House of Representatives
20 November 1947

18th Parliament · 1st Session

  1. House of Representatives
  2. 18th Parliament
  3. 1947

Mr. SPEAKER (Hon. J. S. Rosevear) took the chair at 10.30 a.m., and read prayers.

page 2365

QUESTION

UNIVERSITY TRAINING

Mrs BLACKBURN:
BOURKE, VICTORIA

– “With reference to the financial assistance given by the Commonwealth to University students, correspondents have appealed to me to see if it can be increased, because even the maximum amount allowed, namely, £143 per annum, is inadequate. Students, both of whose parents are deceased, cannot supplement their allowance. I shall submit details of the working out of living expenses from certain students if such information be required. I ask the Prime Minister whether it is possible to increase the allowance? Oan the allowance be made tax free? In order to encourage students, can arrangements be made so that the money received from scholarships shall not be deductible from the allowance? Will the Prime Minister allow students also to earn money in vacation periods, particularly during the ‘ long vacation, without prejudice to their eligibility to receive the maximum amount of financial assistance?

Mr CHIFLEY:
Prime Minister · MACQUARIE, NEW SOUTH WALES · ALP

– I presume that the honorable member refers to direct financial assistance granted to university students apart altogether from the subsidies being paid to students coming within the reconstruction training scheme. The present rate of assistance to the former is £104 a year to students living at home, and £143 a year to students living away from home. In addi tion, certain concessions are also given with respect to meeting the cost of books and fees. [ take it that the honorable member requests the Government to examine, in view of certain increased costs, the possibility of increasing the allowance.

Mrs Blackburn:

– Yes.

Mr CHIFLEY:

– The allowance granted to students coming within the reconstruction training scheme has already boon slightly increased. In conjunction with the Minister acting for the Minister for Post-war Reconstruction I shall examine the honorable member’s request.

page 2366

QUESTION

JAPAN

Proposed Visit by Parliamentary Committee - Migration of Nationals - Peace Treaty.

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES

– I ask the Prime Minister how many British parliamentary delegations have visited Japan since the cessation of hostilities? Did one member of the last British Parliamentary delegation say in Tokyo earlier this month, as reported in the London Times of the 5th November, that the Japanese wore secretly discussing the possibility of emigration, and that he believed that it was his duty to warn the Australian and Dutch authorities of that fact? In view of Australia’s declared primary interest in the Japanese Peace Treaty and the vital importance to Australia of the final Pacific settlement, when is the Australian Government going to agree to the suggestion made earlier this year by the Leader of the Opposition that an allparty delegation from the Australian Parliament should visit Japan before the signing of the Japanese Peace Treaty?

Mr CHIFLEY:
ALP

– To the best of my knowledge one British Parliamentary delegation has visited Japan. One member of that delegation, whose name I cannot recollect at the moment, was reported in the press as having made a statement about the emigration of Japanese to Dutch New Guinea; but later he denied making the statement, and said that he had been misreported. So far as I know, no other delegation, of members of the Parliament of the United Kingdom is contemplated, and apart from the alleged statement reported1 in the press, which was afterwardsdenied, I have not see:: a report which a delegation has made. In addition, theDepartment of External Affairs has not received any such report. The honorablemember for Wentworth also asked whether the Australian Government proposed to send to Japan a delegation consisting of members of this Parliament before the signing of the peace treaty. I confess that I do not see that much purposewould be served by such a delegation.

Having visited Japan, I considerthat it would be difficult for anybody who spends only a short period in that country to obtain more than a superficial knowledge of what has actually happened there. To me, the situation appeared tobe rather unreal, and on a short visit a person would have difficulty in assessing the situation, and gaining an idea of what the Japanese people are thinking. When the. Minister for External Affairs returns to Australia in the near future, he will have some information as to when the peace treaty with Japan is likely to be signed, and I shall discuss with him the honorable member’s suggestion for the purpose of ascertaining whether any advantage can be gained by adopting it.

page 2366

QUESTION

ARMED FORCES

Christmas Publications

Mr HAYLEN:
PARKES, NEW SOUTH WALES

– Will the Minister for the Interior inform me whether the Australian War Memorial is continuing to publish ‘ the annuals for the Royal Australian Navy,, the Army and the Royal Austraiian Air Force? These annuals were produced each Christmas during World War II. If his answer is in the affirmative, will the honorable gentleman inform me whether the books are available to ex-members of the services, and how may they obtain them?

Mr JOHNSON:
Minister for the Interior · KALGOORLIE, WESTERN AUSTRALIA · ALP

– The Australian War Memorial is continuing to publish these annuals, as the result of the interest which was shown in the hooks during World War LT. The first of the post-war publications was entitled As You Were 1946. which was published at the end of last year. This year’s book will be published under the title As You Were 19^7, and the first copies became available last week. The books may be purchased by ex-members of the services, and, indeed, all persons who are interested in them. Copies may be obtained by writing to the Curator of the Australian “War Memorial, Canberra, and the cost is 9s. each.

page 2367

QUESTION

MEMBERSHIP OF BOARDS

A ust.kai.tan Wheat Board - Australian Dairy Produce Board.

Mr McEWEN:
INDI, VICTORIA

– I ask the Minister for Commerce and Agriculture to inform me why the position of Chairman of the Australian Wheat Board has been allowed to remain vacant since last May? Is it intended that the Administrator of Norfolk Island, Mr. A. Wilson, shall resign from that office and be appointed chairman of the Australian Wheat Board ?

Mr POLLARD:
Minister for Commerce and Agriculture · BALLAARAT, VICTORIA · ALP

– The reason why the position of Chairman of the Australian Wheat Board has not been filled is entirely a matter of government policy.

Mr McEwen:

– It does concern the A n s tral i an wheat-growers.

Mr POLLARD:

– The supposition which the honorable member has hatched in his mind that the position is being held for a certain gentleman will possibly prove as false as the supposition of the honorable member for Richmond that a certain other gentleman would be appointed to the Australian Dairy Produce Board.

Mr Anthony:

– I rise to make a personal explanation. The Minister for Commerce and Agriculture has stated that I had named a certain individual as the person who was to be appointed Chairman of the Australian Dairy Produce Board. What I did say was this -

T have no doubt that the chairman will be an individual who has been “hanging round “ the Minister for a long time. He will be an alleged producer, probably an officer of one of the organization* who has never lifted his voice on any vital matter in the interests of the members of his organization. This individual, having kept his mouth shut when the welfare of his associates was involved, will no doubt . . .

Mr SPEAKER:

– Order! In a personal explanation the honorable mem ber for Richmond is repeating a reflection upon the Minister for Commerce and Agriculture. That is contrary to the Standing Orders. It is quite clear to every honorable member that the honorable member for Richmond is repeating an insinuation against the Minister. The honorable member, in making a personal explanation, has the right to show that he did not name the person as, he claims, the Minister said he did. The honorable member has no right to repeat an insinuation against the Minister.

Mr Anthony:

– I said-

Mr SPEAKER:

– 0rder ! The honorable member must not read further in order to continue his insinuation. The honorable member has the right to say that he did not name the person whom the Minister said he named.

Mr Anthony:

– The Minister said, “ Name the individual “. I can name him now; I can say that the individual who fitted the description I gave has been appointed to the position.

Mr Pollard:

– I wish to make a personal explanation. I simply said that the honorable member for Richmond had suggested the individual ; I did not say that the honorable member named him, because the honorable member did not have the “guts” to name him.

Mr SPEAKER:

-Order !

page 2367

QUESTION

PACIFIC WAR

Operations in Borneo.

Mr FALKINDER:
FRANKLIN, TASMANIA

– Has the Prime Minister seen reports of a statement made by Sir Thomas Blarney to the effect that in 1945 the Australian Command prepared a plan the execution of which would have obviated the subsequent tragedy of the “death march” from Sandakan? That plan involved the employment of Australian paratroops, but, according to Sir Thomas Blarney, it hud to be abandoned because aircraft were not available. Will the Prime Minister state the reason why aircraft could not be provided at that time, and obtain a’ full report for the information of honorable members?

Mr CHIFLEY:
ALP

– I have not seen any such report, and I have no recollection of any other report which appeared in connexion with the matter. Operations in the Pacific campaign were carried out under the direction of General MacArthur, and I imagine that there were many instances in which sufficient aeroplanes were not available for the conduct of particular operations. As honorable members know, the number of aeroplanes available at times was extremely small, but because of American assistance it was possible at some later stages of the war to provide a very strong .air force in the SouthWest Pacific. Whatever action was taken in the matter mentioned by the honorable member would, I presume, be decided upon only after consultation with General MacArthur or the Air Officer Commanding in the South- West Pacific. However, I shall make inquiries to ascertain whether there is some information which I can give to the honorable member.

page 2368

QUESTION

ME. E. THORNTON

Mr LANG:
REID, NEW SOUTH WALES

– In connexion with the recent departure of Ernest Thornton, secretary of the Ironworkers Federation of Australia, and a well-known Communist, to attend the congress of the World Federation of Trade Unions to be held in Paris, can the Prime Minister inform me whether it is a fact : - (a) That Thornton is not the accredited delegate to the congress, because Mr. Albert Monk is to act in that capacity? (/;) That the Australian Council of Trades Unions is not paying Thornton’s expenses, because he is only an alternate delegate? (c) That Thornton was the author of the “Hands off Hitler” resolution at the Australian Council of Trades Unions Congress on the 16th April, 1940? In view of the fact that the congress to which I have referred is to he held in Paris, where the Communists are actively fomenting civil war against the French Government, will the Prime Minister inform the House: - (d) Whether any steps have been taken to ensure that Thornton does not involve himself in the activities of the Comintern, or the “ Cominform “, as it is now called, while in Paris? (e) Whether officers of the Commonwealth Investigation Service have informed the Prime Minister who is to defray the costs of Thornton’s trip abroad, which will amount to more than £2,000? (/) If the. money is not to be provided from trade union funds, is the Government aware of the source from which it is provided ?

Mr CHIFLEY:
ALP

– No doubt Mr. Thornton received a passport to leave Australia just as any other citizen would, subject to compliance with Certain laws. However, his trip was certainly not sponsored by the Government, whose members have no knowledge, apart from what they have read in the press, of any mission with which he is associated. I understand that Mr. Monk would be the delegate from the Australian Council of Trades Unions to the World Trade Union Congress in Paris, but that he is to engage in other work. I believe that he was at New Delhi and that he was going later to Geneva. I cannot be certain about that, but I do know that he had to visit some other European city. I was informed, not officially, because I have no official knowledge of the workings of the Australian Council of Trades Unions, that Mr. Thornton is the alternate delegate in the event of Mr. Monk not being available. I understand that it was because Mr. Monk would not be available on the date of the congress meeting that Mr. Thornton took his place.

The Commonwealth Investigation Service has no knowledge of Mr. Thornton in association with the French Communists. I should imagine that the Government of France would act if any visitors to that- country committed breaches of the law or acted in defiance of constituted authority. If an Australian visiting France broke the law, at least as regards political activities, the French authorities would inform the Australian Government.

page 2368

QUESTION

WAR PENSIONS

Means Test

Mr HAMILTON:
SWAN, WESTERN AUSTRALIA

– In the last sessional period, during a debate on social services, the Minister representing the Minister for Social Services promised to consider the removal of the means test from war pensions. If he has considered that matter, what was the result, and, if he has not, when will he consider it?

Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

– War pensions are a matter of repatriation rather than social services. The honorable gentleman’s question concerns what is really a matter of government policy. The Treasury, the Department of Repatriation and the Department of Social Services are linked in a review of war pensions. Some review has been made and they willbe further reviewed when a report is received from the Repatriation Department. When the report comes before the Cabinet, I will carry out my promise to the honorable gentleman to ensure consideration of the removal of the means test from war pensions.

page 2369

HEARING AIDS

Mr.CONELAN. - Several months ago, I asked the Prime Minister a question about the provision of hearing aids for children with defective hearing and about experiments by the Acoustics Research Laboratory at Sydney, which, I understand, works under a Commonwealth grant. The Government of the United Kingdom provides hearing aids free to children and adults. Will the Prime Minister consider the inclusion in the health and medical benefits scheme of a provision for the distribution of hearing aids free to poor people who need them?

Mr CHIFLEY:
ALP

– A couple of years ago, when Senator Fraser was either acting as, or was, Minister for Health and Minister for Social Services, ministerial control of the Acoustics Research Laboratory at Sydney was altered. From the information that I have, I am not sure that the Government of the United Kingdom proposes to distribute free hearing aids to people with defective hearing.

Mr.Conelan. - It does.

Mr CHIFLEY:

– I understand that some hearing aids are provided free, hut that people who can afford to pay for them are required to. There is a maximum charge of about £10. I understand that hearing aids are very expensive. The honorable member desires that people in necessitous circumstances should receive them free. That matter is being reviewed in connexion with the health and medical benefits scheme.

page 2369

QUESTION

SHIPPING

SS. “Corio.”

Mr HOLT:
FAWKNER, VICTORIA

– Last week I asked the Minister for Labour and National Service a question arising out of the tying up of Corio for a period of about eight months as the result of a dispute between two unions. I asked whether it was a fact that the Seamen’s Union, having placed its case before Mr. Justice Kelly for arbitration, would not abide by his decision. I also asked whether the Minister could indicate the cost to the taxpayer of the hold-up. He replied that he would ascertain the facts. I now ask him whether he has any information on the subject and whether he can say what action the Government proposes to take to get the ship moving again?

Mr HOLLOWAY:
Minister for Labour and National Service · MELBOURNE, VICTORIA · ALP

– I have had a conference with the Minister for Supply and Shipping on this subject. My colleague is collecting information regarding the dispute, but it is difficult to ascertain the cost to the community of the tying up of the vessel referred to. Judge Kelly volunteered to conduct an inquiry in an effort to find a solution of the problem which arose out of a tradition affecting marine engineers on the one hand and the ship’s captain and crew on the other hand. Judge Kelly held a conference with the interests concerned and every one thought that he had solved the problem. Perhaps he has done so. I do not know whether the owners of the vessel really want to move the ship or whether it is held up because of the dispute.

Mr Holt:

– The latter reason is the correct one, I understand.

Mr HOLLOWAY:

– The matter is being examined, and I hope to be in a position to supply information concerning it at an early date.

page 2369

QUESTION

PRICES CONTROL

Position in United States of America.

Mr DUTHIE:
WILMOT, TASMANIA

– Did the Prime Minister see in yesterday’s press an announcement that President Truman had called a special meeting of Congress in order to seek from it power to ration commodities in short supply, and to re-impose controls of rents, prices and wages, and that he had warned Congress that such controls were necessary to check America’s alarming inflation which, if not stopped, would cause a serious depression in that country? The report added that President Truman had said that prices in the United States of America had risen by 20 per cent.

Mr SPEAKER:

-Order! It is not necessary for the honorable member to proceed further. He is entitled to give only such information as is necessary to make its meaning clear. He has already done so.

Mr DUTHIE:

– I now ask the Prime Minister what effect such a decision could have on Australia and whether it does not emphasize the need for the national control of credit and a continuance of prices control in this country in order to ensure economic stability?

Mr CHIFLEY:
ALP

– I have seen newspaper reports of the message sent by Mr. Truman to Congress, and I have seen the contents of an official account of the statements made. It must be quite evident to everybody that the inflationary spiral in the United States of America and other countries throughout the world, including Australia to some degree, is something which governments should try to check. High commodity prices in the United States of America mean that those countries which are sorely in need of goods from that country must pay many more dollars for them than they expected. This fact has been demonstrated in the case of the United States of America loan to the Government of the United Kingdom. It is hardly necessary for me to point out the clanger of rising prices, and the action taken by President Truman is an attempt, by the imposition of the controls which previously existed, to prevent prices from rising further. He is also seeking authority to introduce rationing if it is found to be desirable. I appreciate fully the need for some such action as is contemplated in the United States of America. What is happening there emphasizes the folly of those who think that all economic controls ought to be lifted, irrespective of the consequences, and it should prove to the Australian people that the continuation of some controls is highly desirable in the interests of the community.

page 2370

QUESTION

TEXTILES

Men’s Suitings - Exports

Mr DAVIDSON:
CAPRICORNIA, QUEENSLAND

– Has the Minister representing the Minister for Trade and Customs seen reports in the Queensland press that the manufacturers of tailormade garments are finding it harder to obtain supplies of materials than at any time during the war, that only meagre supplies .are available, and that a considerable part of the material in sight “is ear-marked for export? Seeing that this situation is preventing Australians from getting suits of clothes, besides causing tailors to reduce their staffs, will the Minister have inquiries made regarding shortages, and the export of materials, with a view to ensuring that tailors and their employees, and the public generally, get a fair deal?

Mr POLLARD:
ALP

– I have not seen the statements in the Queensland press to which the honorable member refers. The position in regard to the export of suitings has been explained repeatedly in this House. It is most difficult to effect correct division of production between the local and the export markets, if due regard is to bc paid to the future prosperity of the country. When we have satisfied all our own requirements, it will become necessary to find export markets for the surplus. Bearing this in mind, the Government has authorized the sending of token shipments of many corn modi ties with a view to maintaining our position in overseas markets. I do not .believe that the shortage of suitings is as serious as has been alleged. We are exporting only 4 per cent, of our total production of worsteds, and this year the production of worsteds in Australia increased by 2,000,000 yards. I believe that, in all the circumstances, the policy being applied by the Government is a wise one.

page 2370

QUESTION

TAXATION

Regi on a l Officers - Congestion - Refunds

Mr SHEEHAN:
COOK, NEW SOUTH WALES

– I direct a question to the Treasurer with relation to the congestion that occurs in queues which line np at the Sydney office of the Taxation Branch. Will the right honorable gentleman give consideration to the appointment of regional taxation advisers in towns throughout Australia in order to alleviate congestion in offices in the capital cities?

Mr CHIFLEY:
ALP

– Proposals to appoint regional taxation officers have been made previously by the Minister for Repatriation in relation to Launceston and by the honorable member for Hunter in relation to Newcastle. Temporary arrangements were made for an officer to give information and assistance to citizens of Newcastle, and arrangements have been made from time to time for a taxation officer to visit Launceston. The appointment of regional officers to deal with taxation matters has been considered and we hope that, as more competent officers become available, it may he possible to do something to meet that demand. ‘It is impracticable, of course, to set, up offices with complete facilities for dealing with taxation problems in all major towns. Queues occur at taxation offices in big cities in the first place through people attending to pay tax. Many taxpayers delay the making of payment as long as possible and then attend in person instead of forwarding payment through the mail. Very large queues have also been caused by people attending to collect refunds of excess instalments duo to them. Now the Commissioner of Taxation has devised a system by which such refunds are paid by cheque attached to the assessments when they are issued to the taxpayers. “We hope that this will considerably reduce the size of queues. I understand that many taxpayers have already received assessments together with cheques for refunds. That should help to relieve congestion in offices in the capital cities, where the situation is acute. However, I shall discuss the matter with the Commissioner of Taxation in order to ascertain whether anything further fan he done to relieve the position.

page 2371

QUESTION

INTERNATIONAL AFFAIRS

Australian Policy

Mr GULLETT:
HENTY, VICTORIA

– I direct a question to the Prime Minister arising from an article published in the Canberra Times this morning. This article refers to the reaction in Malaya to the recent depor tation of a number of Malayans from this country, and states that it is proposed that Malaya should raise this matter with the United Nations. In view of the fact that this is really an attack on our “White Australia policy and that more of such attacks may be expected and that, when this matter becomes before the United Nations, Ave shall he in need of friends to support our cause, does the Prime Minister consider that the Australian attitude in supporting the Indonesians against the Dutch, our nearest white allies, has been in the best interests of Australia? Also does he consider that the Minister for External Affairs acted in the best interests of Australia in supporting the Indian minority in South Africa against the South African Government? What instructions, if any, does he propose to’ give to the Minister for External Affairs as to the way in which he should deal with this matter when it is brought before the United Nations?

Mr CHIFLEY:
ALP

– The honorable member has asked a series of questions, some of which require considered replies. With reference to the question about the Malayans. I point out, that the Minister has merely carried out the policy of this Government.

Mr Gullett:

– I arn not criticizing that.

Mr CHIFLEY:

– The honorable gentleman asked me first whether I had seen an article in the Canberra, Times. I have not seen it. I have not read that or any other newspaper this morning. Secondly, I agree with the Minister’s action in carrying out the Government’s policy. It, was carried out in regard to the Indonesians in this country. That policy is to return such people to their own countries as soon as possible. It will be carried out in every case. It is the policy not only of this Government but also of other governments. The honorable member suggested that the Government is supporting the Indonesians against the Dutch. What the Australian Government is trying to do is to bring peace and goodwill, among the conflicting interests in the Netherlands East Indies. As I indicated yesterday, I do not propose to make any statement on the Dutch-Indonesian situation while a representative of the United Nations is at Jokjakarta or Batavia endeavouring to bring about a peaceful settlement of the matters in dispute. I ask the honorable member to place on the notice-paper the remaining part of his question relating to the Indian minority in South Africa. I shall then give the honorable member a considered reply.

page 2372

QUESTION

MR, A. M. BLAIN, M.P

Mr BLAIN:
NORTHERN TERRITORY

– Will the Prime Minister say “ Yes “ or “ No “ as to whether he proposes to grant me an inquiry by the Privileges Committee, for preference in public, into the charge made against rae by the honorable member for Lang, namely, that I had shown my parliamentary gold pass to the Japanese in order to obtain special treatment while I was a prisoner of war? Has the Prime Minister or the Government any special information, or any information, from Major Fleming, my commanding officer at Sandakan, North Borneo, as to my conduct? If so, does the right honorable gentleman propose to make it available to the Parliament?

Mr CHIFLEY:
ALP

– I have indicated that I hoped that this unfortunate matter, which has been the subject of discussion in this House, might have been amicably settled. The honorable member will recall that I spoke to him about it on Friday last. I then understood that he would give me an opportunity to discuss it with him again. That, however, is a. matter for the honorable member. My only desire was to avoid what I regarded as unseemly recriminations between honorable members in this House which are more likely to bring the Parliament into disrepute than into favour with the people. I was hopeful that the honorable member for the Northern Territory and the honorable member for Lang would take the opportunity to settle their differences in a friendly way. I have not seen any statement by Major Fleming. I shall ascertain whether such a statement is in existence. As to the notice of motion standing in the name of the honorable member for Indi that the Privileges Committee be convened to inquire into this matter, as T indicated a few days ago, consideration will be given to the question as to when that motion may be discussed by the House. I must confess, however, that I was hopeful that the matter might have been adjusted without resort to that course.

Later:

Mr Mulcahy:

– I desire to make a personal explanation.

Mr SPEAKER:

– Arising out of what?

Mr Mulcahy:

– Arising out of a question asked by the honorable member for the Northern Territory. The honorable member has not stated the facts. I did not make any reflection upon the honorable member in the carrying out of his military duties. The incident was brought about by an interjection by the honorable member that I ought to be ashamed of myself. I have no ill feeling against him. As a matter of fact, since the incident we have been together a few times having a “spot”. I wish to say that it was arranged that he would make a statement in the chamber last Tuesday. He has had other advisers since, and no statement has been made. I hope that in future his conduct will not prevent other honorable members from expressing their opinion. For that reason I have no ill feeling against him. I have no intention now, and never had any intention, of reflecting upon the honorable member in the carrying out of his military duties. Further-

Mr SPEAKER:

-The honorable member has made his point clear. It is useless to add coals to the fire.

Mr Mulcahy:

– I have never been in the Maitland district except once, a few years ago.

Mr SPEAKER:

– Order ! The honorable member is now dealing with another matter. I hope that honorable members on both sides of the chamber will realize that we are not doing credit to the Parliament by continually rehashing this matter. The Standing Orders must be obeyed, and I intend to exercise my authority under them. I shall not allow any further reference to this matter while it is the subject of a notice of motion on the notice-paper.

Mr Blain:

– I wish to make a personal explanation.

Mr SPEAKER:

– Order ! The honorable member must resume his seat. I intend to exercise my authority under the Standing Orders.

page 2373

QUESTION

NEW GUINEA

War Damage Compensation

Mr ABBOTT:
NEW ENGLAND, NEW SOUTH WALES

– I desire to ask the Prime Minister a question arising from war damage . compensation being paid to planters in New Guinea. I have received a letter from a planter in which he says that although arrangements for the payment of war damage compensation to planters in New Guinea are now being finalized, the War Damage Commission is basing compensation for repairs to houses on 1942 values, and on all other fixed property, plant and personal effects, at their cost, less depreciation. As most of these are of prewar vintage, it. means that they are at pre-war values, less depreciation. He then goes on to point out that the British Government is including an increase of 45 per cent, on pre-war values in payments for war damage, and also that while natives are being paid 10s. a palm for all wild palms destroyed in their areas, only 7s. lid. a palm is being paid for cultivated palms on plantations. Will the Prime Minister discuss with the Chairman of the War Damage Commission, Mr. Coles, the question of compensation for New Guinea residents who have suffered very greatly, and ensure that they shall he paid at least sufficient to cover the increased cost of buildings and repairs, and not less than the 45 per cent, above pre-war values that the British Government is paying to planters in the adjacent islands?

Mr CHIFLEY:
ALP

– This matter was raised by Colonel Allen at an interview with the Minister for External Territories and myself a few weeks ago. I assume that Colonel Allen was speaking on behalf of the planters. We agreed to have the matter examined and that is now being done.

Mr Abbott:

– It is not Colonel Allen who has raised the matter with me.

Mr CHIFLEY:

– I understand that, but the subject-matter is just the same.

Mr Abbott:

– That is so.

Mr CHIFLEY:

– I point out to the honorable member for New England now, as the Minister for External Territories and I pointed out to Colonel Allen, that the war damage insurance charges levied in New Guinea did not cover all the matters in respect of which compensation is now being paid. That was admitted by Colonel Allen. The buildings that were destroyed were covered by the war damage insurance scheme, but considerable assistance has been given to New Guinea residents to clean up their farms and properties. This was not covered by the insurance scheme originally, but the regulations were widened to permit it to be done. In most cases, therefore, the individuals concerned are being more liberally treated than they would have been had the original regulations been adhered to. The Minister for External Territories and I are having this aspect of the matter investigated.

Mr Abbott:

– Will the right honorable gentleman also examine the payments that are being made by the British Government ?

Mr CHIFLEY:

– Yes.

page 2373

COMMONWEALTH PUBLIC SERVICE BILL (No. 2) 1947

Motion (by Mr. Chifley) agreed to -

That leave be given to bring in a bill for an act to amend the law . regulating the Public

Service.

Bill presented, and read a first time. Second Reading.

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

– by leave - I move -

That the bill be now read a second time.

The bill provides for a number of amendments to the Commonwealth Public Service Act 1922-1947. Some of the amendments relate to machinery provisions. The following are the more important aspects of the bill.

Clause 4 provides for two additions to section 71 of the principal act. That section in its present form enables the hoard to grant continuous leave without pay up to twelve months. Where the leave is desired to enable an officer to undertake a course of study related to the duties of his office, the maximum period is three years. The proposed amendment will enable the board to extend the leave to meet the needs of reconstruction trainees and officers undertaking lengthy research work or study courses. It will also cover officers appointed by registered Public Service organizations to full-time executive office so that it will not be necessary for them to resign from the service.

Paragraph b of clause 5 is designed to enable the board to grant officers overseas the holidays observed in the particular country in which they are located in lieu of those prescribed in the act for officers in Australia.

Clause 6 of the bill will give temporary or exempt employees with continuous service over an extended period, or who are contributors to the Superannuation Fund, similar appeal provisions against dismissals to those provided for permanent officers. It sometimes happens that a permanent officer and a temporary or exempt employee are concerned together in the same offence. If a recommendation is made for the dismissal of the permanent officer, he has the right to appeal under section 5 of the Public Service Act and the Appeal Board may, inter alia,, impose some other prescribed penalty instead of dismissal. On the other hand, there is at present no similar provision in the case of the temporary or exempt employee, and there is no alternative to his dismissal.

Clause 7 relates to the provision which is made in a number of acts for the payment of remuneration to members of boards and commissions set up under those acts. In certain cases where officers of the service are appointed as members of suchboards and commissions, their salaries under the Public Service Act may have been fixed as inclusive salaries intended to cover all the services rendered by the officer. The proposed section 91a will give the board discretionary power to ensure that an officer shall not retain extraneous payments made to him for services which have already been taken into consideration in fixing his salary. Any further explanations required by honorable members will be given at the committee stage.

Debate (on motion by Mr. Spender) adjourned.

page 2374

BEER EXCISE BILL (No. 2) 1947

Motion (by Mr. Pollard) agreed to -

That leave be given to bring in a bill for an act to amend the Beer Excise Act 1901-1928, as amended by the Beer Excise Act 1947.

Bill presented, and read a first time.

Second Reading

Mr POLLARD:
Minister for Commerce and Agriculture · Ball ar at · ALP

. - by leave - I move -

That the bill be now read a second time.

The bill makes certain amendments to the Beer Excise Act with regard to the renewal of licences to make beer and the form in which a brewer’s licence is issued. It is considered by the AttorneyGeneral’s Department that the legal position under the existing legislation is not clearly defined as regards the renewal of licences from year to year, and this hill is designed to clarify the position in this regard and to ensure that brewers are at all times properly licensed in accordance with the law. No other aspect of the existing act is involved.

Debate (on motion by Mr. White) adjourned.

page 2374

DISTILLATION BILL 1947

Motion (by Mr. Pollard) agreed to -

That leave be given to bring in a bill for an act to amend the Distillation Act 1901-1034.

Bill presented, and read a first time.

Second Reading

Mr POLLARD:
Minister for Commerce and Agriculture · Ballarat · ALP

– by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to amend the Distillation Act 1901-1934 in certain directions. The proposed amendment of section 12 reverts to the provisions which were in existence prior to 1923. In 1923 the section was amended by the addition of the words “ by means of a still of a capacity exceeding one gallon “ to obviate the necessity for licensing small stills of 1-gallon capacity and under, for the distillation of spirits. Such stills are usually used for experimental and testing purposes, and, at that time, it was considered reasonable to exempt them from the licensing provisions, as there appeared to be little danger to revenue, and administration was simplified. The definition of a still, however, is very wide, being “ any apparatus for or capable of distilling spirits”. Cases have arisen in which potable spirits have been produced by means of apparatus of less than 1-gallon capacity, and the excise duty thereon has been evaded, but the law precluded proceedings being instituted. It is now thought desirable to revert to the original provisions in order to fully protect the revenue, and overcome any difficulties which might arise in the future.

Under section 42 of the existing law, the distiller only is competent to make entries covering the removal of spirits. However, spirits are frequently removed under bond, and subsequent entries are necessary when dealt with at the destination, which may not be a distillery. In these circumstances, it is impracticable to require the distiller to make the subsequent entries and the amendment, designed to permit either the distiller or the owner to do so, will remove an anomaly and facilitate matters for all parties concerned.

Section 73 deals with the forfeiture of illicit stills or illicit spirits, and paragraph 4 of that section empowers the seizure of vehicles or boats conveying such stills or spirits. There is no provision, however, to cover the forefeiture of stationary vehicles, and on many occasions this has proved an embarrassment to the department concerned and prevented a reasonable line of action being taken. The amendment is designed to overcome this anomaly and widen the powers under this section of the act.

Debate (on motion by Mr. White) adjourned.

page 2375

SPIRITS BILL 1947

Motion (by Mr. Pollard) agreed to -

That leave begiven to bring in a bill for anact to amend the Spirits Act 1906-1935.

Bill presented, and read a first time.

Mr POLLARD:
Minister for Commerce and Agriculture · Ballarat · ALP

– by leave - I move -

That the bill be now read a second time.

This proposed amendment to the Spirits Act concerns the use of methylated spirits in medicines. Except for veterinary medicines and certain liniments for human use as may be prescribed by departmental by-laws, the Spirits Act prohibits the use of methylated spirits in the compounding of medicines for either internal or external application. It is not proposed to alter the provisions of the law in any way as regards medicines for internal use, but the proposal is to permit the use of methylated spirits in certain medicinal preparations for external use, as distinct from liniments. Control over the use of this type of spirit in medicines has been exercised in order to prevent any possible harmful effects to humans, and even the liniments in which its use is permitted are few in number, as it has been the practice to confine the approvals to those listed in the British Pharmacopoeia and the Codex thereto. However, with the advance of medical science, it has been proved that methylated spirits can safely be used in the preparation of some medicines for external application, and it is proposed to amend the law to permit the use of specially methylated spirits in prescribed cases.

A further aspect is that with the advent of the contemplated free medicine scheme under the Pharmaceutical Benefits Act, the proposed amendment will provide the authority to permit the use of specially methylated spirits in certain formulae for medicines for external application which are prescribed in the pharmaceutical formulary under that act, thus lessening the cost of production of such preparations. It will be seen that the use of the methylated spirits for the purposes outlined will be still subject to strict control, being confined to such preparations for external use only as are prescribed.

Debate (on motion by Mr. White) adjourned.

page 2375

EXCISE BILL 1947

Motion (by Mr. Pollard) agreed to -

That leave be given to bring in a bill for an act to amend the Excise Act 1901-1942.

Bill presented, and read a first time.

Mr POLLARD:
Minister for Commerce and Agriculture · Ballarat · ALP

. - by leave - I move -

That the bill be now read a second time.

It has been deemed advisable to amend the Excise Act 1901-1942 on the lines indicated in the bill now presented to honorable members for consideration. The amendment proposed to section 12 is designed to permit greater elasticity in the administration of the act by the Department of Trade and Customs. It is sometimes desirable, from geographical or other aspects, to remove a portion of a State from the jurisdiction of the Collector of Customs for that State and to place that portion under the control of the Collector of Customs for an adjoining State. At present, there is no provision in the act to permit this to be done.

Section 42, as it now stands, is by no means clearly drafted insofar as it relates to the renewal of licences to manufacture granted under the provisions of the act The Attorney-General’s Department has suggested that the act be amended, as is now proposed, in order to clarify the position.

The amendment affecting section 58 is necessary because excisable goods are frequently removed under bond from a manufacturer’s premises, sometimes interstate, and subsequent entries are necessary when they are dealt with at their destination. In such cases, it is impracticable for the manufacturer to make the subsequent entries, and the proposed amendment to permit the owner of the goods to do so will facilitate the business of both the owners of the goods and the department concerned.

Under sections 70 and 71 of the act, it is mandatory that a manufacturer of tobacco products shall mark every package of tobacco with his name and address and every package of cigars and cigarettes with a factory and State number. The amendment has been framed in order to permit regulations being promulgated at a later stage to provide for a manufacturer to use either his name and address or the allotted numbers at his discretion. Further, the present requirements as to markings vary with the type of product, and it is intended by regulations to provide uniform marking requirements for all tobacco products. The numbers referred to are allotted by the Collector of Customs in each State as a means of identification of the factory. The proposed amendment will facilitate the business of the manufacturer and the administration of the act by the Department of Trade and Customs.

The proposed amendment to section 72 is also concerned with the marking of packages containing tobacco products. As the law now stands, it requires all marking to be effected by cutting, burning or oil paint, but such a method is out of date, and often impracticable, having regard to modern types of packages and methods of packing. The amendment is for the purpose of permitting markings to be applied by any method approved by the Collector of Customs in the State concerned.

Section 116 of the act defines the goods which are- liable to forfeiture. In its present form, no provision is made for the forfeiture of articles or machinery used in the illicit manufacture of excisable goods, nor is there power to seize stationary vehicles containing forfeited goods. The omission of these powers has, on occasions, proved embarrassing to the department administering the act when investigating cases of illicit manufacture or disposal of excisable goods. The additional powers now proposed will strengthen administration and act .as a further deterrent to .illicit practices.

Section 119 is one of the penal provisions of the act. Under the provisions of the existing section it is an offence for the master of a ship to use his ship or suffer it to be used for the unlawful conveyance of goods on which excise duty has not been paid. The principal amendment is designed to bring aircraft within the scope of the section in addition to ships. The amendment to the form of licence to be issued to a manufacturer is consequent on the amendment to section 42, and specifically provides for the renewal of the licence from time to time. With the exceptions of sections 116 and 119, the amendments proposed are mainly concerned with administration. I commend the bill to honorable members for favorable consideration.

Debate (on motion by Mr. WHITE’ adjourned.

page 2377

GOLD TAX .SUSPENSION BILL 1947

Second Reading

Debate resumed from the 25th September (vide page 201), on motion by Mr. Chifley -

That the bill be now read a second time.

Mr HAMILTON:
Swan

.- Because of the importance to Western Australia of the gold-mining industry, I desire to make some comments on the bill. The gold tax was originally imposed in 1939, because it was considered that the gold-mining industry should not be permitted to take full advantage of the sharp increase of the price of gold brought about by war-time conditions, and that it should make some additional contribution to national revenue. With that view people in the gold-mining industry agreed. The tax levied amounts to half the price received in excess of £9 per fine oz. From the price of £10 15s. 3d. per fine oz. paid to gold-miners by the Commonwealth Bank, 17s. 7-Jd. per fine oz. was paid in tax. It will be realized, therefore, that the gold-mining industry made a substantial contribution to the economy of the country and considerably assisted its war effort. Now that peace has returned it is only fair that the tax should be suspended in order that the industry may be given encouragement to regain its former prosperity. One of the principal means by which this can be done is to remove the present tax, and I commend the Government for its decision to do so.

In the financial year 1939-40 the gold tax yielded £1,200,000 from an annual production of 1,371,428 oz. of fine gold, which represents an average monthly yield of 114,285 oz. of fine gold. In the eight years during which the tax has operated the total amount received in revenue toy the Commonwealth is slightly more than £5,800,000. During the financial year 1944-45 only £342,000 was received in revenue through the medium of this tax, and the diminution, of revenue coincided with a decline of production to 656,867 fine oz., which represented a decrease of approximately 1,000,000 oz. from the production of 1938 and 1 939. However, since that period the production of gold has increased. The average monthly production during 1945- 46 was 57,400 fine oz. and during 1946-47 the monthly production was 75,900 fine oz. In July last the production increased substantially, and 114,000 oz. were produced. However, production declined in August, when only 77,000 fine oz. were produced.

Gold is playing an important part in the internal and external economy of Australia. Coincident with its assumption of greater control over banking, the Government decided some time ago to reduce the gold backing to the note issue, and the proportion of gold reserves to notes issued has declined considerably. The latest report of the Commonwealth Bank does not indicate the amount of gold held to support the notes issued. The gold reserves held by the bank are now included in the total shown of balances held abroad and money at short call, which aggregate approximately £51,000,000. When the note issue reaches high proportions gold reserves are necessary for internal stability. Furthermore, Australia’s participation in international monetary agreements, the necessity to offset dollar deficiency, and the imperative need to assist Great Britain as much as possible require the expenditure of a substantial portion of our gold reserves. For those reasons, and in f airness to the gold-mining industry, it is necessary to stimulate production. I commend the Government for the action it is taking to suspend the gold tax, and I trust that it will not be necessary to re-impose it later. This concession will he appreciated, not only by those engaged in the gold-mining industry, but also by people generally in Western Australia. I commend the bill.

Mr JOHNSON:
Minister for the Interior · Kalgoorlie · ALP

– I express my appreciation of the Government’s decision to suspend the operation of the gold tax. I appreciate that the gold-mining industry, particularly in Western Australia, is facing a difficult period just now, because, whilst the price of gold has remained stationary, the industry’s costs have risen considerably. That argument, of course, could be applied to all other industries, but the fact remains that the gold-mining industry has no means of passing on the increased costs, and, in consequence, while the price of gold remains stationary, the costs are ever rising. I appreciate that the Government is rendering very valuable service to the gold-mining industry by taxation relief. But, at the moment, because of the number of low-grade propositions that are in operation, unless further substantial concessions are granted, a number of mines in Western Australia, in particular, will have difficulty in carrying on. I refer to mines like the Big Bell in Western Australia, which carries a population of more than 1,000. The Big Bell has always been recognized as a very low-grade proposition, and my information is that, because of increasing costs, unless some further relief is forthcoming, it and a number of other lowgrade propositions will be forced to close. From my own knowledge of the goldmining industry, I can say that it is facing what may bc termed, without exaggeration, a major crisis. The maintenance of the industry is vital for many reasons. It produces gold that we must have to maintain our solvency. It creates work that the people must have if the nation is to thrive. Its value to the State of Western Australia needs no emphasis, but I cannot refrain from impressing on the House that without it vast areas in the outback would be devoid of population instead of being well populated and having prosperous towns. In order that none of those benefits that the industry confers on Australia shall be lost further assistance to it is essential.

Mr Fadden:

– The gold-mining industry is one of the best decentralizers we have.

Mr JOHNSON:

– But for the goldmining industry a number of backcountry towns in Western Australia would not exist.

Mr Archie Cameron:

– We have the spectacle of a Minister condemning his own Government.

Mr JOHNSON:

– I am making my own case and I can see no justification for the honorable member’s interjection. I have already said that this Government, after it came into power, granted by way of taxation concessions great help to the industry. It was the Government of which the honorable gentleman was a member that imposed that tax.

Mr Archie Cameron:

– It was not.

Mr JOHNSON:

– Well, it was the Government that he supported.

Mr Archie Cameron:

– It was not.

Mr JOHNSON:

– So I see no value in or justification for the interjection. During the war, in order to conserve the interests of the gold-mining industry, the Government made available no less than £’100,000 by way of compensation. The industry is now getting back to normal conditions. The Government has already shown its interest in the industry by granting substantial concessions to it. But the point that I make is that, in view of the number of low-grade propositions in operation, further concessions can be justified. I have already prepared a case for discussion with the Treasurer (Mr. Chifley) and his officers. So my remarks will he brief. The case is almost ready for submission to the Treasury officials. I hope to be able to show to the Treasurer that costs in the industry have increased by 50 per cent. The removal of the gold tax certainly affords further relief to the industry, but not to the extent that I feel is warranted, if we are to encourage its further development. I hope that the submission that I shall make to the Treasurer in the course of a week or so will bring about the desired result. 1 know that the Government does not favour an increase of the price of gold. Possibly there is a justifiable argument against an increase. I hope, however, to have the opportunity of putting every aspect of the case to the Government in the expectation of some further concessions being granted.

Workers in the industry have not had an increase of wages for about ten years.

Mr Blain:

– There has been no increase?

Mr JOHNSON:

– Other than the normal annual basic wage adjustments. I was secretary of the Australian Workers Union when war broke out, and, at that time, we were preparing to submit a case to the Arbitration Court. I was able, by means of conference with the Chamber of Mines in Western Australia, to arrive at an agreement to cover the period of the war, or three years, whichever was the greater, and I am able to say to-day that there has not been one stoppage of any consequence since then. But the workers have recently, through their union, appealed to the Arbitration Court Cor increased wages and improved conditions. The case submitted by the union would, I suggest, because of the time ;hat has elapsed since the last award was made, warrant a substantial increase of wages and better conditions, hut the economic condition of the industry is such that I have no doubt that the Chamber of Mines and its representatives in the Arbitration Court will be able to put forward a case that will influence the judgment that is to be delivered within the next few weeks. As a matter of fact, I was hoping that the court would not deliver its judgment until the Government had examined all the facts associated with the industry.

The workers in the industry have to face many hazards. I have seen towns established in the back country of Western Australia where mines have been developed. Homes have been built and almost, overnight, without warning, the mines have closed and all the assets of the workers, including their home9 and furniture, have been rendered almost valueless. Because of their isolated position, and consequent transport, difficulties, the workers had to sell their houses at a sacrifice. In many instances houses were practically given away. All those aspects should be taken into consideration. Similar things could happen at the Big Bell mine, where today there is a population of about 1,000. I recall the time, five or six years ago, when Wiluna had a population of about S,000. To-day, not more than 3,000 people are there. There has been a similar experience in respect of the Triton gold mine. The position ought to be investigated by the Government, with a view to getting the goldmining industry into full operation. As 70 per cent, of Australia’s output of gold comes from Western Australia, the goldmining industry is of especial value to that State. It, contributes large sums to the revenue of the State as well as of the Commonwealth. I welcome the removal of the gold tax which was imposed by a non-Labour government, and has never been favoured by the people of Western Australia. Indeed so antagonistic are the people of that State to the gold tax that it is generally described as the “gold steal tax “. I have given a great deal of attention to the requirements of the goldmining industry. I have been in constant touch with the Australian Workers Union and the Chamber of Mines, at Kalgoorlie, anc] have asked both bodies to supply all possible information to me so that when the case again conies before the Treasurer all the facts associated with the industry may be available for his examination. .1. leave the matter there knowing that the way has already been prepared for a. further conference. Regardless of what government may bc in power at any time, 1 favour the holding of conferences at which all the facts can be examined. That is a better way to deal with a problem than to make speeches in this Parliament. I hope that, the coming conference, at which all the facts will he available for consideration, will result in further relief being granted to the gold-mining industry.

Mr. ARCHIE CAMERON (Barker) [l:l..58” .-I did not. think that the Minister for the Interior (Mr. Johnson) would “ buy into “ a debate of this description. Had he not done so, I probably should not now bo addressing the House. It is remarkable to see a Minister of State standing at the ta’ble and condemning a policy for which he is partly responsible. The Minister hopes that in the near future he will be able to convince the Treasurer (Mr. Chifley) that something should be done to relieve the goldmining industry, particularly in the interests of Western Australia. The Minister is not well informed on the subject on which he has spoken. Referring to a pertinent interjection which I made he described me as a member of the government which imposed the gold tax in the first instance. I well remember the circumstances in which legislation authorizing the gold tax was passed through the Parliament. .1 was sitting on the cross benches at the time. The Government’s first trial was in the Senate, where there was an even vote and the proposal was not passed. The honorable member for

Warringah (Mr. Spender), who was Treasurer at the time, will recall the circumstances, as well as what happened in connexion with certain tariff proposals introduced at that time. He will recall that the government of the day was beaten by 42 votes to 12. That was the measure of support of which the Minister has spoken. It is additional evidence of his inadequate knowledge of the subjects on which he speaks. I remind the Minister that a Labour government came into office in 1941, about two years after the gold tax was first imposed. Was there any move on the part of that Government to abolish the gold tax? No. We have had to wait for practically seven years for action to be taken.

Mr Johnson:

– -For a great portion of that time Australia was at war.

Mr ARCHIE CAMERON:
ALP

– That is so. During the war, the Minister for the Interior had to go to Western Australia after the then Minister for Munitions (Mr. Makin) had paid that State a visit. The then Prime Minister, Mr. Curtin, also had visited his home State to try to pour oil on the troubled waters around Kalgoorlie.

Mr Johnson:

– The Prime Minister did not go there.

Mr ARCHIE CAMERON:

– I think he did - and I believe that I am as well informed on this subject as is the Minister at the table.

Mr Johnson:

– Be fair.

Mr ARCHIE CAMERON:

– The Minister for the Interior, who represents the Kalgoorlie electorate in this House, knows the way in which the “ boots were put into “ the gold-mining industry of Western Australia. He knows the discrimination that was exercised. He knows that in the Northern Territory every small prospector was driven out and every small mining concern was closed down. He knows, too, what happened in connexion with the El Dorado mine, which was a big mine, owned in part by influential men in the Australian Labour party, if my information is correct.

Mr Johnson:

– The whole of the Northern Territory was then under war control.

Mr ARCHIE CAMERON:

– Was not the El Dorado mine in that area? Why was it necessary to “ turf “ every little prospector off his lease? Why was it necessary to “ pinch “ his engines and his tools? Why was he not paid for the articles taken? Why were the little men all kicked out? And why was it that the big mines, in which influential men associated with the Australian Labour party were interested, could get all the men they wanted, as well as all the steel, explosives and oil needed to continue their operations? When I said that the battery at El Dorado was crushing 48 oz. to the ton, the late Prime Minister, Mr. Curtin, said that I did not know what I was talking about. The fact is that, although a crushing at Alice Springs showed 81 oz. to the ton, only 50 tons of ore was crushed when that result wa.s obtained. The present Labour Government ought to hang its head in shame whenever the gold-mining industry is mentioned. The Minister at the table has told us what ought to be done for the industry, but what did he do recently? He voted for the Bretton Woods Agreement. Indeed, there was only one Minister who did not vote for it.

Mr Johnson:

– Only two members of the Opposition voted against it.

Mr ARCHIE CAMERON:

– I voted against it. The Minister voted for an agreement under which the price of gold is fixed at one-third of its true value. In answer to a question recently asked by me, the Treasurer, who is now sitting on a back bench, keeping the Government Whip company, probably because he knows the honorable member will be lonely in a couple of years, said that the price of gold in the United States of America was over £24 per oz. Since then, men have been brought before the court for selling gold at over £30 per oz. The Minister for the Interior, who is a high officer of the Australian Workers Union, a body for which he just made a strong plea-

Mr Johnson:

– That is not true.

Mr ARCHIE CAMERON:

– Every prospector in the Kalgoorlie electorate should be told that the gold he produces is being sold in the international market for one-third of its true price. The Government is part , and parcel of a gold cartel if such an arrangement exists. It is trying to get over its crimes and foolishness in relation to treasury-bills by falsifying the price of gold. Whatever the Minister for the Interior may say to the Prime Minister, or to the Australian Workers Union, every man who takes out a miner’s licence, or pegs his claim in Western Australia, ought to be told the facts about what the Government is doing with gold. It is all very well to say that certain prospectors have been granted licences to prospect for gold, or that the gold tax is being removed. It is useless to talk about Wiluna, where there are big bodies of low-grade ore, unless the Government is prepared to allow the gold to be sold at world prices. Those mines could carry on at a profit. I know the problem, of the marginal mine, although I am not a miner, and it stands to reason that if the miners are deprived of twothirds of the price of their product, lowgrade propositions will go out of production, whether they be in Western Australia, the Northern Territory, or elsewhere. The industry can be helped effectively only by ensuring that gold is paid for at its true market price, which is 200 per cent, more than the fixed price agreed to by the Government. If the true market price were paid, members of the Australian Workers Union and others could take out their miner’s right, peg out their claims, and have a chance of obtaining a proper reward for their labour.

Gold, like every other mineral, is taken out of the ground only once. In this respect it differs from agricultural products, live-stock, fish, &c, where repeated crops may be obtained. Gold can be won only once, and if the price is fixed at something below the proper level, the miner is robbed of his just reward. I hope that the Treasurer will try to justify the fixation of the price of gold under the international agreement to which this Government is a party. I hope that he will also have something to say about the Bretton Woods Agreement. The Minister for the Interior said that unless relief was provided for the gold-mining industry a difficult position would arise in Western Australia. I ask him, and all those who profess to speak for the goldmining industry, who is responsible for the failure to provide the necessary relief ? The Minister said that an increase of the price of gold might be justified. I agree with him. It is certainly impossible to justify the present price. It is impossible for the note issue of all the countries throughout the world to be expanded, and for the price of gold to remain stable. The Prime Minister may remind me that, according to the Commonwealth Bank. Act, and the Banking Act of 1945, Australian currency is no longer pegged togold. Seeing that, officially, gold no longer has any monetary value in Australia for monetary purposes, I ask the Treasurer, and the Minister for the Interior, who represents 70 per cent, of the miners in Australia, why they worry about the gold-mining industry at all?

If this yellow metal has no longer any bearing upon the currency, why waste time digging it out of the ground? As some one has said, it is merely dug out of the ground in Australia and buried in the ground at Fort Knox, in the United States of America. Why does not the Prime Minister send the Minister for the Interior over to Western Australia to say to the miners, “ Well, boys, we do not want any more gold, even at £10 15s. 3d. an oz. Drop that game, and get on with something useful, such a© cutting jarrah”. I have a strong suspicion that it will not be very long before circumstances will force a revision of the price of gold. I do not very often speak of the depression, but I remind honorable members that during that time Australia parted with its gold reserves at a price very much below that which it could have obtained only a few weeks later. Now, because this Government is a party to an international agreement, it is imposing upon the miners an utterly unjustified price for gold, a price far below that prevailing in any part of the world where gold is bought and sold by free buyers and free sellers. The Government keeps a gang of detectives at Kalgoorlie, and another at the air port in Sydney, to prevent the smuggling of gold from Australia. Why should that be necessary? Because the price of gold is £10 15s. 3d. per oz. in Australia, while in the Middle East it is about £24 per oz., on the Treasurer’s own statement. I believe that there are persons in Kings Cross, in Sydney, prepared to pay £30 an oz. for gold, and one may be sure that they make their profit on it, seeing that the risks and penalties attached to smuggling are so severe. So far as the Australian miners are concerned, the policy of the Australian Government in this regard is pure murder. The Government should be anxious to ensure that miners in Australia obtain the full market price for gold ; either that, or it should tell the miners to get out of the stupid game altogether, and work at something else.

The Minister for the Interior said that he was going to put up a case for consideration by the Treasurer. He will not get very far unless his representations are more successful than any which the Opposition has made to the Treasurer. The Minister, who in this House represents the gold-mining companies, the syndicates and the de Bernales interests, will not reap much of a harvest unless he is very persuasive, indeed, when he puts his case to the Treasurer. For my own part, I can afford to wait and see. I shall look forward with interest to listening to an explanation of, or apology for, the Government’s policy in regard to gold when the matter is discussed again next year.

Mr CLARK:
Darling

.- The Government is doing the right thing by the gold-mining industry in suspending the gold tax, as it is proposed to do in this bill. The honorable member for Barker (Mr. Archie Cameron) spoke with great vehemence ; but I was not able to find out by listening to him whether he favoured the measure or not. This bill will be of substantial benefit to those gold-mining companies which are already operating at a profit. They are entitled to some consideration in view of the rising costs of production, and the fact that the price of gold has been fixed for a long time past. However, the abolition of the gold tax will not help low-yield mines. As the Minister for the Interior (Mr. Johnson) pointed out, mines that have not been returning high profits have been able to secure refunds of tax. Therefore, the suspension of the tax will not benefit them. They will remain in much the same situation as they are in now.

Mining for gold and other minerals is of great importance to the nation, and the Government should do everything in its power to encourage the development of the industry. It brings population to parts of the country that would not otherwise be closely settled. For instance, at Broken Hill, in my electorate, there is a population of 27,000 where, but for mining, there would probably bc not more than 500 people. Gold-mining in Victoria was instrumental in establishing centres of population at places like Bendigo and Ballarat. The agricultural development which has occurred in those districts followed the growth of the mining industry. There are wide areas of Australia with low average rainfalls, where agricultural pursuits would not warrant the establishment of populous towns. It is important for the Government to do everything in its power to induce the development of mining for all sorts of minerals in order to foster the growth of population. The Government is already doing a great deal to encourage mining by carrying out geological surveys. Geophysicists are at work in various parts of Australia under government direction, and I understand that this Government is assisting deepdrilling operations in search of ore deposits. This may lead to great mining development in Australia, as it has done in Canada, where deep-drilling operations have brought to light vast quantities of ore that would not have been discovered by ordinary prospecting methods. Cobar, a town iri my electorate with a population of over 2,000 people, is substantially dependent upon the success of gold and copper mining operations. Hundreds of men are employed at the mine there. If that mine should fail because of unsatisfactory prices, the town would simply go out of existence. In fact, that happened during World War I., when the price of copper fell to an unprofitable level. The Cobar mine closed down, and the town had to close down too. Only a few hundred people were left in it. Some houses were sold for £5 each and carted away. Many residents could not even sell their homes. I should not like to see such a tragedy occur again. lt is important that the Government should assist low-yield gold-mines by means of a direct subsidy on the production of gold. The elimination of the gold tax is not sufficient. Therefore, I ask it to give immediate consideration to the payment of a subsidy for gold production. The Government of Canada to-day subsidizes gold production because of its external exchange situation. I understand also that the Government of South Africa is supplying the whole of that dominion’s current gold production to Great Britain, and has entered into an agreement with the Government of Great Britain providing that, should the price of gold increase or costs of production rise, Great Britain will pay more for South African gold. A similar arrangement should be made by the Australian Government for the disposal of our gold output, and a subsidy should be paid to mine operators who are not able to make a reasonable profit on present prices. Deep drilling should also be carried out so that many struggling gold “ shows “ might be developed. Now, when the Government, faces great difficulties in relation to dollar exchange, is the time to pay subsidies on gold production. Direct subsidies were paid during the depression years in order to improve the foreign exchange situation and the purchasing power of Australian currency overseas. The need for such action to-day is greater than it was then, because of the imminent problems in relation to international exchange.

The honorable member for Barker said that gold had no value in relation to currency. I have always believed that we should operate two separate economies - an internal economy and an external economy. That policy was adopted by the Government when it became a party to the Bretton-Woods Agreement. Gold has no value as backing for the note issue of this country, because our currency has an equally sound purchasing power whether it is backed by gold or not. However, gold is of great value in international trade. It is a universally accepted commodity. It can be sold at any time in order to secure credits with which to buy commodities that we need. Therefore, it has a substantial international value.

The honorable member for Barker also ranted about the price of gold, and declared that producers were being robbed because the Government was not selling gold Hack market. The legitimate market value for gold is the international price fixed for it. The only other value that it has is its black-market price. Does the honorable member suggest that the Government should sell gold on the black market instead of through legitimate channels, thus obtaining supplies of international currency credits which we badly need? The honorable member spoke of gold being shanghaied out of Australia and sold on the black market at £30 an oz. Surely he would not advocate government black-marketing in this commodity! There has been speculation as to whether the international price of gold will be increased. I am inclined to believe that it will not be increased. Therefore, it is necessary for this Government to give immediate consideration to my suggestion that it pay a subsidy on gold production in order to increase our output, thus leading to development throughout the nation and to an improvement, of our international exchange situation which is as bad as that of other sterling countries.

Mr BLAIN:
Northern Territory

– I regret that I have not had an opportunity to prepare a speech on this bill, which provides for the suspension of the tax imposed by the Gold Tax Act of 1939. The reason why I have not been able to do so is that I have been busy in connexion with events in this House, which have affected me personally during the last few days. However, I join with the honorable member for Swan (Mr. Hamilton) in urging the development of the gold-mining industry, not only in Western Australia, but also in other areas in the interior of the continent. If ever there has been a time when a member of this House has had his thunder stolen by another honorable member, that time is now. My thunder has been stolen by the honorable member for Barker (Mr. Archie Cameron). He described how the big gold-mining operators in Central Australia were treated favorably during the war in comparison with small miners, whose mines were allowed to go to ruin, whose machinery was destroyed, and who were called up under man-power regulations or enlisted voluntarily in order to fight overseas. I am very proud of the fact that my thunder was stolen by my friend the honorable member for Barker. The honorable member set out the position now as he set it out on my behalf four and five years ago when I was not able to be here. He stated the facts so well that there is no need for me to repeat them. I thank the honorable member for his appeal on behalf of the miners of Central Australia who were given such a shabby deal during the war years.

I congratulate the Minister for the Interior (Mr. Johnson) for indicating that further concessions will have to be granted in order to bring the goldmining industry of Australia back to normal, particularly his reference to the need for assistance in the mining of lowgrade ores. I have been punching that same sentiment into this Government for the last two years. I am glad that it has now seen the light and realizes that if these low-grade ores are to be of economic value, every assistance must be given to those who work them, especially in the initial stages - so that miners may be induced to bring their mines into productivity. Much wealth lies in our outlying areas, which will remain untapped unless such assistance is forthcoming. The Minister has indicated that he has submitted a recommendation to the Treasurer (Mr. Chifley) that legislation be introduced providing for assistance to he granted for the development of these low grade deposits. Whispers are going around the Northern Territory that something is to be done in that regard there. I assume that these rumours relate to the development of The Granites field, 500 miles west of Alice Springs and the Tanami field 65 miles farther on. It has been rumoured that the Government intends to provide suitable access roads and a water supply in that area provided the mining companies carry out the necessary work to develop the field. I trust that these rumours are based on solid foundation. Far he it from me to say that if that be so the Government is merely greasing the fat pig. As the same time, I believe that first consideration should be given to the small miners who work the low-grade ores. Company effort must, however, be encouraged in the areas of the interior in which the big deposits are located. The Minister has mentioned the Big Bell mine in Western Australia. The development of that mine is a glorious example of what can be done by company effort. Those deposits were opened up by drilling and cross cutting as the result of the enterprise not only of ‘ the company concerned, but also of the Government of Western Australia which constructed 18 miles of railway on the understanding that the company developed the field. I hope that big companies may be induced to exploit the resources of the Northern Territory in the same way. At the same time I trust that priority will be given to those old periscopes of the desert, the old prospectors, who have not been given a fair deal. In the past the Government has allowed these men to go out with their camels and prospect the deposits but it has usually been some city representative of a mining company with a shilling option agreement in his pocket who has reaped the wealth which the old prospectors have discovered. I ask the Government to see that prospectors receive due recompense for their pioneering efforts.

I am glad that we have as Minister for the Interior a man who is familiar with the hardships endured by the old prospectors. I have been looking forward to having a talk with the honorable gentleman about the necessity for regarding the Northern Territory as seriously as it should be regarded. He is familiar with Western Australia, but I am afraid he has spent too little time in the Northern Territory. His comparatively short visits there have not enabled him to appreciate the value of the mineral deposits in the Northern Territory. That is why I have urged that a separate portfolio of Minister foi the Northern Territory should be created, 1 realize that the honorable gentleman is already overburdened with work in. coping with the administrative and other duties associated with his other ministerial responsibilities. To-day the honorable gentleman made out a great case for the workman. His heart bleeds for the toilers. The tears were running down his cheeks like torrents down the steep slope of a mountain-side as lie spoke of them. Yes terday as the result of a letter which I received I felt impelled to place the following question on the notice-paper : - In view of the advertisement by the Department of the Interior in the Adelaide Advertiser of the 15th October, inviting applications for the position of foreman driller, with salary at the rate of £10 per week, inclusive of all allowances, overtime, Sunday and holiday duty-

Fancy that from a Labour government! will he sec that adequate salary is paid to induce a qualified driller to apply, and that overtime and other payments be made to ensure that he would be actually receiving more than his untrained miner assistant?

I shall be interested to read the honorable gentleman’s reply. Here is a letter from the secretary of the Miners and Leaseholders Association at Tennant Greek, . signed by Mr. Owen Eoe, an old miner, whom I believe the Minister knows personally -

At our last general meeting I was instructed to ask you would you bring up in the House the matter of payment for technical and skilled men offered by the Department of the Interior for those grades in the Territory. Unless a change is made in the rate offered to skilled men the Northern Territory industries must languish. The rate for miners at Tennant Creek goes to £8 a week, in most instances a forty-hour week, with double time for overtime and holidays worked.

I attach hereto an advertisement from Adelaide Advertiser calling for applications for a diamond driller (foreman) at the rate of £10 per week for all time worked, holidays, &c. As there is only one Government diamond drill in the Territory-

That is development! - this foreman will be the driller with an assistant. As an ordinary miner with camping out allowances and other concessions he would get at least £10 a week, and payment for overtime and holidays worked. He would also qualify for annual leave, so you see there is no chance of getting a driller for the Territory under these conditions. It looks as if the advertisement was designed to keep drillers from applying. The Minister has agreed to send a diamond drill to Tennant Creek to prospect and for use of leaseholders, but says the difficulty is to get a driller. The department then emphasizes the difficulty by offering ridiculous wages and no conditions.

Tennant Greek has reached a stage of development where a diamond drill is a necessity, and it is probably the only field in Australia its size with a considerable production, without a diamond drill, therefore knowing your well-known enthusiasm for developing the Territory, and your swiftness in looking after the interest of your electors, we again ask you to bring this up in the House.

If ever there was an indictment, of a government for failing to look after the small miners, this is. Why does the Minister possess no greater knowledge of the Northern Territory than is evidenced by the facts contained in that letter? Why does he allow such advertisements to be placed, in the Adelaide Advertiser ? Why does he not confer with me on matters relating to the Northern Territory? Does he continually refuse to consult me because he is of the opinion that I do not know the conditions under which the miners work there? I appeal to the Prime Minister to instruct both the Minister for the Interior and the Minister for Works and Housing (Mr. Lemmon) to consult with the elected representative of the people of the Northern Territory on matters that concern them so vitally. My technical qualifications and my long experience of conditions in the Northern Territory surely entitle me to that consideration. The honorable member for Barker has raised the question of the price of gold. The Treasurer explained in his second-reading speech that the price of gold was £10 15s. 3d. a fine oz., and that the tax was 17s. 7-Jd. a fine oz. It is now proposed to abolish that tax. From memory, I think that the Treasurer said that the suspension of the tax would mean a loss of revenue of £500,000 a year.

Mr Chifley:

– That is on last year’s production.

Mr BLAIN:

– As the honorable member for Barker has said, gold to-day, on some markets, is bringing from £20 to £30 an oz. It would seem, therefore, that the concession granted under this measure will be more than offset by the increase of the value of gold already held by the Treasury. Surely the prospectors at Tennant Creek and elsewhere in the Commonwealth should receive a. share of the increased price, at least on a fiftyfifty basis. Whilst I do not think that the Government is deliberately misleading the people there are certain facts of which the Treasurer must be cognizant.

The honorable member for Darling (Mr. Clark) made certain suggestions with regard to the geophysical surveys. I am proud to say that in my maiden speech, delivered in this chamber on the 9th December, 1934, I dealt with gold prospecting. At that time the geophysical and geological survey of Australia was about to be inaugurated, and the then Treasurer, Mr. E. G. Casey, introduced a bill providing £250,000 for this work. I prophesied that much of that money would be wasted and, indeed, much of it was wasted. I pointed out that in Canada twelve years’ preliminary work had already been carried out and that we could have obtained the results of it for nothing. But we did that work all over again in this country, and wasted more than half of the money that had been made available. I recall saying also that we should not he running away from the known to seek the unknown; that known fields should be developed vigorously. I put that suggestion to the Government now. Whilst I believe that the honorable member for Darling is on sound grounds, I contend that we should proceed carefully with our geological and geophysical survey and that by the adoption of diamond drilling we could avoid wasting large sums of money. Instead of criticizing the gold prospecting pioneers, we should use our increased knowledge to the best advantage. We must remember that in past generations, knowledge of gold prospecting .methods was far leas than it is to-day. I advise the Government, therefore, to proceed warily with the survey and to give the expert in geophysics a chance to prove his theories. We should retain the nucleus of highly trained technicians gathered by the Department of Supply and Shipping. I hope that their work will be given every assistance. Available funds should be wisely expended in the development of the known rather than the exploration of the unknown. I make these suggestions particularly for the benefit of the Minister for the Interior, because I believe that there has not been sufficient concentration on the fields at Tennant Creek and Tanami, 60 miles beyond The Granites. Tanami has been very favorably reported on.

The Australian Government could well adopt the Queensland system, under which mining companies .may receive assistance from the Queensland Government for prospecting work. In return for a guarantee to expend certain sums of money during a specified period, com- panies are granted prospecting concessions. In this way, companies are induced to go into isolated areas. They are protected for a certain period from “ go-getting “ peggers who might try to stake claims alongside their leases after they have gone to the expense of transporting their machinery and equipment many hundreds of miles. It is the Government’s duty to give that temporary protection to any organization that is prepared to expend substantial sums of money to ascertain whether or not a field is worth developing. I urge the Government to adopt this system. I assume that the Minister for the Interior is familiar with that method of inducing companies to invest money in remote parts of the Commonwealth.

I wish, in conclusion, to say a few words about internal and external currency. In my opinion this .system is selfdeception and entails slavery and bondage. It imposes slavery, as reflected in working hours, particularly upon primary producers, whether they be dairyfarmers or gold-miners, because when it comes to marketing their produce they have to stand up to world conditions cn the one hand and a standard of living and costs in their own country on the other. On some later occasion I shall develop ray arguments on this matter.

Sitting suspended from 12.44- to 2.15 p.m.

Mr HUTCHINSON:
Deakin

.- The Government has introduced this measure with the complacency and selfsatisfaction characteristic of it whenever it grants a taxation concession. The truth is, as honorable members on this side have pointed out for many months past, that the Government is enjoying such buoyant revenues that this and other taxation concessions are long overdue. That fact explains why the Opposition has not greeted this measure with hearty cheers. The Government is enjoying very buoyant revenues due to export prices which have now reached levels not hitherto approached in the history of this country. To-day, fantastically high prices are ruling for wool, wheat and other exports. That, of course, is not the result of any action taken by the Government, but is due solely to the shortage of food throughout the world. The consequent world-wide demand for food has boosted the prosperity we are now enjoying. Despite the taxation concessions made by the Government, revenue is far in excess of the Government’s anticipations. Therefore, not only should this concession be considerably greater and permanent instead of temporary, but further reductions of taxes of all classes should be made.

This concession could have been made many months ago. When we were discussing the United Kingdom Grant Bill, I pointed out that there were three principal ways in which we could help the Mother Country. One was the development of the gold industry. Prosperity in the gold-mining industry will immediately relieve the existing dollar shortage, and, therefore, the industry affords a means by which we can help to relieve the Mother Country in the difficulties which now confront, it. We shall not view the industry in its proper perspective unless we keep that fact in mind. With the wool industry, the gold-mining industry is one of the few means by which we can raise dollars, not only for our own purposes, but for the benefit of the Empire as a whole.

The Government has given hut scant attention to the industry. It suffered a serious setback when it and other primary industries were combed for man-power during the war at a time when that man-power could not be fully equipped, or fully utilized, in other spheres. At the same time, it was starved of requirements essential to its operation. Whatever justification may have existed for that policy during the war, the Government can offer no excuse for its failure to give proper attention to the industry since the war ended, because, at the conclusion of hostilities, it became apparent that if Australia were to enjoy full prosperity it must rely largely upon those industries which could be used to acquire foreign currency needed to enable us to purchase essential imports. For that reason the gold-mining industry should have received urgent attention. The Government should have taken immediate steps to remove the obstacles which hindered its progress during the war years. The honorable member for

Barker (Mr. Archie Cameron) has stated that the industry in central Australia was almost cleaned out with the exception of one mine, the shares in which he said were held by persons who were members of the Australian Labour party. The Government must answer that charge before this debate concludes, because the honorable member has a first-hand knowledge of the industry in the Northern Territory as the result of his interest and activities in that part of the Commonwealth while acting on behalf of the honorable member for the Northern Territory (Mr. Blain) when the latter was a prisoner of war in Japanese hands.

The employees in the gold-mining industry have an unrivalled record for good behaviour. That is all the more remarkable because the conditions under which metalliferous miners work are inferior to those enjoyed by coal-miners. Had the coal-miners put up as good a record we should not now be confronted with our present transport difficulties and shortages of essential materials which, incidentally, are seriously retarding primary production of all kinds. Very few other industries have as good a record in this respect as the goldmining industry. Gold-mining is also a great decentralizer. The opening up of every new field, whether it be in virgin bush or desert country, paves the way for the foundation of new settlements and new industries. For that reason the industry is of very great economic value in the development of this country.

I repeat that gold is one of the very few exports which provide an immediate means of enabling us to bring dollars into Australia. Although the dollar scarcity was made known to the public only a few months ago, the Government must have been aware of its imminence for some considerable time past. Therefore, I should like to know why the Government did not give earlier recognition to the importance of this industry, and why it did not take steps much earlier to remove the obstacles which hindered its progress during the war. The Government should give urgent consideration to the need to place the industry on a sound footing. It can do so first by making available to it immediately all of its essential requirements. The export of gold will enable us to lift restrictions on the importation of tobacco, oil, tractors and motor vehicles. That, of course, will be to our own .advantage. At the mme time, we shall make a substantial contribution to the wellbeing of the Empire as a, whole. I emphasize that this measure of relief may be only temporary. The tax may be reimposed at a later date. In my opinion, this concession should be made permanent. As this proposal will alleviate one of the burdens of this industry, I welcome it, but I repeat that, in the past, this Government has treated the gold-mining industry with scant consideration. I hope that the real value of the industry to Australia will be recognized by the Government in future.

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

– in reply - The speech by the honorable member for Barker (Mr. Archie Cameron) was one of the most extraordinary performances that I have heard in this House for some time.

Mr Hutchinson:

– It was an excellent speech.

Mr CHIFLEY:

– Its excellence was not apparent to me. Usually, the honorable member’s remarks do contain some grains of gold among the dirt; but, on this occasion, I could not find any “ colour “. He referred to the price of gold on the black market. I shall not discuss that subject at length, other than to say that the price of gold in the world to-day depends largely upon what the Government of the United States of America is prepared to pay for it. The American Government has made the market for gold, because it has n great accumulation of it. The honorable member knows that perfectly well. If the United States of America were not prepared to continue to buy gold, I am very doubtful about the results of his proposal that the Australian Government should sell our gold on the black market, instead of in accordance with the general agreement, at £.1.0 15s. 3d. an oz. I need not elaborate this aspect. It is true that fantastic prices are obtained for gold, par- ticularly from refugees, who had some harrowing experiences with the currencies of various countries, and who now like to obtain gold., because they can be sure that, in the event of another crisis, it will be readily saleable in any part of. the world for the purchase of goods. The value of gold is that it is the international medium of exchange.

Any person who listened to the speech of the honorable member for Deakin (Mr. Hutchinson) would be justified in believing that this Government had not given any consideration to the goldmininig industry. Of course, that is not true. During World War II., Australia was obliged to devote its efforts to the production of many things which, in the circumstances, were more important than gold at that time. The Minister for the Interior (Mr. Johnson), representatives of the gold-mining industry in Western Australia, and the then Premier of that State, Mr. Willcock, interviewed the late Mr. Curtin when he was Prime Minister and myself in Canberra for the purpose of discussing assistance for this industry. We all realized that many men would leave the industry to serve in the armed forces. Indeed, the number of volunteers from the gold-mining industry was very large. Apart from that, it was not possible to obtain plant and machinery which the industry required. The United Kingdom, which in the past had supplied large quantities of this machinery, was then wholly engaged in the manufacture of armaments. The Government of Western Australia, and the representa fives of the gold-mining industry, including the Chamber of Mines, recognized the position, a.nd an arrangement was made for the Australian Government to make, at various times, a contribution of £150,000, which the Government of Western Australia would expend for the purpose of keeping the gold mines of that State in good condition. The mines were idle, and a substantial percentage of that grant was used for the purpose of keeping the mines free from water in order to save them from being ruined. In Victoria and New South Wales, a considerable number of individual cases were examined on their merits, and the Commonwealth Treasury” granted direct assistance to them. The statement that the Australian Government did not show an interest in the gold-mining industry during World War II. is wrong. Since the cessation of hostilities, difficulties have arisen in obtaining plant and machinery for the mines. Large quantities of this type of machinery were requisitioned for war purposes. However, the Australian High Commissioner in London, Mr. Beasley, and the Australian Government, have been doing their utmost to obtain the type of equipment required for gold production.

In the matter of taxes, this Government has treated the gold-mining industry most liberally. We have not waited until now to do that. Profits from goldmining are entirely exempt from income tas. Hearing that, the Leader of the Australian Country party (Mr. Fadden) must consider that we have almost reached the millenium. In addition, dividends paid from profits derived from gold-mining are exempt from income tax, and calls on gold-mining shares are subject to only two-thirds of the normal rate of tax. Furthermore, a considerable variety of plant associated with this industry is exempt from sales tax. The gold-mining industry also shares in the exemption of “ aids to manufacture “. For those reasons, the gold-mining industry is in a most unusual position. Similar assistance is not granted to any. other industry. A bona fide prospector is allowed exemption from income tax on the proceeds from the sale of his mining rights, or leases. No other industry in Australia, or, for that matter in any other part of the world, is more favoured in these respects than is the gold-mining industry. I had not intended to deal at such length with these matters, hut was compelled to do so by the remarks of the honorable member for Deakin, who claimed that the Government had almost forgotten the gold-mining industry. Here, I remind honorable members opposite that the gold tax was imposed by an anti-Labour Government.

Senator McBRIDE:
WAKEFIELD, SOUTH AUSTRALIA · LP; LCL from 1951; LP from 1954

– But the Labour party supported the imposition of that tax ?

Mr CHIFLEY:

– I have no doubt that we did support it, but the initiative for imposing the tax was taken by the political parties that now constitute the Opposition in this Parliament. As honorable members know, a government does not adopt a policy because the Opposition supports it. At that time, the price of gold had risen substantially, and additional revenue had to be obtained for the purpose of meeting mounting war expenditure. Many people are always prepared to give away sources of revenue, but I have heard very few suggestions for raising revenue. One night, the honorable member for Darwin (Dame Enid Lyons) intimated that she would suggest a method of raising revenue from a tax. and I regret that she has not yet revealed it. I am sure that to me, as Treasurer, it would have been like an oasis in the desert.

I have recounted these various matters in order to make it perfectly clear that the Government has granted considerable assistance to the gold-mining industry. I shall not refer at any length to dollar deficits. Nearly all the gold which we produced during World War II. was earmarked to assist the United Kingdom, and, therefore, ourselves, in regard to foreign exchange and credits. Since the end of the war, we have accumulated some gold. I expected that some of the economic difficulties which now assail the world, would arise. I was not alone in holding this view, because other people were able to look some distance into the future and foresee some of these troubles. As a safeguard, we hoped to accumulate a considerable quantity of gold. However, the difficulties arrived sooner than they were expected by even the wisest men of four or five years ago, including the late Sir Kingsley Wood, who was then Chancellor of the Exchequer. At that time gold was exported to assist the United Kingdom. However, it must not be assumed from the remarks of the honorable member for Barker that the Government or the Commonwealth Bank attaches any very great value to the possession of gold. It is true that if the Government had bought gold when it was at a low price it would have gained some advantage from it, just as any other purchaser would, but the Commonwealth did not do so. The gold bought by the Commonwealth Bank since the war was purchased at the top price ruling overseas. Surely the honorable member does not suggest that the South African Government should “ black market “ its gold merely because a proportion of the world’s trade depends upon gold? Although I am confident that the Government’s action in suspending the operation of the gold tax is appreciated by those in the gold-mining industry, this is but another instance of unwarranted criticism of the Government when one would have expected a word of appreciation. However, there is a small grain of truth in the bushel of words of the honorable member for Barker, namely, that a country obtains some advantage from an accumulated stock of gold. As against that contention, however, the economic position of the world to-day is such that its difficulties could not be solved simply by the production of gold. Another factor which must be borne in mind is that the expansion of the gold-mining industry involves the withdrawal of men and materials from the production of such essential commodities as foodstuffs. I do not intend to canvass the merits or demerits of encouraging production of gold any further, because it inevitably leads one to the old argument as to whether there is any wisdom in digging gold out of one place and burying it in another. In regard to the prospect of continuing the suspension of the gold tax mentioned by the honorable member for Deakin, I do not pretend to be able to foresee the future of the price of gold. I have no information whatever as to whether there is likely to be an increase of the price of gold. The United States of America has vast quantities of it-

Mr Blain:

– Does the right honorable gentleman mean to convey that he believes that the price will not rise?

Mr CHIFLEY:

– I have had no information from any source, official or unofficial, of the likelihood or otherwise of an increase of the price of gold. Of course, it has been suggested that if the United States Government were to increase the price of gold that would act as a subsidy on the production of gold in other countries.

Mr Archie Cameron:

– Can the right honorable gentleman tell us why the United States Government will not sell gold freely at the price which it has fixed for it, namely, 35 dollars an oz.?

Mr CHIFLEY:

– Does the honorable member mean, sell it to other countries or sell it in its own country?

Mr Archie Cameron:

– Sell it to other countries. That would remove the black market to which I have referred, but which I certainly do not support. Why does the United States not supply the world demand from its accumulated stocks of gold ?

Mr CHIFLEY:

– The present demand for gold is largely an artificial one, because the black market to which the honorable member has referred is availed of mainly by the fleeing refugees, who require something valuable to take with them, and is not patronized by ordinary business men. In fact, one country is now receiving so much gold that American dollars sell at a discount in that country. That is one of the many extraordinary economic developments witnessed in the world to-day.

The Government has done everything possible to encourage the gold-mining industry in Australia by introducing special taxation provisions, including concessions designed to facilitate the purchase of mining plant and the renewal of existing plant, and during the war substantial assistance was given to the industry to enable it to maintain its plant in proper condition. My remarks applyto companies and individuals engaged in the industry, not only in Western Australia, but also in other States. Recently the Government made special provision in regard to the sale of prospectors’ rights. In all the circumstances I think that the Government can fairly claim to have displayed a very lively interest in the welfare of the gold-mining industry. Some districts, particularly in Western Australia, are completely dependent upon the production of gold for their economic existence, and that has impelled the Government to give special consideration to the industry. The honorable member for Darling (Mr. Clark) mentioned Cobar as a town which is entirely dependent upon gold production, but I point out to him that Cobar also derives considerable wealth from the mining of copper. One honorable member referred to the desirability of encouraging the mining of low-grade ore, but the difficulty is that the payment of subsidies may result merely in the attraction of men and materials to uneconomic propositions. That is a consideration which the Government has had in mind for some time, and it is really because of its desire to maintain employment in certain areas, such as “Wiluna in Western Australia, that the Government has treated the industry so considerately. If the Government were to continue encouraging .uneconomic production of gold from low-grade ore a point would eventually be reached where the subsidy paid would exceed the value of the gold produced, which would be a fantastic situation. I invite the honorable member for Barker to consider the situation that would arise if the United States Government declared its intention to sell gold freely to any country that required it. What does he imagine would be the result?

Mr Archie Cameron:

– It would lead to ;he disappearance of the black market in gold.

Mr CHIFLEY:

– But something else would occur. In the first place, very few countries could afford to buy gold, because they would not have the necessary dollars, and, in the second place, if a vast quantity of gold were suddenly released into the world’s .markets by the Americans, who said : “ We shall keep just sufficient for commercial purposes “, I cannot imagine the effect that would have on the world’s economy.

Mr Archie Cameron:

– Is the Prime Minister as sure of that as he is of the operation of the Bretton Woods agreements?

Mr CHIFLEY:

– The Bretton Woods agreements have nothing to do with the matter. The honorable member is right “ off the beam “ when he refers to the Bretton Woods agreements in relation to the present subject, and I am surprised at the irrelevance of his interjection, because at times he is extremely logical.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 -

This Act may lie cited as the Gold Tax Suspension Act 1947.

Mr ARCHIE CAMERON:
Barker · ALP

– I desire to move -

That the word “ Suspension “ he left out with a view to insert in lieu thereof the word “ Repeal “.

If the Government can do without the gold tax for an indefinite term there is no reason why the suspension should not be made perfectly definite. The bill gives the Government the power to reimpose the tax at any time it likes by proclamation. I do not think that should be the position. The gold tax was imposed in 1939 and, since certain remarks were made this morning, I have looked at the records of those days, and I have no occasion to qualify anything I said this morning, because I find that my recollection of the occasion is perfectly correct. For the benefit of the Australian Labour party, let me say that the two bills dealing with the tax, one of which we are now suspending, were passed through every stage between 4.3 p.m. and 9.3 p.m. on the 19th September, 1939. At no stage did the Australian Labour party call for a division. The bills received the support of every member of the Australian Labour party then in this House.

Mr Barnard:

– We were very cooperative.

Mr ARCHIE CAMERON:

– Yes. I am glad of the Minister’s assurance because of certain things said to the contrary this morning. The stand I took then was perfectly valid. It was that if we were to tax the production of gold as an industry, the industry should not be liable to additional taxes by way of income tax or anything else. I think the singling out of gold production as one industry to hear a terrific tax was not fair. So I welcome the opportunity of moving the amendment. I intend to force it to a division, because there is no earthly reason why the Government should not accept it. There is very little it accepts from the Opposition as a whole and I do not think it has accepted anything from me. As it is the wedding day of the heir presumptive to the throne, it is about time it did so.

The TEMPORARY CHAIRMAN (Mr Burke:
PERTH, WESTERN AUSTRALIA

– Order! The Chair has given consideration to the ‘amendment, and finds that it is in conflict with the title of the bill. The amendment might have been moved at the second-reading stage.

Mr Archie Cameron:

– I rise to order. The title of the bill has not been agreed to. It, is the last thing to be considered. Until the clauses have been passed, the title is not dealt with. The question “ That the title be the title of the bill “ is the last matter on which the committee will be called on to vote. Until we have decided what the bill is to contain, the title is, according to the Standing Orders and the practice and procedure of the Parliament, the last thing that we consider, because it is open for the committee to make in the bill certain changes that would affect the title. So I contend that you are wholly and hopelessly out of order in your ruling.

The TEMPORARY CHAIRMAN:

– The Chair does not require any comment upon the ruling, which stands. The point of order is not upheld.

Mr Archie Cameron:

– I dissent from your ruling and move -

That the ruling be dissented from.

The TEMPORARY CHAIRMAN.The motion must be put in writing.

Mr Archie Cameron:

– Every one on this side will support it.

The TEMPORARY CHAIRMAN.The Chair considers that the proposed amendment goes beyond the terms of the motion for leave and is therefore outside the scope of the measure.

The honorable member for Barker having submitted in writing his objection to the ruling.

Question put -

That the ruling be dissented from.

The committee divided. (The Temporary Chairman - Mr. T. P. Burke.)

AYES: 24

NOES: 33

Majority . . . . 9

AYES

NOES

Question so resolved in the negative.

Clause agreed to.

Clauses 2 and 3 agreed to.

Clause 4 -

Notwithstanding anything contained in the Gold Tax Act 1939, tax shall not be imposed or payable under that Act in respect of gold delivered in accordance with the provisions of section thirty-two of the Banking Act 1945 on or after the twentieth day of September. One thousand nine hundred and forty-seven, and before such date (if any) as is fixed by Proclamation as the date upon which the tax imposed by that first-mentioned Act shall cease to be suspended.

Mr ABBOTT:
New England

– I desire to move -

That the word “not” be left out with a view to insert in lieu thereof the word “ never”.

The clause would then read -

Notwithstanding anything contained in the Gold Tax Act 1939, tax shall never be imposed or payable under that Act in respect of gold delivered in accordance with the provisions of suction thirty-two of the Banking Act 1945 on or after the twentieth day of September, One thousand nine hundred and forty-seven, and before such date (if any) as is fixed by Proclamation as the date upon which the tax imposed by that first-mentioned Act shall cease to be suspended.

My purpose in moving the amendment is to stabilize the goldmining industry, which is of such importance in the economy of Australia.

The TEMPORARY CHAIRMAN (Mr Burke:

– The effect of this amendment would be the same as that which the honorable member for Barker (Mr. Archie Cameron) desired to move and which I ruled out of order. Leave was given to introduce this bill bearing a specific title, and the effect of the amendment would be to render the title inappropriate. Therefore, the amendment is out of order.

Mr Abbott:

– On a point of order. May I with due respect point out that the title is not altered by my amendment. The title of the bill is the “Gold Tax Suspension Bill”, and the amendment which I have moved does not vary that title in any particular. Its effect would be to suspend the tax in perpetuity. I submit that Mr. “Webster, in his well-known dictionary, would hear out the truth of what I say. Therefore, Mr. Temporary Chairman, I hope that you will uphold the point which I have established with such infallible logic.

The TEMPORARY CHAIRMAN:

– I am sorry that I must reject the allegedly infallible logic of the honorable member. The effect of the amendment would be to cancel the suspension of the gold tax, and thus to defeat the purposes of the hill.

Mr. ARCHIE CAMERON (Barker) 3.0] .-I move-

That all the words after “ forty-seven “ to the end of the clause be left out.

The TEMPORARY CHAIRMAN.The honorable member’s proposed amendment would have the same effect as the other two amendments which have been ruled out of order. It is not competent for the honorable member for Barker (Mr. Archie Cameron) or any one else to move an amendment, the effect of which would be to prevent the reimposition of the gold tax.

Mr ARCHIE CAMERON:
ALP

– It is now perfectly clear that the Government wishes to leave the way open to batten once more on the gold-mining industry, to the great detriment of marginal mines, whenever it thinks fit. Of course, the time the Government will choose to reimpose the tax will be when the country is suffering from that recession of which the Prime Minister has been talking for the last few months. Otherwise, the G05vernment Should have no objection to removing the tax altogether, instead of merely suspending it. The word “ suspension “, which appears in the .bill, is the choice of the Government, not of the Opposition. The Opposition believes that the time has long since passed when the tax ought to be taken off permanently. I do not represent a goldmining district, but I appeal to those honorable members on the Government side who represent gold-mining constituencies to tell the miners that the Government is going to reimpose the gold tax as soon as the financial position begins to tighten up.

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

T3.4]. - The Government does not know what the position may be regarding gold in the years ahead, and, therefore, it has introduced this bill for the purpose of suspending the gold tax. The honorable member ref erred to the possibility of a recession. I have not talked about a recession in this country at any time.

Mr Archie Cameron:

– The right honorable gentleman’s official pronouncements were all wrong.

Mr CHIFLEY:

– 1 did not say that there was a possibility of a recession in this country, but I did speak of a possibility of a recession overseas, and expressed the hope that it would not occur. The honorable member cannot “ tack “ that on to me and get away with it. This bill has been favorably regarded by those engaged in the industry with whom it has been discussed. I admit that the big gold producers will reap the largest benefit from it. Under the existing legislation provision is made for refunds to those whose profits do not reach a certain amount. Considerable amounts were paid out in that way. The tax on last year’s gold production yielded approximately £500,000. [n a normal year it would yield about £1,000,000. Thus, if gold ‘ production were restored to its pre-war level, there would have been a benefit of more than £1,000,000 to the industry. It is true that that benefit largely goes to the biggest producers; but they may be those who are working low-grade propositions on a large scale. The Government is anxious to do the best for the industry, and is more solicitous for its welfare than those honorable members opposite who have indulged in a good deal of talking about it.

Mr ARCHIE CAMERON:
Barker · ALP

– It is perfectly obvious that the biggest producers will get the greatest advantage from this bill. They are also the biggest employers. The object of this provision is to ensure that there will ‘be an increase of employment in the industry.

Mr Chifley:

– At least a maintenance of existing employment.

Mr ARCHIE CAMERON:

– I trust that the employment in the industry W] increase, though, in that respect, I am a little more optimistic than is the Prime Minister, who usually outdoes me in optimism. The right honorable gentleman referred just now to a recession. I have a very strong recollection that the right honorable gentleman coined that word to describe our economic troubles a few months ago. If he did not mean it in relation to Australia, his statement a few moments ago can bear only one construction. If a recession takes place overseas it cannot but be detrimental to this country. During the debate on the Banking Bill, we heard so much about the dangers of a recession and what the big companies are said to have done during the financial and economic depression that one may be pardoned for calling attention to the fact that the right honorable gentleman himself has claimed that the principal feature of this bill is that it gives an advantage to the big companies.

Mr RANKIN:
Bendigo

.- It is obvious to everybody that Australia de pends to a very great degree upon the gold-mining industry. Gold fever is a very serious disease, many men spending their lifetimes trying to wrest the precious ore from the bowels of the earth. Unfortunately, however, not a few honorable members in this House have no regard for that fact.

The TEMPORARY CHAIRMAN (Mr Burke:

– Order! I ask the honorable member to confine his remarks to clause 4.

Mr RANKIN:

– If the Chair does not realize the fact that men are prepared to spend their lifetimes in the doubtful occupation of digging into the bowels of the earth in the hope of finding gold is not vital to a consideration of clause 4, all I can say is that the Chair is just too stupid.

The TEMPORARY CHAIRMAN.Order! The honorable member will resume his seat.

Mr RANKIN:

– Thank you. I think that will be quite all right.

The TEMPORARY CHAIRMAN.Order! The Chair has endeavoured to be tolerant towards the honorable member without giving any reason for that tolerance. I remind the honorable member, however, that there is a limit to its tolerance, which has already been exceeded.

Mr RANKIN:

– “Well-

The TEMPORARY CHAIRMAN.Order! The honorable member will immediately withdraw and apologize for his offensive words, or he will be named.

Mr RANKIN:

– So far as the debate

The TEMPORARY CHAIRMAN.Order ! The honorable member must withdraw and apologize.

Mr RANKIN:

– In view of the-

The TEMPORARY CHAIRMAN Order ! The withdrawal and apology must be made without qualification. The honorable member will resume his seat.

Mr RANKIN:

– I shall do so. I shall-

The TEMPORARY CHAIRMAN:

– Order ! The Chair has asked the honorable member for Bendigo to withdraw and apologize for his offensive words. He has not done so.

Mr RANKIN:

– I did so.

The TEMPORARY CHAIRMAN.Order! I name the honorable member for Bendigo.

Opposition members interjecting,

The TEMPORARY CHAIRMAN.Order! The Chair has ordered the honorable member to withdraw and apologize.

Mr RANKIN:

-I did so.

The TEMPORARY CHAIRMAN:

– The honorable member did not do so.

Mr RANKIN:

– That is a deliberate lie.

Motion (by Mr. Chifley) put -

That the honorable member for Bendigo (Mr. Rankin) be suspended from the service of the committee.

The committee divided. (The Temporary Chairman - Mr. T. P. Burke.)

AYES: 34

NOES: 24

Majority . . 10

In division:

AYES

NOES

The TEMPORARY CHAIRMAN.The Chair gave the honorable member for Bendigo the opportunity to do so, but he did not take advantage of it.

The TEMPORARY CHAIRMAN.The honorable member will be further dealt with if he is not very careful.

Question resolved in the affirmative.

In the House:

Mr SPEAKER:

– Order ! I put the question -

That the honorable member for Bendigo (Mr.Rankin)be suspended from the service of the House.

The House divided. (Mr. Speaker - Hon. J. S. Rosevear.)

AYES: 35

NOES: 24

Majority . . . . 11

In division:

AYES

NOES

Later in division:

Question resolved in the affirmative.

The honorable member for Bendigo thereupon withdrew from the chamber.

In committee: Consideration resumed.

Clause 4(vide page 2392).

Mr HUTCHINSON:
Deakin

– No real reason has been given to the committee why the remission of the tax cannot be made on a permanent basis. The Prime Minister (Mr. Chifley) said in a vague way that he did not know what the position of gold would be in the future. I presume he believes that gold may advance in value, in which case it may be to the benefit of the Government of the day to re-impose the tax. The re-imposition of a tax by proclamation is very rare in British parliaments, because it involves the imposition of a tax without consulting the Parliament. That would be a very unwise course to follow. There may come a time when a Government - I do not refer particularly to this Government, but to any Government - may consider it to be desirable to impose or re-impose the tax, but before such action is taken the industry concerned, and particularly the Parliament, should be consulted. After all, “ No taxation without representation “ is an old principle in British democratic history. The Prime Minister would be well advised to heed the representations of the Opposition on this subject, and abolish this tax permanently. If, in future, circumstances arise necessitating the imposition of additional taxes, the proper method to adopt is to submit the matter to the Parliament for consideration. In that event, probably suggestions would be made for more appropriate ways of raising revenue than by taxing the gold-mining industry. The imposition of any tax without the consent of the Parliament is wrong.

Clause agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 2396

WAR-TIME (COMPANY) TAX ASSESSMENT BILL 1947

Second Reading

Debate resumed from the 25th September(vide page 201), on motion by Mr. Chifley -

That the bill be now read a second time.

Question resolved in the affirmative.

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

Bill - by leave - read a third time.

page 2397

WAR-TIME (COMPANY) TAX BILL 1947

Second Reading

Debate resumed from the 25th Sep tember (vide page 202), on motion by Mr. Chifley -

That the bill be now read a second time.

Mr FADDEN:
Darling DownsLeader of the Australian Country party

– I desire to make a few comments about this bill, the effect of which is to repeal the War-time (Company) Tax Act which was introduced during World War II. I, as Treasurer, introduced the original bill in 1940 as an entirely wartime measure, because the government of the day considered that there should be equality of sacrifice, as far as possible, throughout Australia during the war. We believed that companies should not be allowed to make undue profits out of the then boom war-time period, and the conditions which the Government foresaw would arise in Australia. While the principle underlying the bill was simple, the practical methods involved in carrying out the principle by legislation were not so easy. The government of the day was guided by experience of the imposition of the war-time profits tax during World War I. This tax was a dismal failure, because it did not achieve its stated objects. There had been much adverse criticism from commissioners of taxation, and those who had an intimate knowledge of the working of the relevant act, which showed unequal and harsh treatment in many directions and revealed loopholes in others. Although it had operated for four years, the amount collected under it, after allowing for refunds, was comparatively small. In fact, it was not for some years after the act ceased to operate that assessments and refunds were satisfactorily completed.

In the light of this experience, the government of the day decided early in World War II. that a special committee should be appointed to inquire into the method of obtaining from companies by means of a war-time company tax a part of the revenue which, we considered, was necessary as a just contribution towards war expenditure. After the recommendations of this committee had been carefully analysed, we decided that a tax on a sliding scale should be adopted. Several of the complexities and defects of the war-time profits tax of World War I. were avoided. For instance, the tendency of highly successful companies to spend extravagantly on expenses and other items was curbed by a graduated scale as against a flat rate of tax. The need to make complicated concessions, which had been a bad feature of the high flat rate of tax, was avoided and a much simplified tax was adopted. In other words, the form of the act was a happy compromise between the necessity to obtain the maximum revenue possible without making the principles too complicated or the legislation so harsh as to discourage enterprise. Although certain amendments were made to the act during World War II., the principles involved were, in the main, most satisfactory. The act was continued for several years, but now it is generally agreed that, as peace-time conditions should be prevailing in this third post-war year, the operations of the war-time company tax should be suspended. Consequently, I am in full agreement with the bill, and shall support it.

Question resolved in the affirmative.

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

Bill - by leave - read a third time.

page 2397

STATES GRANTS (TAX REIMBURSEMENT) BILL 1947

Second Reading

Debate resumed from the 9th October (vide page 566), on motion by Mr. Chifley -

That the bill be now read a second time.

Mr FADDEN:
Darling Downs Leader of the Australian Country party

– Thisbill is not so simple or so happily accepted by the State Governments and many people, as the Australian Government appears to believe. One of the most important, and, indeed, expensive grants made yearly to the States occurs in connexion with uniform tax legislation, of which this bill is a necessary part. There has been a good deal of serious dissatisfaction with the nature and extent of this grant in reimbursement to the States, as compensation foi1 relinquishing the field of income tax. Consequently, I propose to make a few suggestions with a view to improving the position. I am of opinion that the formula which is at present in existence is not flexible enough to meet the ever expanding and changing economic conditions of Australia. Early in the war the States realized that the financial resources of the nation would have to be marshalled to the maximum degree in order to meet the extraordinarily heavy war expenditure in this country to which the Australian Government alone was committed. Consequently, about the middle of 1942, the Commonwealth and the States came to an amicable understanding. The Commonwealth was to be the sole taxing authority for the duration o’f the war, and the States were to he reimbursed with annual grants based, in general, on previous collections. That was the basic principle of the formula.

The advantages of such a system in war-time were obvious. Manpower was saved, as there was only one collecting authority, which administered one uniform tax law for the whole of Australia. Every taxable person contributed a uniform amount irrespective of his State of domicile. From a practical viewpoint, uniform tax has had much to commend it. From an ethical viewpoint, however, it is impossible to defend the Australian Government’s subsequent, actions in aggravating the States by the methods which it is using to retain this power permanently.

When sonic of the States wanted their taxing powers returned at the war’s end, the Commonwealth refused, and fought the States in the High Court. Under the Constitution, the Commonwealth has priority in the collection of tax. Consequently, it now enforces its will by the very simple process of continuing its tax collection as before, and making its grants to the States conditional on then refraining from levying income tax. A sovereign government can raise money, first, by taxation in its various forms, secondly, by borrowing, and, thirdly, by credit expansion. Uniform taxation in the indirect field is no new thing, as the Commonwealth has always had exclusive powers over customs and excise revenue, and has, for many years, levied a uniform sales tax. Through its control of the note issue and the Commonwealth Bank, the Australian Government also exercises complete exclusive authority over credit expansion. In principle, these are extensive and important incursions into State sovereign money-raising rights, but the States are content to leave the Commonwealth in complete command of these revenue-producing fields.

The third method of money-gathering is by borrowing. This power has, by agreement, passed out. of the hands of the separate States. It is operated by the Loan Council, a statutory body set up after an alteration of the Constitution, by referendum, over twenty years ago. Both the Commonwealth and the States are represented on this body, which, in general, determines the loan allocations to the States, after Commonwealth requirements have been met. The Loan Council has been found flexible enough to work exceedingly well. The relationship of the Commonwealth and the States is more in the nature of coprincipals, each of which gives due and proper consideration, in recognized fashion, to the others’ essential loan requirements. In these circumstances, the States are active participants in decisions, by statutory right, and are not forced to adopt th* role of mendicants beseeching the Treasurer for the revenue crumbs which fall from the Commonwealth financial table.

Income tax was thus the only important revenue-producing field which was not the Commonwealth’s exclusive province prior to World War II. The original Commonwealth Constitution, or the authority of a referendum, followed by the constitution of a statutory body to see fair play between the Commonwealth and the States, extensively redistributed financial powers in Australia during the course of the twentieth century. The Loan Council may provide the pattern for solving the conflict .between contending interests, which have honest but irreconcilable differences of opinion regarding uniform tax and the advisability of its re-transfer to the States. The plan would involve the establishment of a body similar to the Loan Council with a title such as the Australian Uniform Tax Council.

It is possible that a referendum would ie needed to determine the people’s will and to meet with constitutional requirements. If such a proposal were acceptable, it should - (a) comprise representatives of the Commonwealth and the States as does the Loan Council; (b) have ft flexible formula, operated by the Commonwealth and States as coprincipals to (i) decide taxation revenue requirements of all parties in advance,

  1. advise on a simplified and uniform taxation law and proposed scales of individual tax for parliamentary consideration to raise the necessary revenue, and
  2. determine State allocations of revenue after essential Commonwealth requirements had been satisfied.

Full Commonwealth control is ethically unfair to the States that consider that the uniform tax was intended only as a temporary Avar measure, and to potentially rich but undeveloped States that see little scope for quick expansion under a. rigidly fixed formula for the distribution of revenue, that is variable only by the magnanimity of a tight-fisted Federal Treasurer. The practical simplicity of uniform tax is fairest to the individual. Tt gives to every State an even chance of competing for industrial development. The uniform company tax simplifies problems of collection of tax. Administrative costs are much less, and time-wasting complexities and the filling in of multiple forms is substantially reduced. Therefore, we should find a way in which to maintain the advantages of the uniform lax system and, at the same time, smooth out the difficulties of distribution of tax revenues to the States, having regard to the ethical splitting of sovereign rights, which is inevitably involved. My suggestion comes close to meeting those requirements. It is submitted as a basis for constructive thought by those interested in the Commonwealth and the State spheres as the beginning of an approach to reconciliation of both sides in the uniform tax controversy.

Mr Chifley:

– Will the right honorable gentleman repeat the pith of his suggestion ; I did not quite get the drift of it.

Mr FADDEN:

– I suggest a statutory body like the Australian Loan Council to allocate between the Commonwealth and the States revenue from the uniform tax in the same way as it effectively allocates loan money. I make the suggestion wilh full sincerity. The High Court has upheld the constitutional power of the- Commonwealth to levy tax to the exclusion of the States. The difficulty that arises with the Commonwealth administering both the collection and the distribution of the revenue lies in the allocation of the State? ‘ share of the proceeds. As the bill denotes, the reimbursement of the States is made on a formula. I consider the formula too rigid to meet the needs of States that ave capable of development. The formula is based, with certain adjustments, on the revenues of the States in 1939-40, I understand. The body that I visualize ought to be able to arrive at a formula under which the States would not be dependent on the good grace and generosity of the Federal Treasurer. I take a broad national view, but I am particularly concerned about the potentialities of my State, Queensland. Its capacity for development is great, but that development will largely depend on its income as a partner in the federation. As the States develop, their contribution to the uniform tax pool, which is controlled by the Commonwealth under present conditions, will increase. The formula should be sufficiently flexible to enable them to be proportionately reimbursed. I hope the Treasurer will examine my suggestion. The Australian Loan Council has worked very satisfactorily with the Commonwealth Government and State governments as equally sovereign members, and I think extension of the principle to the uniform tax field would be attended by results beneficial to both the Commonwealth and the States. At any rare, the States would not be dependent on the mercy of the Federal Treasurer.

Dr GAHA:
Denison

– I listened carefully to the Leader of the Australian Country party (Mr. Fadden), and I appreciate his enthusiasm and sentiments. I regard the States Grants (Tax Reimbursement) Bill as the most important measure that the Government could put before the Parliament. I regard it as one hundred times- more important than the banking legislation.

Honorable Members. - What?

Dr GAHA:

– I do. Honorable members from the more populous States have good reason to realize the significance of the present set-up. I do not want to he helped by the honorable member for Barker (Mr. Archie Cameron), who is interjecting, because I am trying to make a serious contribution to the debate, which is something that the honorable member is apparently incapable of doing. I have been in the political game as long as he has been and I know as much about State rights as he does. There is no need for him to try to help me. Let us consider some of the questions that exercise the minds of members of the Commonwealth Grants Commission. During the war, it became necessary for the Australian Government to intervene in the development of certain parts of Australia to meet urgent war needs. The cost of those developments was borne by the Commonwealth. Many of them will be of permanent value to the States in which they occurred. It would be impossible to estimate the value of the contribution to the economic life of the States made .by the wharfs, roads, railways, bridges, and airports that were constructed for war purposes by the Commonwealth. Therefore, the task of the Commonwealth Grants Commission is becoming more and more difficult. I endorse what was said by the Leader of the Australian Country party about the need for more flexibility, but I think the problem is much deeper than the right honorable gentleman has indicated. The Australian set-up should have been reviewed long ago. Before the Commonwealth was ever contemplated, we had the terrible spectacle of one State “ free trade “ and another “ protectionist “ and customs houses on the borders. The dreadful difficulty that confronts all the States to-day of varying railway gauges, with 5-ft. 3-in. gauge in Victoria, a 4-ft. 8^-in. gauge in New South Wales and a 3-ft. 6-in. in Queensland, was not the Commonwealth’s making. That was perpetrated long before federation. It is a legacy of the days of dreadful State jealousies. They are prob lems, though, that we must apply ourselves to in the immediate future.

I now propose to examine what may easily result from the retention of uniform taxation. I see signs of what may happen in the State budget in New .South Wales. The Government of that State, which is sovereign in its own right, can spend as it likes. It does not .have to go to the taxpayers for the money to finance its programmes. If it does not have sufficient revenue, the Commonwealth gets the blame. We are getting a thrashing for the enormously high taxes in this country. Of the revenue from direct taxes, the first £70,000,000 goes to pay the interest bill, and the next £45,000,000 to reimburse the States under the uniform tax scheme. So the Commonwealth has nothing to do with the spending of that, money. Yet we have to take the blame if the States over spend. It should be the responsibility of the States to take from the people what the States need. They would then get the odium if they spent too much. Why should we take the thrashing on their behalf? If £45,000,000 is insufficient to meet the commitments of the States this financial year, and they spend £50,000,000 or £60,000,000, it will be the Commonwealth, as the collecting agent, that will he blamed by the people. It is a topsy-turvy affair. I notice that, the Treasure!’ of New South Wales has budgeted for a deficit of £500,000 this year. So I anticipate that sooner or later the Australian Government will be forced into the adoption of an entirely different, set-up. I have not had sufficient time in which to examine the suggestion made by the Leader of the Australian Country party, but I am convinced that what we need to right the affairs of Australia is far more than the body contemplated by him. The issue is whether the States, as at present constituted, are adequate. Other Australians before us, big Australians, bigger Australians than some of their stupid sons, I am glad to say, spoke of the day when Australia would be broken into a series of economic units known as provinces. Twenty-five years ago would have been the time to do that. I am afraid that it is far too late now. At one time, the Leader of the Opposition (Mr. Menzies) advocated an elected convention to review the Australian Constitution. I have always opposed elected conventions, because they are elected to represent the States, and attend the conventions with strong State prejudices and fail to look at the problems confronting them as Australians. Their approach is negative, for fear that they may prejudice the best interests of their own States. The Prime Minister should examine the proposal’ that a group of highly-respected Australian citizens - I do not care how many: ten, twenty, thirty or forty - without any political tag attached to them, at least publicly, who would be capable of reviewing the whole Australian set-up geographically, economically and socially, be given .a roving commission to break the country into a series of units self-reliant economically, militarily and developmentally. It is a curious thing that, when we have passed victoriously through a war, we seem to think that there will never be another war. During the last 45 years there have been three great wars, in which 100,000,000 lives were needlessly lost. The first great war ended in 1918, and the second began in 1939. To-day, there are signs on the horizon of further dark happenings, and recent scientific developments render it imperative that we should disperse our population, come what may. But this cannot be done by merely saying to the people, “ Go out to some place ! “ But, if the whole of Australia were broken up into 30 or more provincial units, under their own governments, with a proper central government, there would be a whole new series of capitals developed to take population away from the great centres. It would then be possible to ensure that the highly developed areas made a due contribution towards the development of the more backward areas. So long as the present system is maintained, State jealousies will be perpetuated, and I will not listen to any one who suggests that State jealousies do not exist.

When I was a Minister of a State government, I believed that, taking things in their proper order of priority, the health department and social services required a good deal of attention. I devoted my years in Parliament to improving social services, and I think I can say, with some pride, that a good deal was achieved while I was in office. Some other States, however, might not need to pay so. much attention to social services, and would thus be able to devote their resources to developing in other directions. However, the Commonwealth Grants Commission pays no heed to factors of that kind. The commission fixes a standard according to the average conditions prevailing in Queensland, New South Wales and Victoria, and insists that the other States shall conform to this standard. The penalty for failure to do so is a reduction of the Commonwealth grant. In to-day’s press it has been reported that the grant to Tasmania has been reduced. The complexity of the machinery by which the grant is fixed cannot be explained to the people, but they understand immediately when the amount of the grant is reduced, and when this happens difficulties are created between the States and the Commonwealth. Instead of the Australian people being educated to be more federal-minded, the fact is that apparent injustices to the States - I will not stop to argue whether the injustices are real or not - are having the effect in the claimant States of tending to pull them away from the Commonwealth. It ought to be the aim of the Australian Parliament to inculcate in the States a federal spirit. No one in the States seems to be certain where State functions end and where Commonwealth functions begin. One can understand that, in a time of national emergency, power should pass to the Commonwealth, but, when the war machine is being unwound, the power should gradually go back to the States. We should not allow our thoughts to be monopolized by finance. We should consider Australia as a social unit, and we should, in particular, consider Australia as a military entity at which the world is looking. We should take action to disperse our population, so as to increase our safety in time of war, and we should develop our resources. I am very sorry that the grant to Tasmania has been reduced, because it is impossible to make an increasing population understand thaiit can be just to reduce the amount of the grant. The reduction is a source pf anxiety and worry to the people of Tasmania and I hope that the position will be remedied. The system of uniform taxation, under which the State Governments have no responsibility for raising the money which they expend, tends to make for irresponsible spending.

Mr McBRIDE:
Wakefield

.- I approach the consideration of this bill as a. federalist, as one who wholly supports the federal system. I do not favour the way in which the relations between the Commonwealth and the States are at present tending, namely, towards unification. The action of the Commonwealth in taking more and more power from the States is calculated to bring the federal system into disrepute, and even to extinguish it. The power of the Commonwealth over the States was greatly increased during the war with the introduction of uniform taxation. It was argued at the time that the Commonwealth must necessarily be supreme in order that it might make a maximum war effort. When the uniform tax system was introduced, it was thought to he purely a war measure, that after the war the States would get back their taxing powers. It was only natural, however, that when a Labour government came into office, it should be loath to relinquish the power which it found in its hands. Thus, even though the war has been over for two years, there is no suggestion that the Commonwealth should hand back to the States the authority which it took from them during the war. I was in the Senate when the original legislation was under consideration, and at that time many honorable members in that chamber believed that the method by which it was proposed to distribute among the States Commonwealth grants as compensation for lost income tax was entirely wrong. I know that a committee was appointed to consider uniform taxation. It examined the financial position of the States, and made certain recommendations. I do not believe that the recommendations were adopted in their entirety, but I accept tie fact that, in general, the recommendations of the committee were given effect in the act of 194.1. However, it is well to remind honorable members of the flagrant inequalities for which the method of distribution, as embodied in the act, has been responsible. On a per capita basis, the system has worked out as follows : -

Honorable members will immediately realize the inequity of that method of distribution. It is no justification to argue that, because previous administrations in New South Wales, for example, have been most extravagant in their expenditure, the rest of the people of Australia should, for all time, be required to accept a system of distribution of revenue which is manifestly unfair. I bellieved that the system was unfair at the time it was introduced, and I now believe that to perpetuate it would impose great hardship on some of the States. When the original bill was introduced, it was argued that the States had other sources of revenue besides income tax. If we examine the amounts collected by the States from the sources available to them wc find that when deciding upon the reimbursement which they are to obtain, the Treasurer has paid no regard to the efforts they have made in those fields. We find that the heaviest taxed State per capita other than income tax was Tasmania, which collected £3 17s 6d. a head. Next in line was South Australia, £3 5s. Gd.; then Victoria, £3 2s. Sd. ; New South Wales, £2 16s. 5d. ; Western Australia, £2 14s. 7d.; and Queensland, £2 17s. od. It will be admitted that the opportunity to supplement their revenues from the sources available to them was not taken advantage of by some States. For instance, New South Wales, which can be described as a rich State, collected in that way only £2 16s. 5d. per capita, whereas Tasmania collected £3 17s. 6d. The war has been over for two years and, excepting for additional amounts added to the original grant of £33,000,000, the same basis of allocation has been continued. I realize that when the original act was amended to provide for the payment of additional amounts to the States a different basis of distribution was agreed upon. The basis then adopted took into account the population of and the average wage existing in the various States, but it did not take into account the difficulties of the States arising from varying fertility, area and general wealth. Had it done so we would have obtained a distribution more in conformity with that adopted in connexion with the proceeds of the petrol tax in which the area of the State as well as i rs population is taken into account. With all respect, I suggest that the time has arrived when the basis of reimbursement of the States should be thoroughly overhauled. Many factors that at present are ignored must be taken into account. For instance, Victoria, which is a compact fertile State, may well get along with less per capita than Western. Australia, which has huge areas of very low value - some of them comprising desert land - and other areas which can be developed into very fertile areas only at extraordinarily heavy cost, lt is perfectly obvious that an amount that would be sufficient for Victoria on any basis of computation as to population or resources, would be absolutely insufficient for Western Australia and, to a less degree, for South Australia. I believe that the time has arrived when this matter must be carefully reexamined.

I agree with the sentiments expressed by the honorable member for Denison (Dr. Gaha) that under the present system little responsibility rests upon the State governments to budget within their means. In other words, I agree that governments of an extravagant kind can go ahead, as the Government of New South Wales is doing at present, budgeting deliberately for a deficit and finally approaching the Australian Government to bridge the gap. I believe it to be one of the basic principles of government thai the government which expends the money should have some responsibility for raising it. That principle must he adhered to if we are to arrive at anything like a satisfactory solution of the difficulties of the financial relations between the Commonwealth and the States. The present system is bringing about a feeling of irresponsibility among State governments and also a feeling of superiority and domination on the part of the central government. We had an example of that at the last meeting of Commonwealth and State Ministers when the financial relations of the Commonwealth and the States were under consideration. At that conference there were present representatives of both Labour and non-Labour viewpoints. It- was attended by the Libera] Premiers of South Australia and Western Australia and the Labour Premiers of New South Wales and the remaining States. It is curious that during the course of the discussion all the Premiers, irrespective of their political colour, supported certain proposals. .1 believe that the vote on one proposal resulted in six State Premiers voting in favour of a motion and the Prime Minister and Treasurer (Mr. Chifley) voting against it, but the Prime Minister declaring the motion lost. That state of affairs may suit those with Labour views; it may suit the unificationists ; but it does not suit those who believe in the maintenance of the federal system. I am satisfied that the power of Government must be dispersed. There is great merit in the suggestion made by the Leader of the Australian Country party (Mr. Fadden) that some form of council should he established, somewhat on the lines of the Loan Council, to make decisions on these matters. But here again I direct attention to the fact that even in the Loan Council the Commonwealth is dominant. I do not believe that the federal system can operate satisfactorily whilst the federal authority remains dominant. Whilst I do not object to the increase of £5,000,000 proposed to be made available in this measure, for the reimbursement of the States, I believe that a committee should be established composed of representatives of the Commonwealth and the States to inquire fully into the financial arrangements, responsibilities and commitments of the various States, and that the committee, having assessed all these things, should make a recommendation to the Commonwealth designed to restore to the States a field of authority in financial matters.

Whilst in war-time the Commonwealth must be supreme and control the whole of the resources of the country, in peacetime the very reverse should be the case.

In saying that, I believe I am expressing the views of the majority of the people of Australia. Whatever doubts they may have had about the question of federal dominance have been dispelled by the action taken by the Prime Minister and his Government in relation to the banking proposal which has just been passed by this House, and is now being considered by the Senate. The realization of the tremendous upsurge of opposition that came from all sections of the people in all parts of Australia should provide food for thought for the right honorable gentleman. I trust that the people will realize the trend that is taking place, that willy-nilly, without expressing it in explicit terms, the Government is gradually drawing to itself the whole of the powers and controls which rightly belong to the State parliaments. I make these observations because I believe that the need for a review of the financial relations of the Commonwealth and the .States is urgent. I hope that before we are called upon to pass another bill of this kind this subject will be examined and that proposals will he placed before us designed to give to the States, not only a more equitable share of the financial resources of this country, but also some field in which they can exercise their powers and rights as sovereign entities.

Mr LANG:
Reid

.- This bill perpetuates the denial of sovereign rights to the States. The Commonwealth is using the uniform tax legislation to create a tax monopoly. State governments have been left with all the burdens of government and not the prerogative of government to raise revenue from those governed. That position is a repudiation of every known axiom of government. State parliaments can now carry on the work of government only to the extent that this Parliament permits them, through its allocation of revenue. If a State government desired to introduce endowment for the first child in a family, it cannot do so. The State parliaments no longer have the same powers as their own local-governing bodies. For instance, the Abercrombie shire council can impose its own taxation; the Metropolitan Water and Sewerage Board can fix its own levels of taxation; but the State Treasurers no longer have that power. This bill, and this principle, appear to me to be a complete violation of section SI of the Commonwealth Constitution, which provides that “ all revenues or moneys raised or received by the Executive Council of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution “. It was clearly the intention of those who framed the Constitution that the Commonwealth should have the right only to tax for the purposes of the Commonwealth. It could not raise money except for expenditure on those tilings that the Commonwealth had power to do. Such matters as education were specifically reserved for the States. Therefore, the States were to have the sole right of raising the necessary money to carry on their education systems, their bursaries, their welfare centres, and all matters incidental to education. The Commonwealth has no right to collect taxes and then say to the States, “ You are granted this sum of money and this sum only, for the purposes of carrying on your education system The Constitution is very clear, whatever certain justices for the time being may say. All revenue raised by the Commonwealth must be appropriated for the purposes of the Commonwealth. It cannot be appropriated for the purposes of the States, That view was very clearly expressed in evidence before the Royal Commission on the Constitution by two eminent constitutional lawyers, the late Mr. E. M. Mitchell, K.C., and Mr. Owen Dixon, now Sir Owen Dixon, a justice of the High Court. While the measure to impose uniform taxes might have been fully justified during the war, on the ground that the Commonwealth must have priority over all revenues for the purposes of conducting the war, that justification no longer exists. The Commonwealth and the States have their respective powers and responsibilities, and they must be in a position to give effect to them without interruption. It is not right for the Commonwealth to say: “ We have priority over taxation, and, therefore, we can increase our proportion to squeeze every penny of taxation out of the people, leaving nothing for the States That attitude is wrong. If the Commonwealth continues its present policy there can be only one end, the total abolition of the State parliaments. We cannot saddle, the State parliaments with the responsibility of providing- the essential services required by their peoples and leave them without the means of raising the revenue necessary to provide such services. We should not use these taxing powers to create a super State, with the State parliaments as vassals of the Commonwealth without sovereign rights. This Government has a fetish for centralizing power in Canberra. Already some of the States are in serious financial trouble and are dependent upon “ hand-outs “ from the Commonwealth. That is the spirit of this bill. A rich, powerful centralized government is to hand out charity to poor mendicants. The Australian Government is using its taxing power to maintain a Commonwealth dictatorship over all the Australian States. When the State Premiers come to Canberra to sit in conference they have to touch the forelock and bend the knee. If they are subservient they may wring some petty concessions from the Commonwealth Treasury, such as the lifting of the gold tax, which the Government agreed to at the recent conference at the request of the Western Australian Premier, Mr. McLarty, to assist wealthy Western Australian gold-mining companies. If the States resist the Commonwealth dictatorship, they are liable to be beaten to their knees and to suffer financial strangulation. The financial relations of the Commonwealth and the States have undergone this revolutionary change during the last twenty years. The time is rapidly approaching when there must be a complete review of the powers and functions of the States. If they are to survive, some measure of sovereignty must be restored to them. If they are to die, then let it be a quick death, and not a process of slow torture and strangulation. We are now at the cross-roads. We must decide whether we will retain the federal system or not. The federation was based on the idea that in some matters Commonwealth action was desirable whilst in others a decentralized system of government should be retained. At that stage Australia adopted the Jefferson line of thought in regard to the working of a federal system. The federation was to be based on the maximum of freedom for the individual members comprising it, but now we have a new conception of government. This system is not unification as visualized by the Labour movement, but it contemplates the centralization of all power. The new conception is one of centralized dictatorship where every phase of our life is to be determined by the centralized bureaucracy. That dictatorship cannot function under a direct federal system. It needs a totalitarian organization. Therefore the States are to be stripped of all their sovereign rights. Otherwise they might be in a position to resist and ward off the dictatorship.

Uniform taxation is just as much an instrument of this new form of dictatorship as wage-pegging, prices control, rationing, licences for this, that and the other thing, production control and land sales control. The purpose of uniform taxation is not to simplify taxation and to make it easier for taxpayers to understand the basis of their payments and to make it easier for them to pay. Taxation procedure in Australia has never been more involved than it is to-day. The taxpayers have never known less about their legal obligations than they know to-day. The present system of taxation is vicious in both principle and operation. The purpose of uniform taxation is to create a taxing monopoly for the Commonwealth at the expense of the States in order to maintain the Canberra dictatorship. Under this system the amount of money received by each individual State has no relation to either the amount of money raised in the State or to the State’s legitimate needs. The residents of the Australian Capital Territory and the Northern Territory, where there are no parliaments, now pay an indirect State tax the proceeds of which may go to meet the needs of Western Australia, or even New South Wales. All this has been achieved under war-time emergency. It is typical of a monopoly-minded government. No government has ever had a more fervent faith in monopoly than this Government has. It has fostered monopoly at the expense of small business. It believes that the Commonwealth should have a monopoly of power and that this power should be exercised over the private lives of every citizen. Hitler believed in a similar system and called it national socialism. That system was founded on the doctrine of a centralized German government operating a series of State monopolies.

The people of Australia have never expressed their approval of monopolistic government in the Commonwealth. When they had been consulted, as they have been on many occasions, they have almost invariably declared in favour of the retention of powers by the States. They have more faith that democracy will endure under a federal system than under a centralized monopolistic government. For my part I question the validity of this bill. Whatever power the Commonwealth might have to raise revenue by the imposition of taxes, a clear obligation is laid upon it under the Constitution to pay the money so raised into the Consolidated Revenue Fund, and when the money has been paid into that fund it may be appropriated only for Commonwealth purposes. The purposes of the Commonwealth are clearly stated in the Constitution, particularly in section ‘51. The money proposed to be appropriated under this measure will be spent for many purposes outside the powers of the Commonwealth. Therefore, it is my contention that it is not lawful for this Parliament to appropriate money in this manner. That contention has been reinforced by the opinions of very eminent constitutional lawyers.

Quite apart from the constitutional aspect, though, there is a vital aspect at stake. Our State parliaments must remain responsible governing bodies. Without the power to impose taxes they can no longer be regarded as responsible legislatures. If it is right for the Abercrombie shire council to exercise its own taxing power it is right for the Parliament of New South Wales, the Mother Parliament of the Commonwealth of Australia, also to have the right to impose its own taxes.

I object to the title of the bill. It is wrong that money which is being expended for the legitimate purposes of the States, should be referred to as a grant. That is altogether a wrong attitude for this Parliament to take towards constituent States of the Commonwealth. It is not the lawful function of this Parliament to wreck the State parliaments by manipulating finance. Some of the State Premiers have already issued a grave warning that their treasuries will soon face a financial crisis. They have asked that their taxing powers be restored. The Commonwealth has refused this request, only because it is determined to put its own economic and financial policy into operation. But the time is rapidly approaching when this problem will have to be faced by this Parliament. The direct taxing functions of the States will have to be defined, and their sovereign powers restored. The alternative is a complete Commonwealth dictatorship, and that is one thing which the Australian people cannot afford to tolerate.

Mr TURNBULL:
Wimmera

.- One honorable member described this as a most important bill, and I agree with that view, not because I oppose the greater allocation which is being made to the States as a reimbursement, but because I consider that the allocation, in view of the amounts which the Commonwealth collects from the States, is entirely inadequate. The honorable member for Denison (Dr. Gaha) stated that he believes that this is the’ most important bill which has come before this Parliament for a long time. He even considered that it was of greater importance than the Banking Bill. With that view, I do not agree, although I admit that there is some similarity between the Banking Bill and uniform income tax legislation. The banking legislation of 1945 gave to the Australian Government certain powers to control finance. The uniform income tax also gives to the Australian Government other powers to control financial policy. It only requires another move, like the Banking Bill, in connexion with uniform income tax to give to the Australian Government sole control over every form of finance represented by taxation. Therefore, the similarity between those two measures is apparent, and, in that respect, I agree with the honorable member for Denison.

But the honorable member for Denison went even further, ant! said that in wartime, it was only natural that the Commonwealth should acquire greater powers, because it had infinitely greater responsibilities. He added that when peace-time conditions return, this power would gradually revert to the States. However, that is not happening with uniform income tax. The States agreed to accept this system like many individuals agreed to accept restrictions, however distasteful, as n war-time measure, expecting those restrictions to be removed after the cessation of hostilities. When I returned to Australia, I found that many people believed that the States would recover their authority to impose income tax. Whether the uniform income tax legislation is valid, I cannot say, but the Commonwealth continues to enact it, to the detriment of the expansion of certain States.

Mr Barnard:

– A former Premier of Victoria, Mr. Dunstan, tested the validity of the uniform income tax legislation, and the High Court declared that the legislation was valid.

Mr TURNBULL:

– The former Labour Premier of Victoria, Mr. Cain, asked the Treasurer (Mr. Chifley) for a larger allocation, and he was granted an additional £2,000,000. With that amount, he had to be satisfied. I forecast that before long, the new Premier of Victoria, Mr. Hollway, will make an urgent and persistent demand on the Treasurer for an increase of the allocation. A brief examination of the relevant figures will reveal the injustice which Victoria is suffering under uniform income tax. I am well aware that included in these figures are receipts from certain taxes which the Commonwealth was levying before the introduction of uniform income tax, hut they do not materially alter the situation. The Commonwealth collects from Victoria slightly more than £51,000,000 per annum, and returns by way of reimbursement to the State less than’ £9,000,000. According to reports in the press, the Treasurer has not seen fit to grant the amounts which the Government of Victoria requires for certain important irrigation projects. What we have to decide is whether it is better to expend money in the interests of

Australia as a whole in a State like Victoria, which has progressed beyond the initial stages of development, than to put the money down the sink, as it were, in northern Queensland or northern Western Australia.

Mr Edmonds:

– Any money invested in northern Queensland is not put down the sink.

Mr TURNBULL:

– Once a State has reached a certain stage of development, we can achieve greater productivity more quickly with less expenditure than we can with more expenditure in States with less development. That is why the Government of Victoria has asked for a large grant for rehabilitation purposes, and for the development of the great Murray Valley. The honorable member for Herbert (Mr. Edmonds) objected a few moments ago when I described the investment of money in northern Queensland as putting money down the sink. Some honorable members have stated that millions of pounds have been sunk in Queensland without an adequate return. I am not opposed to a fair distribution of this money, but I do object to a disproportionate allocation represented by collections totalling £51,000,000 and a reimbursement of less than £9,000,000. That is wrong. Therefore, I enter an emphatic protest against the continuance of uniform income tax.

One feature of this debate has been the unanimity among honorable members on both sides of the House that the present formula is unfair. Another point which has been made is that Australians generally are not satisfied with the way in which the Australian Government is expending its revenue from taxation. People are dissatisfied with the expansion of government departments, and the increasing number of public servants. Taxpayers believe that the Government should devote more attention to fostering primary production, which would serve the interests of Australia better than an expanded Public Service. Ever since I have been a member of this House, I have heard honorable members speaking of what occurred hundreds of years ago, and, of course, many honorable members opposite often speak of the financial and economic depression.

Mr Edmonds:

– That was not hundreds of years ago.

Mr TURNBULL:

– No. It occurred in the early ‘thirties. To-day, the honorable member for Denison propounded a scheme, for introduction in the distant future, embodying economic units throughout the country which would function somehow or other for the good of the people. The general trend of his remarks was that, under such a scheme, everybody would be happy and prosperous. What I have been endeavouring to find out since I became a member of this chamber is the Government’s plans for the present. Many people delve into the past, or look into the future, and leave the present to look after itself. This is the time when the Prime Minister (Mr. Chifley) should act. Knowing that the formula is unfair, as honorable .members on both sides of the chamber have shown, the right honorable gentleman should realize that the time is ripe for a change. As a representative of Victoria, I look to the Prime Minister to make a definite Statement, or take some action along the lines which I have recommended.

I do not agree with the view of the honorable member for Wakefield (Mr. McBride) that Victoria does not require 90 much money as, say, Western Australia. I did not become a member of the Parliament in order to agree with any honorable member, irrespective of his political beliefs, who made a statement which I did not consider was right.

Mr Pollard:

– I did not agree with the honorable member for Wakefield.

Mr TURNBULL:

– I often disagree with the Minister for Commerce and Agriculture (Mr. Pollard). Sometimes he is right, and, on those occasions, I give him credit for it.

Mr Barnard:

– Then the honorable member must agree with the Minister on this matter.

Mr TURNBULL:

– Yes. The Minister may assert that, in this matter, I am the judge and I give my opinion as I view the matter. If I did not act in accordance with the dictates of my conscience regarding what I ‘believe to be right, I should be a. poor representative of the people.

Mr Chifley:

– A man must have a conscience to .begin with.

Mr TURNBULL:

– I fear that on some issues the right honorable gentleman has been without a conscience. My role in this debate does not call for a long speech. I definitely oppose the present formula, and urge the Prime Minister to increase the allocation to Victoria, and, indeed, to other States which contribute a major percentage of the collections from the uniform income tax. Before long, the new Government of Victoria will ask for a reconsideration of the formula, and, in this House, I shall strongly support its representations. I urge the Prime Minister to heed the remarks on this subject which honorable members on both sides of the House have made this afternoon. They have stated clearly that the present f formula is unfair and inadequate for an expanding Australia.

Mr THOMPSON:
Hindmarsh

– If I understood correctly the remarks of the honorable member for Wimmera (Mr. Turnbull), he expressed the hope that the time would come when the State which contributed the greatest percentage of revenue under uniform income tax would receive the greatest reimbursement. The blessing of uniform income tax is that it has caused us to abandon the “ little State “ idea, and act as Australians. When honorable members compare the allocations which the various States receive, they lose sight of the fact that, when the original apportionment was made approximately six years ago, the calculations were based on the amount which each State considered to be sufficient for it to collect from its people by way of income tax. I agree that, under the original allocation, Victoria suffered in comparison with other States, and that taxpayers in Victoria were obliged to pay more than they had paid under the dual CommonwealthState system of taxation.

The honorable member for Wimmera condemned the honorable member for Wakefield (Mr. McBride), who said that Victoria did not require such a large allocation on a per capita basis, as did “Western Australia or South Australia. I issue a warning that if we revert to the former system, we shall condemn some States permanently to an inferior position. Some honorable members, including the honorable member for Reid (Mr. Lang), contend that under the uniform taxation legislation the States have lost their sovereignty and are practically dependent on the Australian Parliament for money with which to carry out their functions. It has been claimed that, the States have been sacrificed to the Commonwealth. What is the Commonwealth but the States? We represent the different States in the Australian Parliament. I regard the uniform tax as beneficial to South Australia and to thu South Australian people.

Mr.- McBride. - Only since the honorable member’s election to this House.

Mr THOMPSON:

– No. I always favoured it. Long before I was elected to the House of Representatives, when the uniform tax was being introduced, I addressed meetings at which I explained how its operation would benefit the State and the individual State taxpayers. I agree that the uniform tax does restrict the spending rights of the States in noninterestearning directions, but land settlement schemes and irrigation schemes are financed, not from revenue, but from loan funds. So, I do not think the uniform tax will affect the Australian loan works programme.

Mr Turnbull:

– It is already having that effect in Victoria.

Mr THOMPSON:

– The States are not unanimous on this subject. It is said that the apportionment of the proceeds of the uniform tax, as between the Commonwealth and the individual States, is unfair, but what has been said to-day indicates clearly how difficult it is for the Commonwealth and State Treasurers to evolve a system of tax reimbursement satisfactory to the States.

Mr McBride:

– To satisfy the Federal Treasurer is the greatest difficulty.

Mr THOMPSON:

– The Federal Treasurer is in a difficult position. Honorable members opposite press, on the one hand, for reduced taxes and, on the other, for increased payments to the States from the proceeds of the uniform tax. How they can do both surpasses understanding. I wish honorable members opposite would be consistent. As the Treasurer pointed out, by way of interjection, the gap between revenue and expenditure last financial year had to be financed from loan funds. I agree that the formula on which the State3 are reimbursed cannot be regarded as perfect, and that something more in line with the desires of the Premiers could perhaps be evolved. I do not agree, however, that we should revert to the old system, under which the Commonwealth raised money to meet its needs and the States money to meet their needs. In any event, the High Court has decided that the Commonwealth has first call on the people’s money in the matter of taxes. After it had satisfied its needs in a State like South Australia, there would not be much left for the State Government, and it would once more he placed in an inferior position as compared with the more populous States of Australia, and, indeed, a position inferior to that which it occupies to-day. I do not wish to hark back unduly to the past, but twenty years ago, when. South Australia was predominantly a primary-producing State, it was impossible for the State government to levy high taxes, and it had difficulty in attracting secondary industries. As the result, the standard of living of its people was lower than that of the people in the industrial States. The uniform tax has changed that. I hope that it will continue to operate. I know that the Premier of South Australia objects to the uniform tax.

Mr McBride:

– So do the people.

Mr THOMPSON:

– The honorable member, like every one else, can only guess what the people think.

Mr McBride:

– They returned the Playford Government.

Mr THOMPSON:

– Because of the way the seats in the Parliament of South Australia, have been distributed, it is almost impossible to depose the present Premier. About 42 per cent, of the people have 26 representatives and the remaining 58 per cent. ‘ thirteen representatives.

Mr ACTING DEPUTY SPEAKER:
Mr. Sheehy

– Order!

Mr THOMPSON:

– I do not propose to continue that line of argument, but, when the honorable member claims that the return of the Playford Ministry to power indicates the South Australian people’s opposition to the uniform tax, I must impress upon him that it was returned, not on that issue, but because of the manner in which the distribution of seats was made. We must bear in mind that we represent, not merely the people of our own States, but also the people of the whole of Australia, and that it is Australia that counts in the long run. Any system of taxation that places one State at an advantage and another at a disadvantage, keeping the second poor, as it were, must be avoided at all costs. I hope that I am a big enough Australian to be interested in the welfare of all the people, not merely those whom I directly represent. The honorable member for Reid referred to the need of the States for revenue from taxation for educational purposes, but, under the system he favours, prosperous States would be able to spend on education much more per capita, than would other States not so prosperous, and that would condemn the children in the less prosperous States to education inferior to that conferred upon children in the more prosperous. My view is that every child in Australia, whether born or brought here, is entitled to be guaranteed a. high standard of education regardless of the part of Australia in which it may live. The history of taxation is one of evolution. Varying methods of taxation have been applied to meet varying circumstances. We have evolved the uniform tax to meet present needs. I realize, however, that the apportionment of the proceeds of the tax must be considered from time to time and brought into line with the needs of the individual States and Australia as a whole.

Mr HOLT:
Fawkner

.- There are a few points that I desire to bring briefly to the notice of the House while it is considering this legislation. I find myself in agreement with honorable members on the Government side of the House, at least in respect of .some observations that they have made. That is a. rare experience and one which is worthy of emphasis. The. honorable member for

Denison (Dr. Gaha), for example, explained that this was a most important measure, and that the uniform tax represented one of the vital and formative elements in the constitutional history of Australia. While the conclusions that we may both have drawn from that point of view would differ, I believe most honorable members would share his view that the uniform tax, which was brought in as a matter of administrative convenience, has involved a constitutional evolution, in Australia.. The urgency of the war factors that made it a desirable administrative step in the war years in order to gain the maximum finances for the purposes of war have passed so quickly by that we have not yet fully explored the constitutional implications of what was then done. But at least it should have become clear to the thoughtful people of Australia that the operation of the uniform tax has weakened tremendously the constitutional strength of the State parliaments and governments. That is result that may be acceptable to many people. It may be acceptable to a majority of honorable members supporting the Government. But, to many other people, who have become alarmed by the centralizing tendency of the war years and concerned by the impact of » central bureaucratic control of the lives of the people, this development will not, appeal. They will desire to restore to the State parliaments much of the authority which has been whittled away from them by the operation of the uniform taxation legislation. I unhesitatingly place myself amongst those who desire to put the gears in reverse so far as this matter is concerned. I say that, not as one giving expression to a reactionary political philosophy. I say it as one who came into this Parliament virtually a unificationist, desiring to see the powers of this Parliament increased, and desiring to see them exercised for the nation as a whole by a central authority; but the views which I brought here some years ago have been shaken by the experience of myself and others during the last few years. What I have seen happen in this country, and in this Parliament, has convinced me that the views which I then held were mistaken. An opinion which was held strongly by me when I came into this Parliament lias been very much modified by what has happened in the last ten years.

Mr Barnard:

– In other words, the honorable member is becoming more reactiona ry.

Mr HOLT:

– The Minister for Repatriation (Mr. Barnard) says that 1 am becoming more reactionary. That is a popular expression with some honorable members opposite. lor them, any one who is not a. socialist is a reactionary. 1 do not know how closely they have studied the political history of various countries, but if they made such a study they would find that the reactionaries were those who tried to increase the authority of the State - who tried to concentrate all power in the State - whereas the man who was fighting against reaction was the man who stood for the rights of the individual. I am prepared to leave the verdict to history as to who will be regarded as the reactionaries of this time. I am prepared to take my place with thos: who are fighting for the individual, and for his rights. When the history of this period is written, the Minis:er foi Repatriation and his colleagues will b shown up us true reactionaries, as the. men who were determined to build up the authority of the State at the expense of the freedom of the individual. However. I do not propose to elaborate that point further.

What has happened as a result of the operation of the system of uniform taxation, and of the doctrinaire approach of the Government to the matter, has given authority and strength to a centralized bureaucracy in Canberra, something which has not meant good government for the people as a whole. It is customary to talk of uniform taxation, but that is a fallacious expression. What we have in Australia to-day is not uniform taxation, but only uniform income taxation, and income tax is only a part, though an important part, of taxation as u whole. I ask honorable members to ponder the implications of that distinction, because they have an important tearing in Victoria, at any rate. Before the introduction of the present system, each State had developed a taxation system along lines which, in the opinion of successive governments, met the needs of that State. In New South Wales, the people had became accustomed to a comparatively high rate of income tax, but to low rates of taxation in other directions. In Victoria, our income tax rate was lower, but we had a much higher per capita rate of other forms of taxation. Consequently, when uniform taxation, so called, was introduced, the people of Victoria had to carry, not only a comparatively heavy burden of taxation other than income tax, but they had also t.o assume the uniform income tax rate levied throughout Australia as a whole, a rate which was higher than they had been accustomed to. Therefore, a serious injustice has operated in Victoria, and there is a. particular disadvantage in regard to State social services. In those States where the income tax rate was low. it was open to the Parliament to impose higher taxation in other directions in order to meet the cost of expanding social services, but that remedy was not. available, to anything like the same extent, in those States where such taxation was high.

However, the matter goes deeper than that. Under the Constitution, the States have responsibilities which affect the people more directly in many respects than do the responsibilities which, under the Constitution, are exercised by this Parliament. I refer in particular to health, education, police, and other domestic services, which are obviously and properly the direct responsibility of the State parliaments. In recent years there has been a tremendous expansion of Commonwealth income, but no corresponding expansion of the income available to State Governments for expenditure on purposes equally as important as those upon which Commonwealth revenue is expended. Honorable members speak of the great expansion of Commonwealth social services. This Parliament has voted substantially increased amounts for invalid and age pensions, widows’ pensions and the like, but those are social services of the hand-out variety. I do not begrudge the payment of those pensions, but, in importance, they do not compare with such constructive social services as health and education. Commonwealth payments for social services are made, in the main, ‘o the older groups of the population- ro those who have become invalid, or who have reached the mature years of their lives. However admirable that, may be, they are not more important than expenditure on health and education for the benefit of the younger groups in the community. In their hands is the future of Australia, and if we have large amounts of money for expenditure on social services it should be expended proportionately upon those in the younger age groups. It is one of the evils of the expansion of Commonwealth revenues at the expense of the States in recent years that insufficient attention is being paid to health and education services and that, if anything, an. extravagant provision is being made for social services at the other end of the scale.

Mr Chifley:

– I understood that the honorable member was seeking to introduce an amendment to improve such services.

Mr HOLT:

– I do not wish the Prime Minister to misunderstand me, or to misinterpret me to others. I said that I did not begrudge the payment which the Commonwealth made for social services, but, if there is to be an expansion of social services, they should expand proportionately in those fields where the most good is likely to be achieved. However, this is not the place to engage in a detailed discussion on that matter. I merely make the point that one of the unsatisfactory effects of uniform taxation is that it deprives the States of the ability to expand their services as compared with Commonwealth services. I think it is fair comment to say that £1 spent by a State government is usually spent more profitably, because it has fewer pounds to spend, than if the money was spent by the Commonwealth Government.

The honorable member for Reid (Mr. Lang) made a point of the centralization of bureaucracy in Canberra. My criticism is that the Government is clearly trying to perpetuate war-time emergency measures. I do not believe the people of Australia want to perpetuate the wartime bureaucracy. They have given every public indication that they are opposed to it, but the Government, on every possible pretext, seeks to perpetuate the present bureaucratic administration. We have at present before the Parliament legislation designed to extend for. a further’ period certain war-time emergency powers. We have been told that- such powers will be necessary for perhaps three or four years after the end of the war. Whatever doubts we may have had of the bona fides of the Government in seeking to retain those powers are strengthened when we remember that this Government is pledged to a socialist philosophy. We remember that it has only just recently forced through this House financial measures designed to enable it to implement its socialist philosophy. Therefore, we say that the Government is, obviously, determined to perpetuate the bureaucracy centralized in Canberra.

I believe that a centralized bureaucracy, working from Canberra, involves red tape, obstruction, restrictions and repression of the rights of Australian citizens. The present tendency should be reversed. We should decentralize not only our industries,, but also our administration. Instead of strengthening the administrative authority of Canberra, we should strengthen the administrative authority of the States and municipalities, which affect community life so intimately. I make those points because, although we have not the opportunity to examine them more closely now, they must be examined at some time in the future, because involved in them are some of the most important constitutional issues which this country will have to face.

Mr BOWDEN:
Gippsland

.- As a Victorian, it is natural that I should look at this problem through different coloured glasses from those through which the honorable member for Hindmarsh (Mr. Thompson) and those other honorable members who represent States which benefit from the uniform income tax, including the less populous States, viewed it. It was most noticeable that the bill to provide for uniform taxation passed through this House with the greatest possible ease because honorable members representing the less populous States believed that it would benefit their electors. Yet we have the spectacle to-day of practically every State Premier opposing the scheme. That brings into focus the statement of the honorable member for Hindmarsh that the federal sphere is really the sphere of the States. It is nothing of the kind ; the federal sphere is merely part of the federal system which depends upon co-operation between States and the Commonwealth. On the second last occasion on which a conference of Commonwealth and State Ministers was held every Premier was fighting with the Prime Minister in an effort to induce him to modify his hold on the taxes collected from the people and to allocate a little more to the State. He told them what they had to take; he gave them that and not what they wanted. It is obvious that, if this evolutionary process of taxing the people, about which the right honorable gentleman spoke so glibly, is to benefit humanity, it can only do so provided the States are given an opportunity to develop production within their own borders. As a. Victorian I admit that the claims of the less populous States to develop their own resources and to provide their own facilities are reasonable; but at the same time I say that if this country is ever to become great those places where the natural resources exist must naturally be first developed. We have in Victoria, as the Prime Minister knows, an area known as the Latrobe Valley, with natural resources which ultimately must make it as valuable as the Buhr Valley in Europe, not in our time, possibly, but at some future date. Those resources may be developed, not because of the inclination of the people to provide the money for their development, but according to the whim of those who exercise control in the federal sphere as the result of what is misnamed uniform taxation. There may be some uniformity in the collection of the tax, but there is far from uniformity in its distribution. En passant, may I cite a few figures to show what has happened since this tax was introduced. In Victoria in 1946-47 collections of uniform income tax amounted to £42,746,000, and in New South Wales to £67,190,000. Overall tax collections in Victoria amounted to £51,090.000 and in New South Wales to £72,545,000. But note the distribution! Out of the £51,090,000 Victoria received £8,S60,000, anc! out of the £72,545,000 New South Wales received £16,477,000. These figures show how disproportionate are the distributions to the collections. There is no uniformity in that. I do not believe that the Prime Minister will claim that New South Wales is more capable of beneficial national development than is Victoria. Victoria enjoys the advantage of being a small compact State, very rich in resources, and with a large population, and consequently it would have greater opportunity for development by the expenditure of itsown money than would be thecase of the less populous States. I point out that when the party led by Mr. Cain was in opposition in the Victorian Parliament it was wholeheartedly in favour of uniform taxation. It regarded that method of collecting taxes as the grandest innovation that had ever been devised. Yet when Mr. Cain’s Government assumed office in Victoria and accepted all the responsibilities that go with office, it immediately became a hot gospeller “ for a better distribution of the proceeds of uniform tax than is accorded to Victoria to-day. Every government, whether a Labour or a non.Labour government, has an obligation to develop, to the maximum of its capacity, the resources of the State which it controls, and it cannot do so if it is hamstrung because of the lack of money, not of insufficiency of money paid by way of taxes, but because the central government does not dole out sufficient of the revenue collected from the people of the State to enable its development to proceed. The Cain Government was obliged to increase railway fares, which it should not have had to do, because it could not obtain sufficient money out of the taxes collected Ivy it to meet the railway deficit. The governments of the other States are placed in the same position. Apart altogether from the claims made by the less populous States for a better distribution of the proceeds of the uniform income tax, moneys are disbursed to the States under the Federal Aid Roads Agreement. The more populous States have made heavy contributions towards the building of roads in the less populous States. We do not complain about that ; but Western Australia has no Latrobe Valley and, naturally, if that area is to be developed in the national interest as well as in the interests of Victoria, surely it is a matter for the Commonwealth to say, “ Here is where we can improve Australia vastly by developing one of its great natural resources”. The unanimity among the States which the honorable member for Hindmarsh talks about is non-existent. There is unanimity only in the demand that the uniform income tax scheme either be abolished or considerably modified. I am a reasonable man. I admit that the Prime Minister has to meet national obligations transcending in importance any small local State affairs. He has to provide for those obligations and to collect money from all the States for that purpose and to decide what allocations of money to the States can then be made; but in fixing the State allocations he should endeavour to ensure that the greatest possible national development is achieved. That is the only way in which this evolution in taxation principle can be of benefit, to mankind.” To illustrate what I mean I want to refer for the moment to what was achieved in the United States of America during the war period. Because the 4S American States were given an opportunity to develop their own States and were not compelled to depend on the central government, they were able, in a year, to supply the greater part of the civilized world with all the materials necessary to fight the war. If they had not been in that position things would have gone badly for the allied nations. If Victoria were able to develop its natural resources that State would be able to deliver the goods ; but it will never be able to do so as long as it has to depend on the whims of a government sitting in Canberra, remote from the centres of necessary development. The Prime Minister will have to face another battle in the near future. The hungry Premiers will again shortly demand money. I want him to approach the consideration of this subject in a more humane manner, not to tell the Premiers that they are talking a lot of “ ruddy “ nonsense, as he did on a former occasion, but to consider the problems of the States from the viewpoint of the States. All the State Premiers have the interests of their State at heart, and the interest of the States as a whole is the interest of the Commonwealth The States comprise an integral entity, and what is beneficial to one must be of benefit to the other. 1 ask the right honorable gentleman to reexamine the distribution of the proceeds of uniform income tax collections, with a view to ascertaining whether it is not possible for him to give to the States a better opportunity to develop their natural resources.

Mr HAMILTON:
Swan

.- At the last conference of Commonwealth and State Ministers, the Premier of Western Australia made a valiant effort to induce the Prime Minister (Mr. Chifley) to increase the allocations of uniform income tax to the States from £40,000,000 to £o0,000,000. He submitted a case which was supported in its entirety by the Premiers of the other States, but all his persuasiveness did not move the right honorable gentleman. At first he offered them an additional £4,000,000, and, after further pressure had been exerted upon him, lie saw fit to give them an additional £.1,000.000, making the increase £.5,000,000. I admit tha t in Western. Australia we have no Latrobe Valley. T imagine that, the Latrobe Valley is situated in the electorate of the honorable morn bor for Gippsland (Mr. Bowden).

Mr Bowden:

– A pretty good guess.

Mr HAMILTON:

– Western Australia, however, comprises an area representing approximately one-third of the area of Australia., much of it very rich in natural resources. Western Australia suffers greatly from its isolation, and the vast distances which have to be traversed within its borders. Its isolation makes it dependent, to a great degree, upon the eastern States, particularly in its present state of development. Western Australians are developing their State at a time of high costs, whereas the eastern States were able to achieve the major portion of their development at a time when costs were reasonably low. To expect the Commonwealth Grants Commission to assess the whole of the requirements of the less populous States is placing too much responsibility on that body, and the recommendations of the commission are not always accepted by the Treasurer. In the bill which will be placed before us shortly provision will be made for a grant to Western Australia which is £500,000 less than that recommended by the commission.

Mr Chifley:

– Ob no.

Mr HAMILTON:

– At the conference of Commonwealth and State Ministers, in replying to either Mr. McLarty, the Premier of Western Australia, or Mr. McGirr, the Premier of New South Wales, the Prime Minister said - 1 have never been able to ascertain why the three smaller States bother arguing about regaining the right to impose taxation. If they were given all the taxing powers they want they would still not he able to meet the needs about which Mr. McLarty, Mr. Cosgrove and Mr. Playford have spoken. If they received an increase of tax reimbursement, the Commonwealth Grants Commission would reduce correspondingly the amount which it recommended they should receive.

In its fourteenth report, the Commonwealth Grants Commission recommended that Western Australia should receive £2,400,000. The Government proposes to make available an amount of only £1,900,000, a difference of £500,000. Yet, the Prime Minister told State Premiers that, if they had full taxation rights, the Commonwealth Grants Commission would make corresponding reductions in its recommendations.

Mr Chifley:

– That is not right.

Mr HAMILTON:

– Had it been able to collect its own taxes at pre-war rates, Western Australia would have received £1,000,000 more than it has received for 1946-47. That amount of money would go a long way in the development of the south-west corner of Western Australia, which is claimed by Western Australians, and by visitors from all over the world, to have a future equal to that of two Chicagos or even two Californias. Whether or not that claim is reasonable is another matter. It would be the equal in wealth-producing capacity, but unfortunately money is not available within the State for the necessary developmental work in the area. Money for the purpose would need to be made available by the Commonwealth, particularly as it has the full taxing power.

This Parliament should also take into consideration the defence aspect. Western Australia comprises one-third of the whole area of the Commonwealth, and parts of the State are very vulnerable to attack. If it is intended to expend money there on defence projects, such as the. provision of a naval base, aerodromes or army establishments, it will also he necessary to locate some heavy industries in the State, for defence projects and heavy industries must be developed side by side. This would involve substantial expenditure. If the Commonwealth intends to retain complete control of taxation it must be prepared to spend more money in Western Australia or to reimburse the State more generously. The Commonwealth Grants Commission should be requested to inquire into the matter, having in mind defence needs. Expenditure at Albany, in order to make that harbour fully satisfactory for naval purposes, would be amply justified. Albany is the only really deep-sea port between Melbourne and Wyndham that could be converted into a naval base without huge expenditure, but to carry out such a project the expenditure of some money would he necessary. I reiterate that defence projects and the establishment of heavy industries must go hand in hand.

I impress upon the Prime Minister that the reimbursement being made to Western Australia is very much below the requirements of the State. The sooner the Commonwealth increases the amount the better it will be for all concerned, and the better will be the prospect of undertaking adequate developmental work in the State.

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

, - m reply - Some honorable members who have spoken in this debate do not seem to realize the true position. The honorable member for Swan (Mr. Hamilton), for instance, referred to recommendations of the Commonwealth Grants Commission which, he said, the Government had not accepted. When I tabled the report of the commission a few days ago I intimated that the Government intended to give full effect, to its recommendations. The commission stated in its report that its recommendations had been made on the assumption that the tax reimbursements to the claimant States would he on the same basis this year as last year, and that if these were varied the special grants to he recommended to the States concerned would need to be adjusted accordingly. It was for that reason that I said I wondered why the three States involved considered it necessary to argue the matter, because so long as the uniform taxation arrangement continued in force they knew where they stood. I question whether these States would be any better off if they had complete freedom to impose taxes. I have said, at conferences of Commonwealth and State Ministers, and also on other occasions, that I considered it to be the duty of the Commonwealth and of the more financially fortunate States to assist the less fortunate States. I have never departed from that attitude. I do not take credit to this Government alone for having observed the recommendations of the Commonwealth Grants Commission. The fact is that every Australian Government has done so. The point I make, however, is that when the claimant States had complete freedom to impose whatever taxes they desired, they still were unable to meet their financial needs, and they even then applied to the Commonwealth for financial assistance. I have put that point of view to Mr. Playford, and to the other Premiers. The only disadvantage that E can see that these States suffer from by reason of the operation of the Commonwealth Grants Commission is that, whereas the amount of tax reimbursement that they receive is fixed, the amount of grant that may come to them as the result of recommendations of the commission may vary from year to year.

The Leader of the Australian Country party (Mr. Fadden) is, I believe, sincere in his approach to the subject of the financial relations of the Commonwealth and States; but I could not help feeling that he spoke with his tongue in his cheek when be referred to the practicability of ensuring harmony in this matter by the ‘adoption of certain methods. The right honorable member for North Sydney (Mr. Hughes), who has been a member of the Commonwealth Parliament since its inception, knows better than most of us that the financial relations of the Commonwealth and the States have ‘always been unsettled. The right honorable gentleman can go back, in (personal knowledge, to What has been described as the “Braddon blot”. I must confess that I have been somewhat disillusioned by the remarks of the Leader of the Australian Country party. I believe that at times, while he was Commonwealth Treasurer, he en- deavoured to secure some kind, of an agreement between the Commonwealth and States on financial matters.

Mr Fadden:

– I did try;

Mr CHIFLEY:

– But without success ?

Mr Fadden:

– I did not succeed. There were too many Labour Premiers to deal. with.

Mr CHIFLEY:

– The right honorable gentleman, of course, is well aware of the difficulties of the problem. I fear that these difficulties will have to be faced for a long while to come. There will always be a feeling among different people that some States receive too much and some too little help from the Commonwealth. Something- has been said about a formula. Payments to the States are not based, as has been said, on the income tax which the States collected in pre-war years. That principle was abandoned in July, 1946. The Premiers have never been able to agree on many points associated with uniform taxation. The former Prime Minister, Mr. Curtin, and I attended a conference in Melbourne on one occasion in an endeavour to reach an agreement with the States on this subject, but the proposals submitted to the conference were unanimously rejected. The Government was therefore obliged to proceed along other lines. The action which it took was tested in the High Court, and in the resultant judgment the court held that, oven apart from the defence power, the Commonwealth had priority in the collection of taxes.

Mr Fadden:

– The High Court decided that it was a permanent power.

Mr CHIFLEY:

– The decision of the High Court did not deprive’ the States of the right to impose income tax.

Mr Fadden:

– That is so, but the Commonwealth has priority.

Mr CHIFLEY:

– Exactly, the Commonwealth has priority under its tax power and not under its defence power. However, these matters are not new. I did not introduce the lengthy discussions which have taken place for many years between Commonwealth and State Treasurers, not only about the uniform income tax, but also about the Loan Council.

Mr Thompson:

– The position, has not altered very much.

Mr CHIFLEY:

– If anything, the business of the Loan Council has been transacted more expeditiously in recent years than it was before. I emphasize that the States did not agree to the introduction of the uniform income ax. In addition, they did not agree to the amount which we finally decided to allocate to them. But they did agree to the method of distribution. I refer now, particularly, to the latest arrangement under which the amount for distribution was increased from £34,000,000 to £40,000,000. Here again, I make it clear that the States did not agree to the amount of £40,000,000, but they did agree upon the method of distribution. At one of the conferences, we devised a formula. The State Premiers did not agree to the base amount. I shall not attempt to explain to honorable members the formula which will come into operation next year, because it is complex and I doubt whether honorable members have given sufficient study to the subject to be able to appreciate a full explanation of it. As the subject is so complicated, I might not be able to explain it lucidly enough for honorable members to understand its effect. However., the formula will come into operation next? year, and the State Premiers have agreed to it.

Mr Fadden:

– The Premiers agreed to the formula, but not to the quantum.

Mr CHIFLEY:

– That, is correct. The Premiers did not agree to the quantum.

Mir. Fadden. - They agreed to the cut, up. but not to the goose.

Mr CHIFLEY:

– The formula provides for the aggregate amount to be increased as from the next financial year in relation to population and the national income. There are also certain other qualifications in regard to the size and area of the States. The States also agreed on the method of distributing the last allocation. This year we increased it, by £5,000,000. Some honorable members opposite appeared to consider that an additional £5,000,000 is rather niggardly. Personally. I regarded it as rather generous, and some of my colleagues, who attended these discussions with the ‘States, considered, when I increased the amount by £1,000,000, that I was over-generous. I realize that the Commonwealth Grants Commission did recommend certain payments to various States, but there was a provision that if those States received an additional amount from the Commonwealth by way of reimbursements, the original grant would be reduced by a corresponding sum. That is being done. However, the total available for reimbursement to the States was increased this year by £5,000,000. In the next financial year, the formula will begin to operate. As the States have agreed to the formula no difficulty will arise in that respect. If next year, under this formula, the States would receive less than £45,000,000, the amount will be built up to £45,000,000. If the formula entitles them to more than £45,000,000, they will recieve the additional amount.

Mr Burke:

– The formula is based upon the growing expenditure, of the States.

Mr CHIFLEY:

– The formula is based upon population and national income. It is most complex. I remind the House that the development of the States has nor been dependent, upon their revenue derived from income tax. Many taxpayers, under the uniform income tax, are paying less tax than they did in 1938 under the dual system of Commonwealth and State income tax. The development of the States has been dependent upon loan money, and the principle which governs the allocation of loan money to the States has not been altered. What has happened is that, in the past, the banks informed the Loan Council how much money the States could expend upon developmental works. That, has not happened since I, as Treasurer, have represented the Commonwealth at meetings of the Loan Council. During World War II. the States were not able to expend their allocations- from the Loan Council. While they decreased their indebtedness, the Commonwealth’s indebtedness went sky-high. Another point is that the States’ interest payments have fallen. As I stated, the banks formerly told the Loan. Council how much loan money the States might expend on developmental works.

Mr Fadden:

– That did not happen when I was Treasurer.

Mr Spender:

– It did not happen in as late as 1940.

Mr CHIFLEY:

– The honorable member forWarringah (Mr. Spender), a former Commonwealth Treasurer, has some knowledge of this matter. As the Leader of the Australian Country party remarked, all the States had to do was to cut up the goose. The right honorable gentleman will recall that the Commonwealth pays one-half of the sinking fund in respect of loan money for developmental works. Since the end of the war, the States have not been able to expend all the loan money for what they themselves regard as necessary works. Honorable members should bear that fact in mind.

Mr Fadden:

– As a matter of fact, the States were unable to spend their allocations because of the lack of man-power and materials.

Mr CHIFLEY:

– Yes. The amount which they could obtain for developmental purposes was measured only by their physical capacity in men and materials. That position has never arisen previously in the history of the Loan Council.

Mr Fadden:

– It has only happened now because the States are unable to obtain man-power and materials for their development al w o rks .

Mr CHIFLEY:

– I shall not weary the House with any more details. The Leader of the Australian Country party advocated the formation of a new authority. In my opinion, that body would deprive the Parliament of the Commonwealth of its sovereignty. The expenditure of Loan money for defence purposes is not subject to the consent of the Loan Council. If the organization which the right honorable gentleman recommended were established, the Commonwealth Budget would be subject to its review.

Mr Fadden:

– That was not suggested. It was to be just a pattern of the Loan Council.

Mr CHIFLEY:

– Defence expenditure from loan funds is not subject to review by the Loan Council, and Commonwealth expenditure on works has been small.I make these few points because some people become rather confused about the formula for reimbursements to the States under the uniform income tax legislation. The only difference, although it is very important, is the total amount allotted for distribution between the States. The States agreed among themselves to the method of distribution, although I emphasize again that they did not agree to the base figure. However, they reached an agreement on the method of distribution and submitted their proposal to me for approval. I did approve, and that is the basis upon which the distribution will be made.

Question resolved in the affirmative.

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

Sitting suspended from6.2 to 8 p.m.

page 2418

INCOME TAX ASSESSMENT BILL (No. 2) 1947

Second Reading

Debate resumed from the 2 1st October, on motion by Mr. Chifley(vide page 997)-

That the bill be now readasecond time.

Mr FADDEN:
Leader of the Australian Country party · Darling Downs

– There is nothing controversial in this bill. It makes certain machinery amendments in relation to the tax instalment system and also provides for the extension of the zone allowance system to Australian servicemen in Japan. I have no objection to its speedy passage.

Question resolved in the affirmative.

Bill read a second time, and committed pro forma; progress reported.

Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Chifley) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Income Tax Assessment Act 1936-46 as amended by the Income Tax Assessment Act 1947, and for other purposes.

Question resolved in the affirmative.

Resolution reported and - by leave - adopted.

In committee: Consideration resumed.

Clause 1 agreed to.

Remainder of bill - by leave - taken as a whole.

Mr FADDEN:
Darling Downs Leader of the Australian Country party

– I am sure that the Government has appointed to the second taxation board of review, conscientious men of the calibre and integrity of the chairman of the present board, Mr. Gibson, and Mr. Hannan, a member of the board. Ibelieve that I express the opinion of all taxation agents and accountants in Australia when I say that they have given most valuable service to both the Taxation Branch, taxation agents and accountants who, on behalf of their clients, have had the privilege of appearing before them. Their decisions are a treatise on proper tax accountancy practice in Australia.

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

– I appreciate what the Leader of the Australian Country party (Mr. Fadden) has said about Mr. Gibson, the Chairman of the Taxation Board of Review, and another member of the board. The tribute he paid to them is well deserved and will be echoed by every one who has appeared before the board. We will try to maintain, in making other appointments, the high standard set by them.

Remainder ofbill agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time.

page 2419

PARLIAMENTARY ALLOWANCES BILL (No. 2) 1947

Second Reading

Debate resumed from the 21st October. (vide page 997), on motion by Mr. Chifley -

That the bill be now road a second time.

Mr MENZIES:
Leader of the Opposition · Kooyong

– This bill provides for the payment of an allowance to the leader of the third party of the House, and that means, in terms, the Leader of the Australian Country party. Members of my party regard the provision as merited and entirely justified. I am glad to know that the Government has at long last decided to make provision for it. I do not need to add that the Leader of the Australian Country party in this House has a strenuous task. I know, myself, as Leader of the Opposition, the work involved. Every honorable member will be delighted to know that some small provision is to be made for him. I therefore, support the bill.

Mr SPENDER:
Warringah

.- I echo the remarks of the Leader of the Opposition (Mr. Menzies),but I do not think we can consider increased allowances to members of the Parliament without having regard to the needs of other sections of the community. We only recently increased the allowances of honorable members of this House and we have increased the salaries of permanent public servants. To-night we are asked to assent to - and I freely give my assent - an allowance for the leader of the third party. It seems to me that all these payments rest on the need to adjust allowances in accordance with the increased cost of living. One section of the community that seems to have no regard paid to its needs by the Government is the small investors, the small landlords. Landlords are regarded as capitalists by members of the Australian Labour party; but I direct the attention of the Government to the plight of the widow with a small amount of money invested in a few houses from which she receives an income, the purchasing power of which diminishes as years go by. Her rental is fixed on the basis of rents in 1939. She cannot be granted an increase of rents by the Fair Rents Court except on 1939 values.

Mr SPEAKER:

– Order ! What the honorable member is saying is quite beyond the scope of the bill. The question is whether the leaders of the parties in this Parliament should be recognized in the manner proposed in the bill. If we are to discuss the needs of all sections of the community we shall be here till Doomsday.

Mr SPENDER:

– I am seeking to relate the increases which it is proposed to give to members of the Parliament to the needs of other members of the community.

Mr SPEAKER:

– As I have said, the question is whether the Parliament should recognize the leaders of the parties.

Mr SPENDER:

– One cannot determine this matter in vacuo. It must be determined in relation to other matters.

Mr SPEAKER:

– If the honorable member will speak to the bill, we shall get on very well.

Mr SPENDER:

– I am doing so. If increases are given to members of the Public Service and to members of Parliament, there ought to be associated with this action a decision to increase the returns of small investors.

Mr SPE AKER:

– Order ! The honorable member will resume his seat.

Mr ANTHONY:
Richmond

.- While I approve of the proposal that leaders of parties of ten or more in this House should be paid an allowance of £400 a year, I believe that a long-distance view should be taken of the matter, and that we should take into consideration the state of affairs which may obtain in future years. For example, the Prime Minister (Mr. Chifley) is at present the leader of a party with 49 members. If, after the next general election, he. should lose 40 of his supporters, and be the leader of only nine - which in all probability will be the case - will the Prime Minister, as the leader of the new opposition of nine members, be entitled to no allowance at all? I realize that the Prime Minister is doing his utmost to reduce the strength of his party from 49 to fewer than ten. As I look across the chamber at the Government supporters, I could name one member after another who, if we may judge by the result of the Victorian elections-

Mr SPEAKER:

– Order! The honorable member has said that he is ta.king a long-distance view. As a matter of fact, he is already too far away from the bill.

Mr Chifley:

– When this matter was Inst discussed in the House, I promised to give serious consideration to the point now covered by the bill.

Mr ANTHONY:

– I have mentioned that the present number of the Government party is 49, and I have referred to the possibility that it might be only nine in future.

Mr SPEAKER:

-Order! That has nothing to do with the bill.

Mr ANTHONY:

– I am speaking straight to the point.

Mr SPEAKER:

– The Chair thinks otherwise.

Mr ANTHONY:

– The Chair should look at the bill.

Mr SPEAKER:

– Order ! If the honorable member continues to defy the Chair, he must resume his seat. I have looked at the bill. If the honorable member wishes to make a burlesque of the debate, the Chair is not disposed to allow him to do so. The -bill consists of only two clauses, and most honorable’ members ought to be able to understand it.

Mi-. ANTHONY.- The bill provides that the leader of a political party of not fewer than ten members, of which no member is a Minister of State, shall receive an .allowance. I tun visualizing, as I am entitled to do, the possibility of there being a party in this House consisting of fewer than ten members. The Australian Country party may be returned after an election with fewer than ten members, or the Liberal party may he ve fewer than ten members. However, I was referring to the greater possibility that the Labour party might come back after the next election with fewer than ten members. I should like to know why this number ten has been arbitrarily chosen. Is it the opinion of the Prime Minister and the Government that the Australian Country party, which is the party obviously affected by the bill, will never have fewer than ten members in this House? I hope that the Prime Minister is correct in his estimate, and 1 agree with him that the Australian Country party will (probably be stronger in the years ahead. However, I am concerned over the position of parties in this House which may have fewer than ten members. The honorable member for Reid (Mr. Lang) entered this House as a lone member. As one looks around the chamber, one realizes the possibility that honorable members who are somewhat doubtful of their position to-day, particularly in view of the recent hanking legislation, may be prepared to entrust their political fortunes to the honorable member for Reid. He may be able to recruit seven supporters, so that his party, including himself, would number eight. I believe that the honorable member for Reid is of such calibre that, if he led a party of eight members in this House, he would be entitled to an allowance of £400 .a year. I remind you, Mr. Speaker, that there was at one time in this House a notable and virile party known as the Lang party, which did not’ number ten.

Mr SPEAKER:

– The honorable member cannot “ get away with it “ by Mattering the Chair.

Mr ANTHONY:

– I did not .really intend to flatter the Chair; but if the Chair bakes that view of .it I must accept the situation. I was pointing out, that in 1937, when I came into this Parliament, there were here seven or eight members of what was known as the Lang party, led by Mr. Beasley. You yourself, Mr. Speaker, were a distinguished member of that party. I see others in the chamber. The Chairman of Committees, the honorable member for Darling (Mr. Clark), was also a member.

Mr SPEAKER:

– ‘Order ! We are not dealing with the past; we are dealing with the present or the future.

Mr ANTHONY:

– But the past is a good indicator of the future, and it is possible that we may have another- Lang party in this House. It is also possible that we may have another minority party sitting in sole opposition to the Government. What I want to know from the Prime Minister is, by what process of mathematics he arrived at the figure of ten members of a party as the number which would qualify the leader of that party to draw an honorarium. If six members of a party each represented 60,000 electors, they would represent a total of 360,000 people and thus he not a negligible group in this House. The loader of such a party would have to prepare his speeches in opposition to or in favour of the legislation presented to the Parliament. Why should any discrimination be made as to the number of members he must lead before he becomes entitled to the allowance? The number stated in the bill is. but an .arbitrary figure. The Leader of the Australian Country party is entitled to very much more than he is now to receive, especially in view of the allowances drawn by some Ministers. 1 do not propose to labour the matter. 1 merely say that if a number must be arbitrarily chosen, let it be less than ten. It is not inconceivable that before very long a party will be in sole Opposition, the numbers -of which will not exceed ten.

Mr ARCHIE CAMERON:
Barker · ALP

– May I .say that the conditions visualized .by the honorable member for Richmond (Mr. Anthony) are not likely to occur; but if they do occur, we have a suitable precedent to guide us in these matters. When the Australian Labour party met its last great Waterloo in December, 1931, it came back from the elections the weakest party in the House. If it should come back from the next elections as the honorable member for Richmond, hopes, as the weakest party in the House, its position will be safeguarded then, as it was in 1.931, by the fact that the leader of that party would be the Leader of the Opposition. In 1932, when the Lyons Ministry was formed, the United Australia party had an absolute majority of all the members of the House of Representatives, and it exercised its right to form a completely United Australia party ministry. No members of the Country party were included in that ministry. The Australian Labour party was then the weakest of the three parties in the House, and it was rendered still weaker by the fact that its members were .split between the official Australian Labour party and what was then known colloquially as the Lang Labour party. The number of both branches of the party was then fewer than ten. That position obtained until I came here in 1934. On that occasion the Australian Country party exercised its right to sit on the cross benches and did not demand that it ‘be regarded as the official opposition. If these circumstances should be repeated after the next elections, which is not impossible, and the Labour party comes hack as the weakest of the three parties in the House, my friends in the Australian Country party would he prepared and most anxious to adopt the same attitude as they did in 1932, and allow the Leader of the Australian Labour party to assume the title and functions of the Leader of the Opposition.

Mr ABBOTT:
New England

– As a member of the Australian Country party, I strongly support this bill. We are proud of our leader. We are proud of the work he does in this House. All honorable members, irrespective of their political views, will readily admit that he works tremendously hard and devotes his whole services to the country and to the party of which he is the leader.

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

. -in reply - I had hoped that this proposal would be treated with some dignity. I know that there was no desire on the part of the Leader of the Australian Country party (Mr. Fadden) to seek the allowance, but I understand that it was felt by the members of his party that some provision should be made in recognition ofthe arduous work that falls to his lot as Leader of the Australian Country party. It was on that ground that the proposal was put to me when the subject of parliamentary allowances was last under consideration. I then undertook to give attention to the matter, the result of which is expressed in this measure. It must be very embarrassing to the Leader of the Country party to have this proposal made the opportunity for the dissemination of undesirable propaganda. I may add that the right honorable gentleman did not speak on the occasion to which I have referred. The suggestion was made by the honorable member for Indi (Mr. McEwen), who was then acting leader of the party. In referring to the numerical strength of a political party he said -

I offer my suggestion that ten would be a reasonable figure to specify.

Recognition has been given to the work done by the Leader of the Australian Country party, and I feel sure that the right honorable gentleman himself would be the last to make a request such as has been made by the honorable member for Richmond (Mr. Anthony). I do not propose to reply to the other comments made by the honorable member. I regard them as highly improper.

Mr SPEAKER:

– I think I should say to the House that the Chair tried to keep the discussion on the plane suggested by the Prime Minister.

Question resolved in the affirmative.

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

page 2422

AUSTRALIAN SOLDIERS’ REPATRIATION BILL (No. 2) 1947

Second Reading

Debate resumed from the 21st October (vide page 1000), on motion by Mr. Barnard -

That the bill be now read a second time.

Mr HARRISON:
Wentworth

– The Minister for Repatriation (Mr. Barnard) said, in his second-reading speech, on this bill -

This bill brings provisions for control of patriotic funds underthe Australian Soldiers’ Repatriation Act. The existing provisions are the National Security (Patriotic Funds) Regulations under the Defence (Transitional Provisions) Act.

I wonderedthen whether the real purpose of the measure was to retain control of patriotic funds within the federal sphere. Power exists in all the States under which State authorities, in the exercise of their sovereign rights, may control certain classes of patriotic funds. It is apparent, therefore, that this bill represents another effort by the Commonwealth to exercise powers which should be left to the States. Like other honorable members, I have examined this measure carefully, and I have formed the opinion that the Government is making an effort to grab - and I use that term advisedly - all patriotic funds, particularly those of ex-servicemen’s organizations. Every ex-service member of this House should be interested in this matter. It must be realized that many patriotic funds have been raised, by voluntary subscriptions, for specific purposes, and large amounts have been placed in the hands of exservicemen’s organizations in order to assist ex-service men and women. Yet, the bill provides -

The Governor-General maymake regulations i n relation to -

the raising of moneys and acquiring ofassets for patriotic funds;

the control and distribution of moneys and assets raised or acquired by patriotic funds;

the winding-up of patriotic funds and disposal of the assets and moneys of the funds: and

the provision of penalties, not exceeding a fine of Fifty pounds or imprisonment for six months, for any breach of the regulations.

Despite anything that the Minister has said, or that he may say, on this subject, I can find no provision in the bill which exempts any patriotic fund whatsoever from coming under the control of the Repatriation Commission, which is, in effect, government control.

Mr Conelan:

– It is a good thing that nobody takes any notice of what the honorable member for Wentworth says.

Mr HARRISON:

– The honorable member for Griffith (Mr. Conelan) has had no experience of any kind in the services, and, for that reason, he must be regarded as incapable of expressing the views of ex-servicemen. The bill provides that the control shall extend to all patriotic funds, buildings, properties, trust moneys, moneys bequeathed under wills, and moneys raised by voluntary subscription for the express purpose of helping ex-servicemen through their own organizations. The administration of such funds is to be removed from the bodies concerned, and transferred to the Repatriation Commission. Ex-servicemen’s organizations and other patriotic bodies have invested money in bonds and loans for specific purposes, and there is no assurance whatsoever in this measure that the Repatriation Commission will give effect to the specific purposes to which the money should be applied. I have been in touch with many ex-servicemen’s organizations on this subject, and have spoken with representatives of exservicemen who have taken part in recent conferences which have been called to discuss this measure. These all consider that the bill is quite inadequate and does not contain safeguards even, indeed, if it could be agreed, which is not the case, that such a measure is necessary. These organizations consider that some provision must be included in the measure specifically to exempt their funds from controls which could be exercised if the bill is passed in its present form. I hope that the Minister will deal with this point in his speech in reply to this debate. It is essential that the interests of ex-servicemen should be protected in this regard. The organizations concerned should have power vested in them to use funds which have been raised voluntarily to fulfil the purposes for which they were raised.

It is not. a sufficient answer to say that the Repatriation Commission will have authority, for we all are well aware that whereas when the commission was first established it consisted of men who had had experience in the various services and were thus well informed of the disabilities of ex-servicemen and of the problems associated with their rehabilitation, it has now been converted into a branch of the Public Service and its officers are under the authority of the Public Service Board. For this reason it may happenthat, in the future, public servants may be appointed to the commission’s staff who will not be ex-servicemen and will not be informed of the peculiar problems and disabilities of ex-servicemen.

In his second-reading speech the Minister stated that funds such as those of the Australian Red Cross Society, the Royal Australian Naval Relief Fund and the Royal Australian Air Force “Welfare Fund would continue to function indefinitely. Presumably, therefore, these are the only patriotic funds of exservicemen that will not be subject to the controls contained in the bill. The tendency of the Australian Government is to socialize everything within its reach, and the extent of its grasp on all kinds of activities cannot be ignored. A representative at one conference of ex-servicemen expressed the view that the Commonwealth was taking power to nationalize patriotic funds. Certainly the provisions of this measure give power to the Government, through the Repatriation Commission, to assume control of all patriotic funds. One of the greatest sources of revenue which the Government could seize through the commission would be the funds of ex-servicemen’s organizations of various kinds, some of which are the result of contributions made throughout the period covered by two world wars. For many years these patriotic bodies have controlled their funds capably and efficiently and have disbursed the money entrusted to them in a most effective manner. The Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, for example, is a. patriotic organization which has accumulated funds and assets totalling approximately £2,500,000. That is no inconsiderable amount. This organization is well able to control its own funds. A part of its funds consists of a distress fund from which disbursements are made every day. This fund is of tha very sinews of the organization, and no organization could distribute the funds more effectively than they are being distributed at present. This fund contains approximately £10,000 in cash, and £6,000 in bonds. The assets of the league include Anzac House, which is worth about £400,000, and the land, which, is worth about £100,000. These assets were donated by the Government of New South Wales. Only recently, the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, at its annual conference, expressed concern at this legislation under which the control of patriotic funds will be vested in the Repatriation Department. The delegates, who represented all the sub-branches of the league, and who reflected >a wide section of ex-servicemen’s opinions, contended, that the funds of this organization were provided by voluntary subscription for ex-servicemen, and that exservicemen’s organizations were the most appropriately fitted bodies to administer to the needs of those requiring assistance from its funds.

I come now to a section which was created for the relief of ex-servicemen, and for purposes associated, with exservicemen’s affairs. There are the funds which were raised for the men of the 8th Division and which accumulated during the long imprisonment of the men for whose assistance they were designed.

Mr Blain:

– Why did the Australian Red. Cross Society retain that money instead of devoting it to the purposes for which it was collected ?

Mr HARRISON:

– May I correct the honorable member for the Northern Territory (Mr. Blain), and point out that many of these funds have retained money for the purpose of assisting members of the 8th Division in the event of them becoming distressed.

Mr Blain:

– Who held the funds?

Mr HARRISON:

– They made some donations, with which I shall deal, and I shall show the- honorable member how much money is being held. I shall cite a particular case. There is the 2/15th Field Regiment Australian Imperial Force Association Patriotic Fund, now in the hands of the 2/15th Field Regiment Relatives Association, which- is prepared to hand it over to the Unit Association whenever necessary. The controllers of this fund have stated that when the Returned Sailors, .Soldiers and Airmen’s Imperial League of Australia, is prepared to accept the money, they will hand it over to the organization, for the alleviation of former members of the Sth Division who are now in distressed circumstances. The league is prepared to accept the fund, and to open a special trust account so that the money may be used for the purpose for which it was raised. The organizers of this fund collected a considerable sum during the war, and the proceeds were handed to the Lord Mayor’s Fund. Towards the end of the war, when it appeared that surviving members of the unit would be returning to Australia., it was decided to retain some of the money for the assistance of these men and their relatives. This fund is now ‘approximately £900. The organizers are prepared now, if necessary, to hand it over to the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia for the alleviation of distressed members of the 8th Division. The Unit Association is registered, as it should be, as a charity under the New South Wales Charitable Collections Act.

T do not propose to deal at length with these matters, but I shall give a broad outline of the position so that honorable members may understand exactly what the Government proposes to do. Another fund about which, some concern has been expressed is the Merchant Navy Wai” Memorial Fund Limited. Under the approval of the Commonwealth Treasurer, this organization collected money from the public for the erection of a seamen’s home as a memorial to the efforts of the members of the merchant navy during World War IT. It is allied with the Rawson Institute and other bodies dealing with the welfare of men of the merchant navy. I have selected these funds as examples of what the Minister proposes to transfer to the control of the Repatriation Department. The people who administer these funds have a specific object in view, or a specific understanding of the circumstances of distressed exservicemen who have been associated with them. They claim that they have closer contact with, and a better understanding of, the difficulties and disabilities of ex-service^ men. They avoid entirely the red tape of governmental administration which must be associated with the control of any funds of this nature. They contend that they, having collected the money by voluntary effort, are better fitted than is the Government to distribute it. It is true that they are subject to all kinds of overriding controls, but the administration of these funds still remains within their power. We fear that when the Government takes control of these funds, it will assume control of the administration. The bill does not contain a safeguard against that. We contend that, the administration of these funds should not be placed in the hands of the Repatriation Department, which is responsible for the repatriation of ex-servicemen, the payment of pensions for the disabilities that they have suffered, and the like. These funds are entirely divorced from and must not he confused with governmental assistance. The Government has its own obligations to ex-servicemen, and must assume them. It has no right to take over the control and administration of these funds, because that is outside its prerogative. The people subscribed the money to these funds, as distinct from the taxes which they paid to Commonwealth revenue, for the alleviation of the distress of ex-servicemen.

I shall cite an illustration. We have the ordinary educational system, and responsibility for the provision of schools and facilities associated with them rests with the State governments. Outside of that, there are the Parents and Citizens Associations which raise funds in order to give pupils additional facilities which the Government is not prepared to supply, and extra comforts which may be necessary. A State government might step in and take control of the funds of Parents and Citizens Associations saying, “ Although you collected the money and supply facilities and comforts which are outside our obligation, we consider that you have no right to administer the funds or use them for the purposes for which you raised the money”. That is a comparable case. Ex-serv icemen’s funds were subscribed fis- something in addition to what the Government has an obligation to do. The money has been donated by the generosity of the public for a specific purpose. In the circumstances, I assert that the Government should not remove these funds from the control of ex-servicemen’s organizations. Of course, the Government might exercise some control for the purpose of ensuring that the funds shall be used in a manner which, will confer the maximum benefit upon ex-servicemen.

That, in itself, might be quite fitting and proper, but the bill does not contain any provision to state that the Government shall not assume control of the distribution of these funds. If the Minister for Repatriation can give me an assurance to allay my fears, the case which I have made has been well put indeed. But if he cannot give such an assurance, I believe that every honorable member who is an ex-serviceman, should oppose the bill in the interests of ex-servicemen.

Mr TURNBULL:
Wimmera

– I oppose the bill for reasons similar to those stated by the honorable, member for Wentworth (Mr. Harrison). I have spoken to many ex-servicemen and they have no complaint with the manner in which these funds are being administered. Therefore, I cannot understand, and I should like the Minister for Repatriation (Mr. Barnard) to explain, why the Government considers that it is necessary to introduce this hill. Proposed new section 118a. provides that the GovernorGeneral may make regulations in relation to the control and distribution of moneys and ass’ets raised or acquired by patriotic funds. This power is most comprehensive. It covers almost everything. In addition, the Governor-General may make regulations in relation to the winding up of patriotic funds and the disposal of the assets and moneys in them. Suppose an association does not desire its patriotic fund to be wound up or its assets to be sold. What will happen? By regulation, the Governor-General may force the organization to take this action. Only last Monday I received from the 8th Division and Prisoners-of-war Relatives Association, which operates in Melbourne, and of which Lieutenant-Colonel Dunlop is the chairman, a book of raffle tickets at a cost of 10s. I sent the organization a postal note for the amount. This raffle was approved by the Government. If people are still collecting funds for the benefit of servicemen and exservicemen they are doing valuable work. The Minister for Repatriation and his departmental officers already have enough to do without having to under.take the work envisaged for them in the bill. I may be pardoned for thinking that perhaps the amount of money accumulated in the funds is the magnet that drew forth this bill from the Government’s mind. I see no reason for it. If I could be convinced that ex-servicemen would be better served as the result of the passage of the bill, I would not oppose it, but the people who raise and administer patriotic funds have a deep knowledge of the needs of servicemen and ex-servicemen. Some of them are perhaps the mothers of men who made the supreme sacrifice. That sort of person is more sympathetic with exservicemen than any government or department could be, and in saying that, I do not specify Labour governments. It applies to. all governments. Governmental administration implies red tape, and ex-servicemen cannot hope for the same sympathy from men hampered by red tape as they can from people who out of practical sympathy have so interested themselves in their welfare as to raise and administer funds on their behalf. From the knowledge I have of the bill I must oppose it. Yesterday, I was spoken to over the telephone by Councillor S. J. King of “Warracknabeal, who has given wonderful service to exservicemen as a member of the local Repatriation Committee. He said to me, “You will hear more from us about the bill “. Time has passed too quickly for him to have conveyed his further protests to me, but he expressed concern about what will happen to the money, buildings and other assets of patriotic funds when the Governor-General, which means the Government, has complete control over them. As the Minister for Repatriation and his department have enough work on their hands already, and as I see no reason for the bill, I cannot support it at present.

Mr HAYLEN:
Parkes

.- The honorable member, for “Wimmera (Mr. Turnbull) has debated the issue on unsound premises.

Mr TURNBULL:

– If that is so, I arn prepared to change my opinion.

Mr HAYLEN:

– The view I take is that the remnants of patriotic funds left as a legacy from the war should be dealt with in a businesslike way. After the war of 1914-18, there were patriotic funds consisting of amounts ranging from a few thousand pounds to £30,000 or £40,000, and the trustees were perplexed as to what” to do with them. They had various objectives. In the depression, when ex-servicemen had a real need of aid from the funds, it was impossible to disburse money to them because of the iron-clad conditions governing them. The funds were frozen and of no use to men who ought to have benefited from them. The honorable member for “Wimmera, who is jealous of the rights of ex-servicemen, may rest assured that the Minister for Repatriation (Mr. Barnard) has no intention of making an assault on the funds. I know that from my experience of and conversations with him. The proposal is merely to gather the funds together. It is a sort of cleaning up process. The funds will be held in suspension pending the ultimate decision as to what shall be done with them. I regard that as the tidiest way in which to deal with this aftermath of the war. It is better to do that than to leave reservoirs of money throughout the country. I agree with the honorable member that the Minister for Repatriation and his department have their hands full, but the Minister has a duty to the people who subscribed to the funds, and to the exservicemen who may later share in the distribution of the proceeds. The Minister is the appropriate representative of the Government to do the job. I should be sorry if ex-servicemen’s associations regarded this measure as a “grab”. It is not. It is good accountancy that the funds should be co-ordinated. I suggest that local Repatriation Committees in cities and country towns would provide ideal means of feeding the funds back to the citizens through ex-servicemen. There is nothing sinister in the measure, and I commend it. to honorable members on both sides of the House.

Mr RYAN:
Flinders

.- The purpose of this bill is to continue the control that, the Government has over patriotic funds by virtue of National Security Regulations after their expiration at the end of the year. It is understandable that such legislation must be brought down if the Government is to continue that control ; but I should like to know why control of the funds should not, bo allowed to revert to the States in which they were collected. The patriotic funds are on exactly the same footing as are all charitable funds collected in the States, and I see no particular reason why the Government, should wish to continue a strict, control over them. However, the Government intends to continue its control, and, no doubt, the Minister for Repatriation (Mr. Barnard) will explain why when he closes the debate on the second reading. The bill is drafted in such a way as to give the Government complete power over the establishment of patriotic funds, the raising of moneys and acquiring of assets for patriotic funds, the control and distribution of moneys and assets raised or acquired by patriotic fund?, the winding-up of patriotic funds and disposal of the assets and moneys of the funds, and the provision of penalties for any breach of the regulations. It is understandable that the bill has caused great concern to the organizations that, during the war, were responsible for the raising of the funds. The Minister for Repatriation (Mr. Barnard) or the Government, as the case may be, may rake a generous view and decide that funds raised in a locality shall be distributed in that locality. I entirely agree with that principle, but the bill does not provide that that will be done, and it is possible, therefore, for the money to be. paid into Consolidated Revenue and expended in one hundred and one different ways.

Mr Barnard:

– That is not intended.

Mr RYAN:

– Doubtless it is not, but it would be possible for that to happen. That is why the bill has caused anxiety. The Minister says it is not intended to pay the money into Consolidated Revenue. So there should be no objection to the insertion in the bill of a provision that it shall not be. At least, in order that the anxieties of people may be allayed, a firm assurance should be given, on behalf of the Government, that it shall not be. I assure the Minister that many people are very worried. They believe that as this money has been collected from a large number of generous people during the war, often in small villages and in restricted areas, for definite and restricted purposes, they should be allowed to dispose of what remains of the fund - which in some instances represents a considerable a.rn on nt. In some instances the amount remaining is several thousands of pounds. Those persons in whose charge the money now is have definite opinions as to how it should be disposed of. Such purposes as assistance for returned servicemen, provision of amenities and educational facilities, honour rolls, &c… suggest themselves to the mind. However, it is proposed to give the Government complete control over this money, and there is no assurance that it will be devoted to the purpose for which it was collected. If a firm assurance on this point were forthcoming, I should have no objection to the bill; otherwise I will vote against it.

Mr BLAIN:
Northern Territory

– I support the remarks of the honorable member for Wentworth (Mr. Harrison), who criticized this bill for the sins of commission for which it would be responsible. The Government is actually commandeering most of the funds now controlled by ex-servicemen’s associations, funds that are ably administered by men who ha.ve gone through the mill themselves, and have a deep sympathy for others who may be in need of assistance. I suggest to the Government that the authority of these organizations should be recognized, and in particular that they should not be swamped in a government department administered, possibly, by officials with no war experience. The honorable member for Wentworth dealt with this phase of the matter, with the sins of commission, if I may so describe them, but I wish to deal with the sins of omission inherent in the proposal. In the second-reading speech of this bill, the Minister for Repatriation (Mr. Barnard) 3a id -

Many of the funds hare already been wound up and others are in process of being wound up, but funds such as the Australian Bed Cross Society, the Royal Australian Naval Relief Fund and the Royal Australian Air Force Welfare Fund, will .continue to function indefinitely.

No doubt there were good reasons for not interfering with the funds held by those three organizations, but I wish to deal with the Australian Red Cross Society, and here I plunge immediately into the question of prisoners of war, particularly the Sth Division. Of course, every time ex-servicemen are mentioned, 90 per cent, of Government supporters assert that we are trying to ride on the soldiers’ backs.

Mr Pollard:

– That is not true.

Mr BLAIN:

– The honorable member for Griffith (Mr. Conelan) interjected to that effect only ten minutes ago. The men of the Sth Division obtained information through underground channels that money was being collected for them, but on their return to Australia, the money had more or less disappeared into the mist. During the last twelve months I have been making inquiries in Sydney in order to find out why the money had not been devoted to the purposes for which it was raised, instead of being lumped together with the other funds of the Australian Red Cross Society. The honorable member for Parkes. (Mr. Haylen) said that the Government had difficulty in deciding what to do with funds of this kind - though he was not referring particularly to money raised for prisoners of war. I have been informed that when Singapore fell such a wave of sympathy, or should 1 say horror, swept Australia, that the people opened their pockets and contributed very freely. My informant, Mr. Dash, told me that block collections were made, one person making himself responsible for collecting from every one in one street, and another person in another street, and so on. He told me that the fund grew so rapidly that finally it was necessary to tell the people not to contribute any more. Later, I have been informed, legislation was passed in Victoria to enable the money collected in New South Wales to be paid into the central office of the Australian Red- Cross Society and Mr. Dash told me of the remarkable work which they had done in fanning the enthusiasm of people in Australia to contribute towards a fund for prisoners of war. I now ask the Minister to consider favorably my suggestion that the funds collected for that purpose, and paid into the head office of the Australian Red Cross Society in Melbourne, should he set apart to be administered by exservicemen’s associations for the purpose for which the money was collected. I believe that it is within the authority of this Parliament to ensure that that is done. I speak for the prisoners of war, who have asked me during the last two years to do what I could to ensure that the money collected for them should be .handled by the prisoners of war section of exservicemen’s associations. The Minister should accept an amendment exempting such funds held by the Australian Red Cross Society from the bill. It may be taken for granted that those prisoners of war of the Sth Division who die in the next fifteen years will die as the result of their sufferings and tribulations in Malaya. That is the opinion of most doctors with whom I have discussed the matter. At present, prisoners of war who are in distress have to go to the Australian Red Cross Society where they are interviewed by young women - very capable and welleducated young women they are. who give their services voluntarily, and I am not criticizing them. A young woman is certainly not a suitable person to interview prisoners of war, discuss their medical history and ascertain their troubles. The men want to be interviewed by representatives of their own organization. They have no complaints to make against these members of the Australian Red Cross Society on personal grounds. They agree that the young women are highly educated and very tactful ; but they complain that they are under a disability in discussing frankly their personal affairs with them. They contend that the fund should he released and placed under their own control. I do not suggest that the proceeds of the fund have been wrongfully used, but I do suggest that the money has been placed under the control of the wrong organization. Much as I admire the excellent work done by the Australian Bed Cross Society as the spearhead for the collection of these moneys, I believe that the fund should now be administered by the association formed by the prisoners of war. I appeal to the Government, and particularly to the Minister for Repatriation (Mr. Barnard), to insert a provision in the bill to vest the control of the fund in the organization formed by the ex-prisoners of war. If that be done the men will feel that they will receive just and sympathetic treatment.

Debate (on motion by Mr. White) adjourned.

page 2429

PAPERS

The following papers were presented : -

Australian Soldiers’ Repatriation Act - War Pensions Entitlement Appeal Tribunals - Reports for year 1946-47.

Defence (Transitional Provisions) Act -

National Security (Economic Organization) Regulations - Order - War service land settlement - Western Australia (dated 4th November, 1947).

National Security (Enemy Property) Regulations - Order - Persons ceasing to be enemy subjects.

National Security (Rationing) Regulations - Orders - Nos. 147, 148.

Lands Acquisition Act - Land acquired for -

Defence purposes - Cloncurry, Queensland.

Postal purposes - Mount Surprise, Queensland.

Lands Acquisition Act and Lands Acquisition Ordinance of the Northern Territory - Land acquired for Defence purposes - Sattler, Northern Territory.

House adjourned at9.13 p.m.

page 2429

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Australian Army Medical Women’s Service

Mr Harrison:

n asked the Minister for the Army, upon notice -

  1. What is the maximum compensation payable to members of the Australian Army

Medical Women’s Service for loss of personal property as the result of active service conditions or accidental circumstances whilst on service?

  1. On what basis is such compensation assessed ?
  2. Is this amount adequate to replace personal belongings essential to such personnel who served in tropical areas?
  3. Is compensation limited to a fixed maximum amount in the case of members of that service whose personal belongings were totally destroyed in a plane which crashed owing to its unserviceability ; if not, on what basis is compensation fixed in this instance?
Mr Chambers:
Minister for the Army · ADELAIDE, SOUTH AUSTRALIA · ALP

– The answers to the honorable member’s questions are as follows : -

  1. Free replacement of all items issued from army stocks plus up to £3 for loss of other items of personal property.
  2. Issue items are replaced in kind. Monetary compensation for personal items is based on the allowance which the member received for purchase of such items on enlistment.
  3. This amount is considered to be adequate to replace those articles which the department considers essential and which are not an authorized issue.
  4. Yes. The conditions mentioned in 1 and 2 above apply to all losses by accident whilst on service.

Department of External Affairs : Staff

Mr McEwen:

n asked the Minister acting for the Minister for External Affairs, upon notice -

  1. How many (a) permanent and (b) temporary officers are at present employed in the Department of External Affairs?
  2. How many are members of an organization within the meaning of the Commonwealth Conciliation and Arbitration Act?
  3. What are the names of the organizations to which they belong and how many officers belong to each organization?
Mr Chifley:
ALP

– The answers to the honorable member’s questions are as follows : - 1.(a) Number of permanent officers, 197; (b) number of temporary employees, 129.

  1. Number of unionists, 160.
  2. Names of unions and number in each - (a) Commonwealth Public Service Clerical Association, 82; (b) Australian Postal Workers Union, 1 ; (c) Federated Clerks Union of Australia, 24; (d) Federated Public Service Assistants Association, 53; total 160.

Postal Department : Rehabilitation Programme: Tampering with Mails..

Mr Calwell:
Minister for Immigration · MELBOURNE, VICTORIA · ALP

l.- On the 13th November, the honorable member for Maranoa (Mr. Adermann) ashed the following question : -

Has the Minister representing the PostmasterGeneral seen the report that delegates to the Federal Conference, of the Commonwealth Postmasters Association criticized the slow progress of the Postmaster-General’s Department’s three-year plan for rehabilitating postal services. Is it a fact, as stated at tin: conference, that the Postmaster-General’s Department has been able to spend only about £1)00,000 from an allocution of £5,000.000 for rehabilitation work in the last twelve months, rf so, will the Minister, in view of the urgency nl improving postal services in country districts particularly, have the -position investigated, take appropriate action and advise the House of the result?

The Postmaster-General has supplied the following information: -

The report referred to by the honorable member does not indicate the true position.

In a comprehensive statement which I forwarded recently to all members of the federal Parliament the exceptional measures which have been instituted to overtake the enormous arrears of works that accumulated during the war were outlined, and reference to this particular statement will show the honorable member that special attention is being given to country districts.

The Government has approved of a post-war programme for the Postal Department which will extend over an initial period of three years and will include works to the total value nf about £42,000,000. The programme involves an estimated expenditure during the current and two succeeding financial years of approximately £30,000,000: it has been endorsed by the Government and has been commenced.

Despite the acute shortage of some essential materials mid skilled man-power, gratifying progress is being made with the implementation of the three-vein- programme and, as the result of vigorous measures which have been taken by the department, greater progress can lie expected to take place in the future.

Procedures have been streamlined and plans have been co-ordinated to meet the phenomenal situation, which is not peculiar to Australia, and the programme is being supervised by a sub-committee of Cabinet comprising the Treasurer, the Ministers for Post-war Reconstruction. Works and Housing and’ Interior and the Postmaster-General. Members of the Cabinet sub-committee and responsible officers of the Postal Department are fully conscious of the need for implementing the programme as soon as possible.

During the financial year 1940-47, 02,000 telephones were installed throughout the Commonwealth, this representing an all-time record. Based on the progress since the beginning of 1047-48, this record will be exceeded greatly during the current year and, in addition, telephone trunk lines and other essential facilities will be installed to a far greater extent than in the past.

Of the total amount of £30,44.3,000 allocated for Post Office services during the current financial year, the sum of £0.130,000 has been allotted for new capita! works, including buildings and sites, and 1! have every confidence that the whole of this provision will be absorbed and that the 1047-48 portion of the rehabilitation programme will be completed.

The honorable member may be assured that the Postal Department recognizes the inconvenience which is being caused to the community in the absence of adequate and efficient facilities, and is doing everything within its power to restore services to a satisfactory sta mla id.

On the 11th November, the honorable member for Wentworth (Mr. Harrison) asked the following question: -

Last week I posted a letter from Canberra addressed to Mr. K. .12. Winchcombe, of 48; Bridge-street, Sydney. The stamp on the letter bore the cancellation stamp of the post officeat Parliament House, Canberra. This week I found it in my box at the Federal Members’’ Rooms, Sydney, where I understand it had been placed by one of the staff of the Minister for Transport, Mr. Ward. It had been re-addressed to Mr. Ward, and was marked “Opened inmistake”. The letter was open.

I ask the Minister representing the PostmasterGeneral whether, in view of a previous incident concerning the opening of a letter by the Minister for Transport, which had been addressed to the Private Secretary of the Right Honorable R. C. Casey, inquiries will be madeto ascertain how my letter which was not addressed by me to Mr. Ward caine to be diverted to bini and opened by him. In view of the suspicious circumstances surrounding this incident and the many protests which have readied me regarding tampering with mails, will the Minister inform me under whosedirection this letter was diverted and whether such diversion of mail to a Minister representsa continuance of censorship or an attempt to build up a dossier against citizens by members nf the Security Service.

Although it was evident that the misdirection of the letter referred to by the honorable member was obviously an accident, I asked the Postmaster-General to investigate the circumstances and he has now supplied the following information : -

Investigations have disclosed that the letter mentioned by the honorable member was despatched in the normal way from the Canberra Post Office to the General Post Office. Sydney. It was addressed to 48 Bridge-street, Sydney, and was sorted for delivery to that address. The postman concerned was aware. however, that the addressee is a private boxholder at the General Post Office and, in accordance with the usual practice, he endorsed the appropriate private box number on the -envelope and transferred the article to the private box section.

Unfortunately, one of the figures in the -endorsement was formed imperfectly and resembled another figure for which it was mistaken by the officer who sorted the article into the private box bearing the number which he thought to be represented by the endorsement. The box in which the article was placed is held by the State Ministry of Transport and a correspondence clerk employed in that department, when unable to identify the addressee as a member of the staff of the organization,

Assumed that he was attached to the Federal Ministry of Transport and, after marking the letter “Mr. Ward, M.H.E., Federal Members’ Rooms, Sydney “, handed it back, unopened, to jil i officer at the General Post Office.

The inquiries also indicate that the letter wag then delivered with Mr. Ward’s correspondence to the Federal Members’ Rooms in Sydney, where a member of Mr. Ward’s staff opened the article in good faith and without noticing that it bore two addresses. When the officer concerned found that the letter was not intended for Mr. Ward and had been written by Mr. Harrison, he wrote on the envelope the words, “ Opened in mistake “ and placed the article with Mr. Harrison’s corre alspondence

The Postal Department sincerely regrets the occurrence which arose from an unfortunate elm in of events.

Cite as: Australia, House of Representatives, Debates, 20 November 1947, viewed 22 October 2017, <http://historichansard.net/hofreps/1947/19471120_reps_18_195/>.

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