marwick) and the honorable member for Darwin (.Sir George Bell) referred to the possibility of increasing supplies. I assure them that the Government is doing everything within its power to increase production, and it will not relax its efforts until every reasonable prospect of obtaining new stocks has been exhausted. As a country man I realize the importance of superphosphate to primary production. Therefore, I shall do everything possible to increase the supply, which at present, is definitely inadequate to meet reasonable demands.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 985

APPLE AND PEAR (APPROPRIATION) BILL 1941

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. Scully) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund, a sum for the purpose of repaying to the Commonwealth

Bunk of Australia advances made for the purposes of the National Security (Apple andPear Acquisition) Regulations.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Scully and Mr. Beasley do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Scully, and read a first time.

Second Reading

Mr SCULLY:
Minister for Commerce · Gwydir · ALP

– I move -

That the bill be now read a second time.

The purpose of this bill is to grant and apply out of the Consolidated Revenue Fund a sum of £1,400,000 for the repayment to the Commonwealth Bank of advances made by the bank for the purposes of the acquisition and marketing of the 1940-41 crop of apples and pears under the National Security (Apple and Pear Acquisition) Regulations. Because of the unfavorable outlook for any improvement of the export position for fresh fruit in 1941, the Commonwealth Government convened a conference of State Ministers of Agriculture and accredited representatives of the apple and pear industry in order to consider ways and means of dealing with the new season’s crop. Following several further discussions with the States, the Commonwealth Government finally agreed to proposals for a continuation of an acquisition scheme for the following season. The arrangements for 1941, however, differed in the following important respects from those of the previous year : -

  1. Acquisition was effected on the 1st January, instead of the 1st March ;
  2. Instead of making advances to growers at flat rates, a unit system was adopted, which provided for differential rates as between States and as between varieties of apples and pears produced in each State;
  3. Fruit had to be actually delivered before qualifying for advances, except where delivery was not required for marketing. In these cases qualifications for advances were established on the basis of an official tree measurement of the crop at the time of maturity.

Certain changes were made in the organization of the scheme, and the Apple and Pear Marketing Board was constituted under the regulations to administer the acquisition and marketing arrangements. In accordance with regulation 25 of the National Security (Apple and Pear Acquisition) Regulations, arrangements were made with the Commonwealth Bank to advance the amounts necessary to meet the payment of advances to growers, packing and marketing costs, and administrative and publicity expenses. Sums totalling £3,901,779 were advanced by the bank for the foregoing purposes, subject to the following conditions : -

  1. A guarantee in pursuance of the regulations to be furnished for the full amount of the advances made by the bank;
  2. The clearance of outstanding indebtedness before the 31st March, 1942; and
  3. Interest on advances to be charged at the ruling rate for rural credit advances.

Application has been made to the bank for a further sum of £255,000, which would make the aggregate of the advances £4,156,779. So far as it is possible to estimate at this stage, the acquisition and marketing of the 1941 crop will result in a substantial loss of between £1,500,000 and £1,600,000. Last year, an amount of £750,000 was appropriated by Parliament to meet the probable deficiency on the 1940 acquisition scheme. The actual loss on that year, however, will be approximately £605,000, leaving a balance of parliamentary appropriation amounting to £145,000. Honorable members are now asked to approve of the appropriation of a further £1,400,000 in order to meet the estimated deficiency.

In comparing the increased loss on the 1941 season with that of the previous year, a number of factors must be taken into consideration. First, the 1940-41 crop for Australia was of record size, aggregating 15,000,000 bushels of apples and pears. In most of the States the crops were heavy, and in some instances abnormally heavy. In Tasmania and

South Australia particularly, favorable seasonal conditions resulted in crops which were exceptionally clean and free from disease. As a consequence, a greater proportion than normally of the total crop in those States has qualified for advances. Although a market was found for approximately 8,000,000 bushels of fruit, there was no outlet for the remaining 7,000,000 bushels in respect of which the growers received compensation. It should also be noted that the rates of advances to the growers were higher than were paid in 1940.

Secondly, in 1940 we were fortunate in securing space for the shipment to the United Kingdom of about 2,000,000 cases of apples and pears, for which very remunerative returns were received. This year, however, it has not been possible to ship one case of fresh fruit to England.

Thirdly, the marketing results of the board were not so successful as had been originally anticipated, due to the nature of the propaganda directed against the scheme by certain interests.

During the year, the board has taken full advantage of available interstate transport and cool storage accommodation, and has arranged to hold record quantities of apples in cool store. A substantial increase of the production of dried apples, from a normal 470 tons to 1,250 tons, equivalent to 500,000 bushels of fresh apples, was made possible because of the action taken by the board. This additional tonnage was required in order to meet the large demands of the defence services. However, it is not possible to market in Australia, or to process, the whole of the surplus normally exported overseas.

Honorable members must realize that the loss of our main export market for fresh fruit is a serious matter for the apple and pear industry. Until these remunerative outlets are restored, obviously some measure of assistance must be afforded to the industry, and some control must be exercised over the marketing activities. With the approach of the new season, the Government will make an early pronouncement regarding future policy. I commend the bill to the favorable consideration of honorable members.

Mr ANTHONY:
Richmond

.- This bill is the almost inevitable result of the apple and pear acquisition scheme. Prior to the war, approximately one-half of the Australian production of apples and pears, which averaged 11,000,000 or 12,000,000 cases, was exported, and the remainder found a market in Australia. With the outbreak of war, and because of lack of shipping space, there was no market for the quantity usually exported, and had the Government not taken action the effect on the growers would have been disastrous indeed, because so much fruit would have been thrown on the Australian market that the price received would not have covered the cost of marketing. The Government was, therefore, compelled to inaugurate a scheme for the relief of those engaged in the industry. In the first year in which the scheme operated, there was a loss of over £600,000. It has to be remembered that in that first year a limited quantity of shipping was still available, and, as the Minister for Commerce (Mr. Scully) has stated, 2,000,000 cases of apples was exported and returned to the pool approximately £900,000. Therefore, in considering the loss made this year, three factors have to be taken into account. The first is, that not a single case of apples was exported to the United Kingdom, and in that respect alone we are £900,000 worse off than in the preceding season. In the second place, a record crop was produced last year all over Australia, particularly in Tasmania and South Australia, and to a, lesser extent in Victoria, although I am under the impression that it approached record figures in that State also. Consequently, we have to deal with several million bushels more than had previously been handled. In addition, the Government, realizing that in the preceding season the remuneration of the growers had not been sufficient to enable them to carry on their industry, increased the amount payable per case, and made variations of the prices to be paid in respect of the different varieties in the various States. In the first year of the pool, a flat rate was paid to producers in all of the States, but in the year under review the growers of particular varieties of apples in Queensland and New South Wales .received special consideration - properly, because fruit which they produced realized a higher price than did fruit from the other States, whilst the Queeusland fruit came on the market very much earlier and on that account was usually able to secure more favorable conditions. For these various reasons, the Government made a differential rate of payment as between growers in New South Wales and Queensland, and, to a limited extent, in Victoria, and growers in South Australia and Tasmania. The loss of £900,000, the higher price paid to the growers, and the record crop, combined to produce the result which has made it necessary to seek an appropriation of £1,4.00,000 in order to meet the losses on the pool.

That section of the fruit industry which is represented by the apple and pear growers is one of the most difficult sections to deal with and organize. I had the responsibility of administering the acquisition scheme for a considerable period. Upon assuming that responsibility, I found that there was little or no organization within the industry itself. There are very few men of sufficient business experience combined with a knowledge of the industry, whom one can approach for advice and help.

Mr Frost:

– Is that why the honorable gentleman went outside the ranks of the apple and pear growers in order to find the manager whom he appointed?

Mr ANTHONY:

– I did not select the gentleman who had charge of the administration in New South Wales. When I undertook the organization of the scheme last year, I gave to the chairman of the board, Mr. Mills, as the managing director of the business, full executive powers, with complete authority to select his own staff. When he approached me with the suggestion that Mr. Stevenson, of New South Wales, would be a proper person to appoint to the position, I fully concurred, because I have an intimate knowledge of the fruit industry, and knew from experience that Mr. Stevenson was probably the only man in New South Wales who could be said to represent the growers and to have a knowledge of marketing problems. By virtue of his having been chairman for three years of the only fruit-growers’ marketing organization which had ever come into existence in New South Wales, I considered that he should have had the necessary ex perience to carry out the duties which the chairman of the board proposed to entrust to him. In the fruit-growing industry generally, there is not a sufficient number of men of wide experience to deal with these particular problems.

Mr Prowse:

– That does not apply to Western Australia.

Mr Frost:

– Nor to Tasmania.

Mr ANTHONY:

– My experience of fruit-marketing problems is probably as wide as that of any honorable member. I have also a close knowledge of the leading figures in the fruit industry of Australia, and know what qualifications they possess for different kinds of jobs.

The time is overdue for a pronouncement as to what the Minister proposes to do in the coming season. Taking over early in last November, as I did, I was at a great disadvantage in trying to put into operation a scheme which had to commence functioning about the end of the year. If the Minister is not careful, he will find himself in similar difficulty. The first supplies of apples will probably reach the Sydney market within a few weeks. The honorable gentleman has very little time to lose if he proposes to establish an effective organization to deal with the apple and pear crop for the ensuing year. The Apple and Pear Board made a great effort to increase the consumption of apples and pears, hut, as the Minister has pointed out, consumption was detrimentally affected by certain propaganda, some of itby the growers themselves. In the districts around Melbourne some growers, in pursuance of what they thought to be their rights, wrote to the press stating that apples were going to waste in great quantities, that the growers were being crucified, and that the prices charged by the board were too high.

Mr Brennan:

– And apples did go to

Mr ANTHONY:

– Yes, and they would necessarily go to waste under any system when you had to put 15,000,000 bushels of fruit on a market which normally absorbed only 7,000,000 bushels. The trouble was that the growers, in their eagerness to insist upon their individual rights, destroyed the desire of the public to buy apples. The public got the idea that apples ought to be practically given away, and they were not prepared to pay a reasonable price. If it had been possible to obtain ls. or 2s. a case more for apples during the harvesting period, this appropriation would be many hundreds of thousands of pounds less. Certain newspapers published matter which was detrimental to the scheme, such as statements that millions of bushels of apples were being ploughed under the ground. I do not say that they set out deliberately to sabotage the scheme, but they undoubtedly did much harm to it. In New South Wales very little fruit went to waste, except certain unscheduled varieties, and fruit that was hail marked. Even in normal times there was no market for such fruit except in. times of scarcity, and in areas close to the point of production.

Mr Abbott:

– The honorable member had better not tell that to the Kentucky growers. “ Mr. ANTHONY.- Such fruit as went to waste in .Kentucky had been damaged by hail. New South Wales is an importing State, whereas Tasmania, Victoria, South Australia and Western Australia rely upon exporting a part of their crop. Normally, New Month Wales used to import over a million cases of apples from the other States. It is unreason able, therefore, to ask us to believe that any considerable quantity of sound fruit was ploughed under in New South Wales. T admit that there was probably a considerable loss of hall-marked fruit for which, in other years, the growers would have found a market. I agree that the growers suffered a considerable hardship on that account.

Mr Pollard:

– Notwithstanding the fact that the committee presented an interim report recommending that compensation be paid to growers whose fruit had been damaged by hail, the honorable member’s Government took no action.

Mr ANTHONY:

– Our Government sought to institute a hail insurance scheme to protect growers against loss from hail, but it broke down because of opposition from certain States.

Mr Pollard:

– That does not absolve the Commonwealth of responsibility.

Mr ANTHONY:

– I think that it does. If the Commonwealth Government were to compensate growers for hail- damaged apples, there would be no reason why it should not accept similar responsibility in regard to every other kind of fruit, and, indeed, in regard to crops of all kinds.

Sitting suspended from 8.21 to S.52 p.m.

Mr ANTHONY:

– Whilst it is a matter for regret that the Parliament is obliged to provide such a huge sum at present for the apple and pear industry, existing circumstances make this appropriation inevitable. Probably the Government will, be compelled in future to grant financial assistance to other primary industries, if lack of shipping space prevents the export of their products. The assistance which has been given to the growers of apples and pears is an indication of the importance that the previous Government and the present Administration attach to the necessity for maintaining on the land primary producers who, because of the loss of their export markets, would otherwise be deprived of their livelihood.

One could speak at great length upon the apple and pear industry. Since the introduction of the acquisition scheme, the subject has been canvassed throughout the bind, but mere words do not conceal the fact that the Commonwealth must make good a deficiency of £1,400,000. That appropriation has to be made in conformity with the undertaking that the previous Government gave to the Commonwealth Bank, but the experience gained during the last acquisition season will prove to be of great value to the Minister. Whilst I do not envy him, and those to whom he delegates the responsibility of managing the schema, their task, our experience of a number of problems related to the apple and pear acquisition scheme will enable us to make substantial improvements during the coming vear.

Mr JOLLY:
Lilley

.- Whilst J do not oppose the bill, I regret that honorable members have not been supplied with a complete statement of the financial transactions of the Apple and Pear Board. On. referring to the report of the Committee which inquired into the operations of the board earlier this year, I find some comments about unsatisfactory financial arrangements, associated with the activities of the board. The House is entitled to receive an explanation of the reasons for this substantial loss of £1,400,000. Even the statement which the Minister for Commerce (Mr. Scully) submitted to the House this afternoon upon the activities of the board does not enable honorable members to estimate the value to Australia of the apple and pear industry. So far as I can gather, its value is approximately £3,000,000 a year. If my estimate be accurate, honorable members should note that the appropriation which Parliament is now asked to make represents 50 per cent, of the value of the industry.

Mr Frost:

– What roti

Sir George Bell:

– One-half of the Australian production of apples and pears in normal times is exported.

Mr JOLLY:

– The total advances by the Commonwealth Bank in connexion with the activities of the board are approximately £4,000,000. Of that sum, Parliament is asked to find £1,400,000.

Mr Anthony:

– That is not 50 per cent.

Mr JOLLY:

– I can cite only broad figures, because honorable members have not been supplied with the details of the operations of the board. If Parliament were to pay a proportionate bounty to other industries, the country would be in a sad economic plight.

Mr Pollard:

– The previous Government, which the honorable member supported, granted considerable financial assistance to secondary industries.

Mr JOLLY:

– Nothing like the amount proportionately which Parliament is now called upon to pay to the apple and pear industry.

Mr Pollard:

– What about the assistance that is being given to the sugar industry?

Mr JOLLY:

– Surely the honorable member for Ballarat will agree that when Parliament is asked to meet a loss of this kind, honorable members are entitled to an explanation of how the deficit was incurred.

Mr Pollard:

– The information is contained in the report of the committee which recently inquired into the industry.

Mr JOLLY:

– During the last season the sale of apples and pears by the board failed by £1,400,000 to cover the expense of its operation.

Mr Pollard:

– The report of the committee, which is available to the honorable member, explains the whole position.

Mr JOLLY:

– I have an abridged report, and I defy any honorable member to elicit from its contents the actual financial position of the industry.

Mr Ryan:

– A larger report of 604 pages is available.

Mr JOLLY:

– I trust that the Minister will ensure that the recommendation of the committee, that the AuditorGeneral should make a complete investigation of the financial position of the board, will be adopted. I ask him also to supply to the House a statement of the value of the industry to Australia and the expense incurred by the board in marketing apples and pears last year.

Mr BRENNAN:
Batman

.- Much has been said during this debate from the standpoint of the grower of fruit, and something has been said from the standpoint of the general public about the considerable measure of financial assistance which Parliament is now called upon to grant to the apple and pear industry in order to protect the interests of the growers. I propose to speak briefly about the position of the consumer and the would-be consumer of the excellent fruit that is grown in this country, because that feature has been almost entirely neglected, as it so frequently is in matters of this kind.

I have noted with great regret that during the last season not one bushel of apples or pears has been exported, and I invite the Minister to explain to the House the reason for that. In the previous season, Australia was fortunate enough to secure shipping space for 2,000,000 cases of apples. The honorable member for Richmond (Mr. Anthony) who, until recently, bore the ministerial responsibility for the actions of the Apple and Pear Board, stated that extravagant charges were levied by certain growers, and I think that he instanced Victorian growers. In my opinion, the charges were not extravagant. The previous Government failed lamentably in the discharge of its obligation to market apples and pears. I am persuaded that fruit, regarded properly, Ls not a luxury but a necessity, especially to the rising generation, whose health is benefited and whose pleasure in life is tremendously augmented by access to the great profusion of good fruit with which Australia is blessed. It is a terrible thing that good fruit, grown in such tremendous quantities, should be obtained with such difficulty by working-class people, I charge the late Government with having done nothing to facilitate the contact of the consuming public with the fruit produced. The honorable member for Richmond has scorned as extravagant charges that fruit has been allowed to rot on the ground, but that charge cannot be .refuted, because I myself have seen the fruit rotting on the ground in many of the areas represented by the honorable member for Ballarat (Mr. Pollard), who has done so much as a member of the Apple and Pear Committee and as a primary producer to safeguard the interests of the consumers as well as those of the growers. The late Government did little or nothing to enhance the local market and make it possible for the working classes to acquire the fruit. I know that the late Government’s policy was applauded by many large orchardists who as the result of that policy received large sums of money from the Government, but the ordinary consumer has suffered because he has not been able to obtain fruit.

Mr Abbott:

– What does the honorable member suggest should be done by the present Minister for Commerce?

Mr BRENNAN:

– The present Minister is new in office, but 1 suggest to him that, if the apple and pear acquisition scheme is to be continued, wholesome fruit, perhaps not up to export standard, should be made readily available to the thousands of people who want that fruit, but cannot afford to buy it. Fruit should not be allowed to rot or be fed to pigs when thousands of people are forced by economic circumstances to do without fruit. We have been told by the Minister that in the last season unprecedented quantities of apples and pears were harvested, but one will not find fruit on the dining tables of the workers, because they cannot afford to buy it. Bountiful harvests are of no use to Australia if, owing to the fancy prices charged, the people cannot benefit from them. One aspect of this matter which arouses my curiosity is the fact that whilst the ingenuity of the Government has not been equal to shipping a single bushel of apples abroad it has been equal to exporting unlimited quantities of beer. I do not object to the predilection of some people for beer rather than apples, but I do object to the suggestion that hundreds of thousands of cases of beer can be shipped but not a single case of apples. It is true that many growers near to the metropolitan areas of Victoria are in a comparatively small way, but it is equally true that had they been free last season to follow their custom of hawking and marketing their own fruit they would have been able to convert their crops into cash. The apple and pear acquisition scheme has taken their livelihood from them.

Mr ABBOTT:
New England

– The difficulties which confronted apple and pear growers when, almost overnight, as the result of the war, they lost about 50 per cent, of their market, need no emphasis. It was a wonderful performance on the part of the Apple and Pear Board to dispose of 8,000,000 cases of apples in Australia last year, but that left an unsold surplus of 7,000,000. It is not my purpose to whitewash the apple and pear acquisition scheme; on the contrary, I shall say plainly what I think about certain aspects of it. No scheme for the marketing of primary products has been more criticized or damned in the press or in .the minds of the people than the apple and pear acquisition scheme, but in order that that scheme may be improved, I propose to make some constructive suggestions, not suggestions such as those in the mind of the honorable member for Batman (Mr. Brennan). The theme of the honorable member’s speech was what the last Government did or failed to do. Recrimination is useless, and I am concerned with the future, not with the dead past. The honorable member for Batman said that he would like to know why we were able to export large quantities of beer, whereas no shipping space could be found for apples and pears. I do not know whether the honorable member is a beer drinker, cider drinker, or nondrinker.

Mr Brennan:

– That is irrelevant.

Mr ABBOTT:

– No, it is most relevant. Apples could not be sent through tropical seas to London in holds similar to those in which beer can be shipped. Unless exported in refrigerated holds, the choicest apples which we sent abroad would, on their arrival, be a fermenting mass of vinegary cider. The honorable member knows probably as well as I do that apples cannot be shipped in ordinary holds as can cases of beer. The honorable member’s criticism in this regard was absurd.

The report of the Apple and Pear Committee indicates that there has been the grossest mismanagement of the marketing of apples by the State committees. If the people on those committees are the best in the industry, God help the fruit industry. On page 4 of its report the committee stated -

Evidence given before the committee revealed an unsatisfactory position in many centres so far as the payment of advances and final settlements were concerned. In some cases long delays have occurred and incorrect payments have been made.

In its first progress report the committee was more specific and pointed out -

ADMINISTRATION AND FINANCE.

New South Wales Apple and Pear Committee.

Various witnesses at Orange, Armidale and Kentucky South expressed dissatisfaction with the State committee’s administration with regard to incorrect accounts and payments. At Orange one grower was said to have been paid three times for the same consignment, and many men were overpaid. At Armidale and Kentucky South the committee was informed that delays in payments up to a period of three months took place. One orchardist received a cheque for £17 10s. for fruit which he had not sent, but received £1 13s. 3d. for a, consignment of pears for which ho should have been paid £21 3s. 3d.

Similar instances came to my notice. One grower entitled to £21 received a cheque for £1 3s., and another grower received two cheques on the same day, one for 6d. and the other for 9d., and, since the State committee had made his initial “N” on one cheque and “ M “ on the other, he had to pay6d. exchange on each. The Minister for Commerce (Mr. Scully) must put these State committees in order. They have been guilty of shockingly bad administration. The fourth recommendation of the committee was -

That the Auditor-General should be asked to conduct a full inquiry into the financial arrangement and accounts of the officers of the board and the committees in the various States.

That is a very good suggestion. The ninth recommendation of the committee was -

That during the intake period a free distribution of apples should be made in the schools, both State and registered, and also to charitable institutions.

When I asked the honorable member for Batman (Mr. Brennan) to suggest a means of disposing of the surplus fruit, he made a proposal along those lines. But that would not overcome the difficulties of the Government or of the growers. Unless the growers were paid for their fruit, they would be in queer street, and unless the Government could obtain some return from the public for the fruit for which it had paid the growers, it would be in queer street also. However, I make a suggestion to the Government, based on the 1939 report of the Secretary of Agriculture in the United States of America, on the subject of that country’s Food Order Stamp Plan. The report stated : -

The food-order stamp plan, which was inaugurated on 16th May, 1939, was developed by the department in response to the need for still more effective ways of increasing the home market for the American farmer. The greatest opportunity to increase the domestic consumption of food lies in the field of farm products for which there is an clastic demand. The consumption of dairy and poultry products and of fruits and vegetables goes up and down with consumer income. When income is low the consumer is likely to go short on these commodities even though his diet and health may suffer. The stamp plan gives lowincome consumers the buying power to secure these needed foodstuffs.

Such a scheme would overcome many of the difficulties which the honorable member for Batman raised. The report continued : -

Under the stamp plan, which is entirely voluntary, relief families may purchase orange-coloured stamps at the rate of $1 a week for each member of the family as a minimum, or at the rate of $1.50 a week for each member of the family as a maximum. For each dollar’s worth of orange-coloured stamps purchased, 50 cents’ worth of blue surplus stamps are given free to the family.

Both typos of stamps can bc used for food in any grocery store in the area in which the plan is operating. . . . The blue surplus stamps represent a 50 .per cent, increase in food purchases by relief families.

The stamp plan was inaugurated iu Rochester, New York, after which the programme was put into operation on an experimental basis in five other cities during the summer of 1939. The report stated that -

By the end of the summer preliminary studies showed that the mechanical operation of the plan was satisfactory and that the results accomplished were encouraging enough to warrant gradual expansion of the plan to other cities throughout the country. . . . Actual purchases made with the blue surplus stamps up to this time indicate that lowincome consumers, given increased buying power, will purchase sharply increased amounts of dairy aud poultry products, and fruits and vegetables, as well as other agricultural commodities.

I submit that to the Minister as a method of assisting lower-range income earners to obtain the beautiful apples and pears that are produced in this country, as well as of assisting the growers. On the subject of hail insurance for growers, the Apple and Pear Committee made the following recommendation : -

That there should be a hail insurance scheme to hu financed by a percentage levy being made by the board on the assessed value of the crop in each State for the purpose of compensating growers for loss sustained by hail damage.

I entirely disagree with the contention of some honorable members that it would be impossible for the Commonwealth to undertake a hail insurance scheme. On the advice of the highest legal authority available to the Commonwealth Government - the Solicitor-General - I believe that the Government could inaugurate a, hail insurance scheme, and that it would not matter one rap if one or more of the States remained aloof from it. I have been advised by the Solicitor-General that the power to introduce such a scheme could be derived from an original power of the Constitution relating to insurance, and. .that the Commonwealth would not be liable to the restrictive condition, applicable to taxation measures, that there must not be discrimination between States or between parts of States. The Government could implement a scheme, and any States which wished to remain aloof from it could be allowed to do so. The. growers in the other States at any rate would benefit. The 27th recommendation of the committee was: -

That the Government should not only urge but encourage and assist by every practicable means the extension of the manufacture of by-products of apples in the Commonwealth: and if such encouragement is given, processing should bc carried out in the districts where the fruit is grown.

T agree entirely with that proposal. On page 9 of its report, the Committee stated -

In the United States of America the volume of . . . by-products has been increased to such an extent that a considerable portion of the surplus of apples over marketing has been consumed with great benefit to the industry.

The Government was very unwise to impose heavy rates of sales tax upon the by-products of the apple and pear industry, such as cider and pure fruit juices. Whilst these impositions may increase revenue from sales tax, they will certainly damp down the consumption of the by-products, and that will necessitate heavier subsidization of the industry. I suggest that the Minister appoint a research committee of the Council for Scientific and Industrial Research to investigate further uses for apples and pears and their by-products. On the worn-out Mississippi cotton-lands in the United States of America, the Departments of Agriculture suggested to the suffering growers that they should plant peanut crops. The growers did so, but they produced such quantities of peanuts that the market was glutted and they were faced with ruin as the result of excess production of peanuts, just as they had been faced with ruin as the result of poor cotton crops. The Bureau of Agricultural Economics of the United States of America employed a negro professor of the University of Mississippi to investigate the problem. As the result of careful research, he discovered 300 additional products that could be made from peanuts, and to-day the peanut industry in that area is one of the most flourishing primary industries in the United States of America. Similar research in Australia might solve many of the problems of the apple and pear industry. The Minister might also investigate the possibility of subsidizing some of the orchardists who are growing worthless varieties of apples that should not be marketed. When I was in England in 193S I saw, on Charing Cross railway station, Australian apples which were a disgrace to the Commonwealth and to the people who exported them. Some of the orchardists who grow this class of fruit could be subsidized, over a period, while they replanted their properties with better varieties of fruit. I suggest this because, although the acquisition scheme certainly gives something to growers, it offers no solutions to the problems. I sympathize with the Minister, who has to deal with this and many other problems. However, I hope that lie will investigate the suggestions which I have made.

Mr RYAN:
Flinders

.-During this debate .many references have been made to the wastage of apples and pears. The speech of the honorable member for Batman (Mr. Brennan) dealt almost entirely with fruit littering the ground underneath the trees. Anybody who knows anything about the apple industry must realize that this is no now phenomenon. I have spoken to growers who have had long experience of the industry, and they have told me that, in years of bounty, of which there have been many, the wastage of apples has not been much greater than it was during the last season. The export market was reduced by 50 per cent, last year, and, as the crops were unusually good, obviously, the entire production of the industry could not be consumed. The honorable member for Batman suggested that the wastage which occurred was, in the main, the fault of the last Government. I deny that. I cannot see how any government could have provided for the distribution and consumption of the vast quantity of fruit which was produced. The honorable gentleman did not state all of the facts of the situation. I object to waste as much as anybody. But how, in ‘the present circumstances, is it possible to eliminate all waste in connexion with apples and pears? It is true that consumption can be increased, but we could not prevent waste in one year of bounteous return when we were unable to export normal quantities. When the honorable member for Batman was asked to propose a remedy for the position, he suggested that the Government should distribute the fruit to the poor. But I point out that the cost of distribution would be high, and would have to be borne by the Government or by the consumers. I assume that it is not the honorable gentleman’s intention that the cost should be borne by the individual. Therefore, he suggests that the Government should distribute surplus fruit at its own expense.

Mr Conelan:

– Would it not be better to feed the poor than to give the fruit to the pigs?

Mr RYAN:

– Very little fruit is given to pigs. Most of it goes to waste under the trees. I am appalled at the amount of the bounty; it is no less than £1,400,000. That is a large sum to expend in one year on one industry, important though it may he. It should be possible, by administrative means, to reduce the bounty to a reasonable amount. I realize that some form of bounty is necessary in order to enable the industry to remain in existence in these difficult days. But the amount to be expended this year is excessive. I trust that the Government will find a means of carrying on the industry, and, at the same time, reducing the burden of the industry on the country. I hope that it will make its decision regarding the future of the acquisition scheme at an early date, because all growers are anxiously awaiting an announcement. They would be helped materially if they knew the details of the scheme. I believe that, if the industry is to be preserved during the war, some system of control similar to the present scheme will be necessary. I agree, in the main, with the recommendations of the Apple and Pear Committee, although I consider that some of the proposals should be reviewed by the Government before it puts them into effect. Any scheme which is introduced must apply to the country as a whole, and must be as fair as possible to the great majority of those engaged in the industry. At the same time, a minority of growers oppose the scheme, because they do not benefit as much from it as do their fellow growers. They are members of the Metropolitan and Peninsula Fruit-growers organization. In the main, their situation at the initiation of the scheme was different from that of the vast majority of the fruit-growers. Before the war, they had in Melbourne their own means for the marketing of their products. They grew their own varieties of fruit, which suited the section of the trade with which they dealt, and expended quite a lot of labor and time in marketing operations. Profits were derived by them from not only the growing but also the sale of their fruit. The introduction of the acquisition scheme destroyed the possibility of the individual marketing and selling of fruit, and they were forced into the same position as the larger growers in country districts whose activities did not embrace marketing operations. I know them well, and have visited their orchards. They have been harshly treated compared with other growers in country districts, and I trust that when the details of the new scheme are being considered an adjustment may ‘be made which will meet their position. I do not envy the Minister the task of drawing up a scheme. The present scheme has operated for two years, and has been the subject of more controversy than any other scheme regulating primary production in this country.

There are two further points to which I wish to direct attention. The first relates to costs, which are as important to the fruit-grower as to all other primary producers. Costs of production have risen very considerably in the last year or two, and represent a large proportion of the total out-of-pocket expenses connected with work on the orchard, such as spraying and picking, and finally the collection of the fruit at the close of the season. All of these costs have risen in connexion with not only material but also labour, which is difficult to obtain except at a much higher price than that which formerly ruled. There is consequently justification for consideration of an increase of the payments made by the Government in respect of the fruit.

My final point relates to distribution. The last scheme failed because of the methods of distribution adopted. The Apple and Pear Committee, in its report, proposed that distribution should be extended, by the establishment of kiosks, sales by hawkers, and the adoption of other means for enabling purchases by the public to be made more readily. The proposal should be developed as far as possible, for two reasons. Following up the idea expressed by the honorable member for Batman (Mr. Brennan), if the scheme were properly worked the public would be enabled to .obtain fruit at a reduced cost. In the second place, larger consumption of apples and pears would be made possible throughout the country. The more easily purchases may be made, the greater will be the quantity sold. This is one of the most important points that the Government should consider when drawing up the new scheme. I request it to make an early decision, in order that the apple-growers as a whole may know where they stand.

Mr PROWSE:
Forrest

.- I support the bill. The loss on the last scheme was greater than it might have been. The idea underlying the scheme was excellent, but management and distribution may have been at fault. The honorable member for Batman (Mr. Brennan) has made a special plea on behalf of a few growers at Doncaster who supply the market daily. Their rights are no greater than are those of growers who are not so close to a market. In assisting the industry, the ‘Commonwealth cannot pick out a few growers for special treatment. The war has made it necessary for the Commonwealth to legislate with a view to saving this industry, the development of which has cost millions of pounds. The export of fresh fruit from Australia has returned large sums, which have helped to establish the overseas credit of this country. As shipping space is not now available, those who have put their life’s savings into orchards must be assisted to maintain their properties. The Minister has stated that an early pronouncement will be made of the Government’s intentions. That pronouncement will be welcomed by apple and pear growers throughout Australia. It should be possible to evolve a scheme which would be of greater advantage to both the public and the growers, and reduce the extent of the loss.

Question resolved, in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 996

BILLS RETURNED FROM THE SENATE

The following bills were returned from the Senate without amendment or requests : -

Income Tax Bill 1941.

Estate Duty Bill 1941.

Gift Duty Assessment Bill 1941.

Gift Duty Bill . 1941.

Post and Telegraph Bates Bill 1941.

page 996

PETROLEUM OIL SEARCH BILL 1941

Motion (by Mr. Beasley) - by leave - agreed to -

That he have leave to bring in a bill for an act to amend the Petroleum Oil Search Act 1936-40.

Bill brought up, and read afirst time.

Second Reading

Mr BEASLEY:
Minister for Supply and Development · West Sydney · ALP

. - by leave - I move -

That the bill be now read a second time.

The bill proposes, first to amend para graph a of sub-section 5 of section 5 of the principal act, in order to remove from it ambiguity in relation to the powers possessed by the Minister in respect of advances under the act. It is not clear that the Minister has the power to enter into an agreement relating to advances, as well as agreements covering the repayment of advances. The sub-section reads -

The Minister may, in connexion with any advances made or to be made under this act - (a.) in the name of the Commonwealth enter into such agreements and take such securities for repayment of the advances as he thinks fit.

The bill proposes to alter that so as to make it read - in the name of the Commonwealth enter into such agreements relating to the advances and take such securities for the repayment of the advances as he thinksfit.

This is really a drafting amendment for the purpose of clarifying the powers of the Minister. It merely does what I have no doubt was originally intended when the bill was drawn.

Mr Holt:

– Has this matter arisen in connexion with Lakes Entrance development ?

Mr BEASLEY:

– No. The other alteration is contained in clause 6, and has a much wider significance. This is the clause which proposes to confer on the Minister power to vary the conditions governing the making of advances under the act so as to give greater flexibility. The amending provision is in these words -

Section 6 of the principal act is amended by ‘ inserting after the word “ not “ wherever occurring, the words “ unless in any particular case the Minister, by notice published in the Gazette, otherwise directs”.

The special case which decided the Government to take this action is that of the Apanapi Petroleum Company, which was searching for oil in Papua. The previous Administration agreed to advance £50,000 to this company, on a £1 for £1 basis. However, although the arrangement was for £50,000, the amount actually advanced was only £30,000, leaving a. balance of £20,000, which has not yet been paid over. The company has now used all the money advanced by the previous Government, plus what it was able to raise itself, and it is now unable to continue its operations. We had to decide whether boring was to be continued, having regard to the very real need at this time for discovering oil. The Commonwealth geological adviser, who had all along been advising the company, and had directed it where to sink the bores, has informed the Government that prospects are favorable, and that boring operations should be continued. He has recommended that the Government should advance a further amount of £55,000. The last Government hired to the company a drilling plant worth £25,000. The plant weighs 500 tons, and even when dismantled, parts of it weigh as much as 12 tons. There is no wharf or crane to handle it, and it had to be floated into position on pontoons. We have been informed that if it were proposed to remove the plant it could be done only during January and February, when the tides were suitable. All these factors were taken into consideration when the Government was making up its mind whether or not to allow the enterprise to lapse, or to make a further advance. Eventually, the Government decided that it should advance at least the amount of £20,000 which had been promised by the previous Government, but which had not been paid over.

Mr Archie Cameron:

– How much more does the company want?

Mr BEASLEY:

– That is always the problem. The Commonwealth geologist has reported that £55,000 should be sufficient. The Government considers that companies of this kind should not be encouraged to believe that they have only to apply to the Commonwealth in order to receive large sums of money. We believe that the best way would be, not to hand over £20,000 in one sum, but to make monthly advances of £3,000 or £4,000 each. In order to safeguard the expenditure of the money it has been decided to place a representative of the Commonwealth Treasury on the company’s board of directors. As the company is unable to find £1 for £1 for the advance, we are asking Parliament to agree to the granting of £20,000 without this condition. It has to remembered that the Commonwealth has already advanced £30,000, and has plant valued’ at £25,000 on the spot. If we decline to make a further advance it might be said that, when the company was within 100 feet of striking oil, the enterprise had to be abandoned for lack of funds.

Mr Holt:

– Does the Minister know the cost of searches conducted by other companies in those territories?

Mr BEASLEY:

– I cannot say.

Mr Holt:

– I know that one big oil company has expended very considerable amounts.

M’r. BEASLEY.- That may be, but I ask honorable members to consider this case on its merits. The bill provides that if the Minister uses his discretion to make advances for the purposes stipulated, a notice of his intention shall be published in the Gazette. It was originally provided that the money should be advanced free of interest, that it should be re payable only when profits were earned, and then at the rate of 50 per cent, of the profits earned. It is now proposed that on money advanced interest shall be paid at the rate of 5 per cent, when the enterprise becomes profit-earning, also that the Commonwealth shall receive a share of the profits in proportion to its share of the capital for ten years after the liquidation of the Commonwealth’s advance. These are the special circumstances that have arisen in connexion with the searches that have been made. The Government considered that it was desirable to effect the alteration by an amendment of the act rather than by means of regulations under the National Security Act. In my opinion, the matter should be dealt with by Parliament, so that honorable members may have precise information about the efforts which are being made to discover flow oil in those areas and dealt with in such a way as to allow opportunity to exploit to the full these projects, particularly the one in which the Commonwealth has already expended £30,000.

Mr PATERSON:
Gippsland

.- I am most interested in the relation of the proposed amendments to the oil field in Gippsland, although the Minister for Supply (Mr. Beasley) referred mainly to oilfields in the territories north of Australia. The proposed amendment of section 3 of the principal act may restrict slightly the power of the Minister or of the Commonwealth to make agreements, since they must relate to advances. The only alteration which will be made to section 5 of the principal act is to insert after the words “in the name of the Commonwealth enter into such agreements “ the words “ relating to the advances “. Presumably the principal act at present enables agreements to be made on matters other than those relating to the advances. Consequently, we must regard this amendment as having a restrictive effect.

Clause 4, which amends section 6, appears slightly to widen the discretionary power of the Minister. Instead of the limitation, which is imposed in section 6 of the act by the words “ that the amount paid to any person shall not exceed the amount expended by that person after the commencement of the act,” the

Minister is empowered, in a particular case, to vary that by notice published in the Gazette. I take no exception to that, because I can conceive that instances may arise when it may be desirable that the Minister’s hands should not be tied. As the notice has to be published in the Gazette, it will give any arrangement by the Minister sufficient publicity, and honorable members may bring the matter before the House for criticism or commendation, as the case may be.

Clause 3 of the bill relates to the Commonwealth entering into agreements regarding advances. Concerning the agreement which, I understand, has been or is likely to be reached in connexion with the oil field at Lakes Entrance, I hope that the provisions will be sufficiently generous to make it possible to raise the private capital necessary to undertake the work, with the assistance of the advance from the Government. The agreement proposes that the amount of money to be made available by the Commonwealth and State Governments, £50,000, must be fully repaid to them before any return can be received by the investors in the enterprise. In my opinion, that provision is a little harsh and is likely to discourage men from putting their money into this enterprise, because attempts to produce oil in Australia to date have not profited those who were “ game “ enough to invest their money in them. It would be a good thing to temper or modify the proposed arrangement by requiring the companies to repay the advances on a £1 for £1 basis. In other words, the Government should permit £1 of profit-taking by the people who ventured their money, for every £1 which is repaid to the Crown. Admittedly, under that method, a little longer time would be required for the repayment of the advance, but people would be encouraged to invest their capital in the enterprise at Lakes Entrance. I bring that matter to the notice of the Minister for his sym-pathetic consideration. The proposal is in my opinion, quite reasonable. I trust that the Minister will follow the words of the Scriptures -

Withhold not good from them to whom it is due, when it is in the power of thy hand to do it.

I commend the bill.

Mr ARCHIE CAMERON:
Barker · ALP

– I ask the Minister for Supply and Development (Mr. Beasley) to furnish to honorable members -the personnel of the directorate of the particular enterprise to which he referred, because I am most interested to obtain full information about the foundations upon which the bill is based. The honorable member for Gippsland (Mr. Paterson) urged the Minister to modify the conditions of the repayment to the Government of the advance under an agreement which, he said, has been made or is likely to be made with the company engaged in the enterprise at Lakes Entrance. I am not greatly concerned about that. If oil be struck in payable quantities there, the repayment of an advance of £50,000 or £500,000 will not be very difficult. Once oil is struck in quantity, the returns are pretty high. If I understood the Minister correctly, he stated that the Government would become a shareholder in the company in the event of the discovery of oil.

Mr Beasley:

– The honorable member has misunderstood me ; I did not say that

Mr ARCHIE CAMERON:

– We must elucidate that in committee. The first matters of importance are to discover the personnel of the directorate, whether the Government has received a request during the last few days to make this amount available, and, if so, by whom was it made.

Mr BEASLEY:
Minister for Supply and Development · West Sydney · ALP

– £» reply - The honorable member for Gippsland (Mr. Paterson) interpreted the first amendment as imposing a restriction upon the power of the Minister, and the second amendment as enlarging his power. Actually, the first amendment extends in both directions his power to deal with agreements. The principal act does not make it clear that the Minister has power to enter into agreements relating to advances as well as agreements covering repayments.

Mr Paterson:

– I understand now.

Mr BEASLEY:

– The amendment extends the power of the Minister in both directions. The honorable member was correct when he stated that the second amendment allows for the exercise of greater discretion by the Minister because it does not bind him to adopt the £l-for-£l basis in instances where the Government desires to grant additional support to a venture, particularly in the particular instance I mentioned, in which the Commonwealth has already advanced £30,000.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Mr BEASLEY:
Minister for Supply and Development · West Sydney · ALP

– The honorable member for Barker (Mr. Archie Cameron) asked for the names of the directors of the Apanapi Petroleum Company. They are - The late Mr. Marks, solicitor, of Sydney, the late Honorable J. C. Watson, Sir Charles Marr, Mr. W. H. Taylor, Mr. E. S. Haines, the late Mr. Theo Marks, architect, and Mr. J. A. McRitchie.

Bill agreed to.

Bill reported from committee without amendment; report adopted.

Bill - by leave - read a third time.

page 999

INCOME TAX ASSESSMENT BILL 1941

Bill returned from the Senate with amendments.

In committee (Consideration of Senate’s amendments) :

Clause 7 -

Section forty-four of the principal act is amended -

The amendments effected by the last preceding sub-section shall not apply to any dividends paid, credited or distributed if the dividends were declared prior to the 30th day of October, one thousand nine hundred and forty-one.

Senate’s amendment No. 1 -

Leave out sub-clause (2) and insert the following new sub-clause: - “ (2) The amendments effected by the last preceding sub-section shall not apply to any dividends paid, credited or distributed if the dividends -

were declared prior to the thirtieth day of October, One thousand nine hundred and forty-one; or

are paid out of profits arising from the sale or the compulsory resumption for public purposes of assets not acquired for the purpose of resale at a profit and that sale or resumption, as the case may be, took place prior to the thirtieth day of October, One thousand nine hundred and forty-one.”.

Clause 13-

Section seventy-eight of the principal act is amended -

by omitting paragraph (d) of subsection (1.); and

Section proposed to be amended -

- (1.) The following shall . . be allowable deductions: -

Calls paid by the taxpayer in the year of income on shares owned by him in a mining company or syndicate carrying on mining operations in Australia for gold, silver, base metals, rare minerals or oil, or in any company carrying on afforestation in Australia as its principal business.

Senate’s amendment No. 2 -

Leave out paragraph (b) and insert the following new paragraph: - “ (b) By inserting in paragraph (d) of subsection (1.) after the word ‘Calls’ the words not exceeding fifty pounds,’; and”

Clause 17 -

Section one hundred and two of the principal act is amended -

By omitting from sub-section (2.) the words “ so much of the net income of the trust estate as is attributable to the beneficial interest “ and inserting in their stead the words “ the net income of the trust estate, or so much thereof as is attributable to the beneficial interest, as the case may be,”.

Senate’s amendment No. 3 -

After “ interest “, first occurring, insert “ which he had power so to acquire,”.

Clause 24 -

Section one hundred and sixty of the principal act is repealed and the following sections inserted in its stead: - 160a. - (1.) Where a taxpayer has, in the year of income, paid calls on shares owned by him in a mining company or syndicate carrying on mining operations in Australia for gold, silver, base metals, rare minerals or oil, or in any company carrying on afforestation in Australia as its principal business, he shall be entitled to a rebate in his assessment of the amount obtained by applying to the amount of the calls . . .

Senate’s amendment No. 4 -

After “ paid calls,” insert “ in excess of fifty pounds “.

Senate’s amendment No. 5 -

Leave out “ the calls,” insert “ that excess “.

Clause 30 - ( 1 . ) The amendments effected by sections four to ten (both sections inclusive), sections twelve and thirteen, paragraph (a) of section fourteen, sections fifteen, sixteen, seventeen, nineteen,twenty, twenty-four, twenty-five and twenty-eight of this act shall apply to all assessments for the financial year beginning on the first day of July, One thousand nine hundred and forty-one and all subsequent years.

Senate’s amendment No.6 -

Leave out “ sixteen “.

Senate’s amendment No. 7 -

After sub-clause (2) insert the following new sub-clause: - “ (3.) The amendment effected by section sixteen of this act shall apply to all assessments for the financial year beginning on the first day of July, One thousand nine hundred and forty-two.”.

Motions (by Mr. Chifley) agreed to -

That amendments Nos. 1, 3,6 and 7, be agreed to.

That amendments Nos. 2, 4 and 5 be disagreed to.

Resolutions reported; report adopted.

Motion (by Mr. Chifley) - by leave - agreed to -

That Mr. Fadden, Mr. Menzies, Mr. Scullin and Mr. Chifley be appointed a committee to draw up reasons for the House of Representatives disagreeing to amendments Nos. 2, 4 and 5 of the Senate.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– On behalf of the committee I bring up the following reasons : -

REASONS OF THE HOUSE OF REPRESENTATIVES FOR DISAGREEING TO AMENDMENTS Nos. 2, 4 AND 5 OF THE SENATE.

The proposal of the House contained substantially the tax concession at pre-war rates.

Deducting calls on shares in mining companies up to £50, irrespective of the income of the investor, would have the effect in some cases of subsidizing the investment up to £50 by 83 per cent.

The increased rate of tax is purely for war purposes and should not be used to give in war-time approximately three times the rate of concession that was granted in peace-time.

With full sense of responsibility of the importance of conducting a successful war, thisHouse cannot accept the amendment which involves a serious loss of revenue.

The excessive concession which (having regard to war taxation) the Senate amendment would involve is illustrated by the attached table.

Statement Showing Tax Benefits - Personal Exertion Income.

Income shown is after Allowance of all Deductions except those for Calls and Statutory Exemption.

Statement Showing Tax Benefits of Calls of an Amount of £50 - Personal Exertion Income.

Income shown is Income remaining after allowing all Deductions except those for Statutory Exemption and £50 Calls.

and move -

That the committee’s reasons be adopted.

Question resolved in the affirmative.

Sitting suspended from 5.21 to 7.5 p.m.

page 1001

BILLS RETURNED FROM THE SENATE

The following bills were returned from the Senate without amendment or requests : -

States Grants Bill 1941.

Appropriation Bill 1941-42.

Appropriation (Works and Buildings) Bill 1941-42.

Supplementary Appropriation Bill 1939-40.

Supplementary Appropriation (Works and Buildings) Bill 1939-40.

Loan Bill (No. 3) 1941.

Superphosphate Bounty Bill 1941.

Apple and Pear (Appropriation) Bill 1941.

Petroleum Oil Search Bill 1941.

page 1001

INCOME TAX ASSESSMENT BILL 1941

Bill returned from the Senate with a message intimating that it did not insist on its amendments Nos. 2, 4 and 5, disagreed to by the House of Representatives.

page 1001

GALVANIZED IRON, WIRE AND NAILS

Mr MAKIN:
Minister for Munitions · Hindmarsh · ALP

– by leave - I desire to make a brief statement to the House on the rationing of galvanized iron, wire, and nails, the shortages of which are giving concern to honorable members, and to users of these materials throughout the Commonwealth. These materials, together with all metals, timber, and industrial chemicals in short supply, are controlled by my department because they are essential munitions materials in which my department has a predominant interest. This control necessarily extends to the details of all metal fabrication to the point of supply to manufacturers and merchants, and to all export and import of such commodities.

Honorable members will realise that there is a world shortage of these materials, and that imports are not available. Before the war, Australia itself imported many kinds of steel and steel products. The position is now reversed. The local industry is expected to supply not only our new and enormous munitions demand, and the scarcely smaller demands for war purposes in all neighbouring countries which formerly obtained steel from Europe or America, but also civil needs. New Zealand, for example, is dependent for essential supplies on Australian products to replace goods formerly imported from England, and we are endeavouring to keep the sister dominion going on a parity with our own industries. The demand comes from all quarters, from Africa, Asia, and the Pacific Islands, and the defence demands from these quarters and the Middle East are prodigious. It is possible to supply only a portion of these demands, but it is essential that the department should do everything possible to meet them.

The most difficult metal to obtain at present is zinc, which is, of course, used for galvanizing. The munitions effort of the whole Empire is concerned with Australian zinc, which is required for the making of brass, and for direct use in many items of armament. Cartridge cases and fuses are made of brass, and Australian consumption for such items is rapidly increasing. The production of zinc is being expanded as much as is practicable, but there is no alternative to the most ruthless restriction of the civil use of this metal in the interests of war production. In consequence, there is no galvanized iron or wire available for civil use, except where galvanized iron is actually required for the making of containers of water or other liquids. It has become necessary either to use black iron or wire, or to use substitutes such as asbestos cement sheets or iron coated with a mixture of lead and tin, known as terne sheets. The civil population in Australia must use these substitutes, and the armed forces in the Middle East have also to be denied the use of zinc for such purposes. The same general principle applies to water piping.

The problem in respect of nails and wire of all kinds is of a different nature. There is no shortage of the raw material, but the basic fabricating capacity cannot be increased. All wire, including nail wire, is first produced as steel rod. For many months past, the rod mills have been working at full capacity. The output goes to produce reinforcing rod, small size bolts, nail wire, screw wire, electrode and other special purpose wire, strapping wire, and, of course, the more generally used forms of fencing wire, barbed wire, and wire netting.

The cause of shortages in all cases is the enormous and urgent demands on Australia for defence purposes. In these circumstances, it is impossible to allow merchants or manufacturers to buy for stock. Supplies to the trade are, in fact, rationed, with allowances for normal seasonal fluctuations. This season, the normal requirements for hay baling wire were exceeded, and special action had to be taken to increase supplies in some States. Fencing wire is in short supply also, and longer notice than is usually needed may have to be given to merchants for unusual supplies.

The practice with nail wire is to furnish manufacturers with quantities based on their pre-war usage, and to supplement those quantities when there is justification, but it is impossible for manufacturers to fulfil merchant orders for stocks. Defence contractors have priority rights over the nails available, and some inconvenience is inevitable on occasion when builders and others cannot obtain nails on demand, as in peacetime.

In some localities, owing to very heavy local demands, there have been temporary shortages of some of these products for an essential purpose, but the department, through its officers in each State, endeavours to fill such gaps as quickly as possible.

I should like to add that what I have said in respect of the articles mentioned applies generally throughout the whole field of controlled materials, including metals, timber, and industrial chemicals.

The method of bulk rationing to merchants and manufacturers provides for priorities and some other discriminations based on the usages of the materials. The system depends largely on the voluntary co-operation of merchants and users, but it is watched and checked to a sufficient extent by officers of the department, and it avoids cumbersome procedures. Discussions are now taking place with the Department of War Organization of Industry regarding the restrictions on the use of materials.

page 1002

SUPPLEMENTARY FINANCIAL STATEMENT 1941-42

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– by leave - In my financial statement of the 29th October, 1941, I set out the financial proposals of the Government. Certain amendments to the proposals relating to taxation have been made by Parliament. I shall briefly summarize these amendments, and show their effect on the budget for 1941-42.

It was proposed that the taxable incomes of husbands and wives should be aggregated in order to determine the rate of tax to be paid by both husband and wife on their taxable incomes. This proposal was considerably modified as the result of <a conference between party leaders and, under the amendment as finally adopted by Parliament, the new principle of aggregation for rating purposes will operate only in respect of income from assets transferred after the 29th October, 1941, by a husband to his wife if the taxable income of the wife exceeds £200. No revenue will be received in the current year from this source.

The Government had proposed to remove the present exemption so as to provide that dividends received by Australian residents from companies, the profits of which are derived wholly or partly from outside Australia, should be taxable in the hands of the recipients. When submitting this proposal, I stated that the Government was prepared to set up a small committee to devise a formula to mitigate any hardship that might arise from double taxation. Subsequently, a committee of experts recommended that the new proposals should take effect as from the 29th October, 1941. The Government accepted this recommendation and the law was amended by Parliament accordingly. As a result, dividends from this source which were received prior to the 29th October, 1941, will not be subject to tax, and no revenue will be received in the current financial year.

It was proposed to discontinue the practice of allowing as deductions in arriving at taxable income calls paid on shares in mining companies. This proposal was examined by a special committee, which recommended -

That a deduction for calls in mining companies should not be allowed as a deduction in arriving at taxable income, but that a rebate of tax on the amount of calls paid should be allowed in the taxpayer’s assessment calculated at one-third of the rate of tax imposed for the financial year on the taxable income.

This recommendation was adopted by the Government, and the law has been accordingly amended by Parliament. This means that the value of the tax concession on mining calls will be approximately the same as the concession which was enjoyed before the war. Owing to these amendments, the budget estimate of revenue from income tax must be reduced by £1,000,000. The loss of revenue for a full assessment year would also be about £1,000,000.

The Government had proposed that the war-time company tax should be amended to provide for a statutory percentage of 4 per cent., and that the commencing rate of tax should be 6 per cent., increasing by steps of 6 per cent, until a maximum rate of 78 per cent, is reachedon the taxable profit in excess of 16 per cent, on capital employed. The Government accepted an amendment submitted by the Leader of the Opposition (Mr. Fadden) that the statutory percentage should be 5 per cent, in lieu of 4 per cent. This amendment was approved by Parliament.

Accordingly, the commencing rate of tax will now be 6 per cent., progressing by 6 per cent, steps for every 1 per cent, on capital employed by which profits are in excess of the statutory percentage of 5 per cent, on capital employed until a maximum rate of 78 per cent, is reached on the taxable profit in excess of 17 per cent, on capital employed.

This amendment will reduce the revenue which it was expected to gain in 1941-42 from the war-time company tax by £800,000. The loss of revenue in a full assessment year will be £950,000. The estimated total revenue from wartime company tax for 1941-42 will now be £4,600,000 in lieu of £5,400,000.

The effect of these alterations is to reduce the estimated revenue for 1941-42 by £1,800,000, viz. : -

As a result, the amount which it is estimated will be available from the revenue budget for war expenditure, is reduced from £82,147,000 to £80,347,000. The revised budget summary will therefore be -

There will be a consequential increase of £1,800,000 in the amount of war expenditure to be met from loan fund. The estimated total war expenditure of £221,485,000 for the year will, therefore, be financed as follows : -

The estimated total loan expenditure for 1941-42 will now be increased to £143,738,000, of which £2,600,000 is for civil works, and the balance for war purposes.

page 1004

SPECIAL ADJOURNMENT

Motion (by Mr. Curtin) proposed -

That the House, at its rising, adjourn until a date and hour to be fixed by Mr. Speaker, which time of meeting shall be notified by Mr. Speaker to each member by telegram or letter.

Mr ARCHIE CAMERON:
Barker · ALP

– There should be some understanding between the Government and the Opposition that the House will be called together in certain eventualities.

Mr Curtin:

– We have agreed to do that.

Mr ARCHIE CAMERON:

– One of those eventualities may be a serious development in the Pacific.

Mr Curtin:

– Yes.

Mr ARCHIE CAMERON:

-And another, our failure to obtain reinforcements. I am putting that up deliberately. Another may be major developments in any theatre of war. So long as that is understood I have no objection to the motion.

Mr Curtin:

– We have reached a clear understanding.

Mr Jolly:

– Can the Prime Minister indicate on what date he expects Parliament to be called together?

Mr CURTIN:
Prime Minister · Fremantle · ALP

– in reply - Having regard to the position abroad, it is not easy at this stage to indicate the date on which Parliament will be called together. I have in mind the fact that the work of Parliament will be facilitated if the joint committees are enabled to conclude their inquiries so that their reports can be considered by Cabinet and, if necessary, made the basis of proposed legislation. I have reason to believe that the work of those committees has been considerably handicapped recently by the irregularity of the sittings of Parliament. They have not been able to make a continuous investigation of their respective subjects. I expect that in the ordinary course of events we may come together somewhere about the middle of March.

Question resolved in the affirmative.

page 1004

LEAVE OF ABSENCE TO ALL

page 1004

MEMBERS

Motion (by Mr. Curtin) agreed to -

That leave of absence be given to every member of the House of Representatives from the determination of this sitting of the House to the date of its next sitting.

page 1004

ADJOURNMENT

Valedictory - International Situation - Conscription Referendums : Soldiers’ Votes - Mr. W. J. Smith: Construction of Horse-float - “ Smith’s Weekly “ and Dr. Battaglia - Miners’ Pensions: Strike at Aberdare Central Colliery - Refugee Purchasers of Property - Australian Fighting Services : Notification of Casualties.

Mr CURTIN:
Prime Minister · Fremantle · ALP

– I move -

That the House do now adjourn.

I take this opportunity, Mr. Speaker, to express the wish, on behalf of honorable members generally, that the recess will be pleasant to you. I also offer to you our thanks for the manner in which you have presided over our deliberations. To the Chairman and Temporary Chairmen of Committees we are deeply indebted for the work they have done. I feel a special obligation to the Leader of the Opposition (Mr. Fadden) and, indeed, to the leaders of the Opposition parties, for the great help they have given to me as a novice in my office as leader of the House. The Leader of the Opposition has not only been considerate to me; I should like it to be understood that I regard his attitude towards me as one of complete generosity. We are also very much indebted to the Whips, particularly the Government Whips, who have not lost a division in this chamber. To the Opposition Whips 1 also offer the thanks of my colleagues because they have played the game fairly by invariably seeing to it that their own side registered a few votes less than ours. To the officers of the House, particularly the Clerk and the Clerk Assistant, this Government, and, I have no doubt, previous governments, are greatly indebted for the aid they have given to Ministers in this chamber. The Parliamentary Draftsman has had a great deal to do, and I also express our thanks to him. Whether I have been on this side or the other side of the House I have always expressed our deep obligation to members of the Hansard staff for the way in which they do their work. The members of the Parliamentary Library and the Parliamentary Refreshment Room staffs have also served us with the diligence that has always been characteristic of their work in the past.

As this session has been devoted predominantly to financial matters, the House will not mind my paying a special tribute to the Treasurer (Mr. Chifley) for the way in which he has handled his very important and complicated work.

Honorable Members. - Hear, hear!

Mr CURTIN:

– I realize, of course, that the very great labour falling to the Treasurer would have been too great a task for one man. He had the able assistance of the Minister for Homo Security (Mr. Lazzarini).

Honorable Members. - Hear, hear!

Mr CURTIN:

– I should like the country to know that. I feel greatly indebted to the right honorable member for Yarra (Mr. Scullin) for the work he has done during this session. I do not desire to make invidious distinctions, but it is obvious to the House that in respect of the important financial measures we have considered, the Treasurer, the Assistant Treasurer and the right honorable member for Yarra constituted a team that has rendered great service to not only the Government but also the country. I thank them for that work. To members generally, I offer my compliments. I sincerely hope that the recess will enable them to visit their constituents, renew acquaintances, and also gain some refreshment of spirit as the result of relief from parliamentary duties. But more than anything else I hope that before the House meets again the course of the war will have turned most definitely in our favour, aud that the cause for which we stand, will be in sight for earlier vindication as the result of victory than is at present indicated. We have no sense now of defeatism. The spirit of victory pulses strongly through all the democratic countries, and is as vibrant in the Commonwealth as it is in any other part of the Empire, because the issues that are at stake have appealed to the men and women of this country from the day that the conflict commenced. They will remain clearly before our eyes until the war is ended; and it will not be ended until the cause of free men and free women is recognized the world over.

Mr FADDEN:
Bailing DownsLeader of the Opposition

– I support the remarks just made by the Prime Minister (Mr. Curtin). The Opposition appreciates the difficulties that confront the Government to-day. L did not have an opportunity to congratulate the Minister for External Affairs (Dr. Evatt) upon his review of the international situation, which I consider he placed very admirably and clearly before this chamber to-day. I now congratulate him upon that fact, and express the hope that wo sha.ll have greater opportunities in the future to discuss the international affairs. Australians must realize that we cannot look at this matter wholly through our own glasses. We must appreciate not only that we are part and parcel of the British Empire but also that we stand as a nation in our own right. I realize and, I am sure, every honorable member realizes that even today a certain section of the Australian community lacks a sense of responsibility as to just what this war means. Nothing else counts except the winning of the war. If we can come out of this conflict with our title deeds intact, aud unencumbered by obligations to a foreign power, we shall be very fortunate. Members of the Opposition have criticized the budget proposals, but as responsible members, and as trustees of the Australian people, we realize that the war cannot be waged successfully without sacrifice. We do not agree with the method which the Government has chosen for distributing those sacrifices. We consider that a more equitable distribution of our inevitable burdens should be made; but our conviction in that respect must not cause any one to doubt for a moment that we are a united people. In this House we have one objective, and that is to win the war. The ways and means decided upon by the Government to achieve that objective may be open to debate; but only one thing counts, and that is to maintain our system of democratic parliamentary government.

I thank the Prime Minister most sincerely for his appreciative remarks about the degree of co-operation that the Opposition has extended to the Government. Honorable members on this side of the chamber intend to lend all possible assistance to the Government in order to achieve a maximum war effort. Without victory, our democratic institutions will perish. As a vigilant and virile Opposition, we shall expound constructive views. Every observer will have noted in recent weeks what can be accomplished by compromise. Anomalies which have been exposed in legislation during the debate have been referred to special committees upon which all parties were represented, and those unsatisfactory provisions were suitably amended. The country should be grateful for what has been accomplished in this respect.

I join with the Prime Minister in extending to you, Mr. Speaker, our best wishes for a restful recess; and on behalf of the Opposition, I thank members of the parliamentary staffs for their services to us. Much water has flowed under the bridge since we assembled here for this session, and everybody has worked most strenuously, especially those holding responsible positions. To-night, I feel like a schoolboy who has waited long and eagerly for the vacation. I hope to enjoy the respite from parliamentary duty and to resume in the new year my humble contribution to the conduct of the affairs of the country.

Mr BLACKBURN:
Bourke

.- I regret that I have to ask the House to grant me indulgence to speak of a controversial matter which does not usually arise when Parliament is about to adjourn for the Christmas recess. A controversy took place recently upon the soldiers’ vote in the conscription campaigns of 1916 and 1917. As their decision then is being now treated as relevant to the question, and as the decision of the soldiers is relied upon by the conscriptionists and the anti-conscriptionists of to-day, I shall outline to the House, as concisely as I can, what appear to me to be valid reasons for believing that the soldiers actually on active service in the last war voted on both occasions against conscription.

The first referendum was taken in Australia on the 2Sth October, 1916, but voting began overseas on the 16th October. Before the poll in this country, a manifesto issued by the Prime Minister called upon the soldiers to lift up their voices and send one mighty shout across the leagues of ocean, bidding their fellow citizens to do their duty to the Empire, its allies and the cause of liberty, and to vote “ yes “. Notwithstanding that, so soon as the 28th October had passed there was a general belief in Australia that the soldiers overseas had voted against conscription, and that belief was confirmed by statements of persons in authority who should have known the facts, that “ the Anzacs had turned them down “. This opinion was further confirmed by the curious reluctance of the Government of the day to make any statement on the matter. Although the poll closed on the 2Sth October, 1916, both in Australia and abroad, no definite statement about the result could be obtained from the Government. Both in the Parliament of the Commonwealth and in the House of Commons, questions seeking information on the subject were directed to Ministers. The Prime Minister of Australia declared that he was precluded by instructions from England from divulging the result of the soldiers’ vote.

Mr Calwell:

– That would be correct.

Mr BLACKBURN:

– It does not appear to have been correct. On the 19th December, 1916, I quote from Ilansard, volume LXXX., page 10216, Mr. Joseph Cook asked -

Is the Prime Minister aware that conflicting statements have been made concerning the way in which the soldiers at the front voted on the compulsory service referendum, and is it noi possible to set the matter at rest by making public the details of the voting?

The Prime Minister (Mr. Hughes) replied -

I should be very glad to make such a return public did not a request from the Imperial Military Authorities preclude me from doing so.

Both before and after that date the Secretary of State for the Colonies in the House of Commons was asked similar questions. On the 14th December (I quote from the Parliamentary Debates, House of Commons, 1916, volume

SS, pages 831) Mr. Lynch, asked the Secretary -

Whether he can give the result of the voting of the Australian soldiers in France in reference to the compulsory military service in Australia?

The Minister replied that he had no information, and added -

It is quite obvious that the publication of chis information is entirely a matter for the Commonwealth Government and not a matter for the Government here.

Incidentally that occurred before the Prime Minister of Australia had given the answer that I have read earlier. Again, on the 20th December, the clay after the Prime Minister had replied to Mr. Joseph Cook, Mr. King asked the Secretary of State for the Colonies -

Whether he will ask the Australian Government to publish as soon as possible the actual numbers of soldiers voting for and against conscription ?

The Secretary of State (Mr. Long) replied -

No, sir; this is entirely a matter for the discretion of the Commonwealth Government.

That is at page 1423 of the volume of the Parliamentary Debates I have just quoted from. Although the referendum was completed on the 28th October, 1916, it was not until the 27th March, 1917, the day after Parliament had been dissolved and an election campaign had been commenced, that the figures were published. When they were announced it appeared that a majority of the soldiers had voted for conscription. I shall deal with that later. Had there been a majority for conscription, it would not have been very remarkable in view of the way in which the referendum was taken. The Commonwealth Electoral Office was not in charge of the referendum in 1916. The persons who had control of it were appointed by the Government of the day and no provision was made for the scrutiny of the votes by independent scrutineers at the poll. In 1917, the poll was taken under the direction of the Commonwealth Electoral Office, and on that occasion provision was made for scrutineers appointed by each party to examine the votes. Again it has been made to appear that the result favoured conscription.

I come now to the opinion that was expressed by people who knew the facts at the time. It indicates that the votes of the soldiers actually on active service favoured the voluntary system and opposed conscription.

Mr Hughes:

– There is not a word of truth in what the honorable gentleman says.

Mr BLACKBURN:

– I shall take the unimpeachable testimony of Dr. C. E. W. Bean. Dr. Bean was a supporter of conscription, and, although he reveals that in his references to the campaign, he gives an objective account of what occurred. In volume 3 at page S92 he says -

As a matter of fact the more responsible part of the force, including practically all ibo officers, most of the non-commissioned officers, and at least half of the mcn, was in favour of conscription. But the hope of securing the desired resolutions vanished. The polling, which had begun on the Kith October as ihe units reached the villages behind the lines was quickly completed. The vote of ibo Australian Imperial Force was found to be in. favour of conscription, but only by 72,339 against 5S.S94; and it was understood that it was the mcn on transports and in camps rather than those actually at the front, who were responsible for the excess of the “ Yes “ vote.

That opinion has been supported by other authorities, to some of which I shall refer. It was supported in the British Australasian, a well-known journal published in England, and circulating amongst Australians in England as well as in this country. Reference to that paper is made in Dr. L. C. Jauncey’s book, The Story of Conscription in Australia. Dr. Jauncey holds an American degree, but he is a South Australian. He was in Australia at the time of the conscription campaign, and wrote his book in Australia. The book quotes at page 239 the following passage from the British Australasian: -

It is too soon yet to say whether the voice of Australia has said a final “ No “ to conscription, but it will be surprising if the voles yet to come counterbalance the adverse majority. Certainly the votes of Australian soldiers abroad will not do it.

That was the opinion of an Australian writing in England. Among the Australians who were overseas at the time of the campaign was our present Minister to China, Sir Frederic Eggleston, who enlisted in the Australian Imperial Force as a private. He was definitely a conscriptionist at that time, and in a by no means friendly review of Dr. Jauncey’s book, be says -

The soldiers were right. I voted for conscription, hut I doubt whether I should do so again. No issues except defence against invasion will ever be clear enough to enable us to compel people to fight.

That review is published in Pacific Affairs for 1930, page 594. These statements tend to show that in the opinion of the soldiers, whatever attitude was taken by the men in troop transports and in camps, and those who, although enlisted men, were doing civilian duty in England, the men who were doing the actual fighting voted against conscription.

Mr.Fadden. - The honorable member has cited only three authorities.

Mr BLACKBURN:

– I have cited only three authorities because my time is limited. In any case, I do not think that the Leader of the Opposition (Mr. Fadden) was at the front, and I cannot see that he is competent to express an opinion. On the 3rd November, 1916, the Government promulgated a regulation forbidding anyone to say how the soldiers voted. That was actually after the effect of the soldiers’ vote was known in this country. The regulation was Statutory Rule’ 1916, No. 213, and the relevant provision was -

No person shall publicly announce, publish, or exhibit any figures or alleged facts as to the results of the voting by -

members of the forces serving beyond Australia or having returned from such service; or

members of the crews of Australian transport vessels employed in the conveyance of members of the forces to or from Australia, at the referendum held under ‘the Military Service Referendum Act 1010.

Under that regulation, prosecutions were launched against a Mr. Holland and a Miss Cecilia John, in Melbourne. Mr. H. E. Starke, of the Victorian bar - now Mr. Justice Starke - defended Mr. Holland and Miss John, and examined the then Commonwealth Electoral Officer for Victoria, Mr. Lawson.From Mr. Lawson it was elicited that persons doing civilian duties abroad had been entitled to vote because they had actually enlisted for active service.

Greater precautions were taken at the 1917 referendum, when the soldiers overseas recorded a majority of 1,622. My authority is a statement made by the Commonwealth Chief Electoral Officer of that time, Mr. Oldham, and published on the 11th January, 1918, in the Melbourne Argus, and, I presume, in other metropolitan papers.

Mr Hughes:

– There is no truth in that statement.

Mr BLACKBURN:

– I am not setting my unsupported word against that of the right honorable member for North Sydney (Mr. Hughes), who was Prime Minister at the time. All I say is that my statements were taken from official figures.[Extension of time granted.] I quote from volume 5, page 22, of Dr. Bean’s Official History of Australia in the War of 1914-18-

The soldiers’ vote taken about the 11th December under arrangements made by administrative head-quarters in London was slightly more favorable than in 1010; it is believed that a majority of the troops actually in the front was against the measure, but that the vote from the camps and the transports turned the scale and produced a slight majority of soldiers in favour.

In a statement made by the then Chief Electoral Officer, Mr. Oldham, on the 10th January, 1918, and published in the Argus, and, I presume, other daily newspapers, on the 11th January, the figures showed that, of the soldiers actually overseas, which would include every member of the Forces overseas, whether at the time on active service or not, there was a majority of 1,622 for conscription. Of the soldiers on transports, there was a small majority against conscription, and of the soldiers who had not left Australia, there was a majority of about three to one in favour of conscription.

Mr McCALL:
Martin

.- When I asked the Prime Minister (Mr. Curtin) about a telegram forwarded by 47 employees of Australian Consolidated Industries Limited in which they gave their occupations and denied that they had been taken off defence work to manufacture a. horse float for Mr. W. J. Smith. Director of Gun Ammunition, the honorable member for Melbourne (Mr. Cal well) asked the Prime Minister to ascertain whether the men who had sent that telegram had done so under duress or voluntarily. I now direct the attention of the Prime Minister to the following letter from Mr. W. E. ‘Curie, of Belmoreroad, Punchbowl, to The Century newspaper : - Sir,

I have read in the newspapers a question by Mr. Calwell, asking the Prime Minister who paid for the telegram which was sent to him on the question of the horse float which was built for Mr. W. J. Smith.

As one of the men who did a lot of work on this job, I wish to state that the telegram was prepared in the shop by the men themselves, who had a meeting to discuss the matter, and was signed by 47 of the mcn who worked on the float. 1 send you for proof the original signed copy, which has the signatures of the mcn themselves.

I can also state that a collection was taken up amongst us to pay the cost of the telegram to Mr. Curtin. I ask you to publish this letter in order that our case may be made public, as we have no other way of getting ourselves heard on the matter. The men concerned are very resentful at the suggestion that the wire they sent in defence of themselves was paid for by the management. tn view of that letter, the authenticity of the telegram cannot be questioned. My only reason for directing the attention of the Prime Minister to that telegram was to show that the publicity which has been given to the building of the horse float for Mr. Smith did him an injustice. The inference from the original question asked by the honorable member for Watson (Mr. Falstein) was that the horse float, which was built by those 47 men, was comparable with a pleasure yacht, and that men had been taken off defence work in order to construct it, whereas the purpose for which the horse-float was built was to assist in the development of a primary industry which will bring to this country thousands of pounds worth of dollar exchange, namely, the export of thoroughbred horses to the United States of America. In view of the fact that, owing to the necessity to conserve our supply of dollars, we have had to ration the public and private use of petrol and to prohibit altogether the importation of certain articles from the United States of America, an industry which, through the sale of our thoroughbred stock to the United States of America, increases our supply of dollar exchange, is a national asset. Before the thoroughbreds from Mr. W. J. Smith’s stud at Scone can be shipped overseas, they have to bo brought to Sydney, a distance of 200 miles, and, for that purpose, a vehicle for transportation is necessary. Hence the construction of a horse float at the works of Australian Consolidated Industries Limited. The stir which followed the question asked by the honorable member for Watson has cau.-ed consternation amongst other manufacturers in Australia because many of them engage in manufacture of two kinds, one the manufacture of munitions and other defence requirements, and the other the manufacture of luxury or semi-luxury lines, for example, refrigerators and washing machines. Some firms engaged in the manufacture of that sort of equipment have had annexes erected for the manufacture of armaments because they have the machinery and skilled artisans with which to build articles of war which the Commonwealth needs. Of the total production of one firm 44 per cent, consists of goods required for war purposes ; about the same ratio would apply to a large number of other firms. Once the skilled nien have finished what they have to do in the manufacture of the specific articles of munitions which the employing firm is manufacturing, they are transferred to the production of articles which it normally would be producing for the whole of the time, namely goods of a luxury or a semi-luxury character. That firm is fulfilling 100 per cent, of the defence orders which have been given to it. If the skilled fitters and turners were not provided with work of a civil character after they had finished all that they could possibly do on the defence work they would have nothing to do.

I next direct the attention of the Government to an injustice which has been clone to Smith’s Weekly, Australia’s national newspaper. The case of Dr. Battaglia. must be unprecedented in legal annals. This is a case of British justice stretched in a one-sided way to extraordinary lengths. In its anxiety to be fair to a plaintiff of enemy origin, Smith’s Weekly suffered injustice in a previously unheard of way. The facts are that Dr. Battaglia, head of the Fascist organization in Queensland, was interned immediately upon Italy’s making war on France, and automatically on Britain.

After the last federal elections he was for some obscure reason released from internment. No satisfactory explanation of his liberation has ever been given, but when lie was at large Smith’s Weekly publicly declared his dangerous and close association with the enemy. This brought a writ from Dr. Battaglia’s solicitors for £10,000. Before the writ was issued Smith’s Weekly published in its Queensland edition a photograph of the Queensland Blackshirts, the central figure of the group being Dr. Battaglia. Smith’s Weekly was cited for contempt of court, notwithstanding that publication preceded the service of the writ. The newspaper was fined £25 and it was involved in legal costs amounting to more than £300. I ask the Attorney-General (Dr. Evatt) to imagine what would happen to any Australian subject in Italy who dared to question at the present time the right of an Italian newspaper to charge him with being an enemy alien. The result of such an action would probably be certain death; but, in this country, an enemy alien has moved the courts and obtained a verdict against the proprietors of an Australian newspaper. I contend that a grave injustice has been done. I hope that the Attorney-General will have the matter investigated, particularly as to whether compensation can be paid to the newspaper.

Mr CALWELL:
Melbourne

.- While the Prime Minister (Mr. Curtin) is inquiring into the matter of Mr. W. J. Smith’s horse-float, about which the honorable member for Martin (Mr. McCall) has waxed eloquent, will he also arrange with the Minister for Munitions (Mr. Makin) for the appointment of an officer in his department to inquire as to whether Defence job No. P.420 at Australian Consolidated Industries Limited, at Waterloo, Sydney, concerning the making of a rotary swaging machine to be used in manufacturing shells, was held up on Thursday of last week because a blacksmith was too busy making fittings for horse-boxes to take Reading and other racehorses to America? If the facts are found to be as stated, will the Prime Minister insist that defence jobs in the annexe of Australian Consolidated Industries Limited shall be given priority over the making of horse-boxes ?

Mr ABBOTT:
New England

.- On the 25th November, 1 asked the Minister for Labour and National Service (Mr. Ward) whether his attention had been drawn to a statement published in the Maitland Mercury, of the 22nd September, to the effect that more than 2,000 miners were expected to retire next January under the miners’ pensions scheme of New South Wales, and whether, in view of the shortage of coal and the serious lack of man-power, the Minister thought that the continued employment of those miners would be of greater assistance to the war effort than their compulsory retirement. I asked him to discuss the matter with the Minister for Mines in New South Wales. He said that he would be pleased to do so, and would advise me of the result of the conference. In to-day’s Sydney Telegraph appears the following report: -

1,000 MEN STOP WORK.

Cessnock, Wednesday

Nearly 1,000 mine workers were idle to-day wl,en stoppages occurred at Aberdare and Aberdare Central collieries. The stoppage at Aberdare Central colliery followed a protest against the statement made by Mr. Abbott, M.H.R. (CP., N.S.W.), that the 2,000 mine workers due for retirement under the miners’ pension scheme should bc kept on in view of the shortage of coal and of man-power.

After discussing the position at the pit-head the men decided to go to work. There was a move towards the shaft-head, but the men who had advocated the declaration of a protest stoppage handed in their lamps, indicating they did not intend to go below. As they left the pit, others were compelled to follow.

The Aberdare stoppage followed a dispute over payment for breaking up top coal. A conference has been arranged to deal wilh the dispute.

Recently, the Attorney-General (Dr. Evatt) described the sit-down strike at the Wallarah colliery, south of Newcastle, as “utterly bad and utterly mad”. Referring to the strike at the Aberdare Central colliery I did not suggest in my question that the 2,000 miners should be prevented from retiring next January, but I asked the Minister for Labour and National Service for his opinion with regard to the matter. Apparently, he saw nothing objectionable in my question. Things have come to a pretty pass in this country if a member of the Commonwealth Parliament cannot address a question to a Minister as to his views with respect to the employment or unemployment of miners, owing to the acute shortage of man-power. It seems to me that this is purely a fractious strike, and it is disloyal to the Prime Minister (Mr. Curtin), who already has enough burdens on his shoulders without more being piled on top of them. It is also treacherous to the war effort of the Commonwealth. I do not blame the Government, nor do I suggest that it may be able to do anything to alter the position ; but it is well known that, in the last war, some of the largest percentages of enlistments were obtained amongst the miners of this country. It is up to the miners themselves to remove from their own trade unions and other organizations those who are responsible for action which is harmful to the Commonwealth in its war effort. The report that I have quoted stated that the majority of the 1,000 men were prepared to go down the mine. The loyal elements in the industry should do nothing that would injure their fellow men among the fighting services overseas. Everybody knows that there is an acute shortage of coal, which is essential in the production of munitions of war, and is also required for our ships. I appeal to the miners, and to the leaders of the trade unions, to stand behind the Government and help it to carry on a maximum war effort. I draw the attention of the House to what has taken place in a purely fractious strike, which was, to repeat the words of the AttorneyGeneral, “ utterly bad and utterly mad “.

I bring to the notice of the Treasurer (Mr. Chifley) what appears to me to bo an omission from the National Security (War-time Banking) Regulations issued last night. Recently, I submitted a question in the Hou3e with regard to the limitation of the use of the title “bank”, and asked the Treasurer whether he would apply such a limitation, but I notice that there is no such provision in the regulations. I referred recently to a certain institution which advertises itself as an industrial bank, and claims that it brings personal banking service to the people of Australia. Apparently, according to its own advertisement, it renders this service at low rates of interest, but if one takes the trouble to work out the rate, it amounts to 26 per cent. I believe that it is the duty of the Government to limit the use of the word “ bank”, and not allow bodies which are no better than blood-sucking, moneylending institutions to describe themselves as banking establishments.

Mr MARTENS:
Herbert

.- A week or so ago I asked a question in the House regarding the purchase of property by refugees. Some misunderstanding has occurred over the matter, and I have been attacked by certain people on the ground that I have made a discourteous reference to them. I stated that one could pick out the individuals to whom I referred by certain physical characteristics; but the refugees whom I had in mind were not necessarily Jews. Many of them want to purchase property at Point Piper, Rose Ray, Dover Heights and Clovelly. I was thinking of the many persons who are alleged to have left Germany as refugees. Some of them are, I think, the agents of Hitler, and may be found in Sydney and other capital cities of Australia. Certain persons in Sydney are to-day telling women that there will be a new religion in this country before we are much older. This is confirmed by statements made in other parts of the world by men who are not irresponsible. I hope that as soon as possible the Government will investigate this matter. The Minister for Labour and National Service (Mr. Ward) has certain information that I have placed in his possession, and he probably knows a great deal more about unnaturalized aliens who are buying up property in Sydney. In Sydney last week-end 1 rode on a tramcar on which there was a young returned soldier, who said that he had seen service in the first Libyan campaign, and in Greece and Crete. He was crippled and sent back to Australia. In the tram he was talking so that anybody who wished could listen to him. He said, “ I believe that Australia is worth fighting for, but I am not going to ask anybody to fight for it unless the Government will stop these aliens from buying homes and renting them at exorbitant rates to soldiers’ wives whose husbands are overseas “. That is a serious statement for any man to make, particularly a man wearing the King’s uniform. Doubtless similar statements are being made in many other places. This sort of talk, which is justified, has more to do with the difficulty of recruiting men for the fighting services than anything else that could be said. Aliens should not be allowed to own one stick of property until they have sworn allegiance to our King. Anybody who allows them to do so is not acting in the best interests of the nation and the Empire as a whole. Therefore, I hope that this Government will stop their operations, if the State Governments will not do so.

Mr DUNCAN-HUGHES:
Wakefield

– I wish to make representations to the Minister for the Army (Mr. Forde) in particular, and to the Minister for the Navy (Mr. Makin) and the Minister for Air (Mr. Drakeford), regarding the notification of fatal casualties to parents of members of the fighting forces. This matter has caused grave dissatisfaction in a number of places, chiefly in country districts. In the cities, it may be easy for notification of deaths on active service to be given directly to the bereaved parents. But the position is calamitous in rural districts where notifications are sometimes delayed for days. I know of an instance at Orroroo in which the telegram notifying a couple of their son’s death did not come into their hands until two days after it had been received at the post office. This sort of thing should not be allowed to happen. When a fatal casualty occurs the intimation should go direct to the parents, even if this should involve sending a special messenger into the country. The least that we can do, when a member of our fighting services is killed, is to notify his parents first. 1 brought this matter to the notice of the Minister for the Army on another occasion, and he said that the formation of local committees had been suggested, but that these had failed to operate. That being so, the Government should take a hand in the matter, and remove all causes of delay.

Mr SPEAKER (Hon W M Nairn:

– I express my thanks to the Prime Minister (Mr. Curtin) for the kind reference which he made to myself.I thank honorable members on both sides of the chamber for the generous support. which they have consistently given to the Chair during the twelve months in which I have had the good fortune to occupy the position of Speaker. I am very much indebted to them, because it is due to their good taste that I have been able to maintain order in this House. I also express thanks on behalf of the Chairman of Committees (Mr. Prowse), and on behalf of the Clerk, the Clerk Assistant, and other officers of the chamber, members of the Hansard staff and the press. I join with the Leader of the Opposition (Mr. Fadden) in the sentiment which he expressed in regard to this occasion. We all can enjoy the sense of expectation which we feel when Christinas is in the offing. My only regret is that our happiness cannot be shared in full measure by our kinsmen who are fighting our battles abroad.

Question resolved in the affirmative.

page 1012

PAPERS

The following papers were presented : -

Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - 1941 - No. 33 - Amalgamated Postal Workers’ Union of Australia.

War Service Homes Act - Regulations - StatutoryRules 1941, No. 264.

Lands Acquisition Act - Land acquired for Defence purposes - Tamworth (New South Wales).

National Security Act -

National Security (General) Regulations -

By-laws - Controlled area.

Orders -

Prohibited places (3).

Protected areas (6).

Taking possession of land, &c. (43).

Use of land (8).

Regulations - Statutory Rules 1941, Nos.

262, 263. 265, 266, 267, 268, 269. 270. 271.

Australian Imperial Force Canteens Funds Act - Report by Auditor-General upon Accounts of Trustees of Fund, for year 1040-41.

Commonwealth Railways Act - Reporton Commonwealth Railways Operations for year 104.0-41.

Mouse adjourned at 8.10 p.m. until a date and hour to be fixed by Mr. Speaker and to be notified byhim to each honorable member by telegram or letter.

page 1013

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Newspaper Representatives : Conference with British Minister for Information

Mr Calwell:

l asked the Prime Minister, upon notice -

  1. Is it a fact that certain leading representatives of Australian newspapers have gone or are going to England at the invitation of the British Minister for Information to confer with him on questions of propaganda and so on?
  2. If so, was the invitation conveyed through any Australian Minister?
  3. If the invitation was issued direct to each such pressman does he consider that there was any breach of etiquette or any improper procedure in Australian Ministers being so ignored?
  4. Was the Australian Government notified that such conference was being held, and, if so, was its approval sought?
  5. Docs the Government apprehend any danger to our democratic institutions when Australian nationals attend discussions or conferences, convened by a Minister of a sister dominion to deal with questions of propaganda and other questions the nature of which has not been disclosed?
  6. How many newspaper representatives have applied for passports to attend such conference ?
  7. What are their names and the newspapers they represent!
  8. How much money will each person be allowed to take out of Australia?
Mr Curtin:
ALP

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

  1. I am advised that invitations have been extended by the British Minister for Information to representatives of the Australian press as individuals to visit the United Kingdom separately and at their own expense in order that on arrival they may be afforded facilities to see and inquire into any matters of interest to them. The visit will be regarded as informal.
  2. No.
  3. It is thought that it would have been more appropriate had the invitation been issued through the Commonwealth Government.
  4. No.
  5. See answer to No. 1. 6, 7 and 8. This information will be obtained.

Northern Territory: Lands Administration; Provision of Station for Half-caste Returned Soldiers ; Selfgovernment.

Mr Blain:
NORTHERN TERRITORY

n asked the Minister representing the Minister for the Interior, upon notice -

  1. Is it a fact that the Payne Commission recommended that the Northern Territory Land Board be abolished?
  2. Is it a fact that the then Minister for the Interior (Mr. McEwen) abolished the Land Board without consulting the sitting member for the Northern Territory?
  3. If so, will he inquire why the sitting member was not consulted?
  4. Will he inquire from the Queensland Lands Department as to the capabilities of the honorable member for the Northern Territory to report on large pastoral holdings in northwestern Queensland contiguous to the Northern Territory ?
  5. Is it a fact that the honorable member before entering Parliament reported on, valued, and classified theresumable areas of the Barkly Tableland? If so, has the Minister read these reports?
  6. Did the then Minister for the Interior (Mr. McEwen) give the Administrator complete control of lands administration?
  7. Have Vestey’s and other large holders observed their assurances to improve their holdings?
  8. Is it a fact that since the Payne report was presented Vestey’s have over -improved the choice areas so that when resumption becomes due a prospective new settler will be unable to afford to pay for the improvements on the desirable areas and will not be prepared to select the adjoining discarded second-class land unless some of the choice land is included ?
  9. Are Vestey’s now more firmly entrenched in the Northern Territory by this practice than before the Payne report was presented to Parliament?
  10. Will he see that all improvements so placed are valued for resumption purposes in accordance with their value to an incoming lessee working an economic family holding in conjunction with the contiguous second-class unimproved lands?
Mr Lazzarini:
ALP

– The Minister for the Interior has supplied the following answers : -

  1. Yes. 2 and 3. Following the adoption of the recommendations generally of the Payne Committee by the then Government, one of which was to abolish the Land Board, the then Minister took the necessary steps togive effect to the Government’s decision. I am not aware whether the then Minister consulted the sitting member on the matter.
  2. If the honorable member will advise me why he considers this information should be obtained I will consider the question.
  3. I am advised that the honorable member did classify the areas mentioned and his reports and valuations were fully considered by the then Minister in determining the areas to be resumed from affected pastoral leases at the 30th June, 1935.
  4. Yes, subject to the control of the Minister.
  5. Yes. 8 and9.I have no information to indicate that these statements are correct, butI shall look carefully into the matter.
  6. Any improvements on resumed lands will be valued in accordance with the Ordinance.
Mr Blain:

n asked the Minister representing the Minister for the Interior, upon notice -

  1. Will he see that a properly constituted land board, with a director of lands as chairman, is again set up in the Northern Territory?
  2. In all future land resumptions, will he see that preference is given to experienced landsmen of the Northern Territory who have fought overseas?
Mr Lazzarini:
ALP

– The matter will receive consideration.

Mr Blain:

n asked the Minister representing the Minister for the Interior, upon notice -

  1. Is it a fact that an experienced landsman from Orange, with two sons, was, during the previous Minister’s term, refused by the Administrator a resumable area of 400 square miles of choice land from the Rocklands Station, Barkly Tableland?
  2. Is it a fact that the applicant produced evidence that he had £10,000 in cash and finance amounting to £1G,000?
  3. Why was the application refused?
  4. Will the Minister review the case to see whether the application can now be granted?
Mr Lazzarini:
ALP

– Information with regard to this matter is being obtained and the honorable member will be further advised in due course.

Mr Blain:

n asked the Minister representing the Minister for the Interior, upon notice -

  1. Will arrangements be made to reserve Western Arnhemland for a cattle station for half-castes who fought overseas or served at Darwin ?
  2. If so, will the station be established on similar lines to the one for returned soldiers at Scartwater, Queensland, with Mr. Cunningham as chairman of trustees?
Mr Lazzarini:
ALP

– The matter will receive consideration.

Mr Blain:

n asked the Minister representing the Minister for the Interior, upon notice -

As a first stop in self-government for the Northern Territory, will ho agree, in response to a petition from residents, to set up an executive council and a legislative council to assist in the administration and to take part in framing ordinances?

Mr Lazzarini:
ALP

– The matter will receive consideration.

Australian Consolidated Industries Limited

Mr Calwell:

l asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. Does the report of the Prices Commissioner support the report of the departmental officer who made the preliminary investigation into the affairs of Australian Consolidated Industries Limited that excess profits were made by that company in its last trading year?
  2. What profit did the company make in that period?
  3. Plow much of that profit was regarded as excessive ?
  4. ls there any reason why those portions of the reports of the several officials that do not contain matter of confidential nature should not be published?
  5. Will he publish such portions of the reports immediately?
  6. In view of the industrial record of Australian Consolidated Industries Limited and its subsidiaries, is there any reason why all munitions work at present being done in annexes of this company and its subsidiaries on a cost-plus basis should not be done in future in governmental establishments?
  7. Will he consult with his colleagues with a view to a change being made in all directorships in Government establishments where the holders of such directorships hold interests in business undertakings?
Mr Beasley:
ALP

– The Minister for Trade and Customs has supplied the following answers : - 1, 2, 3, 4 and 5. Information contained in reports by the Commonwealth Prices Commissioner and his staff is obtained under oath of secrecy and is not available for publication. 6 and 7. These questions involve matters of Government policy, on which it is not customary to make pronouncements in answers to questions by honorable members.

For the information of the honorable member, I draw his attention to the fact that the principal products of Australian Consolidated Industries Limited, namely, sheet glass, figured rolled glass, glass bottles and containers, and all the products of two of its important subsidiaries, namely, Crown Crystal Glass Proprietary Limited and Dott and Company Proprietary Limited, have now been declared under the National Security (Prices) Regulations. The prices of all these products have been pegged at pre-war prices and they will remain under the control of the Commonwealth Prices Commissioner. This would ensure that excessive profits will not be made by the company.

Bren Gun Carriers.

Mr Makin:
ALP

n. - On the 20th November the honorable member for Grey (Mr. Badman) asked rae a question, without notice, as to whether Government factories were continuing the manufacture of

Bren gun carriers, or whether any large contracts had been let to private firms for the purpose of increasing production. On that occasion I gave the honorable member an outline of the position in regard to the manufacture of these carriers. I now wish to inform the honorable member that the Commonwealth Government factories are not, and never have been, concerned with the production of this equipment. At the present time there are four assembly contractors, namely, the Victorian Railways Workshops, Newport, Victoria ; the Metropolitan Gas Company, Melbourne, Victoria; the South Australian Railways Workshops, Islington, South Australia; and the Ford Motor Company, Sydney, New South Wales, and these are fed by numerous contractors for component parts in various States of the Commonwealth.

With a view to co-ordinating the operations of the assembly contractors and the contractors for component parts, and to facilitate further decentralization, negotiations are proceeding for the appointment of a co-ordinating authority, who will operate under the Armoured Fighting Vehicles Division of my department and through the Boards of Area Management of the various States. In the near future I hope to be able to announce the arrangements made regarding the co-ordinating authority.

Royal Australian Air Force: Billeting, of Personnel. Mr. Rosevear asked the Minister for Air, upon notice -

  1. What is tha total amount per week being paid by the Commonwealth for the billeting of Air Force personnel outside ordinary quarters at aerodromes?

    1. Is it a fact that palatial residences in Sydney and Melbourne have been rented as quarters for Air Force officers? If so, what is the rental of each one?
    2. Are these quarters within reasonable access of aerodrome accommodation?
    3. If expensive quarters are being rented in Sydney, Melbourne and other capitals, does he propose to continue their use?
Mr Drakeford:
ALP

d. - The answers to the honorable member’s questions are a3 follows : -

  1. No billeting is arranged by the Royal Australian Air Force, but numbers of Royal Australian Air Force personnel serving at such establishments as head-quarters, owing to non availability of service accommodation, “live out” and receive special lodging and ration allowances. As these arrangements operate in all States, some little delay will ensue in collating full costs, but as soon as those figures are available, I will advise the honorable member.

    1. No. Properties have been secured as offices at Point Piper, Sydney, at a rental of £12 a week for No. 2 Training Group Headquarters, and at Toorak, Melbourne, rent free, rates only being payable, for No. 1 Training Group Head-quarters. _ 3 and 4. As indicated in the reply to question No. 2, no residences are being rented as residential quarters. Therefore, questions Nos. 3 and 4 do not arise.

Drug Production.

Mr Blackburn:

n asked the Minister for Commerce -

  1. Has hia attention been drawn to a memorandum recently published by the British Medical Research Council, Economy in the Use of Drugs in War-time?
  2. If he has seen the memorandum, does he thinks its proposals for a long-term policy of drug-growing in British territories are practicable ?
  3. If it is regarded as practicable, will the Government give effect to those proposals so far as they affect Australia?
  4. Is the Australian export of drug plants or of the manufactured product of such plants increasing?
  5. What is the present value of such export as compared with the value of such -export in pre-war years?
Mr Scully:
ALP

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

  1. Yes. 2 and 3. Investigations have already been initiated into the possibilities of medicinal drug cultivation in Australia. Early in 1040 the Medical Equipment Control Committee directed attention to the importance of carrying out investigations on certain essential drug plants in Australia. Arrangements were made for the Council for Scientific and Industrial Research to investigate the cultivation of essential drug plants in Australia; for the University of Sydney to determine the alkaloidal content of such plants; and for the University of Melbourne to undertake the biological standardization of material grown for therapeutical purposes. A progress report on this work has been issued by the Council for Scientific and Industrial Research for the information of the State Departments of Agriculture, and I shall be glad to make a copy available to the honorable member. 4 and 5. On security grounds, it is considered inadvisable to make public detailed information of this kind, but I shall be pleased to supply the honorable member with such information as is available.

Repatriation AUTHORITIES,

Mr Morgan:

n asked the Minister for Repatriation, upon notice -

  1. Who comprise, and at what remuneration respectively, (a) the Repatriation Commission, 1. -

    1. the Repatriation Board, (c) the War Pensions Entitlement Appeal Tribunal, and
    2. the Assessment Appeal Tribunal?

  2. W hen was each member appointed and for what period, and when will each appointment expire, respectively ?

Mr Frost:
ALP

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

  1. See above.

Prisoners of War.

Mr Forde:
ALP

e. - On the 14th November the honorable member for Richmond (Mr. Anthony) asked me the following questions, without notice -

Will the Minister for the Army make avail- ableasearly as possible information regarding the number of war prisoners held in Australia, the cost of maintaining them, and the number of persons employed in guarding them? Will he also say when he expects tohave information regarding the treatment of the Australian prisoners of war held by the Italians, with particular reference to the reports of two Australian soldiers who escaped from Benghazi? Will he give further consideration to the proposal for the employment of prisoners of war in Australia in some useful capacity?

I now furnish the following reply: -

The number of prisoners of war at present held in Australia is approximately 5,800. As all costs of the accommodation and maintenance of prisoners of war transferred to Australia are borne by the United Kingdom Government there are no costs of maintenance to be borne by the Commonwealth. In the interests of security, it is considered undesirable to reveal the strength of the guards at prisoners of war camps. Advice, in answer to the inquiry by the Commonwealth Government as to the conditions and treatment of Australian prisoners of war held by the enemy in Africa cannot be expected until their camps are inspected. Owing to the location of the camps, this may take some weeks but when information is available it will be communicated to the honorable member. Large numbers of prisoners of war in Australia are at present being employed on work connected with the maintenance and development of their camps. The question of employing prisoners of war on other work outside their camps is under consideration; but it can be taken for granted that the provisions of the Hague Convention in regard to prisoners of war will be observed by the Commonwealth Government.

PRICE of BUTTER

Mr Curtin:
ALP

– A question asked by the honorable member for Richmond (Mr. Anthony) on the 19th November, 1941, regarding an application for an increase of the price of butter was referred to the Commonwealth Prices Commissioner, who has informed me that the decision not to permit an increase at present was reached after a careful examination of particulars assembled by a sub-committee appointed by Commonwealth Dairy Produce Equalization Committee Limited, which sponsored the application.

The main argument upon which the applicants relied was that costs of production of butter have increased since the outbreak of war. This argument was supported by evidence purporting to show that the average cost of production of butter during the last five years was higher than the price received for domestic sales. Whilst full credit must be given to the industry for a genuine and painstaking; investigation to establish the facts as affecting both issues, its case was built not on the actual employment in and wages paid in the industry, but upon what these would be if conditions in the industry were considerably improved. Some recognition can be given to the desirability of improved conditions, but the Prices Commissioner did not consider it part of his duty, especially in time of war, to permit increased prices for this purpose when there was no guarantee or certainty that the price suggested would contribute any material improvement to existing conditions. The state of affairs existing in the industry cannot be attributed to circumstances arising from the present war. It has existed for years. For long before the outbreak of war the fixation of domestic prices for butter was in the hands of the industry itself and if the industry saw fit to allow allegedly inadequate returns to dairy-farmers over this long period, it cannot be conceded that it is the responsibility of the Prices Commissioner to rectify at the present time a position 60 long overlooked by the industry itself. The cost per unit of product or the price per unit of product at any a;iven time provides no useful yardstick for measuring costs or returns. For this reason the industry wisely conducted its investiga tions over a five-year period when the varying effects of good and dry seasons would largely cancel out. For the same reason the Prices Commissioner has taken the five-year period before the war for purposes of comparison with the two years since the outbreak of war. Any change of the capital value of herds or equipment as a whole since the outbreak of war would be due only to changes up or down of the profitability of the industry, and it can therefore be assumed that the investment in the industry since the outbreak of war is no different from what it was before the war. This does not mean, however, that some costs of repairs and renewals have not increased since the war, because it is fully recognized that they have.

Figures taken from statistics compiled by the Commonwealth Dairy Produce Equalization Committee Limited, which cover the main producing States, have been assembled to show the following comparison : -

It is clear from these figures that, although there has been a slight increase of butter production since the outbreak of war, there has been a very great increase of returns, due in some measure to increased prices from overseas sales, but also to higher prices for domestic sales which were brought into operation in 1938-39. The Commonwealth Prices Commissioner is satisfied that the actual increases of costs of conducting the industry since the outbreak of war are not so high as the increase of 25 per cent, of total returns to the industry.

The dairying industry did not enter the war with lowprices, as was the case with some other primary products. The following table of domestic prices will show a steady increase over the five years prior to the commencement of hostilities : -

If there were any assurance that the present favorable position would remain unaltered, the Prices Commissioner would see no reason for a further review of the industry for some time. Material changes are, however, taking place in the industry this year, owing to the necessity for transferring a considerable volume of production from butter to cheese. An enhanced price for cheese is assured, but the butter position is uncertain. The Prices Commissioner, therefore, had undertaken to make another survey of the industry in six months’ time, when it was anticipated that matters now in doubt would be resolved. I have, however, requested the Minister for Trade and Customs to arrange for the review to be made by the Prices Commissioner within three months from now. murrumbidgee irrigation area

Mr Dedman:
Minister for War Organisation of Industry · CORIO, VICTORIA · ALP

n. - On the 20th November, in reply to a question, upon notice, by the honorable member forRiverina (Mr. Langtry), I indicated that inquiries would be made into statements by theRural Committee of the Murrumbidgee Electorate Council of the Australian Labour party in connexion with the report of Professor Prescott and Dr. Dickson concerning settlers in the Murrumbidgee Irrigation Area.

I am now in a position to supply the following information : - 1. (a) The evidence submitted by the Australian Labour party representative at a con ference at Griffith on the 4th December, 1940, was carefully considered by Professor Prescott and Dr. Dickson, and was not ignored in the preparation of their report. Itwas pointed out by these officers that flooding was due to the exceptionally heavy rain of the winter of1939, to overflow of rice bay bunks and to release of water from rice lands into the drainage system which could not cope effectively with such an unusual body of water. A main recommendation in the report was that a strong committee be set up to deal with the habituation of all settlers in difficulties as the result of the water-logging.

  1. Figures regarding the number of returned soldiers among the settlers affected and their financial position should be sought from the State Government of New South Wales.

    1. Information should be sought from the Department of Repatriation about assistance given to soldier settlers.
    2. The inquiry by Council of Scientific and Industrial Research officers was conducted at the request of the Water Conservation and Irrigation Commission with the full concurrence of the State Government of New South Wales. It is understood that the report was adopted by the State Government, and that the recommendationsare being put into effect as rapidly as war-time conditions permit.

Abbco Inquiry.

Mr Beasley:
ALP

y. - On the 5th November, the honorable member for Dalley (Mr. Rosevear) asked me a question, without notice, as to whether I would examine the report of Mr. Justice Maxwell in relation to the criticism which he had directed against an official of my department in connexion with the legal proceedings taken against the Abbco Bread Company.

I now desire to inform the honorable member that a review of the royal commissioner’s report in regard to the Abbco Bread Company reveals that the commissioner’s criticism, so far as the Supply Department is concerned, is that the inquiries made following the Abbco company’s conviction were not adequate to the occasion. The commissioner further remarks that there is no reason to suggest that the inadequacy of the investigations has resulted in any loss to the Army or to the Commonwealth following the granting of a further contract to Abbco or in any other way.

The remarks of the commissioner have been accepted by the department as a direction that where there is reason to doubt the integrity of a tenderer, the matter should be fully investigated and the greatest care exercised. All district contract boards have been instructed that this course must be followed.

War Equipment Specifications.

Mr.Forde. - On the 20th November, the honorable member for Martin (Mr. McCall), referred to the matter of war equipment specifications and asked that inquiries be made to ascertain the reason for the delay in altering the standards from those in use in 1918 and in the adoption of the standards set down in Great Britain in 1940.

I now inform the honorable member that, in the case of war equipment, a standing authority exists between the War Office, London, and Army Headquarters, Australia, whereby the latest drawings and specifications are issued directly to the Army Inspection Branch, Maribyrnong, by the Chief Inspector of Armament, Woolwich. Therefore, immediately a change or modification is made in England, a copy of the notification is air-mailed direct to the Army Inspection Branch in Australia. The alterations embodied in the drawings received from England always include the latest British standard specifications, which are used in Australia immediately they are received here.

Darwin : Outbreakof Scurvy.

Mr Forde:
ALP

e. - On the 7th November, the honorable member for Melbourne (Mr. Calwell) referred to reports regarding an outbreak of scurvy at Darwin.

I now desire to inform the honorable member thatI have had inquiries made from the Military Head-quarters at Darwin, and also from the DirectorGeneral of Health for the Commonwealth, who administers the Northern Territory medical services, regarding the report. I am informed by District Headquarters, Darwin, that no case of scurvy has occurred in the Military Forces during the past nine months. The DirectorGeneral of Health has advised me that he has sought information from Darwin and has been informed that no case of scurvy has occurred either in the civil population or in the defence forces.

Cite as: Australia, House of Representatives, Debates, 26 November 1941, viewed 22 October 2017, <http://historichansard.net/hofreps/1941/19411126_reps_16_169/>.

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