House of Representatives
18 February 1943

16th Parliament · 1st Session

  1. House of Representatives
  2. 16th Parliament
  3. 1943

Mr. Speaker (Hon. W. M. Nairn) took the chair at 10.30 a.m., and read prayers.

page 884

QUESTION

ADVISORY “WAR COUNCIL

Alleged Disclosure op Secret Information.

Mr FADDEN:
DARLING DOWNS, QUEENSLAND

– Has the Prime Minister seen in to-day’s Daily Telegraph under the heading “News Blab to Enemy “, .the report that the Leader of the Government in the Senate (Senator Collings) yesterday accused Opposition members of the Advisory “War Council of “ blabbing “ to the enemy ? In view of the gravity of this accusation, will the right honorable gentleman state whether he possesses any information in support of Senator Collings’* charge? If he does not, will he make a statement, or take such action as will ensure that a denial by Senator Collings of the charge will receive publicity equal to that given the allegation ?

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

– My attention was directed last night to certain remarks that had been made in the Senate. I drew the attention of Senator Collings to the reports that were circulating, and he made in the Senate an explanation which I learned this morning, from both him and the Leader of the Opposition in the Senate (Senator McLeay), is regarded as a complete and satisfactory retraction.

Mr Spender:

– What was his explanation of having told an untruth?

Mr CURTIN:

– I do not know what took place in the Senate. It would appear that a number of senators were talking at once, and some one was being “ baited “, and that Senator Collings, presuming an interjection to have been correct, provided what he considered was the explanation.

Mr Francis:

– “A Roland for an Oliver “.

Mr CURTIN:

– Yes, on a misunderstanding based upon wrong premises. The incident has been closed in the Senate in a manner which, I. believe, is always acceptable to members of the Parliament, in that whatever implication had been made has been withdrawn and whatever wrong or unfair statement had been made has been retracted. I understand that, so far as the Senate is concerned, the incident is closed.

Mr Fadden:

– But others are concerned in the accusation.

Mr CURTIN:

– In reply to the question put to me by the Leader of the Opposition, I have to say that I do not know of any instance in which members of the Advisory War Council have used information in a way that would be a violation of their duty as members of the council.

Sir Frederick Stewart:

– Why not prevent Minister’s from making such statements?

Mr CURTIN:

– The honorable gentleman is not a member of the Advisory War Council. He may sometimes imagine that remarks relate to council matters when in reality they belong to what is described as the realm of high politics.

page 885

QUESTION

ALLIED WORKS COUNCIL

Remarks bt Senator Collings - Authorization of Prosecutions - Acquisition of Roadmaking Machinery.

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

– Has the Prime Minister read in the press the report that, at the Allied Works Council inquiry in Sydney, the representatives of the allegedly victimized men complained of the text of a broadcast made by the Minister for the Interior (Senator Collings), and the Commissioner replied that, to say the least, some of the remarks that had been broadcast were unfortunate? Will the right honorable gentleman advise the Minister for the Interior to refrain in future from trespassing on matters that are being investigated by a royal commission?

Mr CURTIN:
ALP

– I do not know what remarks were made in the broadcast address of Senator Collings. I understand that he reviewed the first year’s activities of the Allied Works Council.

Sir Frederick Stewart:

– It was unfortunate.

Mr CURTIN:

– Probably it was. I consider that the comment of the Commissioner adequately covers the matter.

Mr ROSEVEAR:

– I ask the AttorneyGeneral whether his department accepts all or any responsibility for the launching of prosecutions df industrial conscripts by the Allied Works Council for alleged offences against regulations? If not, are such powers delegated to the Director-General of Allied Works on the assumption that he will personally satisfy himself with the details of cases before prosecutions are launched? Does the Attorney-General’s Department play any part in such prosecutions? If so, does it do so on the assumption that the DirectorGeneral of Allied Works has satisfied himself that such prosecutions should be launched ?

Dr EVATT:
Attorney-General · BARTON, NEW SOUTH WALES · ALP

– Authority has been given to the Director-General of Allied Works to consent to prosecutions.

Mr Rosevear:

– By a delegation of powers ?

Dr EVATT:

– By delegation. At the same time, before the proceedings are commenced in court, the practice now is that the particulars are furnished to the Attorney-General’s Department. Moreover, the actual proceedings in court are under the control of officers of the Attorney-General’s Department. There are exceptions, but I think it can be said that as a general rule there is supervision of the facts of the cases before a prosecution is launched.

Mr.Rosevear. - Has the DirectorGeneral of AlliedWorks to satisfy himself as to the details of cases before he consents to the launching of prosecutions?

Dr EVATT:

– That is the main purpose of the authority. The DirectorGeneral of Allied Works consents by the delegation, and he has to be satisfied with the facts in each case.

Mr Conelan:

– Can the Director General of Allied Works delegate that power to any one?

Dr EVATT:

– The authority is given by the act to the Attorney-General or to a person authorized , by the AttorneyGeneral, and that authority has been delegated in this case by the AttorneyGeneral to the Director-General of Allied Works, not to any other official of the Allied Works Council.

Mr.Rosevear. - I have in my hand a blank summons. It is undated, bears no name and carries no details of the prosecution, but it does contain the following:

I consent to the prosecution summarily of the offence herein alleged.

Dated day of

Edward G. Theodore. Director-General of Allied Works a person thereto authorized in writing by the Minister of State for Defence.

Does the Attorney-General approve of this method of using delegated powers? Is this not evidence that the DirectorGeneral of Allied Works has no regard to the necessity to satisfy himself that prosecutions of workers should be launched? Is this not evidence of the abuse of delegated powers and responsibility? Will the Attorney-General consider the withdrawal from the DirectorGeneral of Allied Works of the authority to prosecute? Alternatively, in the interests of common justice, will the AttorneyGeneral’s Department take such action as will prevent the indiscriminate signing of consents to the prosecutions of workers ?

Dr EVATT:

– Is the name of the person involved given on the summons?

Mr.Rosevear. - The summons has not been filled in at all, except for the signed consent.

Dr EVATT:

– It sounds sinister, but there may be an explanation. The facts may have been brought to the notice of the Director-General.

Mr.Rosevear. - There are bundles of these blank summonses on which the consent of the Director-General has been noted.

Dr EVATT:

– The facts may have been before the Director-General. We do not know the number of the prosecutions or the facts. Consent may have been given subject to the Director-General’s being satisfied as to the person by some other documentation. The mere fact that the Director-General signs that consent in advance or separately from the name of the person does not show that no consideration has been given to the case. If the honorable gentleman will give me the document I shall have it investigated and furnish a full answer.

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– The Prime Minister recently was good enough to promote an inquiry into the Biggenden and Strathpine Shire Councils’ desire for the return of their road machinery which has been impressed by the Allied Works Council. I ask the right honorable gentleman to take into consideration the following particulars when he is investigating the matter: - At the time of my question the Biggenden Shire Council’s machine was at Longreach and had been idle since the beginning of November. When I mentioned the matter in the House the machine was at once shifted to Blackall. An agreement for the hire of one machine was made in May. Yet no payment has been made and no reply to requests for payment can be received from the Allied Works Council by the Biggenden Shire Council. A grader was impressed at £392, and no payment has been made for its hire since October.

Mr CURTIN:

– I have no knowledge of these facts. All I can say is that I shall make inquiries.

Mr Bernard Corser:

– That is all I want the right honorable gentleman to do.

Mr CURTIN:

– I have no doubt that the Allied Works Council has a procedure which, if it is followed, results in the speedy payment of whatever claims axe properly made against it. Delays in meeting certain payments are, I understand, almost entirely due to some failure to agree as to what the rate of payment should be.

Mr Bernard Corser:

– They have agreed.

Mr CURTIN:

– Apparently, because of the urgency of its work, and because it was dealing with public bodies, the Allied Works Council took over the machinery and said, “ Well, we can decide the compensation or the hiring charges in due course.” I find that in many instances failures to pay have not been failures to pay what was a fair price, ‘but failures to pay the price demanded.

Mr Bernard Corser:

– The Allied Works Council agreed to pay what was asked, but it has not yet paid.

page 887

QUESTION

SUPREME ARMY COUNCIL

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES

– I ask the Minister for the Army whether the Sydney Daily Telegraph is correct in its report, published to-day, that plans are being prepared by his department for the estabment of a Supreme Army Council? If so, will he state what will be the position of the Commander-in-Chief of the Allied Land Forces, General Sir Thomas Blarney, in relation to such a body?

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

– This is the first I have heard of the matter.

page 887

REPATRIATION COMMISSION

Appointment of Woman Member

Mr MORGAN:
REID, NEW SOUTH WALES

– In view of the proposal to increase the number of members of the Repatriation Commission from three to five, the important part that is now being played by women in the fighting services, and the fact that many female dependants of service men will be affected by the administration of the Repatriation Department, will the Minister for Repatriation consider the inclusion in the Australian Soldiers’

Repatriation Bill of a provision for the appointment of at least one woman to the commission?

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

– I do not know whether or not the House will agree to an increase of the number of commissioners. If it does, every consideration will be given to the proposal of the honorable member.

page 887

QUESTION

SIR OWEN DIXON

Sir CHARLES MARR:
PARKES, NEW SOUTH WALES

– I ask the Prime Minister whether the Australian Minister to the United States of America, Sir Owen Dixon, is returning to Australia? If so, is it at the request of the Government or of himself?

Mr CURTIN:
ALP

– I do not propose to make any comment on the matter which the honorable gentleman has raised. Movements of high officers of state in time of war are not matters for public discussion. So far as I know, the Australian Minister to the United States of America is at present attending to his duties in that country.

page 887

SPECIAL ADJOURNMENT

Motion (‘by Mr. Curtin) proposed -

That the House, at its rising, adjourn to Wednesday next, at 3 p.m.

Sir GEORGE BELL:
Darwin

– I ask the Prime Minister whether he will make arrangements for a secret meeting of the Parliament, in order that Service Ministers may give to the House information regarding many phases of our war effort. I particularly desire information in elaboration of the statement made in this House last week by the Minister for the Army (Mr. Forde), which he also broadcast, in respect of another matter. Whilst the information which the honorable gentleman gave was of interest, it was quite insufficient to enable honorable members to estimate the relative strengths of the Australian Imperial Force and the Militia, or to be informed as to how many members of the Militia are fit and unfit, and related matters concerning which we ought to be advised. Not being a Minister, or a member of the Advisory War Council, I am not in a position to obtain information of this kind unless it is given to me in the House. I am’ as intensely interested as any one else in such matters. I do not request that when statements of the kind are made in future the papers shall be laid on the table, and there shall be a debate ; that is not necessary. All that I want is information which will enable me to form a judgment and to be informed in respect of matters that are of tremendous interest.

Mr CURTIN:
Prime Minister · Fremantle · ALP

– in reply - I shall give due consideration to the request of the honorable member. The order of business, and a number of other matters, are involved. I shall have to ascertain from the High Command how much of the information sought by the honorable member ought to be made available outside the War Cabinet.

Question resolved in the affirmative.

page 888

AUSTRALIAN ARMY

Leave - Labour Corps

Mr FORDE:
Minister for the Army · Capricornia · ALP

– by leave - On the 16th February the honorable member for Boothby (Dr. Price) spoke of the leave granted to the men of a South Australian battalion of the Australian Imperial Force, after being on active service in New Guinea. I immediately took action to have the matter considered by the CommanderinChief and am now in a position to state that the leave of fourteen days granted is a special leave in ackowledgment of the arduous nature of the campaign and the splendid service rendered in it by all the units involved. This fourteen days is in no way associated with the ordinary routine leave accruing to all soldiers, including those now under reference, under the provisions of the current general routine orders relating to leave. The troops granted this special leave have, in addition, large credits of leave, computed on the basis of two days’ leave for each month of service. I am informed by my military advisers that the existing strategic situation completely precludes the granting to members of the formation concerned all the leave that is due to them - that is to say, leave other than the fourteen days’ special leave. As soon as the operational situation permits, and transport facilities are clear, the whole of the present entitlements will be granted; these will average approximately 28 days.

In respect of soldiers who, while on leave, become ill, the arrangements in relation to recreation leave have, of course, no application. Soldiers who are sick, so report to the local medical authorities, and in these circumstances are required to rejoin their unit if in no way unfit to travel.

The period of leave granted to members of the battalion to which the honorable member has referred does not include the normal leave of two days a month to which every soldier is entitled, and which is accumulated by him, to be taken when the operational circumstances permit. These men, therefore, still have an accumulation of leave, and the leave already granted to them is extra leave consequent on their withdrawal from the advanced operational area. On the other hand, the Militia troops to which the honorable member has referred have been granted the full accumulation of leave to which they are entitled; consequently, there is no basis of comparison between the two cases.

Sir FREDERICK STEWART:

– I ask the Minister for the Army what is the cause of the unconscionable delay in completing the comparison between the emoluments of soldiers working on the wharfs with what the Government would have to pay to waterside workers under the award? What is holding up the determination of the disposal of surplus moneys involved?

Mr FORDE:

– As I said yesterday, representatives of the Treasury and the Army have carefully gone into that matter. The Treasurer and I have approved their report, a copy of which I shall send to the honorable member. It shows that there is no credit in the fund after consideration has been paid to the pensions and other privileges enjoyed by the soldiers who are doing the work.

page 888

QUESTION

PRISONERS OF WAR

Mr JAMES:
HUNTER, NEW SOUTH WALES

– In view of the facts that there is a grave shortage of labour in Australia, and our soldiers when taken prisoner by the enemy are used on construction works. dn«s not the Minister for the Army think that prisoners of war held in this country, instead of being allowed to spend their time digging tunnels in attempts to escape, should be put to some useful work, such as clearing land, so that our fighting men, when they return, may have farms ready for them?

Mr FORDE:
ALP

– There are not nearly so many prisoners of war in this country as some people believe, and I have been assured by the Adjutant-General that those who are here are fully occupied in the vicinity of their camps in cutting firewood and performing other duties of the kind. Where they can be employed under guard, such as on sections of the East-WestRailway, that is being done. Others are being employed in other ways, and I shall inform the honorable member more particularly on that point in private. It has been suggested that physically fit German prisoners might be sent out to work on farms, but if that were done it would be difficult to prevent them from escaping, because it would be impracticable to place a guard over each man.

page 889

MOTOR TYRES AND SPARE PARTS

Mr.RYAN. - Has the Minister for Supply and Shipping seen a report in the Melbourne newspapers that an unofficial calculation by government experts supports the belief that, at the present rate of consumption of motor tyres and spare parts, only 11 per cent. of the motor trucks now running will be on the road at the end of the year? Is this the considered opinion of experts in the Minister’s department? If so, what is being done to prevent this threatened interruption of the distributing services, with the consequent serious effect upon the economy of this country?

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

– I would not attempt, at this stage, to estimate the number of motor vehicles likely to be on the road at the end of the year. Various measures are being taken to meet the situation, and I shall supply to the honorable member a copy of the instructions which have been issued regarding priorities for the supply of tyres and parts for cars and trucks. It is a fact that the supply of tyres and rubber is becoming a problem of increasing seriousness, and further restrictions will have to be imposed. In due course, particulars regarding the proposed restrictions will be published. The position in regard to spare parts is also causing concern, having regard to the extensive use of motor vehicles for Army purposes. It is proposed to appoint a controller who will organize the supply of parts and tyres so that the best use may be made of them for essential services. That is the purpose which must be kept constantly in view.

page 889

QUESTION

ASSISTANCE TO UNIVERSITY STUDENTS

Mr DEDMAN:
Minister for War Organization of Industry · Corio · ALP

– by leave - Honorable members will have noticed that the Government has had to take special action to ensure that the war effort of our country shall not he handicapped through lack of university-trained men and women. On the 3rd February, National SecurityRegulations were issued setting up a Universities Commission, and authorizing the payment of financial assistance to students in certain faculties. On the 5th February these regulations were varied to include additional classes of students. For the following reasons this important departure in educational policy became imperative: -

  1. Voluntary enlistments and call-ups have seriously reduced the number of university students;
  2. The inducements for single women to undertake war work have aggravated the problem;
  3. The counter attraction of good wages has pulled into the industry a considerable number of excellent pupils who ordinarily would have started on a university course ;
  4. The financial position of many families has become worse because of war-time conditions;
  5. The decrease of the number of students has created a difficult financial position for the universities.

It was pointed out to the Government that these causes combined to produce a serious gap between the number oftrained students available and the number required. It was emphasized moreover, that this gap was likely to widen, and to continue widening. The Commonwealth Government could not afford to ignore the growing shortage of trained personnel of the classes urgently needed by the services, production departments and other essential activities. Although education has always been a State function, the Commonwealth is the greatest user of trained man-power; it is therefore the responsibility of the Government to see that the numbers are sufficient and the quality the best possible. The Commonwealth is therefore interested in the universities because they are, and are likely to remain, the only training ground for certain essential contributions to our war effort.

Responsibility for the allocation of man-power is another reason why the Commonwealth is interested in universities : obviously it is necessary to strike a balance between the needs of the fighting forces and the present and future needs of the community as a whole. The needs of the post-war years also require that there shall be no shortage of trained personnel. Tremendous problems will have to be solved in that period - problems which will call for the devoted application of the best brains this country possesses. With increasing responsibilities for the immediate post-war years, the Commonwealth must make sure in advance that these brains are available.

Honorable members will thus see that the Government has not been prompted by any spirit of mere bounty-giving. There was unquestionable evidence that numbers of young men and women were failing, for financial reasons, to embark on a degree or diploma course. To assure an adequate number of students of the right type it was necessary to widen the field of selection by removing the financial barrier. It must be remembered, too, that all the universities are in financial difficulties. By guaranteeing the attendance of more students, the Commonwealth Government will make it less difficult for the universities to maintain their essential services.

Action was taken by the Government first in regard to the faculties of medicine, dentistry, engineering, science, veterinary science and agriculture. Loss of students in the first three faculties mentioned was serious. Numbers enlisted; others were attracted by more remunerative work; and others dropped their studies because of lack of means to continue them. It soon became clear that only financial aid would make it possible to obtain the necessary number of doctors, dentists, physicists and other specialists required. Accordingly, the Commonwealth Government decided, in addition to modifying in some degree the system of reservation and selection of students, to make a measure of financial assistance available.

The amount of assistance will vary. It will take the form of payment for all tuition and other necessary university fees, together with a living allowance proportionate .to means. The Government does not propose to assist where it is clear that a student can meet the whole cost without hardship to his family. On the other hand, the assistance will be sufficient to open for selection the whole field; of those who matriculate, rich and poor alike. In the case of a student living with his parents, the maximum living allowance will be £104 a year; in the case of a student not residing with his parents, the living allowance can be increased up to £143 a year.

In assessing the means of students, there will be no prying into personal affairs. Cabinet has directed that inquiries shall he limited to ascertaining the amount of family income and the number of dependent children in the family.

To administer the regulations, a Universities Commission has been appointed. It. will consist of four members, under the chairmanship of Professor R. C. Mills, of the University of Sydney. The other members are the honorable member for Maranoa (Mr. Baker) ; Mr. J. R. Darling, headmaster of Geelong Grammar School ; and Mr. Lloyd Ross, secretary of the New South Wales Branch of the Australian Railways Union and a distinguished graduate of more than one university. The Government is fortunate to have been able to persuade .these men to act on this very important commission.

In providing financial assistance for university students as indicated, the Commonwealth Government has been moved by good solid utilitarian reasons, directly concerned with the war effort. Other countries, including England, the United States of America, Canada and Germany have found it necessary, under the stress of war, to make radical departures in educational policy; but such decisions obviously have profound social implications. Once we have introduced the principle that university education in any course shall be open to the ablest students, however small their financial resources, we have taken, a long step forward. Personally, I hope that Australia will never go back on that principle, that we are big enough to regard this necessary wartime measure as a first instalment of a better order, and that it will be the forerunner of a scheme which wall ensure that every deserving student shall get his or her chance for higher education, even though .the parents’ means are slender. I am convinced that it is only by the adoption of such a plan that our nation can be assured of the service of those gifted with the best brains.

page 891

QUESTION

PRICE OF FIREWOOD

Mr GUY:
WILMOT, TASMANIA

– I ask the Minister representing the Minister for Trade and Customs whether it is a fact that the price of firewood in Tasmania was fixed by the Prices Commissioner after consultation with and at the request of the Tasmanian Forestry Department?

Mr BEASLEY:
ALP

– I do not know whether the Forestry Department was consulted, but it would be safe to assume that the Prices Commissioner would be responsible for the decision. I shall ascertain, for the honorable member the basis upon which the Prices Commissioner made his computation and the people with whom he discussed the matter.

page 891

QUESTION

INTERMENT OF JAPANESE

Mr FRANCIS:

– Is the Minister for the Army yet able to furnish a reply to the question I asked him last week about the burial of Japanese in the Australian Imperial Force portion of the Brisbane cemetery? Is it a fact that since the publication of the Minister’s denial that Japanese are being buried in that portion of the cemetery another Japanese has been interred within 20-ft of the graves of Australian soldiers?

Mr FORDE:
ALP

– I signed a reply to the honorable gentleman. It should be in hia mail this morning.

Mr Francis:

– I asked the question in this House and I ought to be answered here. I have not yet received a reply from the Minister.

page 891

QUESTION

CORNSACKS

Mr SCULLY:
Minister foi Commerce and Agriculture · Gwydir · ALP

– by leave - The honorable member for Grey (Mr. Badman) on Tuesday asked whether there was any foundation for the report that the Australian Wheat Board had approached the Jute Advisory Committee with the object of taking over the importation and distribution of cornsacks for wheat and barley. He further asked whether this was not contrary to the decision made by another government at the inception of the Jute Advisory Committee that cornsacks should be imported and distributed through the usual trade channels.

I have since ascertained that it is true that the Wheat Board is contemplating taking over duties formerly carried out by “the licensed importers and distributors of cornsacks. Licensed importers of cornsacks have been paid a commission of 1-Jd. a dozen in addition to other costs, for establishing credits overseas for the board’s purchases, and for arranging the clearance of sacks through the customs. The Australian Wheat Board provides all storage space for the imports. The duties are such that they could be readily undertaken by the board without any increase of its staff, and a saving of £30,000 per annum would thereby be effected on behalf of producers.

The position in regard to licensed distributors is much the same. Arrangements entered into with the licensed distributors by earlier governments provided for the payment of a remuneration of 4½d. a dozen on all sacks distributed. Of this, country agents receive a maximum payment of 2d. a dozen. The board believes that the continuation of the practice of appointing licensed receivers is unnecessary and that country agents should work under the direct control of the board. If this were done it would involve only a slight increase of staff and distribution costs would be reduced by 2½d. a dozen. The annual saving would amount to approximately £20,000.

I do not agree with the honorable member for Grey that this in any way violates a decision made by a previous government. The Government to which he refers made a decision, which, in effect, safeguarded the interests of jute merchants. It is competent for this Government to rescind, amend or vary that decision in any way. For all practical purposes the matter resolves itself into a question of whether the board is to continue to impose a levy of £50,000 a year on the users of cornsacks, who are in the main wheat and barley growers, in order to maintain certain merchant interests, or whether it should undertake the work itself and abolish the levy. Believing that it is unjust that producers of wheat and barley should be levied for the purposes stated, I have informed the Australian Wheat Board that its proposals to undertake the importation and distribution of cornsacks have my full support.

page 892

QUESTION

RATIONALIZATION OF INSURANCE BUSINESS

Sir FREDERICK STEWART:

– I ask the Minister for War Organization of Industry whether it is a fact, as reported, that plans for the rationalization of the insurance business are in contemplation? If so, do such plans contemplate the discontinuance of present methods of collecting industrial insurance premiums? Will the Minister furnish the House with a statement setting out the number of men ordinarily engaged in the insurance business who have already been drawn into the armed services ?

Mr DEDMAN:
ALP

– It is a fact that discussions are taking place with the representatives of insurance companies with a view to the rationalization of the business in order that a greater amount of man-power may be transferred to the war effort. I am not certain how far discussions have advanced. I shall have inquiries made and advise the honorable member further.

page 892

QUESTION

TOBACCO FOR TROOPS

Remission of Duty

Dr PRICE:
BOOTHBY, SOUTH AUSTRALIA · UAP

– Has the Prime Minis ter seen the statement of Mr. Cyril Docker, honorary administrator of the New South Wales section of the Australian Comforts Fund, that the Government’s contention in relation to excise on cigarettes and tobacco for the troops obscures the issue because the only two bodies recognized by the Government as being responsible for the well-being of men and women on active service are the Australian Comforts Fund and the Red Cross ?

Mr SPEAKER:

– Order ! The honorable gentleman is not entitled to express the opinions of himself or any other person in asking a question.

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– I ask the Prime Minister whether it is a fact that the Department of Trade and Customs is insisting upon the payment of £20,900 excise on a consignment of tobacco and cigarettes which the Australian Comforts Fund is arranging to send to troops who are resting after their Papuan campaign? Is it a further fact that for the three months ended December, the Australian Comforts Fund supplied to men at northern Australian ‘battle stations tobacco and cigarettes which cost £155,000, of which £115,000 was duty? Is it a further fact, as stated by the honorary organizer of the New South Wales section of the Australian Comforts Fund, Mr. Cyril Docker, that the Prime Minister stated that no good purpose would be served by his receiving a deputation from the Comforts Fund executive? In view of the fact that allied troops receive tobacco and cigarettes free of duty, will the Prime Minister give immediate consideration to the removal of the heavy duty upon which the Department of Trade and Customs is insisting?

Mr CURTIN:
ALP

– The honorable member for Richmond has stolen the thunder of the honorable member for Boothby.

Sir Frederick Stewart:

– But it is thunder !

Mr CURTIN:

– I agree. The law upon this matter is the work of this Parliament and accords with customs policy and administration since the commencement of the war.

Mr Anthony:

– It could be altered.

Mr CURTIN:

– Any alteration must be made as a result of the decision of this Parliament.

Mr Anthony:

– It could he altered by regulation.

Mr CURTIN:

– Parliament must make the requisite provision for carrying on the services of the country. The suggestion is that tobacco and cigarettes sold to the troops should be exempted from excise duty. But all the troops do not smoke. Some of them prefer to drink beer. Is it suggested that excise should be removed from beer? Again, all the troops do not smoke or drink. Some of them prefer to have sweets; but sweets are subject to sales tax. Soldiers’ dependants have to wear clothes and boots. Is it suggested that the dependants should be relieved of the liability to pay taxes on their essential requirements?

Mr Spender:

– That is an absurd statement.

Mr CURTIN:

– What the honorable member for Warringah says is absurd now is a policy which the previous Government enforced.

Mr SPEAKER:

-Order! Honorable members, in asking questions, are not permuted, to introduce argument and in addition, the rules of debate forbid Ministers to introduce argument when replying to questions.

Mr Anthony:

– Will the Prime Minister receive a deputation from the Australian Comforts Fund for the purpose of discussing the matter?

Mr CURTIN:

– I have intimated that in view of the repeated decisions of the Government, I do not see that any good purpose would be served by a deputation waiting on me. But if the honorable member considers that conversations between the deputation and myself would enable the full facts to be presented to the Australian public and, in addition, that the deputation would perceive the consequences of their request in relation to the whole of the requirements of the forces) I am willing to discuss the matter with them. I have been amazed at the way in which honorable gentlemen opposite now consider as a matter of profound simplicity that which, as. Ministers, they regarded as possessing insuperable complications.

page 893

QUESTION

SHIPPING PRIORITIES

Mr MARWICK:
SWAN, WESTERN AUSTRALIA

– Has the attention of the Minister for Supply and Shipping been directed to the fact that substantial quantities of bottled beer were landed in Western Australia, although consignments of wearing apparel and foodstuffs were left on the wharf at Port Adelaide ? Will the Minister take immediate action to ensure that transport is made available to convey those essential goods to Western Australia?

Mr BEASLEY:
ALP

– Whilst the facts supplied by the honorable member may be correct, I am unable to investigate a general statement.

Mr Marwick:

– Has the Minister received such information from his department?

Mr BEASLEY:

– I have not received the information and consequently I ask the honorable member to submit the facts to me. I should like to know the name of the ship which delivered the bottled beer to Western Australian ports ; the day on which the goods left Port Adelaide; the names of the consignees ; the names of the ships which left Port Adelaide subsequently ; and the period during which the wearing apparel and foodstuffs lay on the wharf. Unless I have that information, it is most difficult for me to ascertain the full facts. From time to time, I have read in the press of similar occurrences, but when I asked the editors to supply me with the facts, they were unable to do so. I wish to do the right thing in these matters, but I must have the assistance of honorable members.

Mr Marwick:

– Will the Minister call for a full report from Mr. Fernie, who represents the Department of Supply and Shipping in Western Australia?

Mr BEASLEY:

– Yes. But I consider that my decision should not be based entirely upon departmental reports, because they might not contain the complete facts.

page 893

WOOL APPRAISEMENT CENTRES

Mr. LANGTRY. Is it the intention of the Minister for Commerce and Agriculture to carry on the good, work of decentralization that he has started by erecting additional wool appraisement centres in country districts?

Mr SCULLY:
ALP

– The Government desires to encourage decentralization as far as possible, and the honorable member may rest assured that the claims of country centres, even for the erection of wool appraisement centres, will not be overlooked.

page 894

LOAN BILL 1943

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

Bill presented by Mr. Chifley, and read a first time.

Second Reading

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– I move-

That the bill be now read a second time.

This bill seeks authority for the borrowing of £100,000,000 for the purposes of war expenditure in the current financial year; also an appropriation of a similar amount to finance war expenditure from loan funds. In my financial statement to the House last week, I referred to the increased expenditure this year, which is estimated at £540,000,000, of which it is proposed to finance £390,000,000 from loan money. War expenditure out of loan funds for the first six months of this financial year totalled £206,000,000. The balance of the loan appropriation at the beginning of the financial year was £86,000,000. Further appropriation of £200,000,000 was obtained in October last, making a total of £286,000,000. It is expected that the bill will provide sufficient funds for the purpose of covering loan expenditure to the end of the current financial year.

Debate (on motion by Mr. Fadden) adjourned.

page 894

INCOME TAX ASSESSMENT BILL 1943

Second Reading

Debate resumed from the 11th February (vide page 560), on motion by Mr. Chifley -

That the bill be now read a second time.

Mr SPOONER:
Robertson

.- The Leader of the Opposition (Mr. Fadden) will speak upon this bill next week, and, until he does so, I shall reserve my attitude towards the second reading, or any amendments that he may foreshadow. Speaking generally, the bill does not lend itself to the assistance that can usually be given by the all-party taxation committee. The essence of the measure is an increase of the rates of tax, and the alteration of the methods of assessing and collecting it. In addition, there are some minor machinery amendments. The principal featuresof the bill are matters of policy, which only the Government can determine for itself in the light of. its financial circumstances. I am confident, however, that, in committee, Opposition members of the allparty committee will co-operate with the Government in effecting amendments of a machinery nature.

The main objects of the bill should have the general support of all honorable members. The objects are -

  1. To provide more money to finance war expenditure;
  2. To provide finance that will lessen the Government’s demands upon treasury-bill accommodation and, to that degree, lessen the risks of inflation; and
  3. To spread the burden of taxation over groups of income earners who have not previously been taxed in proper proportion to war costs.

Unfortunately, however, although the bill has these worthy objects it makes a very poor approach to them. I shall recite what I believe to be the weaknesses of the bill. They are-

  1. It is harnessed to a national welfare scheme that obviously is introduced at this stage only to obscure the necessity to impose more taxation upon the lower groups of income.
  2. It fails to adopt the “ payasyougo “ principle whereby taxation may be assessed and collected each year upon the incomes of that same year instead of on the incomes of a past year.
  3. It seeks, for the first time in the history of Australian taxation, to collect instalments from taxpayers in advance of the year of tax.
  4. It fails to give taxpayers, particularly in the lower income groups, the benefit of post-war credits such as were outlined in the Fadden budget of 1941.
  5. It increases the already unfair incidence of income tax upon private companies in comparison with public companies.
  6. It removes the right of taxpayers to claim refunds of overpayments, after the year 1942-43, upon instalments that have exceeded the taxpayers’ liability and creates distinction in that respect between different groups of taxpayers.
  7. It introduces more complications into an already involved system of taxation when the opportunity existed to simplify it.

I shall make some general observations on the bill and then deal seriatim with the several weaknesses that I have indicated. The Treasurer (Mr. Chifley) estimates that the increased rates of tax imposed by the bill will yield £40,000,000 in a full year, and that instalments at the new rates, commencing on the 1st April, 1943, will bring in £8,000,000 by the 30th June next. I do not propose to deal at the moment with the general financial position, because that can be done in due course in the debate upon the Treasurer’s financial statement. It is sufficient to say now, in emphasizing the need for additional taxation, that even allowing for this extra revenue the Treasurer estimates that the deficiency for 1942-43 will be £390,000,000. Of this amount probably £200,000,000 will need to be raised by treasury bill short-dated accommodation through the Central Bank. If the Government had faced up, in October, 1941, to the financial position, and had adopted the financial proposals of the Fadden budget of September, 1941, it would not be in the financial difficulties that now confront it.

But the Government is obliged now to accept the foundations of the Fadden proposals of September, 1941, and unfortunately it is doing so in a manner that is calculated to mislead taxpayers, and, in certain respects, is unfair to them.

I return now to the weaknesses that I have already enumerated’, and will discuss first the foreshadowed National Welfare Fund. The Government proposes to increase the annual assessments of income tax on individuals to an amount of £110,000,000. This amount is nearly four and a half times greater than the combined Commonwealth and State collections from individuals in the last pre-war year, inclusive of the unemployment, development and emergency taxes imposed by the States for that year.

These are huge taxes, but the House appreciates that there is a huge need for more money; so there was no need for the Government to adopt any subterfuges in its statement of the purpose for which this money is required.

The Treasurer, in his financial statement, said -

The Government proposes to finance the national welfare scheme by taxation. The most equitable way in which this can be done is by increasing the income tax on individuals. Further taxation is also required for the additional repatriation and other benefits that have been proposed.

Increases in uniform income tax on individuals are now proposed which are estimated to produce £40.000,000 in a full year. This sum will provide for the contribution to the national welfare fund and the increased repatriation and increased pensions benefits and will also provide some further contributions for war purposes.

That final observation is mentioned as quite a minor matter. I shall amend the Treasurer’s statement in the light of the figures he has supplied and say that the additional £40,000,000 per annum is estimated to provide £35,715,000 for war finance and £4,285,000 per annum for a range of benefits and allowances described in detail in the financial statement as follows : -

It is clear, therefore, that 89 per cent, of the total additional money is needed for war purposes. I cannot understand why the Government should not say so. “Why refer to it, incidentally, as “ some further contributions for war purposes “ ? Clearly an attempt is being made to induce the public to believe that £30,000,000 of the money is for a national welfare scheme which is to reach its fulfilment after the war.

The Treasurer also said in his financial statement -

In the early stages the fund will build up some credit balances which will be used later when the welfare scheme reaches full operation. For instance, in the first year a substantial credit may accrue. These balances will not be allowed to remain idle but will be invested and will thus provide a useful source of temporary finance for war purposes which will be replaced by long-term borrowings when the moneys, are required later for welfare purposes.

In reply to that statement I say that if we can borrow on long terms after the war for a welfare fund there is no need to impose taxation for that purpose to-day. So let us be frank and say that about £4,250,000 of the proceeds of this new taxation is required for some social benefits and the whole of the balance is required for war finance. Let no one who pays these increased taxes imagine that it is necessary that they should be imposed now in order that a welfare fund may be established for the post-war period. The two things have no connexion with each other, other than a possible book entry.

I come now to a consideration of the taxation of current earnings. The bill continues and intensifies the present complications by which taxpayers pay instalments during a year of tax upon an income that was earned during an earlier year, but the Treasurer proposes that the instalments shall commence four months earlier than has been the practice in the past. On this point, the honorable gentleman said in his second-reading speech -

The first assessment at the new rates will be made in the financial year 1943-44 on incomes earned in .1042-43.

But he then said that a system of continuous instalment deductions in respect of salaries, wages, &c, would commence on the 1st April, 1943, and that these

Mr. Spooner. would conform to the tax rates for the next year. It would appear that this unusual procedure has been adopted in order that the Government may technically observe the declaration made by the Prime Minister (Mr. Curtin) last year, that there would be no increase of taxes on incomes derived in 1941-42. The Government did not desire to admit that the extra instalments payable in the last three months of 1942-43 were in respect of the income year 1941-42. Therefore, so that the Government, may appear not to breach this undertaking, we are to have the unusual procedure of new instalments at the 1st April, 194)3, based upon the income year 1942-43 upon which tax is not paid normally until 1943-44. Consequently, when taxpayers commence to meet their instalments on the 1st April, 1943, they will derive considerable satisfaction - assuming, of course, that they have a sense of humour - because they will pay income tax for three months in advance instead of nine months in arrear. The Government will say, ‘“We have honoured our promise “ ; and the taxpayers will say, “ We do not understand “. Notwithstanding this rather astute adjustment of dates, the commencement of instalments on the 1st April, 1943, cannot be regarded as other than an expedient to comply technically with the undertaking given by the Prime Minister. The new instalments are to be based on the year 1942-413 instead, of on the year 1941-42. I want honorable members to note this carefully, and to be very clear as to the position that will arise because of the change that has been made for the purpose of honouring the Prime Minister’s undertaking. If, during 1942-43, a taxpayer earns £2,000 a year in a business or profession, he will not pay the additional tax upon that income until some time subsequent to February, 1944, when he receives his assessment. But, if he earns £200 a year by way of salary or wages, he will commence to pay the additional instalments on the 1st April, 1943, nearly twelve months earlier than the man who earns an income ten times greater from a business or profession. The reason for that, of course, is that the taxpayer who earns £2,000 a year from a business or profession will be assessed upon his return of income up to the 30th June, 1943, and will receive his assessment in due course ; whereas the other taxpayer will commence his instalments in advance, on the 1st April, 1943. If we accept as correct the Treasurer’s last official statement - I am referring to the statement that he made in reply to questions that I asked in this House recently; in my opinion, either he has been misinformed or he has not a clear conception of the position - that the instalments paid by taxpayers from the 1st August, 1942, onward have been in respect of income earned during 1941-42, then the new arrangements in respect of the instalments that are to commence on the 1st April, 194’3, are calculated to cause the taxpayer to believe that he is not paying additional tax in respect of income earned during the year 1941-42. Here is confusion worse confounded. The way out of the tangle is for the Government to put beyond doubt, by legislation, that the instalments from the 1st July, 1943, will meet the tax liability of the income-earner upon what he derived in 1943-44. Had the Government adopted the system “ pay as you go “, all this confusion as to whether the taxpayer is paying for the year behind or a year ahead would cease immediately. What is, perhaps, even more important, the taxpayer would pay instalments on the income he earned in that year instead of in another year, when it might have been very different. In these days of high rates of tax on high incomes, and on the low incomes too - because the bill introduces rates of tax that will be a heavy responsibility on people of moderate and low incomes; I do not disagree with that, but believe it to be correct, and consider that it should be cheerfully accepted by all sections of the community - the Government owes it to the taxpayer to remove these anomalies. He should not be under the responsibility of carrying tax on a year of income when actually, according to a certain interpretation of the law, he does not owe it. The doubt which surrounds the matter should be dissipated. The uniform system of taxation having been established throughout Australia, it has become possible, for the first time in our history, to adopt the principle of “ pay as you go “ and to remove the injustice to taxpayers that their payments are always a year behind the year of income. I say that it is now possible for the first time because, while there were seven major and many subsidiary income taxes in Australia, no one except a sheer optimist would imagine that it was possible to induce seven governments so to amend their legislation as to bring the law into exact conformity, with a view to the adoption of the principle; but as this Parliament now has control of the whole of the income tax machinery of Australia, there is nothing to prevent that from being done.

Mr PERKINS:
EDEN-MONARO, NEW SOUTH WALES

– Has the principle been adopted abroad?

Mr SPOONER:

– In America, in part. I should not complain if this Government would adopt it to that extent; because that is the first step, and the other step would follow later. I am speaking, at the moment, of the opportunity that is presented to the Government to adopt the system of “ pay as you go “, and thus to remove from taxpayers the injustice that their payments are always .a year behind the year of income. I want to make clear that two separate issues are involved. One is the alleged lag period. In my opinion, that does not exist; it is a myth. I have reason to suspect that the Treasurer has unofficially come to that conclusion, although he is not yet prepared to make an official statement.

Mr Jolly:

– It is not a myth when one receives one’s assessment.

Mr SPOONER:

– It is not a myth when one dies and watches it from the other side of the grave; it is then a stern reality.

Mr Chifley:

– Will the honorable gentleman say how he would propose to meet the case of a man whose income cannot be determined until the end of the year?

Mr SPOONER:

– That would apply to nearly all assessments.

Mr Chifley:

– Including professional men?

Mr SPOONER:

– Yes. The honorable gentleman could continue to use the previous year as the year of notional income, and make an adjustment at the end of it; provided that it is clearly understood, first, that if he is speaking of 1943-44, that would be the year of the income as well as the year of tax. The taxpayer, then, would clearly; he paying in respect of that year.

Mr Coles:

– Does the honorable gentleman consider that there would be a saving of administration?

Mr SPOONER:

– I do not consider that the cost of administration would be either increased or reduced to any extent, because the return has to be received, examined and checked in any case.

Mr Coles:

– Would not the making of adjustments cause an increase?

Mr SPOONER:

– No. The assess-‘ ment has to be issued once a year. The only additional administration of which I am aware would be in the collection of the instalments’; and these are collected to-day from a large body of taxpayers. All those things which would have to be done are done to-day - the return is submitted, examined and checked, and the assessment is issued. It would be a matter of simple bookkeeping to show that a certain amount had been paid on account, and to determine whether there should be a refund or an additional collection.

Mr Paterson:

– What would be the effect in respect of a primary producer who depends on an annual wool or harvest cheque?

Mr SPOONER:

– I have anticipated that. I spoke on this subject over the air in Sydney. I realize that there are not only primary producers but also other taxpayers who receive the- bulk of their incomes once a year, if not in one cheque, at all events at about the one time of the year, from the proceeds of the sales of wool or a harvest. I cannot see why the Commissioner of Taxation should not have the discretion to say that the instalments shall commence at a time fixed by him, to conform with the date on which the taxpayers commence normally to receive their incomes. This need apply only to those taxpayers who are in the plight that I have mentioned ; they would not be a large proportion of the total number.

Mr Perkins:

– Would they represent 10 per cent, of the total number?

Mr SPOONER:

– I do not think so.

Mr Coles:

– Would not the primary producer have to pay his instalments by means of an overdraft while he waits for his cheque?

Mr SPOONER:

– I have said that he would not commence to pay until he had received his cheque. One should not be asked to give, while on one’s feet, technical explanations of how one would apply the machinery of taxation. That is a matter which requires a good deal of thought, and one would be foolish to attempt an explanation offhand. If the Commissioner had the discretion to provide in regard to primary producers whose income came in at certain periods of the year, or other taxpayers similarly circumstanced, that their instalments should not commence until after the receipt of that income, or approximately at that time, the objection that instalments would have to be paid by means of an overdraft would be met. A lot of taxpayers to-day pay their income tax by means of an overdraft.

Mr Paterson:

– And the remainder of them out of capital.

Mr SPOONER:

– Apart from whatever desirability there may be to clear up this doubt that exists in the income tax administration - I believe it to be more in the administration than in the law - an injustice will be done to taxpayers if it be not cleared up; because it surely was not the intention of the original Income Tax Act of 1915 that some years later this position should have evolved. The original act was passed in 1915, and caine into force during the year 1915-16. It has now been in operation foi1 28 years of tax, and according to the administrative interpretation, when the taxpayer has paid his tax for 28 years, he- still owes for another year. Surely that cannot be right. This bill intensifies the difficulty by providing that the taxpayer shall, on the 1st April, 1943, commence to make new instalments three months in advance of the commencement of the 29th year. This anomaly should bt adjusted. This is not the time to discuss the detailed machinery by which it should be done. It would probably take experts some time to evolve a workable scheme, but in broad principle there is no reason why the Government should not immediately take steps to adjust the matter.

The fourth weakness of the bill is that il fails to adopt a system of post-war credits.

Mr Calwell:

– What, again?

Mr SPOONER:

– Yes, again. In one part of the bill the Government indicates that it has moved forward to a point where it mimics the post-war credits plan of the last Government, but it has not officially adopted the plan. Labour supporters will not admit that they were wrong in September, 1941, when they told the Fadden Government that the post-war credits system had nothing to recommend it.

Mr Breen:

– The honorable member is determined to have the post-war credits system introduced. “ Mr. SPOONER. - Yes, and it is coming. It is already well on the way. Because the Government refuses to admit the Fadden scheme of post-war credits v. as the best way to insure some return to the taxpayer on his war-time contributions, and to preserve a balance between war-time and post-war expenditure, it is proposed in this bill to inflict further injustices upon the taxpayer. It is now proposed to demand from the taxpayer with an income of £250 a contribution of £36.7, and he will receive no post-war refund. The Fadden scheme proposed that he should pay a total contribution of £33.3.

Mr Breen:

– And that he should pay himself back after the war!

Mr SPOONER:

– Under the Fadden scheme he would be asked to make a Colltribution of £33.3, of which he would receive back after the war £9.5 if he lived h< Queensland, or £22.7 if he lived in Victoria. At that time, it will be remembered, the State governments were still in the income tax field, and the rc-funds to taxpayers were calculated according to the levels of taxation in the various States. For the purpose of comparison, I propose to take the refund as u would apply to New South Wales, which was about midway between the highest and the lowest taxed States. The post-war refund to the New South Wales taxpayer on £250 a year would be £16.

Mr Lazzarini:

– It might be.

Mr Chifley:

– The last Government did not say when the money would be paid back.

Mr SPOONER:

– True, but the bill to implement the scheme had not been brought in.

Mr Chifley:

– The honorable member, v;hen speaking the other night, admitted that the contributions under the compulsory loan system would have had to be increased as the war progressed.

Mr SPOONER:

– I recognize that. Under the present scheme, the taxpayer will have to pay more, and he will receive nothing back after the war. A man on £500 a year would have contributed £95.1 under the Fadden scheme, and would receive back £23 after the war, but under the present scheme such a man will pay £136.7, and will get nothing back. The juan on £1,000 a year would have been asked to pay £282.9 under the Fadden scheme, and he would receive a post-war refund of £4S. Now he will be required to pay £355.4, and will get nothing back. I agree that increased war expenditure since 1941 justifies the Government in asking for higher national contributions tc-day, and if the Fadden Government had continued in office, I have no doubt that before now it would have been obliged to ask Parliament to agree to the levying of higher contributions than those proposed in September, 1941. However, although the taxpayer would have had to make larger contributions even under the Fadden scheme, there would have been provision for refunding to him some part of his contributions after the war. All the present Government promises to the taxpayer is that he may eventually become a beneficiary under a nebulous national welfare scheme of which no details are known, and for which money will have to be borrowed after the war. The taxpayers are being asked to buy a pig in a poke. They should have been told plainly that money is urgently required now for the war effort, but that some of it, at any rate, will be refunded to them after the war.

Just as the Government’s new taxation proposals are unfair to the small individual taxpayer, so they are unfair to the small private company, whilst the large company is let off. It might appear on the face of the bill that no increased taxation upon companies is contemplated, but that is not so. Unfortunately,, the private companies are to suffer in the comparison with public companies, because the private companies are taxed upon their undistributed profits at the same rate as is paid by their shareholders. As the income tax paid by those shareholders is to be increased, the private companies will have to pay substantially increased income tax. I should not mind this were it not for the unfortunate position in which many private companies are placed whereby they already pay considerably more tax than public companies on the same profit. Under the present bill, public companies will not pay any increased tax. Their shareholders, of course, will pay more tax upon that portion of the profits which is distributed in dividends. But so, also, will the shareholders of private companies. The Government owes it to private companies to remove the disabilities under which many of them operate to-day in being unable, because of the rate of taxation upon undistributed, profits, to make proper reserves against the inevitable depreciation of the trading assets in the post-war period.

Recently there has come into controversy, induced by the high rates of taxation, what is known as the “ lag “ year in taxation. It is clear that taxpayers in a year of tax, say, 1942-43, meet assessments based for the purpose of convenience upon the taxpayer’s income in what the act describes as the year of income - in this illustration the previous year, 1941- 42. But when the taxpayer meets his assessment in 1942-43, has he discharged all his liabilities for income tax up to the 30th June, 1943, or does he still owe accrued tax for another year? I have endeavoured to obtain from the Treasurer an official statement upon this matter, so far without success. He has promised to refer the point to the Crown Law authorities. In the meanwhile, very confident unofficial statements appear in the press to the effect that the Government is satisfied that there is no “lag” year at all, and that the payments during 1942- 43 meet the tax liability for that year, although they are based upon the income of the previous year. But the Treasurer so far will not admit it. This confused position should not continue for a week longer. If there is any doubt concerning the legal position it should be cleared up by an amending clause.

This bill proceeds upon the assumption that there is a “lag” year, for it is proposed to withhold at the 31s.t March, 1944, the refunds that taxpayers who have overpaid their assessments for 1943-44 should receive, to the extent that they are necessary to meet the following year’s assessment. The Government proposes to issue a certificate of credit to taxpayers for excess instalments so held and to pay interest at 2 per cent, thereon. I should like the Minister assisting the Treasurer (Mr. Lazzarini) to listen to this, for the Government is getting close to a post-war credits system. Ministers should have something to say on this matter. I regard this method as clumsy for the Government and irritating for the taxpayer. Why not adopt a proper scheme of post-war credits and stop these roundabout methods? The Government’s proposal will introduce another crop of anomalies. The taxpayer who meets his taxation by precise assessment based upon actual income will have no right to refund and will not be contributing in advance to the instalments of another year of income. But another taxpayer who, in meeting his tax by instalments, overpays his tax for that year, may not receive any refund, but the surplus may be credited against his tax for the following year. Honorable members see how this bill through and through operates against the small taxpayer. My heavens, if the Fadden Government had introduced a bill like this, how it would have been attacked by the then Opposition ! If you are a large taxpayer, say, the owner of a business, you will make your return, get your assessment, and pay the proper tax; but, if you are a small, struggling wage-earner and pay your tax by instalments, and make an over-payment, the Government will say, “ We will give you a certificate in return for that and pay you 2 per cent, interest on the money we retain, but the money will be returned to you in the sweet by and by “.

Mr Chifley:

– The instalment plan applies to the highest salaries in the land. ‘

Mr Jolly:

– But not to the income of companies.

Mr Chifley:

– No. hut it applies to the highest salaries.

Mr SPOONER:

– It also applies to the smallest salaries.

Mr Chifley:

– Exactly.

Mr SPOONER:

– And the Treasurer will admit that most of the salaries in this country are small salaries. Suppose a taxpayer holding a certificate of credit for some amount overpaid at the 31st March, 1944, also pays instalments for the next three months and dies towards the end of June, 1944. Will the Commissioner pay over to his executors the amount of the certificate of credit and refund the instalments paid between April and June? Or will these be held against an accrued tax liability for 1943-44? I ask the Treasurer to say in his reply what is the effect of section 217, which provides that tax should be paid on the whole of the income derived by the deceased person up to the date of his death. Clearly, the deceased has not paid on the income up to date of his death, because the assessments he has paid are based upon his income in the previous year 1942-43. Yet, if his estate is assessed for the last year, the deceased may have paid tax for more years than there have been years of income since the Federal Income Tax Act commenced. I ask the Government to clear up these doubts. This is the first real opportunity Australia has had to remove ail” doubts about the “lag” period., for the. overlapping of Federal and State taxes made that course impossible before. The adoption of any scheme of “ pay-as-you-go “ taxation and the removal of the “lag” period needs time for consideration, and I do not ask the Treasurer now to agree to any particular plan ; but I do ask him to make, when he replies to this debate, some pronouncement of policy and to say, broadly, what the Government believes the position to be. The country expects some pronouncement on this matter, and, unless the Government takes the position in hand quickly, the issue will be settled in the courts.

In the urgent circumstances of finance to-day, I do not object to the spreading of instalments over 52 weeks instead of about 40 as at present. Now that the taxpayers will have to pay more, spreading the payments over a longer period will help them. That is a wise course, provided the instalments are collected in the proper period. It is also proposed to spread the concessional deductions and allowances for dependants over the new period for instalments. Here, again, it seems to me that the Government has not given thought to the position that will arise with the commencement of the payment of instalments on the 1st April, because most taxpayers will not know until the 30th June, 1943, what claims they will have for concessional deductions in respect of the year 1942-43. Yet their instalments will have commenced on the 1st, April. Therefore, some time after the 30th June they will need to apply to the Commissioner of Taxation for a revision of their claims for concessional deductions. Tens of thousands of taxpayers will have to make application for revision of the basis of their assessment, but some thousands of taxpayers will not know what to do and will make no such application. The result will be that they will not get their full deductions from their instalments up to the 31st March, 1944. [Extension of time granted.] Their over-payments will be credited to them and interest thereon paid by the Government at the rate of 2 per cent. These complications are quite unnecessary. I hope that we shall eventually have in this Commonwealth a Treasurer who will simplify the income tax system.

This is a bad piece of legislation, and in normal times it should not be passed by this House. The only reason why it will be passed now is the overriding need of the Government for another £40,000,000 of revenue for the conduct of the war. The Government has used the subterfuge that it requires the money for social service purposes, but that does not impress honorable members, who know that it needs this £40,000,000 in order to fight this war, and that the money will be used for that purpose. Ever since I entered this Parliament in 1940, the attitude of Parliament has been that whatever money the Government requires for war purposes it, shall have. But for that principle, the House would be justified in rejecting this bill, which, I repeat, is a bad .piece of legislation. It is a plain acknowledgment of bad finance during the last sixteen months. It tries to make amends by imitating the foundations of the Fadden budget of September, 1941, but from the foundations it branches off in wrong directions. The Government has endeavoured to PUll a cloak, labelled “national welfare scheme”, over the fact that the bill taxes lower incomes. When the cloak is removed after the war the taxpayers will find that none of the money claimed to have been raised for social service purposes is left, because all the money raised during the war will have been spent on the conduct of the war, as it should be.

I invite the Government to withdraw the bill; and I make this suggestion with the fullest appreciation of the needs of war finance. Let us examine the facts. To the 30th June, 1943, the bill will produce an additional £8,000,000 towards war commitments which, according to the Treasurer, will amount to £540,000,000. during the current financial year. No matter how serious the financial position may be, this relatively small amount cannot make or break the Government’s arrangements. For such a comparatively small sum, the Government will introduce injustices and complications that will further embarrass the people who are carrying the heavy burden of this war. I do not ask the Treasurer to withdraw the bill, without recognizing the need for a substitute. Another measure must be introduced to ensure that these rates of tax shall come into operation at some point; and a suitable date would be the 1st July, 1943.

I ask the Treasurer to examine a new scheme that will adopt the following principles : - First, the continuance of the instalments now in existence to the end of 1942- 43, or for so long as they are necessary to complete the payment of assessments for that year. Secondly, the new instalment plan to commence from the 1st July, 1943, making it clear that the instalments for the year then following will pay the tax liability for 1943-44 and be based upon the income for that year. Thirdly, a portion of the income tax for 1943- 44 to be converted into a post-war credits scheme. Fourthly, the instalment system to be applied from the 1st July, 1943, to incomes of businesses, professions and companies. That plan ‘requires detailed investigation, but I am confident that its adoption will enable the Government to make up in 1943-44 more than the sum of £8,000,000 which it needs between April and June of this year.

Mr JOLLY:
Lilley

.- The House is indebted to the honorable member for Robertson (Mr. Spooner) for the wealth of information that he has submitted on this bill. Taxation now plays such an important part in the economic structure of the nation that it is the duty of this Parliament to give serious consideration to any new proposals. This bill introduces radical departures from the recognized principles of income taxation and, therefore, it behoves this chamber to devote more than passing attention to some of the important features.

Before addressing myself to the bill, I take this opportunity to repeat what I said on another occasion, namely, that the time has arrived for Parliament to revise the whole of our taxation methods. The present system was largely designed to meet the system of dual taxation by Commonwealth and State governments. Several acts are in operation, and they should be consolidated so that any one who desires to refer to them shall be able to obtain the information without difficulty or delay. The position is so complex that not only the public but also honorable members and the Government experience difficulty at times in determining the exact position, and a good deal of time and effort is wasted by officials of the Taxation Department and the public in endeavouring to observe the law.

As evidence of the enormous amount of unnecessary work which has to be performed at present, I refer to the taxing of undistributed profits of private companies. The taxation authorities have to refer to the returns of the individual shareholders of private companies for the purpose of ascertaining the rate of tax that they pay on the incomes, in order to arrive at the rate of tax to be charged to the private company on its undistributed profits. Private companies are in a .different position from public companies because they are liable for tax on the whole of their undistributed profits. The tax is levied at the rate which the various shareholders would have paid if they had received the whole of the profits by way of dividends. That is a wasteful and extravagant means of calculating tax, because the amount of work involved in obtaining the information must be enormous. Under the present system, it is impossible for a private company to check the assessment issued to itby the Taxation Department because it has no access to the returns of the individual taxpayers.

While dealing with private companies, I should like to support the remarks of the honorable member for Robertson. I have previously drawn attention to the very unfair position in which private companies are placed under existing income tax legislation. A private company is called upon to pay, first, the flat rate of company tax, namely, 6s. in the £1, and, secondly, on the undistributed profits, the rate which the shareholders would have paid if they had received the whole of the profits by way of dividends. It. frequently happens that shareholders are taxed at the maximum rate of18s. in the £1 - under this bill the maximum will be increased to18s. 6d. in the £1, and the company is called upon to pay the tax at that rate in addition to the flat rate of company tax, namely, 6s. in the £1. Under those conditions it is impossible for a private company to build up reserves. One of the results of this principle will be that many private companies will be forced out of business.

Private companies, in respect of their liability to pay the tax on undistributed profits, should be regarded as being similar to a partnership. For taxation purposes, it is only fair that private companies should be placed definitely upon that basis. They should be taxed as a partnership, and should be relieved of the obligation to pay company tax.

I also direct attention to the practice of compelling taxpayers who derive income from more than one State to forward their returns to the head office of the Taxation Department in Melbourne. Under the dual system of taxation, there was some justification for that policy; but since the introduction of the uniform income tax, it is only fair that taxpayers of this class should be permitted to lodge their returns in the State from which they derive the bulk of their income. It will be most inconvenient to taxpayers in Brisbane, Sydney, Adelaide, Perth and Hobart to go to Melbourne when they wish to interview the department regarding their affairs. I appeal to the Treasurer (Mr. Chifley) to give earnest consideration to this matter. I do not suggest that large companies whose operations extend throughout the Commonwealth should be relieved of the obligation to submit their returns to the central office. In making my suggestion, I have in mind companies Whose total profits may amount to £35,000, but who, because they receive an income of £500 from another State, are compelled to submit their returns to the head office. That is unreasonable and unnecessary.

The honorable member for Robertson dealt at some length with the new proposal of the Government for the payment of income tax on the instalment plan and in advance. That scheme will operate harshly in many cases. For example, under the present scheme, a man with an income of £6 10s. a week pays a tax instalment of £1 7s. If his income be increased to £611s. a week, his tax instalment will be £111s. Thus an additional 1s. of income in that instance attracts an increase of tax of 4s. a week. The position would not be so bad if the bill proposed to effect an adjustment at the end of the financial year, but payments of tax in excess of the assessed amount will be retained by the department. So far as I am able to ascertain, the bill contains no provision for the repayment of those credits.

Sitting suspended from12.45 to 2.15 p.m.

Mr JOLLY:

– I suggest to the Treasurer that when taxpayers are shown to have made payments, by instalments, in excess of their assessments, the instalments should cease until such excess payments have been absorbed. That would be fair to the taxpayer and it would not affect the department. If a taxpayer has a credit of, say, £5, it should be exhausted before he is called upon to make payments in respect of a new assessment. Unless some such arrangement be made, the present proposals will operate most harshly in many cases.

I wish now to refer to what has been called our taxation “ lag “. A good deal of confusion of mind exists in the community about what is known as the “ year of income “ and the “ taxation year “. When the Commonwealth income tax law was passed originally, in 1915-16, it was decided, for the purpose of convenience, to adopt the income of the taxpayer for the year ended the 30th June, 1915, as the basis of calculation; but it now appears that the Taxation Department regards taxpayers as being liable for tax for the year ended the 30th June, 1915. So long as the Commonwealth income tax remained at a relatively low figure that did not matter very much, but now that the rates are so high it is a serious consideration. Let us look at the position when a taxpayer dies. If the death occurred during the year ended the 30th June, 1942, the taxpayer would have paid tax in respect of that year, but we find that in the next year his executors are again called upon to pay tax on the income for the year ended the 30th June, 1942. I suggest that that was not the intention of the Parliament when the first Commonwealth Income Tax Assessment Act was passed. It was intended that taxpayers should be liable in respect of the financial year 1915-16, but not of another year. The income for the preceding year was taken as a basis of calculation only for convenience.

The instalment provisions of the new rates of tax to be imposed under this bill will not apply to companies or to taxpayers whose income is derived’ from sources other than salary. Companies and taxpayers who derive their income from such other sources will not be called upon to pay these increases during the current year. This surely constitutes a differentiation between taxpayers. Taxpayers in a certain class will be called upon to pay the new rates at once, whereas taxpayers in other classes will not become liable to pay them until after the end of this financial year. In my opinion, that is an injustice.

I am glad that the Government has made provision in the bill for concessional deductions in respect of a daughter of a taxpayer who is a widow or a widower if the daughter is wholly engaged in housekeeping for such taxpayer. I congratulate the Government, also, upon having provided that a concessional allowance shall be permissible in respect of invalid children over the age of 10 years who are wholly maintained by the taxpayer. I have always regarded it as anomalous that whilst, on the one hand, the Taxation Department would not permit such a deduction, on the other hand, the Commissioner of Pensions would not allow a pension to be paid to an invalid child over 16 years of age, irrespective of whether he was or was not maintained by the taxpayer. This amendment improves the position.

I have already drawn the attention of the Treasurer to the unsatisfactory system under which the Prices Commissioner orders refunds of excess profits. A private company which is deemed to have made excess profits of £10,000 in, say, the year ended the 30th June, 1942, will have completed its taxation return and the Commissioner of Taxation will not permit such a return to be reviewed or amended. The company is consequently required to pay tax on the excess profits. A private company which is liable to pay the maximum rate of tax would be called upon to pay a tax of £9,000 of that £10,000. It is true that in the following year the company would be allowed to deduct that amount from its return, but, under the present system, the Treasury, in the final analysis, will have in many cases to carry the greater part of such refunds. I suggest to the Treasurer that it would be more equitable to allow the amount of income tax paid on such excess profits to be set off against the amount to be refunded.

The high rates of tax now imposed under this bill will cause serious embarrassment not only to many people to-day, but also to the nation tomorrow, as the present generation will have no opportunity of saving for the future, and this will add considerably to the cost of social services in the days to come. I therefore suggest, for the serious consideration of the Government, that, at an early date, a complete review be made of our whole system of taxation. As the uniform tax scheme is now in operation, the Government has an opportunity to devise a new and simpler method of collecting taxes which could be freed from many of the anomalies that at present irritate not only the taxpayers, but also the officers of the Taxation Department.

Debate (on motion by Mr. Calwell) adjourned.

page 905

COMMONWEALTH BANK BILL 1943

Second Reading

Debate resumed from the 17th February (vide page 847), on motion by Mr. Chifley -

That the bill be now read a second time.

Mr ABBOTT:
New England

. -I rise to address the House on the proposals brought down by the Government in regard to what is called the establishment of a mortgage bank in Australia. These proposals arise out of the recommendations that were made by the Royal Commission on the Monetary and Banking Systems in its report of August, 1937. The Government of which the Honorable R. G. Casey was Treasurer also brought down a bill to establish a mortgage bank in Australia. When the recommendations were made, the members of the commission, including the present Treasurer (Mr. Chifley) and myself, did not envisage such a prostitution of their recommendations as occurred in connexion with the earlier bill, and the measure that we are now considering. Having seen evidence during the course of our inquiry throughout Australia of the dire need for a mortgage bank, we did not visualize the introduction of such a monstrosity as this.

I draw attention to the difficulty which exists in connexion with the raising of loans on long terms in areas outside the metropolitan districts of Australia. The royal commission reported in paragraph 569 -

Our attention has been directed to the facilities for borrowing for fixed terms upon land and improvements in the cities, towns and country districts. The chief sources for loans of this type are assurance companies, trusted companies, building societies, trustees and private lenders. Loans on real property are made in New South Wales by the Rural Bank, in Victoria by the Savings Bank directly and through the Crédit Foncier Department, and in South Australia by the State Bank and the Savings Bank of South Australia. The Commonwealth Savings Bank has never made a practice of lending on this class of security.

Every honorable member should mark those words, and remember them later when considering the clauses of the bill in detail. The report continued -

In the capitals and the other larger cities there are greater facilities for the borrower who wishes to obtain money for a term of years than are available to the borrower in country towns and rural areas. According to the evidence there is a definite reluctance on the part of many of these institutions to lend money in country areas. The reasons are -

That it is expensive and difficult to supervise the securities in towns and districts far removed from the office of the lender.

That if the borrower fails to meet his obligations, there might be difficulty in realizing on the security.

In these circumstances, many borrowers in country districts requiring fixed-term loans are forced to obtain accommodation on overdraft from the trading banks or pastoral finance companies. While the overdrafts are repayable on demand, they are in many cases granted with the knowledge that they may not be repaid for several years, and that they are in effect long-term loans. The method of financing by overdraft is not generally appropriate to fixed capital purposes or term finance, as the term and the rate are both uncertain. In some circumstances, the fact that the borrower is allowed to pay off his debt in whole or in part, and that interest rates may be easier, is in his favour. But, in other circumstances, the liability of the borrower to have the loan called up, or the rates of interest raised, is, from his point of view, a very serious matter. It may mean that at the very time when he is unable to make other arrangements, he is burdened with heavier interest charges than he anticipated; and he may even be faced with the necessity for realization. In the case of the individual this may be a matter of hardship, but when these cases are sufficiently multiplied, something more than individual hardship is involved. In other words, there is a strain on the whole system.

In the case of the small borrowers other than those resident in large towns, these difficulties are accentuated. The borrowers need the money for some fixed term with the option of repaying portion of the money annually. This is a class of business in which the banks do not engage, apart from the fact that they do not provide loans on fixed terms. Private investors are reluctant to undertake this class of lending, firstly, because they are uncertain of the value of small holdings outside large towns; secondly, because small sums do not appeal to them; and, thirdly, because most private investors dislike repayment by instalments. Therefore, it will generally be found that small loans of this type have to bear a high rate of interest.

The House will realize from that the great necessity to make ample funds available for people in rural areas to borrow on as good conditions as can those who live in the metropolitan areas. I believe that honorable members would not be so narrow as to say that this longterm finance should be strictly limited to agricultural and pastoral properties, or properties solely used for primary production. Although the Country party arose in Australia as a protest against the neglect of country interests by other political parties, it has never been so sectional or narrow as to demand that long-term lending should be reserved for a particular class and should not be available to all classes in country towns and districts for the purpose of enabling them to have housing at least equal to that which is obtainable in the cities and metropolitan areas. This bill is far too narrow in its incidence. It needs to be broadened, and made applicable to many more sections of the community than are envisaged by it.

Mr Holt:

– The honorable member does not contemplate that large sums will be made available for this purpose in war-time.

Mr ABBOTT:

-I do not contemplate that much will be available for anything in war-time. I would not expect a male inf ant, at birth, to be the massive man of action into which he may grow; but I would not emasculate him at birth, so that he would be of no use for valuable service later ; he should be allowed to grow to manhood, and play his part in the development of this Commonwealth. The royal commission recommended that a mortgage bank or banks should be established. Not in any sense does the bill propose to establish a mortgage bank. The intention is to establish a department of the Commonwealth Bank. That institution, with its numerous departments and attachments, is becoming the queerest banking structure which any country has established. It is supposed to be a central reserve bank. It is also a trading bank and a savings bank, and has attached to it a rural credits department. The present proposal is to add to the already large family group by the attachment to it of a mortgage bank department. Both the bill, and the recommendations of the committee which examined it, are unsatisfactory to the primary producers and the dwellers in rural areas. The setting up of a department of the Commonwealth Bank to handle mortgage bank business will mean the handing over of those functions to a body which has always been hostile to the establishment of a mortgage bank. The bill is indicative of the terrible timidity of Treasury officials, who are adverse to launching out on what is new, not old and conservative, in the eyes of the Australian public. The mortgage bank is to be placed completely under the control and direction of the Commonwealth Bank Board, which has never shown itself in the slightest degree favorable to the institution of mortgage banking in Australia. The operations of the mortgage, bank will be greatly stultified. There is to be no freedom of operation by the directors in respect of either the policy of making advances or the methods of obtaining capital. The bill makes the following provisions in relation to the raising of capital: -

The capital of the Mortgage Bank Department shall be the aggregate, not exceeding £4.000,000, of the following amounts: -

The sum of £1,000,000 transferred from the special reserve account in pursuance of sub-section (5.) of section 60k of this act;

The amounts paid to the Mortgage Bank Department from the net profits of the bank; and

The amounts paid to the Mortgage Bank Department from the profits derived from the issue of Australian notes.

The bank may make advances to the Mortgage Bank Department of such amounts, and subject to such terms and conditions as the board determines, but so that the total amount of such advances not repaid shallnot at any time exceed £1,000,000.

The Savings Bank may make advances to the Mortgage Bank Department of such amounts, and subject to such terms and conditions as the commission or, until the commission is appointed, as the board determines.

The funds of the bank and of the Savings Bank shall not be used in the business of the Mortgage Bank Department, except as expressly provided in this Act.

The Treasurer may make advances to the Mortgage Bank Department of such amounts, and subject to such terms and conditions, as are agreed upon between the Treasurer and the Bank.

The Treasurer may from time to time, under the provisions of the Commonwealth Inscribed Stock Act 1011-1940. borrow money for the purpose of making advances to the Mortgage Bank Department under this section.

The whole of those methods of raising capital prevent any freedom of borrowing by those who are to control the mortgage bank department of the Commonwealth Bank. It would have been infinitely better had the Government adopted the recommendations of the royal commission, by setting up a true mortgage bank under the control of the central reserve bank, making certain that it would not bo the plaything or the child of those who, since the recommendations of the royal commission were made, have consistently done everything in their power to oppose the inauguration of in ort.gage banking in this country. That applies to the Treasury officials and the Commonwealth Bank Board. It would also have been infinitely better had the Government agreed to make available to a real mortgage bank, not the limited amount of capital suggested in the bill, but an adequate amount of capital, and allowed it to issue bonds to the public, as is done by every such bank throughout, the world, thus enabling it to obtain the savings of the people and lend them to those who wish to develop the Commonwealth. By such means, borrowers would have been able to obtain loans at cheaper rates than will probably rule under the proposed system. The margin between “the rate at which the Credit Foncier of France borrowed and the rate at which it lent money was six-tenths of 1 per cent. In many of the other mortgage banks throughout the world the margins are approximately the same, or even smaller. They vary from per cent, upwards. I believe that it would be possible to borrow money at a rate comparable to that paid by the Government itself, or even lower, as was the case in Denmark and Argentina. The mortgage bank should be under the control of men free from the inhibitions engendered by trading bank experience, men who would be ready to adopt the progressive ideas on mortgage banking which have been current in the world ever since the establishment of those banks after the Seven Years’ War.

When I say that the Commonwealth Bank Board has been hostile to the idea of long-term lending, I am not making a wild statement. If honorable members refer to paragraph 313 of the report of the Royal Commission on Monetary and Banking Systems, they will see that in 1931-32 the Commonwealth Savings Bank acquired from State organizations which it absorbed mortgages to the value of £2,659,000. By June of 1936, the value of the mortgages held had been reduced to £2,045,000. The fact is that the Commonwealth Bank Board has never encouraged this class of business. We who sat on the commission and heard the evidence of the general manager of the Commonwealth Savings Bank - and we had a great deal of trouble in getting it out of him - learned that it had been laid down that mortgage lending by the Commonwealth Savings Bank was not to be encouraged. During the depression, and the period immediately preceding it, the Queensland Savings Bank, the Government Savings Bank of New South Wales, the Government Savings Bank of Western Australia, and the Tasmanian Savings Bank were taken over by the Commonwealth Savings Bank. In Tasmania, only two small, independent concerns were left. While the Government institutions were operating in these States, they had been in the habit of lending money on long-term mortgages for the development of land and the building of homes; not. only in the cities, but also in country towns and villages. Year by year, a large amount of the savings of the people were used for the building of homes and the development of farms. When the Commonwealth Bank obtained control of the savings of the people, the money, instead of being employed for the development of the country, was placed at the disposal of the Commonwealth Government. That was wrong,1 and it is equally wrong to-day for the Government to hand over the control of this new institution to a body which has shown itself in the past to be so hostile to the principle of long-term lending.

Mr Paterson:

– Does the honorable member suggest that the mortgage bank should be entirely separate from the Commonwealth Bank?

Mr ABBOTT:

– I suggest that the mortgage hank should stand on its own feet as an institution free of direct control by the Commonwealth Bank Board; but that, as part of the financial system of Australia, it should be subject to the general control of the Central Bank in carrying out the latter’s policy.

Mr McLeod:

– Why did not the honorable member do something to amend the Commonwealth Bank Act in 19,34 so as to give effect to his wishes?

Mr ABBOTT:

– Because I was not then a member of this Parliament. Although the term of the loans which are to be issued by the bank has been increased from 35 years to 41 years, I believe that it should be longer still - that it should be increased to 60 years.

Mr Clark:

– Why not make it a thousand ?

Mr ABBOTT:

– -The honorable member for Darling (Mr. Clark) is more conservative than the Bank of England. The Agricultural Mortgage Corporation Limited of Great Britain, which is associated with the Bank of England, has fixed the term for loans of this kind at 60 years. Whilst interest rates, and the rate of repayment, are important, what really concerns the borrower most is the amount which he is required to pay every month or every six months. Those who borrow from the Mortgage Corporation of Great Britain on a 40-years’ term are required to repay at the rate of £4 18s. 4d. per cent., while on a 60-years’ loan the rate is £4 15s., which is i per cent, less than the rate provided in this bill. There may be some honorable members who think that a few shillings more or less do not matter to men on the land, but we who have had practical experience, in contrast with their false and trumpeting friends, know that a difference of even a few pence in the repayments to which farmers are committed can be very important. When the term of the loan is increased, it reduces the effective rate of repayment over the whole period.

I am glad that the Government has accepted the principle of making advances up to 66§ per cent, of the value of the security. I do not agree with those who have suggested that the amount should be raised to 70 per cent, or 80 per cent. I think I even heard some one whisper that it ought to be 90 per cent. To make the advance so high as that would be to encourage bad financial methods among borrowers, and those who might otherwise invest their money in the mortgage bank would lose faith in it. The mortgage bank should be a financially sound institution, and the public should be encouraged to invest in mortgage debentures. Therefore, I agree with fixing the limit at 66$ per cent.

Throughout Australia there are, as every body knows, a great many primary producers who, because of their debt difficulties, are practically slaves to their properties. The honorable member for Wannon (Mr. McLeod) referred to them, and I pay him the compliment of saying that he spoke very sincerely. Those men cannot be rescued by a measure of this kind, but there is a way out for them. There should be a reconstruction department which would lend them more than the 66$ per cent, of the value of their security under the terms of this proposal - in some instances the excess might amount to 30 per cent or more. The first mortgage would be given to the mortgage bank, but the second one for the additional amount would be to the reconstruction department. This department could fix interest rates on this type of loan as low as zero. In this way, when commodity prices rose, the farmers would have a chance of getting on their feet once more. It is a shocking thing that, under a scheme of rural rehabilitation, farmers should have compound interest piling up against them. I seriously commend my suggestion to the notice of the Government.

I believe that the scope of the bill should be widened, and in order to effect this I propose to move an amendment in committee to proposed new section 60 abv, Part 1. This section is as follows : - “60abv.- (1.) Subject to this Part, loans may be made by the Bank through the Mortgage Bank Department to any 1 person engaged in farming, agricultural, horticultural, pastoral or grazing operations, or in such other form of primary production as the Bank thinks fit, upon the security of a mortgage to the Bank of an estate or interest in land in the Commonwealth used or to be used primarily for farming, agricultural, horticultural, pastoral or grazing operations or in such other form of primary production as the Bank thinks fit.

As the Commonwealth Bank Board has never previously thought fit to help primary producers by making long-term loans, I should feel happier if some more primary industries were added to the list. Therefore, I propose to move later that, after the word “ grazing “ the words “ afforestation and oyster culture “ be added. I also believe that loans should be made to co-operative societies engaged in primary production for developmental purposes, and to enable them to erect factories for the processing of primary products. Loans should be made to persons for the erection of houses and small factories, particularly in rural towns and villages; also to persons for the acquiring and building of ships and boats to be used for fishing and for trawling. In Great Britain, the Ministry of Agriculture is one with the Ministry of Fishing. As the Minister for Repatriation (Mr. Frost) is aware, the fisheries of Australia have for years past been the Cinderella of our primary industries. They are capable of great development, and the Government should look into this matter.

Mr Frost:

– I can assure the honorable member that if this Government continues in office the fishing industry will be developed. I remind him, however, that during the 40 years that nonLabour Governments were in office nothing was done to help the fisheries.

Mr ABBOTT:

– If the Government brings down a measure for the assistance of the fishing industry the proposal will have my support. The Government should follow the example of the Agricultural Mortgage Corporation Limited of Great Britain by providing for the making of advances for improvements. That corporation lends, for a statutory period of up to 40 years, money with which to improve properties. Those advances are entirely separate from the base mortgages on properties. Before a loan is made the proposed improvements are investigated by officers of the corporation. If they are convinced that expenditure of additional money on the property will bring about such improvements as will increase production and, therefore, the earning capacity of the property, the advance is made, and the payments of interest and amortization are covered by additional rental payments. I do not know how the Government could incorporate such a provision as that in this measure unless it took the infant back into the nursery. The Agricultural Mortgage Corporation Limited makes advances for such purposes as -

  1. Drainage, including the straightening, widening, or deepening of drains, streams and watercourses.
  2. Irrigation; warping; reclamation.
  3. Embanking or weiring from a river or lake, or from the sea or a tidal water.
  4. The erection of groynes, sea-walls and defences against water.
  5. Inclosing; straightening of fences; redivision of fields.
  6. Clearing; trenching; planting.
  7. The provision of cottages or small dwellings,either by means of building new buildings or by means of re-construction, enlargement or improvement of existing buildings.
  8. The erection of farm houses, offices and outbuildings and other buildings for farm purposes.
  9. The erection of saw-mills, scutch-mills, and other mills, water-wheels, engine-houses and kilns, which will increase the value of the land for agricultural purposes, or as woodland or otherwise.
  10. Boring for water and other preliminary works in connexion therewith.
  11. The construction of reservoirs, tanks, conduits, water-courses, pipes, wells, ponds, shafts, dams, weirs, sluices and other works and machinery for supply and distribution of water for agricultural purposes.
  12. The erection of jetties, piers, and landingplaces on rivers, lakes, the sea or tidal waters, for facilitating transport of persons, and of agricultural stock and produce, and of manure and other things required for agricultural purposes.
  13. The construction of markets and marketplaces.
  14. The making of farm roads.
  15. The provision of drains, pipes, and machinery for supply and distribution of sewage as manure.
  16. Restoration or re-construction of farm buildings damaged or destroyed by dry-rot.
  17. Structural additions to or alterations in farm buildings reasonably required, whether the buildings are intended to be let or not, or are already let.

The proposed mortgage bank will never incorporate modern devices so long as it is in the charge of the gentlemen of the

Commonwealth Bank Board or such conservative people as the honorable member for Darling (Mr. Clark). When they are in Opposition, men like the honorable member shout against what they allege has been done for 40 years, but when they are in office they do exactly what they protested against. I contend that the mortgage bank should be controlled, not by the Commonwealth Bank Board, but by a separate board which would be progressive enough to examine what has been done in other countries with a view to Australia doing the same thing in the interests of its development.

This bill should contain a provision similar to that which operates in the Agricultural Mortgage Corporation Limited whereby borrowers from the mortgage bank would be protected against paying heavy legal costs by way of procuration fees or fees for the preparation of the deeds of mortgage. Borrowers from the Agricultural Mortgage Corporation Limited are required to pay only one small fee, and that is in respect of the valuation of the properties. That fee is charged in order that the corporation shall not be snowed under by applications from people who have not the slightest chance of negotiating a loan. The mortgage bank should carry the Whole of the legal costs and registration fees in connexion with mortgages. In view of all the shortcomings of this measure the Government should treat it as one would treat a child suffering from all” the illnesses that an infant can suffer from; it should put the bill in hospital and restore it to health by an infusion of strengthening medicine so that it will be able to bring it back to us, not as a monstrosity incapable of development, but as a healthy body which can do all that a mortgage bank plan should do to improve the lot of primary producers and rural dwellers.

Mr LAZZARINI:
Minister for Home Security · Werriwa · ALP

.- But for the outburst of the honorable member for New England (Mr. Abbott), I should not have intruded into this debate at this stage, but I am compelled to do so by his unjustifiable attack on the Commonwealth Bank Board and officials of the Treasury. The honorable member supported the Government which stripped the Commonwealth Bank of all the powers it was given by its founders to assist the primary producers. That Government destroyed the original charter of the Commonwealth Bank.

Sir Earle Page:

– We increased it.

Mr. LAZZARINI.- The right honorable member for Cowper (Sir Earle Page) was Treasurer in the Government which created the Commonwealth Bank Board and instructed it that it was not to compete with the private banks. The limitations upon the Commonwealth Bank’s operations which were imposed by that Government are the only reason why the Commonwealth Bank has not done twice or three times as much as it has done to protect the primary producers in the interests of this nation. Succeeding anti-Labour administrations have hamstrung the Commonwealth Bank in every way.

Mr Abbott:

– What rubbish!

Mr LAZZARINI:

– That is the truth and the honorable gentleman who has been so condemnatory of the Commonwealth Bank Board in his speech to-day must “ take it “.

Sir Earle Page:

– The Commonwealth Bank has grown like a mushroom.

Mr LAZZARINI:

– It has grown in spite of the shackles that the right honorable gentleman put on it. The honorable member for New England, in a very ingenious argument, attacked the establishment of the mortgage bank as a branch of the Commonwealth Bank. He wants to hand the mortgage bank over to private enterprise.

Mr Abbott:

– I said no such thing.

Mr LAZZARINI:

– The honorable member said that the Government should establish the bank with Commonwealth funds and that private enterprise should then be allowed to buy debentures in the bank.

Mr Abbott:

– That is not true.

Mr LAZZARINI:

– The honorable gentleman is tied to the private wealth of this country and he does not want to see the Commonwealth Bank, or any part of it, given the authority to do the job of assisting the primary producers out of the financial morass in which they are struggling. The Royal Commission on the Wheat Industry told the world that the greatest burden on the wheat-growers of this country was the interest on their indebtedness, and, if it did not say so in so many words, it indicated that the costs of labour were only a minor consideration in arriving at the cost of producing wheat. The honorable member knows that the primary industries of this country have been bled white by private financiers, especially the Associated Banks. I remind honorable members of the land boom and the burst which followed it. The private banking institutions encouraged men to go on the land by making large advances, and then suddenly closed down and obtained repossession of all the best wool-growing lands of this country. I remember that when I was a boy in the Young district the private banks, by the simple expedient of calling up mortgages which could not be repaid, obtained possession of thousands of acres of the best woolgrowing country in Australia, and, having dispossessed the occupants, installed their own managers. If the honorable member for Hume (Mr. Collins) was a resident of the Young district at that time he will be able to confirm what I say.

Mr Collins:

– I did. not know that.

Mr LAZZARINI:

– If the honorable member’s knowledge of the Young district were as long as mine is, he would know it. Apparently, he came to the district after that period. The banks obtained possession of those wonderful properties in exchange for the advances that they had made on the properties. That is the system which the honorable member for New England wants to perpetuate.

Mr Abbott:

– I have never asked for that.

Mr LAZZARINI:

– The honorable member for New England claimed at the outset of his speech that he entered this Parliament in the hope that thereby the primary industries would get a better deal. Yet, he wants to tie them hand and foot to the private banking system.

Mr Abbott:

– I deny it.

Mr SPEAKER:

– Order ! The honorable member for New England must refrain from interjecting.

Mr Abbott:

– But I am being misrepresented.

Mr SPEAKER:

– The honorable gentleman is interrupting too much.

Mr LAZZARINI:

– Implicit in the honorable gentleman’s speech from beginning to end was a plea for the private financiers and an attack on the Commonwealth Bank and everything it stands for

Mr Abbott:

– What rubbish!

Mr LAZZARINI:

– The honorable member will be surprised, when he reads his speech, at the implications in it.

Mr Abbott:

– It will read better than the honorable member’s speech.

Mr SPEAKER:

-Order ! The honorable member for New England refuses to take any notice of my appeal to him to keep quiet. My remedy should be known by him. If not, it will be made known.

Mr MARWICK:
SWAN, WESTERN AUSTRALIA · CP

– The honorable member for New England is being misrepresented.

Mr SPEAKER:

– Any honorable member who claims to have been misrepresented is entitled to make a personal explanation.

Mr LAZZARINI:

– I leave that question by saying that the honorable member for New England stated distinctly that when the mortgage bank was initiated debentures in it should be offered to the general public. If that does not mean handing the control of the bank over to the people who buy those debentures, I do not know what it means. The honorable member said that the bank should be placed under independent management, which is nothing less than management by private individuals and a surrender of control by the nation through the Treasury.

Mr Abbott:

– I wish to make a personal explanation.

Mr LAZZARINI:

– The honorable member is not entitled to make a personal explanation now.

Opposition Members. - Take a point of order.

Mr Abbott:

– On a point of order, Mr. Speaker. I am being misrepresented.

Mr SPEAKER:

– The honorable member will be entitled to make a personal explanation at the conclusion of the Minister’s speech, but he is not entitled to interrupt him now.

Mr LAZZARINI:

– Firmly implanted in my memory is a cartoon I saw years ago in a weekly paper. It depicted a farmer in the middle of his bush-fire swept property saying, “ Everything gone but the mortgage ! “. It is because the primary producers of this country are head over heels in debt to private mortgagees that the Government has brought down this legislation to establish an institution which will do something to alleviate their misfortunes by lifting from their shoulders the huge load of debt that they carry. I am astounded therefore, that an honorable gentleman who commenced his speech by saying that the Country party came into this Parliament to ensure that the primary producers should get a fair deal should now want to leave those primary producers to the tender mercies of the private financial institutions.

Mr McEWEN:
INDI, VICTORIA · CP; LCL from 1940; CP from 1943

– The Minister is repeating something he has said about eleven times.

Mr LAZZARINI:

– And it warrants repetition. The honorable member for Richmond (Mr. Anthony) said that other parties had toyed with the idea of establishing a mortgage bank. But except for short anti-Labour parties have occupied the treasury bench in this Parliament for the last 40 years and have never done more than talk about this matter^

Sir Earle Page:

– No; we brought down a measure.

Mr LAZZARINI:

– And the right honorable’s gentleman’s own party strangled it at birth. Yesterday, the honorable member for Richmond stated that in 1938 the United Country party told the former Treasurer, Mr. Casey, that he should “put his proposals for the establishment of a mortgage bank in a bag and bury them “. Obviously, the then Leader of the Country .party (Sir Earle Page) did not have much influence with his followers, because he could not persuade them to accept that legislation.

In peace-time, the mortgage bank could be introduced smoothly into our economic system, but the demand for the establishment of the institution is so imperative that the Treasurer has decided not to delay it, even though the country is engaged in the greatest war of history. I admit that the mortgage bank will be an infant at the beginning; but then, the Commonwealth Bank itself began as an infant and to-day it has developed into a wonderful institution. Its value would be infinitely greater if anti-Labour govern ments had given it the opportunity to play its proper part in the economic life of the country. The basis of the mortgage bank is sound, and it will be a part of a solid institution which has stood the test of time. During the last war the Commonwealth Bank rendered magnificent service to this country. It floated loans for 7s. 6d. per cent, when the associated banks, which honorable members opposite support, demanded £2 10s. per cent. The mortgage bank will be a branch of that institution which has won the admiration of financiers throughout the world. They have expressed amazement at the work which the bank has been able to accomplish during its brief history. From small beginnings the mortgage bank will develop as did the Commonwealth Bank, and will eventually play an important part in post-war reconstruction. I appeal to honorable members to support the bill so that it may become law without delay.

Mr Abbott:

– I desire to make a personal explanation. The Minister assisting the Treasurer (Mr. Lazzarini) stated that I desired to hand over the proposed mortgage bank to private enterprise, without control. What I said was that the mortgage bank should be independent, but under the control of a management responsible to the Commonwealth Bank as the Central Reserve Bank of Australia. Secondly, the Minister said that I wanted to hand the bank over to bondholders, but I point out to him that such a provision is contained in proposed new section 60abu (2) of the Commonwealth Bank Act. It reads -

The Treasurer may from time to time under the provisions of the Commonwealth Inscribed Stock Act-

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

– Order! The honorable member is exceeding the bounds of a personal explanation.

Mr Abbott:

– My purpose is to remind the Minister that what he accused me of being desirous of doing is actually provided for in the Commonwealth Bank Act. Thirdly, the Minister declared that I support the associated banks. I desire to make it clear that I have no interest in the associated banks or in any bank, except the interest that I pay on my overdraft.

Sir GEORGE BELL:
“Darwin

.- A long time ago, before even the foundation of the United Country party, and certainly before the Royal Commission on Monetary and Banking Systems was appointed, I advocated the introduction of legislation of this nature. I remember well that in 1932 I submitted my views to the then Prime Minister, Mr. Lyons. Later, during the depression, when something had to be done to assist primary producers by way of a debt adjustment scheme, I reminded him again of my ideas on this subject. I am mindful of the good work which has been carried out in some States by institutions such as the Savings Bank of Victoria.

I support the bill for reasons somewhat different from those which have been expressed by some honorable members. In my opinion, long-term credit is essential for the success of primary producers. It is true that the overdraft system wal] suit some primary producers and, that being so, there is no reason why they should not continue to take advantage of it. Generally speaking, however, the overdraft system is not suitable for the primary producer who is developing his holding. Therefore, I favour longterm credits on the lines proposed in this bill because they will give security of tenure, which is absent under the overdraft system. That sense of security is of tremendous importance. In the past primary producers were sometimes called upon abruptly to reduce their overdrafts, and some persons who were perfectly solvent were greatly embarrassed. Under a measure of this kind people will not be required to reduce their overdraft at a word from a bank. Nor will they have cause to fear great fluctuations of interest. That sense of security is of great value, and for that reason I favour this scheme. The proposals contained in the bill are not unreasonable, though I agree that the scope of the measure could, with advantage, be broadened. It could be extended in conformity with the suggestions of the honorable member for New England (Mr. Abbott),, but that is no reason why we should not initiate a scheme of this kind which will be of special benefit to the primary producer, who requires this form of assistance now. Some honorable members have tried to outbid one another regarding the rate of interest that shall be paid. Some advocate 2% per cent., and others 2 per cent, or 1^ per cent. Some contend that the bank’s limit for advances should be increased from 66§ per cent, to 80 per cent, or 90 per cent, of the valuation of the security. That kind of talk is easy. If we are to help the man who requires assistance we must place the bank upon a sound basis. The words “ orthodox “, “ soundness “ and “ practicability “ are anathema to many people; “but we cannot separate primary producers from the general community in respect of the terms upon which they shall be granted credit. I have no objection to the scope of the bill being widened for the purpose of enabling other forms of industry to receive assistance. It makes little difference whether we decide that the figure shall be 66§ per cent., or 70 per cent of the security. Some people seem to consider that the difference is most important, but those who think that they can make such a fine discrimination in the valuation of land have very little knowledge of land and rural industries. But it would be a great mistake in the interests of primary producers

Mho require assistance, if Parliament decided that the mortgage bank may advance them sums of money up to 90 per cent, of the value of the security at a low rate of interest. That would encourage them to borrow money, and I fear that they would spend it as if it were income. That mistake has been the downfall of many people. Companies are able to borrow money and even expend it wisely, but very few individuals can avoid the error of treating it as income. The ultimate effect of that policy is well known to honorable members.

I favour the provision for amortization over a period of 41 years. That term is not unreasonable. To extend the period to 60 years, as was suggested by the honorable member for New England, would be worse. Within that span, the ownership of the property would almost certainly change. Consequently, the period of 41 years appears to be satisfactory, and the repayments of principal and interest, are sufficiently reasonable to enable a primary producer to succeed. The interest should be at current rates and should not exceed the cost of the money to the Government, plus administrative expenses. A misunderstanding appears to have arisen amongst some honorable members regarding the capital

A £4,000,000, which the bill will establish for the mortgage bani. That is not the sum of the money which will be available for advances to primary producers. The greater part of the money that will be available for this purpose will be provided from time to time by the Commonwealth Treasurer. Therefore, the success or failure of the institution will depend largely upon the policy of the government of the day. I do not favour theintroduction of a scheme under which bankrupts will be granted advances for the purpose of paying their debts. We know perfectly well that some of the banks - known variously as rural banks, agricultural banks, and mortgage banks - which have been set up in the States with the object of assisting the man on the land have had anything but a happy experience. They have been saddled with clients who have been persuaded by private banking institutions to seek advances, and the money so obtained has been used to liquidate the existing advances of the private financial institutions. If that procedure has not exactly ruined some of the State instrumentalities, it certainly has considerably embarrassed some State Governments. Certain honorable gentlemen suggested yesterday that the mortgage bank department of the Commonwealth Bank should make advances of up to SO per cent, or 90 per cent, of the value of the security offered, at an interest rate of 2 per cent. If that policy were applied, the State institutions would probably be closed within ten years, and the mortgage bank department of the Commonwealth Bank would be ruined within 20 years. Our object should be to help genuine cases. Many rural producers have been unfairly treated, and it is essential that we should do something to help men who are willing to pay their way, but if advances were made on the basis advocated by some honorable gentlemen yesterday it would be disadvantageous alike to the individuals concerned and to the Government, and I am not prepared to be a party to such proposals. “

A good deal of what some “honorable members said yesterday obviously had very little thought behind it. I was a member of the all-party committee that was appointed by the Government to report on this bill, and I resent the remarks made yesterday by the honorable member for Calare (Mr. Breen) to the effect that certain members of the committee represented private banking institutions, although he did not actually name them. His statement was entirely untrue. I do not know of one member of the committee who was interested in any banking institution. I make it clear that I have no such interests and that I was not approached by any of them. The statement of the honorable member was most unfair. I might have treated it with silent contempt had it not been given publicity in Hansard and elsewhere. The object of the committee was to do its best to suggest means by which the intentions of the- Government could be most effectively expressed.

I have always been an advocate of the policy of making advances to primary producers through such institutions as the Commonwealth Bank. That organization has the facilities available for such a purpose. The bank needed no defence from the Minister for Home Security. In many respects, the biggest jo’b that has to be done in this country is to develop our unused or inadequately used land. I know of land in some parts of my own State which is practically valueless to-day, but which has a tremendous potential value. In years gone by, private people were prepared to expend capital on the development of such land, but those days have passed. It is therefore essential that the Government shall take steps to develop the land. I know of land which at present is covered with dense forests. If it could be cleared, it would be most valuable. Other areas that I have in mind need the provision of water and capital expenditure in other ways. Money must be found for these purposes. We have been given to understand that, under existing conditions, the Commonwealth Bank does not favour extension of the previsions of the bill for such purposes, but once this measure is on the statutebook it will be practicable for us to extend its provisions from time to time. The law will not remain for all time in its original form. Because I believe that the bill will provide substantial benefits for rural producers, I am prepared to support it. Although I am somewhat indifferent about the margin of security that must be provided, I could not support an amendment which the honorable member for Richmond (Mr. Anthony) has foreshadowed. The present margin is 66$ per cent. If that were increased to 70 per cent. I should not be greatly concerned; but I would not agree to an increase to 80 per cent. The value of rural lands varies tremendously from time to time. Because of bad management, for example, a property that may be worth £12 an acre to-day may be worth not more than £9 an acre ten years hence. I know of an excellent property that was sold for £95 an acre years ago but would not bring £45 an acre to-day. We must keep in our minds the fact that land values are not static. They may increase, but they may also decrease. A man who requests a particularly liberal advance on his land in order to see him through a difficulty is, sometimes, an individual who will allow his property to deteriorate. For this reason we must maintain a reasonable margin of security and charge the current rate of interest, though interest rates should be kept as low as possible. I em not impressed by what some honorable gentlemen have said about the legal expenses that may be involved in transactions with the mortgage bank department. There should be no reason for incurring any legal expenses under this measure, for, undoubtedly, the officers of the bank will do all the documentary work that is necessary in connexion with advances. The situation is quite different in private banking companies, which require clients to renew their mortgages every five years or so and to meet the attendant legal expenses. Such costs will be avoided under this scheme. I consider the bill to be worthy of support. It will confer substantial benefits upon many people who are in great need of assistance. I do not intend to support the many amendments that have been foreshadowed, because, in my opinion, they would probably destroy the whole purpose of the measure and result in the ruin of many individuals.

Debate (on motion by Mr. Wilson) adjourned.

page 915

ADJOURNMENT

Canberra Housing - Shipping Priorities - Allied Works Council : Authorization of Prosecutions - Price of Bread

Motion (by Mr. Chifley) proposed -

That the House do now adjourn.

Mi-. LAZZARINI (WerriwaMinister for Home Security) [3.42]. - On the 12th February, the honorable member for Adelaide (Mr. Stacey) made several statements in this House concerning the high rents charged for houses in Canberra, and he referred, in particular, to one rented by a Mr. Neeld.

That property is owned by the estate of the late Mrs. N. A. Barton, and is the subject of a mortgage under the provisions of the Housing Ordinance of the Australian Capital Territory. It is situated on a block of land having a frontage of 100 ft. and a depth of 165 ft. The buildings consist of a house of foul rooms and a kitchen, with bathroom and conveniences. A one-car garage is built into the house. In addition, there is a solid brick garage and workshop with 1,100 square feet of floor space. A lavatory is provided at the back of this ‘building. At the request of the executor, the property was advertised by the Housing Commissioner for sale or sub-lease. The advertisement indicated that the conditions of the lease required the property to be used for a minor industrial purpose. Mr. John Neeld, who conducts a transport business, including a service between Canberra and Albury, and also special tourist trips about Canberra, secured the sub-lease. The rent he agreed to pay was £4 a week. Mr. Neeld applied for a reduction of rent, but this was not recommended by the Housing Commissioner. Even if it, were considered justifiable to reduce the rent, it would be necessary to advertise the tenancy again in order to ascertain whether any business concern was prepared to take the property at the existing rent.

The criticism of the honorable member, for Adelaide was based on the rent of the house alone. He did not take into consideration the fact that the house is only subsidiary to the industrial undertaking, and he made no mention of the workshop. The property is not owned by the Government, but belongs to the estate of the late Mrs. Barton. The Government is interested in it, however, by virtue of the fact that a loan has been granted in respect of it by the Housing Commissioner. Mr. Neeld approached the Minister for the Interior in January, 1942, for a reduction of his rent. On the 10th February the Minister foi- the Interior replied to him as follows: -

I have made careful inquiries into the position of your tenancy of Block 1, Section 20, Braddon, but am unable to agree to any reduction of the rental.

Even if I were prepared to do so, it would be necessary to re-advertise the tenancy, in order to give other interested parties a chance to make an offer for it.

The honorable member’s statement that Mr. Neeld was ignored by the Minister is therefore entirely incorrect. In regard to the general criticism by the honorable member of the rents charged in Canberra and his comparison of them with rents of houses built in Adelaide, I assume .that he referred to houses built by the South Australian Housing Trust. Full details of these are in the possession of the Department of the Interior, and a very careful comparison has been made between them and cottages of somewhat similar size in Canberra. The construction adopted in South Australia, could not be followed in Canberra without alterations of the building regulations. The South Australian cottages cannot be compared with the smallest and cheapest Canberra cottage, in regard to either construction or the facilities provided. Reports by the South Australia Housing Trust, together with plans and descriptions of the South Australian houses, wert studied by the National Capital Planning and Development Committee, which came to the conclusion that the difference in cost between the South Australian houses and the small types erected in Canberra was attributable to an inferior standard of accommodation and construction on the one hand and the increased cost of labour and materials in the Territory cb the other hand. The committee did not consider that the South Australian standards were suitable for adoption in Canberra.

The honorable member for Adelaide stated that about two years ago, when he intended to move the adjournment of the House to discuss costs of building and rents charged in Canberra, he was taken to north Ainslie by an architect and valuer and was told that, if he did not make a disturbance, he would be given a verbal guarantee that the semi-detached pairs of cottages would not cost more than £1,100 a pair, and that the rent would not exceed £1 a week. He added that the cost was from £1,200 to £1,500 a pair. No officer of the Department of the Interior has any authority to suggest to a member of Parliament that if he does not make a disturbance certain guarantees will be given, and it seems remarkable that any member of Parliament would be dissuaded from making a statement in Parliament on such a flimsy assurance as that alleged to have been given. Moreover, the honorable member stated that the foundations of a number of these houses had been laid. This indicated that a contract for their construction had been let. The actual contract price would, therefore, be known to the architect, and there would be no possibility of his having the houses constructed in accordance with the specifications at less than the contractor’s price. At about the time to which the honorable member referred, twelve pairs of semi-detached cottages were constructed at Ainslie. Each pair cost more than the maximum of £1,500 mentioned by him. Of the 24 cottages, the rent of two is £1 ls. each a week, one is rented at £1 0s. 9d. a week and three ai £1 0s. 6d. a week each. All the others are rented at less than £1 a week, the lowest being 17s. 3d. a week and the highest 193. 6d. a week These houses were inspected by the Parliamentary Committee on Social Services in March, 1942. I refer the honorable member to the members of that committee, who will probably be prepared to express an opinion as to the type of accommodation provided and the reasonableness of the rents.

Mr MARWICK:
Swan

.- At question time this morning I asked the Minister for Supply and Shipping (Mr. Reasley) two questions in connexion with the transport of beer to Western Australia whilst essential commodities had been left on the wharf at Adelaide. It was not the first occasion on which I had been obliged to direct attention to the unfair allocation of shipping in South Australia. When I previously mentioned the shipment to Western Australia of a large number of producergas units and other commodities, the honorable gentleman took action immediately to have the practice stopped. ] asked him this morning whether he had received a report that beer was being transported to Western Australia while other commodities were being left behind, and whether he would call for a report from his officer. I have never been in the habit of asking questions or making statements that have not some foundation. It would be impossible for me, for security reasons, to ascertain the names of the vessels on which the cargoes had been sent. I was able to learn the exact number of producer-gas units and other commodities from a passenger who had travelled on the vessel which conveyed them. Western Australia can produce all the beer that its quota will permit it to consume. Bottled beer is being sent from Adelaide, even though there is a shortage of bottles throughout Australia, and, because of a vicious law, the empty bottles remain the property of the brewer in South Australia and consequently are wasted. A much wiser course would be the distribution of their contents among the people of South Australia, who, I feel sure, would be only too ready to consume whatever supplies they could obtain. My first question was based on a statement in the West Australian. It was confirmed by Mr. Fernie, an advisory officer to the Minister for Supply and Shipping, whose appointment, I understand, was made by the Minister for External Affairs (Dr. Evatt). The newspaper statement is as follows : -

Several thousand bottles of beer have arrived here from the eastern States, although supplies of brandy, wine and spirits are short. The chairman of the Shipping Prior ities Committee (Mr. N. Fernie), when questioned last night on the subject said it was regrettable, but true, that beer had arrived in this State from Adelaide, both by train and ship.

I remind the House that the Commonwealth owns the railway by which a portion of the cargo was transported. The statement continues -

The Shipping Priorities Committee had repeatedly refused to sponsor shipping space for beer, in view of the considerable quantity of essential cargo held up in Adelaide, lt was with a view of preventing the abuse of shipping space that the Minister for External Territories (Senator Fraser) had arranged for the appointment of the Shipping Priorities Committee. His attention would bc drawn to this latest misuse of cargo space, with the request that he take similar action to that taken with gas producers and salt. Those business interests who had used their influence to secure cargo space for beer should realize that the beer had replaced cargoes of children’s clothing and medical equipment urgently needed in this State.

The Deputy -Director of War Organization of industry (Mr. Taylor) had already taken the matter up with his department in the eastern States, with a view to the imposition of total prohibition on the export of beer from other States to Western Australia.

I asked, the Minister to call for a report from Mr. Fernie. and it fully bore out the contention I had advanced for a long time. This is the third occasion on which T have raised the matter of undue influence having been exercised in South Australia in order that non-essential commodities might be transported to Western Australia whilst urgently needed spare parts, medical supplies and clothing for children were left behind. I want the Minister to ascertain who is using this undue influence in order to obtain, not 0lilY shipping space, but also space on the Transcontinental railway, for the transport of beer to Western Australia, when that State can produce all that the Commonwealth will allow to be consumed. I advised the secretary to the Minister of the source of my information. Evidently, the newspaper statement has been perused, because I understand that the Minister for Munitions (Mr. Makin) has been given a reply to my representations.

Mr MAKIN:
Minister for the Navy and Minister for Munitions · Hindmarsh · ALP

– .This morning, the honorable member for Swan (Mr. Marwick) referred to an article in the West Australian of the 13th February, regarding the shipment of beer to Western Australia in preference to- children’s clothing and medical equipment.. The article- was accredited to Mr. Fernie. who was stated to’ be the official representative of the Department of Supply and. Shipping in Western Australia. I now make the following statement regarding the matter, on behalf of the Minister for Supply and Shipping (Mr. Beasley) : -

Mr. Fernie is not the official representative of the Department of Supply and Shipping in Western Australia, nor is he’ a Commonwealth officer. He is a member of the Department of Industrial Development of tie Government of Western. Australia, and is also a member- of the State Priorities Consultative Cargo Committee, which was set up at the suggestion of the Minister for External Territories (Senator Fraser) so- that the- State of Western Australia could indicate to the Commonwealth; the priorities which should be observed.

Arising out of the statement in the West Australian of the 13th February, the Minister for Supply and Shipping talked with Mr. Fernie on the telephone this morning and: requested him to furnish the detailed, informmation on which he had based hia. article.. He- declared that he had- no- definite knowledge that these cargoes had replaced children’s- clothing or medical equipment, but stated- that’ he was aware that bottled- beer had arrived from the eastern States. Beyond the point of confirming the arrival of bottled beer, he- could give’ no definite information as- to the actual- cargoes, if any,, that this beer had replaced.. The Minister, questioned him- regarding any knowledge he- possessed as to whether suppliers of children’s clothing and medical equipment had actually forwarded these.- goods for shipment. To this- he had no answer ; nor, in fact,, could he f furnish any helpful information.

Urgent inquiries have been made into ihe matter by telephone, and it has been ascertained from the representative of the chipping Control! Board, Adelaide, and also the steamship company concerned, that neither children’s clothing, drugs, nor other essential supplies were left on the wharf, for the simple reason that they were- not there, not having been tendered for shipment to Western. Australia.

It will’ be seen that, from inquiries made by the Commonwealth, there is no- substance in the article which appeared hu the West Australian in. respect of the non-transport of children’s clothingand; drugs. If the honorable member hasadditional information which is not in possession of the Commonwealth, and will furnish details as to the firms that weresupplying the children’s clothing and drugs, the dates of delivery to the wharfs-, and the length of time during which it is alleged supplies have been awaiting shipment, together with the actual location of the wharfs on which supplies are now lying,, further inquiries will be made immediately.

Whether or not bottled beer should leave been shipped is a matter for determination by the Trade and Customs Department, which handles the distribution of this liquor, and the Department of War Organization of Industry, which determines the priorities. It,, therefore, becomes a matter for separateconsideration.. The Minister for Supply and Shipping has since been advised that the matter was. under examination before the newspaper article appeared.

Mr MARWICK:
SWAN, WESTERN AUSTRALIA · CP

– Did Mr. Taylor make any comment?.

Mr MAKIN:

– That is the only statement which I can make at the moment.

Mr BLACKBURN:
Bourke

.- I wish to- refer to a matter that was raised by the honorable member f or Bartley (Mr.. Rosevear), because of itstremendous importance1 to- liberty in this’ country.. The. National- Security Act passed in 1939, by sub-section 4 of section 10; provided -

An offence against this - Act shall not be prosecuted summarily without the written consent of. the Attorney-General or the Minister of State for. Defence, or a person thereto authorized in writing by the- Attorney-G-enera.1’ or the: Minister of State for Defence;; and aoa offence against this Act shall not be prosecuted upon indictment except in the name of the Attorney-General .

Section 13’ of the act provided that a person who was found committing an offence, or was suspected of having committed! or was about to commit an offence,, might be arrested without warrant.

Section 4 was enacted for the protection of the public. In the case McDonnell v. Smith, reported in 24 C.L.R., at page 409, a similar section of the War Precautions Act was considered. Sir George Rich then said, at page 411 -

Thu necessity for getting the prescribed consent to a prosecution is a check on irresponsible persons -who might heatedly, although from patriotic- motives, institute proceedings.

Obviously, .’it was intended that, .before a prosecution was launched, the (person Laving authority to consent to it should consider the matter and give his authorization. I have in my hand a form of summons which ‘has been used hy the Allied Works Council. Lt ‘purports to be issued in blank the names are not filled in - but it already “bears upon it the following endorsement.: -

I consent to the prosecution summarily of the offence herein alleged.

It is signed by Edward G. Theodore, “ Director-General of Allied Works, a person .thereto authorized in writing by the Minister of State for Defence “, who is the Prime Minister (Mr. Curtin). The only name which appears on the form is that of Mr. Theodore, the person who consents to .the prosecution. I understand that forms of this kind, already bearing the consent of ‘the Director.General of Allied Works, are handed out in great numbers to subordinate officers, who take upon themselves, and are -expected so to take, the responsibility of deciding who shall be prosecuted and who shall not. That is an abuse of section 6, sub-section 3a, of the War Precautions Act, which is aimed at preventing the harassing of people by frivolous .prosecutions. When a magistrate sees <on a summons the endorsement of a responsible officer, he naturally assumes that the officer has gone into the case, and is satisfied that there is ground for prosecution. That naturally weighs with the magistrate when he comes -to give his decision. It is altogether unfair that .a general warrant of this sort should be employed. In the .18 Idi century, there was «. great struggle against this system of issuing warrants against unnamed persons. I trust that the Minister will take steps to terminate the praeti.ee so that his delegated authority may not be abused again.

Mr CALWELL:
Melbourne

.- I desire to bring under the notice .of the Prime Minister (Mr. Curtin) the following resolution ‘carried this week at a meeting of the Malvern “branch of *he Australian Labour party -

That the Prime Minister ‘be “requested to restore to the people by means of a reduction of the price of bread the amount .of £800,000 saved to the .master bakers by the man-power regulations.

If it be true that the effect of the manpower regulations has been to save the master bakers this large sum of money, it is reasonable that the price of bread should be reduced. Many families are finding it extremely difficult in these days of shortages of certain foods and rising prices to make ends meet. There may be a fictitious prosperity, hut actually people we not much better off, because while wages have increased, the cost of living has increased disproportionately. As bread is a staple food, it is only fair that the Government should ensure that any savings effected through the introduction of the zoning system of bread deliveries, or by any other means designed to release manpower, .should not become the sole property of master .bakers, but .should be shared with the general public. If the rationalization of industry is to he of any use ,to the community, those who own and operate the industries concerned should not secure for themselves the savings which are effected by the .action of the Government. I know that the sentiments expressed in .the resolution are held by working people generally. If this matter does not come within the purview of the Prime Minister’s Department, I .hope that he will refer it to the Minister for War Organization of Industry (.Mr. Dedman), or to whatever department is the proper -one to handle it.

The meeting of the Malvern Australian Labour party expressed -views on other matters which are the subject of legislation already before the House, including the Government’s taxation proposals, and I shall have an opportunity later to make what I hope will be some relevant observations on .those matters.

Mr DEDMAN:
Minister for War Organization of Industry · Corio · ALP

– The matter raised by the honorable member for Melbourne (Mr. Calwell) is the concern of the Minister for Trade and Customs (Senator Keane), but my department has had a good deal to do with this. The savings effected in the distribution of bread by the introduction of the zoning system of deliveries amount to between £600,000 and £700,000, but that is the amount saved over the whole Commonwealth. It does not represent the saving in the city of Melbourne only. It sounds a large sum of money, but it does not amount to very much on each loaf. I was very interested when I heard that this saving had been effected through the action of my department, but I was surprised and disappointed when I was informed that actually the saving represented only about £d. on each loaf. It is not my function to fix the price of bread. That is the responsibility of the Prices Commissioner, who comes under the control of the Minister for Trade and Customs. However, I have a liaison officer in the Prices Branch who advises on the activities of my department, and on the likely effect which they may have upon prices. The Prices Commissioner has been fully advised of the savings effected in the delivery of bread, and his explanation for not requiring those savings to be passed on to the public is as follows: Early last year the master bakers applied to him for permission to increase the price of bread. He advised them that the Department of War Organization of Industry proposed to introduce a system of zoning for bread deliveries which would result in reducing costs, and therefore he deferred the application for an increase of price. I understand that the Commissioner is now of opinion that the savings effected by the rationalization of the industry exactly offset the claim of the master bakers last year for an increase of price. However, I shall refer the matter once more to the Minister for Trade and Customs and ask for further details.

Mr Calwell:

– What saving would be effected if the Minister were fortunately to succeed in rationalizing the newspaper industry?

Mr DEDMAN:

– I am not able to give the honorable member any information on that subject. I shall draw the attention of the Attorney-General (Dr. Evatt) to the matter raised by the honorable member for Bourke (Mr. Blackburn), whose representation, I am sure, will receive immediate attention.

Question resolved in the affirmative.

page 920

PAPERS

The following papers were presented : -

Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - 1943- Nb. 6 - Amalgamated Society of Carpenters and Joiners of Australia.

Commonwealth Grants Commission Act - Report of the Commonwealth Grants Commission on application made by the State of Tasmania for further assistance in 1942-43 from the Commonwealth under section 96 of the Constitution.

House adjourned at 4.10 p.m.

page 920

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Wheat Industry.

Australian Capital Territory: Franchise for Service Men

Mr Morgan:

n asked the Prime Minister, upon notice -

In connexion with the proposals of the Government to grant the franchise to all members of the lighting services irrespective of age, will consideration be also given to the granting of a similar privilege to members of the services enlisting from the Australian Capital Territory by enabling them to vote for an adjoining electorate, or, alternatively, granting them representation similar to that of residents of the Northern Territory?

Mr Curtin:
ALP

– The matter is being investigated, but constitutional difficulties arise in regard to the suggestion that certain residents of the Australian Capital Territory should he given thB right to vote for a division of a State.

Gas Masks

Mr DUNCAN-HUGHES:
WAKEFIELD, SOUTH AUSTRALIA · UAP

N-HUGHES asked the Minister for Home Security the following questions, upon notice: -

  1. Has adequate protection against gas attack, by the provision of reserves of gas masks, been made in the southern Slates of Australia!
  2. What has been done in the capital and country centres of South Australia in the way or (a) the issue of gas musks to civilians, and (ft) the training or instruction of civilians in .the use of gas masks?
  3. What is the estimate nf the number of gas masks so issued and of civilians so trained in the areas mentioned in paragraph 2 respectively?
Mr Lazzarini:
ALP

– For security reasons I am unable to make public my reply to the honorable member’s questions. Howover, I am furnishing a reply by letter.

Australian Army: Use of Service Personnel.

Mr FORDE:
CAPRICORNIA, QUEENSLAND · ALP; FLP from 1931; ALP from 1936

s. - On the 17th February, 1943, the honorable member for Parkes (Sir Charles Marr) asked the following question, without notice : -

Will the Minister for the Army inform the House how many former Militia men, who have been accepted for the Australian Imperial Force, arc performing duties of the kind naturally associated with the designation of Australian Imperial Force? If about 23 per cent, of the Militia are unfit for service overseas, how is it that the single men in their twenties who have been transferred to the Australian Imperial Force and passed as fit for combatant service arc spending their days in offices and their nights at home?

For security reasons it is regretted that particulars of the number of Militia men who have applied for transfer to the Australian Imperial Force cannot he supplied to the honorable member. As I stated in the House last week, the medically fit members of our fighting services include the Australian imperial Force, Royal Australian Navy, Royal Australian Air Force, and the Militia. The latest Chiefs of Staff report on the strength of these forces discloses that after deducting the number of medically unfit men in the Militia Forces, 73.7 per cent, of the medically fit men in the armed forces have volunteered for overseas service. The honorable member is, therefore, under a misapprehension when he states that the House was told last week that only 23 per cent, of the Militia had volunteered for service overseas. What was said was that the members of the Militia who are unfit for service overseas are 23 per cent, of its total strength. There is no reason, however, why men who are not fit for active service should not be attested in the forces and be required to perform duties in base and lines of communication units, and this is the policy adopted by the Government. It is preferable that the services of those young men who are classified as unfit for front-line duty should, nevertheless, be utilized to the maximum extent possible, and it is sound policy to require them to perform duties in suitable base units which will thus ensure that men who are medically fit for active duty are performing duty in frontline areas.

Call-up of Women.

Mr Blackburn:

asked the Minister for Labour and National Service, upon notice -

  1. What protection is accorded to women called up under the Man Power Regulations who have conscientious objections to war work?
  2. Will lie give a direction that such women shall be put to work of a civil character under civilian control?
Mr Ward:
Minister for Labour and National Service · EAST SYDNEY, NEW SOUTH WALES · ALP

d. - At the moment the National Security (Conscientious Objectors) Regulations do not deal with women, hut appropriate regulations will be made in relation to the proposed legislation dealing with the compulsory call-up of women for service .with the ancillary defence forces.

Cite as: Australia, House of Representatives, Debates, 18 February 1943, viewed 22 October 2017, <http://historichansard.net/hofreps/1943/19430218_reps_16_173/>.

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