23rd Parliament · 2nd Session
Mr. SPEAKER (Hon. John McLeay) took the chair at 2:30 p.m., and read prayers.
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– Has the Minister for Health rejected the proposals for a Commonwealth dental benefits scheme submitted by the Australian Dental Association? If the association’s request has been rejected, will the Minister say why it was rejected and, also, whether the opinions of the benefit societies were sought at any stage during the negotiations?
– Considerable discussion about a dental benefits scheme has taken place between the Australian Dental Association and myself, but it would not be correct to say that any definite and final proposal had been officially put forward. Therefore, the rest of the honorable gentleman’s question does not apply.
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– I desire to ask the Minister for Labour and National Service a question concerning the resettlement advisory panels that are being set up by his department to assist the transition of personnel from service to civilian employment. When will the resettlement advisory panel for Western Australia be appointed?
– Already, two resettlement advisory panels have been set up, I think in New South Wales and Victoria, and we are looking for outstanding personnel to fill the positions on the panels in other States. I am sure that we should be able quickly to obtain the required personnel in Western Australia. I shall have inquiries made and shall let the honorable gentleman know how far the matter has proceeded.
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– I preface a question to the Treasurer by explaining that some people believe that the recent credit restrictions are having an adverse effect on the prices being paid for Australian wool. Do the recent credit restrictions imposed by the central bank- in any way reduce the availability or cost of accommodation to over1 seas wool buyers or their Australian purchasing agents?
– 1 cannot imagine that there is any force in the proposition that has apparently been put to the honorable gentleman. In the first place, these credit restrictions would not touch the funds available to Australian representatives of overseas principals; and secondly, the figures released for the last month show that bank advances increased by £11,000,000 in that month and, indeed, increased also in the months leading up to last month. I have not had brought to my notice any suggestion of the kind put forward by the honorable member, but 1 will make some inquiries. However, all my information would suggest that there is no substance to it.
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– My question, which is directed to the Minister for Primary Industry, concerns a letter that he wrote to me recently in which he informed me that the Commonwealth Government would not be responsible for assisting the Government of New South Wales to provide extra wheat terminals for the storage of this year’s harvest. Is it not a fact that some years ago the Commonwealth Government made a loan to Victoria of £3,500.000 for the building of bulk wheat terminals when storage in that State was inadequate? What conditions apply to-day in New South Wales that differ from those that applied in Victoria in 1953?
– I think that the honorable member is not fully acquainted with the position at the time of the emergency in 1953-54, when £3,500,000 was advanced for wheat storage, because that emergency existed throughout all the States, and the Commonwealth grant was applicable to all the States. The position to-day is entirely different. The Commonwealth took its decision, and advised all the State governments prior to the last meeting of the Australian Loan Council that the responsibility for storage was theirs. No State, not even New South Wales, to my knowledge made any application for extra money for wheat storage. It has been recognized that production is the responsibility of the States, and this was confirmed by the action of the States at the last meeting of the Australian Agricultural Council when the reports on production and marketing came before that body. On that occasion the States themselves took the initiative and made decisions concerning production and marketing, and stated that production was their responsibility. That proposition was accepted unanimously at that meeting. The Australian Wheat Board was established to market wheat. A monopoly of storage rights has been given by the New South Wales Government to its own State bulk handling authorities. Similar action has been taken in the other States. Will anybody suggest that there should be a second system of storage conducted by the Australian Wheat Board or the Commonwealth, in which either the board or the Commonwealth might be asked to take second place to the New South Wales State bulk handling authorities in times when there was little demand for storage facilities? Of course not! Does anybody suggest that the Commonwealth should assume control of the carry-over and share with the States a responsibility which has already been given to the Australian Wheat Board? The fact of the matter is that New South Wales has spent sufficient to provide storage for another 2,500,000 bushels this year. I think that the position is no worse than it was twelve months ago. Every State, barring New South Wales, made ample provision financially for wheat storage, and the handling, interest and depreciation charges for storage that has been erected are provided by the growers through the annual pools. The payments are made by them from their funds. So the responsibility is back to the New South Wales Government if there is any need for more storage.
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– My question is addressed to the Minister for Primary Industry. I preface it by saying that at present Australian farming is experiencing two extremes of weather. In the north there is serious drought and shortage of feed for live-stock whilst in the south there is an extremely bountiful season. Will the Minister give consideration to discussing at the next meeting of the Australian Agricultural
Council the possibility of re-establishing the national fodder scheme that was introduced by the Menzies-Fadden Government in 1940 and abolished by the Curtin Labour Government in 1942?
– I think it would be a good idea if I placed that question on the agenda for the next meeting of the Australian Agricultural Council.
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Visit of Australian Prime Minister. Mr. JONES. - I ask the Acting Prime Minister and Minister for Trade: Are current reports in America which describe the visit of Mr. Menzies to the United Nations General Assembly as “ An effort to get President Eisenhower out of what Washington viewed as an embarrassing situation “, correct? Will the right honorable gentleman now request President Eisenhower to get this Government out of an embarrassing situation by lifting Washington’s embargo on Australian wool, dairy products and a number of metals that are mined here? Do we place any restrictions on the importation of American goods into Australia?
– I have to report that I am now back to the field as I am no longer Acting Prime Minister. I met the Prime Minister in Sydney this morning, and honorable members will be glad to know that he is in good health and will be in this House to-morrow. There is not the slightest doubt that the Prime Minister’s visit to the United Nations at New York and his visit to Washington have had a valuable and constructive outcome. I have no doubt that this will be made very clear to the Parliament when the Prime Minister speaks to-morrow night.
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– In a statement on 6th July, the Minister for Primary Industry said that the principle behind the beef research scheme was that the 2s. levy under the Cattle Slaughter Levy Collection Act should be borne by the producers, although the act says that the levy is payable by the owner of the stock at the point of slaughter? Is the Minister aware that some members of the Fat Stock Salesmen’s Association are threatening to prosecute butchers for failure to pay the levy? Can the Minister clarify this apparent anomaly?
– Some operators and butchers have done more than threaten to take such action; they have actually issued a writ to test the validity of the act. So I leave the matter there.
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– My question is addressed to the Postmaster-General. Is it a fact that most applications for private telephone installations are answered in the negative and that the reason given is the acute shortage of equipment? If so, can the Minister advise me how his department suddenly procured the necessary equipment, right out of the blue for the installation of a telephone in every room - and in some cases two telephones to a room - in the luxurious Chevron Hotel at Kings Cross and in the Rex-Carlton Hotel in Castlereaghstreet, Sydney? Is it a fact that his department has one policy for luxury hotels and another for private individuals in the matter of telephone installations?
– In the preamble to his question the honorable member stated that most of the applications for telephones were answered in the negative. With respect to the honorable member, that statement is sheer rubbish. I emphasize the correctness of my comment by pointing out that last year applications and total gross connexions just about balanced; that is to say, there was very little increase in the total number of outstanding applications. There were about 160,000 or 170,000 installations last year, so it will be seen that the statement that most applications are answered in the negative is not correct.
– But there are still 40,000 applications on the waiting list.
– There is still a waiting list, but there always will be a waiting list because the majority of outstanding applications are for installations which take some months to process. We can never reach the stage of having no outstanding applications because that would be a physical impossibility.
– Why do you not answer the question?
– Does the honorable member not like the answer that he has received already?
– I want to know about the Chevron Hotel.
– I have no immediate knowledge of the number of telephones that have been installed in the hotels to which the honorable member has referred. I have not been to them myself, and I do not know whether he has any personal knowledge of the circumstances to which he has referred, but when he suggests that the department has one rule for installations in luxury hotels and another rule for installations elsewhere I could, if I wished to be offensive again, direct to that statement the same comment as that with which I commenced this reply. In fact, the department has a system under which, as I think is wellknown to all honorable members, applications for telephones are given certain priorities according to their essentiality. The department does not depart from that general principle of priorities in determining the order in which telephones shall be installed.
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– Did the Minister for Trade make a statement in Adelaide on Monday last in which he implied that secondary industries were not pulling their weight in the national task of increasing exports? Can he inform the House what can be done by secondary industries in this regard so that they can get off the back of the primary industries, which have borne the burden for so long?
– On invitation, I did deliver an address in Adelaide on Monday last on the occasion of that city’s Export Week - Made-in-Australia Week. I pointed out to the representatives of commerce and manufacture who were present to hear my address that Australia needed more overseas funds; that the primary industries, historically, had carried the burden of earning these funds, very often at a loss to individual primary producers, and that I believed that manufacturing industry should have a greater consciousness of the fact that it-had a duty and an opportunity to do more in the field of export. I cited some instances of Australian-manufactured goods being sold in Japan. I named one item of which Australia is ‘the principal -supplier to Japan. This illustrates that even in a lowcost country there are still opportunities for marketing Australian products. I pointed out also that we are selling Australian-made motor cars and plastic goods in many countries and that we aTe selling Australianmade ball-point pens in the United Kingdom. I pointed out further that we can sell automotive parts in Detroit, America, in competition with the goods of experienced local manufacturers, and that I believed that in an economy which has a gross national product as high as Australia has, and so many efficient manufacturing industries as Australia has, there is an opportunity for our manufacturing industry generally to earn more than the present £100,000,000 a year. These statements were made, not in an accusative manner but in a constructive manner, and I believe that they were so received.
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– Has the Minister for Trade received information to the effect that many items of electrical equipment now being imported do not conform to i Australian safety standards? Is it a fact that Australia’s safety requirements for electrical goods are among the strictest in the world, and that compliance with these requirements is enforceable by ;law? Will the Minister examine this important matter, with a view to imposing some kind of import restriction upon all such -articles that do not conform to Australian standards
– I do not pretend to be able to speak with full knowledge of this subject, but I have the impression, that standards of safety for electrical equipment are prescribed by State governments, and that those standards generally apply at the point -df -sale. ‘I will consult with my colleague, the Minister for Customs and Excise, who has the control of goods at the -point of entry into Australia, to see whether there ris proper scope for the
Commonwealth to do more .than it does at the present time in respect of a matter which, I concede, is . of -great public interest and importance.
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Mr. -HAMILTON. - I address a question to the Minister for Primary Industry. It is supplementary >to ‘the question asked a few minutes ago by the honorable member for Farrer. Can the Minister inform the House of the provision that has been made for the bulk storage of wheat in Western Australia? I understand that a record crop is expected this year. What facilities exist in Western Australia tor handling that crop?
– It is estimated that at the end of the wheat year, 30th November, there will be a carry-over of approximately 24,000,000 bushels of wheat in Western Australia. Added to this will be the current year’s crop, which, it is estimated, will be between 5.5,000,000 .and 60,000,000 bushels. .However, the cooperative bulk handling authorities in Western Australia have taken early action, and their current .programme for the erection of new storage facilities and the repair of existing ones involves an expenditure of £5,000,000.
– Is that the growers’ money?
– That is the growers’ money. Those authorities -receive the same treatment from the Australian Wheat Board, as regards payment for handling and for capital expenditure, as do the New South Wales bulk handling authorities and the Queensland Wheat Board. A statement by the Minister for Agriculture in Western Australia on this point is interesting. He said that to all intents and purposes Western Australia would have ample storage for its record crop this season.
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– My question is addressed to the Minister for Health. Is it correct that the death-rate of aborigines in the Northern Territory rose from 16.7 per 1,000 in 1957 to “19.7 per 1,000 in 1958, the last year for which figures are available, while the infant mortality rate of the aborigines increased during the same period from 81 per 1,000 to 138 per 1,000? Can the Minister give reasons for these alarming increases? Does he feel that there is a need for improved medical facilities in the north? Further, can he give later figures than the ones I have cited, so that we may know the present position?
– I cannot give the honorable member a detailed answer. In part the answer may be that recording has become more accurate than it used to be. I will obtain full information for the honorable gentleman and let him have it.
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– Has the attention oi the Minister for Trade been directed to the analysis of imports, their use and essentiality, issued recently by the Australian Industries Development Association? As the analysis gives every appearance of being a very sound piece of work, will the right honorable gentleman arrange for it to be reviewed by officers of his department, and will be then issue a statement to guide honorable members?
– I am broadly familiar with the statement to the extent that I .have read fairly extensive reports in .the press of what has been said by this very reputable body. I think the situation is this: Undoubtedly more goods could be manufactured in Australia of the type that are imported. There as no doubt that there are progressive developments in that direction; but I would say unhesitatingly that at a moment when inflationary pressures are troubling Australia, it is scarcely the time to turn on the heat in a further great burst of industrial expansion. To do so would increase inflationary pressures. Here is a case of -balancing the problem of inflation against the problem -of the balance of payments. That is a fair analysis of the situation. On the other hand, the position to-day is that of all the consumer goods that are sold or purchased in Australia, £15 worth are manufactured in Australia for every £1 worth imported into the country. That shows a very high degree of production in Australia for our own requirements as compared to what we import.
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– I direct a question to the Minister for Territories concerning the Companies Ordinance for the Trust Territory of New Guinea. The ordinance requires that no .company shall be formed or registered unless at least two-thirds of the shares are held by or on behalf of British subjects. Since the indigenous inhabitants of the Trust Territory are not British subjects, will the Minister take steps to have the ordinance amended to permit them to form companies in which they own all or most of the shares?
– About eighteen months ago, I personally directed the attention of the Administration to that particular question, and I understand that the Crown Law officers of the Territory are examining it at the moment. I am not quite sure what position has been reached, but the matter to which the honorable member has referred is well under the notice of the Government. I will see what has happened, and will then inform the honorable member.
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– I preface a question to the ‘Postmaster-General by referring to a report that the chairman of the Radio Corporation of America forecast that it would be possible to telecast the 1964 Tokyo Olympic Games to all parts of the world. I ask the Minister whether his department has studied this possibility, and whether we have trained personnel technically equipped to ensure that Australia can avail itself of this service. I ask further whether the Government will exercise any control over this type of world television service within Australia, or whether it will be negotiated by private enterprise.
– =1 have not actually seen the report referred to by the honorable member for Balaclava, but I have heard some comment on it. The honorable member asked whether the Postal Department had studied the development referred to by the chairman of the Radio ‘Corporation of America and the possibilities inherent in it for the expansion of television. My reply is: Yes, the department constantly watches developments in the field of radio transmission of all types and advises me from time to time on these developments.
I point out to the honorable member that there are several ways in which television transmission could be developed to give a world-wide coverage, although in each case it would take a considerable time before that objective could be reacted. It is not too much to say that the submarine telephone cable, which we are now proceeding to install, ultimately could be used for this purpose. Similarly, it is quite within the bounds of technical and scientific advancement that micro-wave systems might be developed. However, I think that the chairman of the corporation would be referring to recent developments in the possible use of space satellites for the transmission of communications generally. This is a matter that is still very much in its infancy. Experts are at present investigating the possible use of space satellites for communications, including television, but I think the most optimistic of them would say that any practical use of satellites for this purpose will not be possible within a miniumum period of ten years from now. So any suggestion that the 1964 Olympic Games might be telecast throughout the world by this system is, I think, very optimistic indeed and most unlikely to be achieved.
The honorable member also asks whether we shall have in Australia the trained personnel to enable any such developments to be used here when they become available. I would say, definitely, Yes. We have the trained personnel available both in the national and commercial television and broadcasting fields; so there need be no fear that we would not be able to take advantage of any developments. He asks further whether the Government would exercise control over this form of transmission when it was developed or whether it would be left to commercial enterprise. The reply is that obviously that would be a .matter of policy to be determined by the government of the day when transmission by this medium arrived. It is not possible at this stage to make a definite pronouncement.
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– I ask the Minister for Social Services whether it is a fact that interest received by pensioners from savings bank accounts is taken into consideration when assessing pensioner medical and hospital entitlements. Will the Minister confer with the Treasurer to ascertain whether interest can cease to be regarded as income when assessing pensioner medical entitlements, or alternatively will the Minister ascertain whether interest can be paid half-yearly on pensioners’ savings, thus enabling them to spend their newly acquired capital rather than have them reduce their savings so that assessors when determining medical entitlement will not assume that the income of pensioners will exceed the permissible £2 a week and so prevent them from receiving medical and hospital benefits?
– It would be much more appropriate if the honorable member for Shortland addressed his question to the Minister for Health. Under the Social Services Act there is a means test with respect to both income and propery, but when the means test is applied to property, income from property is exempt. The answer to the honorable member’s question so far as it affects my department is, therefore, in the negative.
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– My question is addressed to the Postmaster-General. Is the Postmaster-General aware that although his department conducts efficient town and rural mail delivery services, in areas between these two, no delivery is made? Will the Postmaster-General consider giving the residents of these “ no-delivery “ areas special preference in the allocation of private mail boxes at local post offices?
– No doubt the honorable member for Mallee refers to the fact that mail deliveries are confined to people outside a radius of one mile of a post office, because various other types of service are provided for residents within that radius. It is always possible for any one in such a position to obtain a letter box at the post office, and I think that was the essence of the honorable member’s question. The Post Office, of course, provides letter boxes wherever they are required, so that those who do not come within the scope of mail deliveries may obtain their mail without very much trouble. If the honorable member for Mallee gives me particulars of any instances where it has not been possible to obtain a letter box, I will see that they are looked into.
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– By way of preface to a question addressed to the Acting Prime Minister, I refer the right honorable gentleman to the pleasing and courteous practice which has been observed since federation, and which is in accordance with the dignity of this Parliament, whereby a Minister, in accepting a public engagement in the electorate of another member, subjects that acceptance to two conditions. First, he satisfies himself that proper courtesy has been shown to the member for the district by his being invited to the function; and, secondly, he informs the member for the district of his intention to enter that electorate. While I concede that that practice prevails generally among Ministers, I ask the Acting Prime Minister whether he will bring it to the attention of those of his Ministers who, perhaps through inexperience or ignorance, are unaware of it.
– I am aware that in certain circumstances what the honorable member has mentioned is done, and that in other circumstances it is not done. I think every one understands that. I am sure that all my colleagues understand the practice and the principles at issue.
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Tariff Board Report. Mr. WIGHT. - I ask the Minister for Trade whether he has yet received the Tariff Board’s report on furnishing fabrics. If he has received it, can he tell us when the document will be tabled?
– Yes, I have received the Tariff Board’s report on furnishing fabrics. It is still under examination by my department preparatory to my taking it to Cabinet. I am informed that this is one of the most comprehensive and complicated reports that the Tariff Board has made for some time, and I should make it clear that the examination by the Tariff Board in this instance does not originate from a request by the industry itself. When the industry was last before the Tariff Board in, I think, about 1957, the Tariff Board recommended that the industry might be examined again in three years’ time, and that has been done. I am not sure of the exact details, and can only describe the approximate circumstances. I can say that I expect that within a few weeks the examination will be completed, a decision will be made, and the report will be tabled.
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– I ask the Minister for Trade whether he is aware of the concern of many primary producers at what is regarded as the unnecessary importation of farm seeds such as lucerne, phalaris, perennial rye grass and others from Great Britain, the United States of Amenca and Italy into Australia at a time when ample supplies of high-quality seeds are being produced here and are readily available. Will the right honorable gentleman have regard to the danger of importing seeds from countries in which foot and mouth disease prevails and the risk of introducing plant or animal diseases, and also noxious weeds? Finally, is he aware of the unfair competition from countries that heavily subsidize those of their farmers who produce these seeds?
– Dealing with one aspect of the question first, I assure the honorable member that my colleague, the Minister for Health, and the Department of Health are particularly careful at the point of quarantine to ensure that no animal or plant diseases or noxious weeds are imported into this country. There is a long record of success in quarantine in that regard, because great care is taken. I grow seeds for sale, so I know something of this business. I know that the producer in Australia always feels that the domestic market should be left to him. That is natural enough, whether he be a producer of seeds or of machinery. I know, also, that particularly in the field with which the question is concerned there are being developed overseas strains of seeds - of white clover, rye grass and a variety of similar plants - which can with advantage be brought to this country. After all, the seeds which are basic- to our improved pastures have been developed from strains that were imported into this country. I think that a pretty fair balance exists. Seeds may be imported without restriction, subject in some instances to payment of customs duties.
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– My question is addressed to the Minister for Trade. Has his attention been directed to a report that food production in Europe is. likely to increase faster than demand in the next five years, resulting in greater surpluses? Are massive price-support- programmes in Europe contributing to this state of affairs? Will our economy be affected by this situation and, if so, what steps will be taken to deal with it?
– lt is true that a phenomenon of post-war Europe has been the increasing domestic production of basic foodstuffs - wheat and other grains, dairy products and meat - with the result that the opportunities for countries which have been geared to export foodstuffs to Europe, including the United Kingdom, have diminished. As an example, I may point out that imports of wheat into Europe - in which I include the United Kingdom - are running at the level of 1,500,000 tons a year less than in the pre-war years, although population and purchasing power are greater and standards of living are higher. Within limits, this has occurred also in the case of other foodstuffs. The situation is explained by the very heavy cash subsidies and other price-support plans that operate generally, I think, throughout Europe and in the United Kingdom.
We have continued to argue, at meetings of the members of the General Agreement on Tariffs and Trade and elsewhere, that the concept of balance of opportunity which is nicely worked out in the- industrial field does not really exist in the bulk-commodity field, where there are- unreasonably heavy price-support programmes, and we take what steps we can to ameliorate our problems in this field. For instance, in the current United
Kingdom-Australia trade treaty, there is an obligation on the United Kingdom to buy not less than 28,000,000 bushels, equivalent to 750,000 tons, of wheat a year - an obligation that is being discharged. That is one kind of provision. The situation drives us both to argue in our own defence in the appropriate places and to search the world for new markets. One of the great successes here has been the opening up of new markets in Japan and other Asian and African countries.
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– I ask a question of the Minister for Territories. Who was it that’ suggested’ about eighteen months ago that the New Guinea company ordinances should be amended in such a way as to’ permit natives to own all or a majority of the shares in. a company formed in the Territory? Did the suggestion come from the Administrator, from the Territory Department of Law, from the Department of Territories or from the Minister himself? What is the channel of communication between the Minister and the officers for the carrying out of suggestions such as this in New Guinea, and whose job is it to keep the channel clear?
– In the unlikely event that the honorable member for Hindmarsh ever has an opportunity to hold a portfolio, he will realize that the processes of government are extremely complicated and are intermeshed at every turn. I do not think that any event could be analysed in the way in which he would have me analyse this one. Quite some time ago, it was clearly realized bv the Government that existing legislation made it difficult, if not impossible, for indigenous people in the trust territory of New Guinea to take a significant part in the formation of companies. In the Administration of the Territory, in the Department of Territories, and at Cabinet level, some attention was given to this problem. I have already promised the Deputy Leader of the Opposition that I will give him a full statement on the latest position. 1 do not think there would be any profit in trying to say whether this, that, or some other officer was responsible.
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Restriction of Credit
– by leave - Quite recently the honorable member for Farrer (Mr. Fairbairn) asked a question of’the then Acting Treasurer (Mr. McEwen) relating to the substance of the request made by the Reserve Bank of Australia to the trading banks and its bearing on rural lending. The honorable member for Hume (Mr. Anderson) and other honorable members have also shown an interest in this matter. 1 propose, in view of that interest, to make a short statement on the. position as it has been conveyed to me.
The terms of the recent request by the Reserve Bank of Australia to the trading banks were, first, that the banks should achieve an immediate and significant reduction in the rate of new lending. The Reserve Bank went on to state that, while a check over the general range of lending was being sought, the banks were also asked to intensify their efforts to ensure that they were not providing finance directly or indirectly for speculative activities. The existing prohibition on new or increased advances for the extension of hire purchase and instalment-selling was continued. This request, the purpose of which was to combat inflationary pressures in the economy, followed a sharp expansion of bank credit which had resulted from very strong pressure for bank loans over a wide field.
It is, perhaps, unnecessary for me to observe that the combating of inflationary pressures is of the greatest importance to our primary industries. Indeed, the particular problems caused to primary and other exporting industries by rises in cost, levels and by other effects of inflation are very prominently in mind in all the thinking of the Government and of the Reserve Bank on economic lines.
As the Reserve Bank is seeking a reduction in the rate of new trading bank lending, which has been, running at high levels, and as it has requested a check over the whole range of bank lending, it may well be that some primary producers will find difficulties in obtaining additional bank finance. However, the Governor of the Reserve Bank has told the trading banks that, even in the context of a very restrictive lending policy, he feels sure that banks will continue to bear in mind the need to provide reason able finance for export industries. He has also said in this connexion that banks will presumably continue to give special consideration to the needs of customers affected by adverse seasonal conditions at present prevailing in some States.
While I am on my feet, I might say that I have had prepared some documents which relate to the annual meeting in Washington of the International Monetary Fund, the International Bank and the International Finance Corporation. They also touch on the meetings of the Commonwealth Economic Consultative Council in London. Rather than take the risk of wearying the House with a long statement of what went on there and my own contribution to those discussions, I have had the information prepared in documentary form. I lay it on the table of the House and copies will be available for those honorable members who may be interested in the activities of these institutions.
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– I lay on the table the following paper: -
Audit Act - Finance - Supplementary Report by the Auditor-General upon other accounts, for year 1959-60.
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Motion (by Mr. Harold Holt) agreed toThat Jeave of absence for one month be given to the honorable member for Bowman (Mr. McColm) on the ground of parliamentary business overseas; and to the honorable member for Mackellar (Mr. Wentworth) on the ground of public business overseas.
SUSPENSION OF STANDING ORDERS. Motion (by Mr. HaTold Holt) agreed toThat so much of the Standing Orders be suspended as would prevent Order of the Day No. 3, General Business, being proceeded with forthwith.
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Consideration resumed- from 18th August (vide page 176), on motion by Mr. Fairhall-
That the following paper: - Proposed construction of a new international terminal building at Perth airport, Western Australia - be printed.
Question resolved in the affirmative.
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Debate resumed from 16th August (vide page 84), on motion by Mr. Harold Holt -
That the bill be now read a second time.
.- The Opposition does not intend to oppose this measure, but will point out certain anomalies and other features of the sales tax which seem to be worthy of comment on an occasion such as this. Virtually, the proposed amendments make very little change in substance to the sales tax as it operates at the moment, lt has been estimated that the sales tax will yield about £180,000,000 in the current financial year. This tax has become the third or fourth most significant tax levied by the Commonwealth Government. It has come a long way, indeed, since it was introduced as a temporary measure in 1930-31, and yielded a total of £3,500,000.
This is a tax which has considerable significance for large and important sections of Australian industry. There are numerous items, of course, on which no sales tax is payable at the moment. Sales tax is payable on about one-third of £3,000,000,000 worth of articles sold in shops or warehouses. The last available retail figures are contained in the thirty-eighth report of the Commissioner of Taxation - that very handy compendium of taxation statistics. In the financial year which ended on 30th June, 1958, tax was collected on the sale of goods of a total value of £863,000,000, and something like £2,000,000,000 worth of sales were not subject to tax. However, it is when we look in more detail at the kinds of goods which bear sales tax that we realize the nature of this impost. I think it would be quite fair to make now the statement that was made in 1935 by Mr. G. C. Ligertwood, who is now Mr. Justice Ligertwood, which is quoted in an article prepared by Mr. H. R. Irving, F.A.S.A., entitled “ Sales Tax Highlights “, published as a pamphlet by the Australasian Society of Accountants (N.S.W. Division). That statement was-
The complications of the income tax law were mild as compared with those of the Sales Tax Acts. No business man could possibly ascertain for himself-
Meaning, presumably, that he needed experts to help him - what the Acts and Regulations required of him, or even what goods were subject to tax.
In 1935, when that statement was made, sales tax had been in operation for only four years and the total amount collected annually was less than £10,000,000. The present complications of the law and the regulations are discussed in this pamphlet “ Sales Tax Highlights “, which shows that there is difficulty sometimes in ascertaining whether particular goods are subject to tax, whether they are aids to manufacture or whether they are part of the process of manufacture. There are all sorts of complications there. Again, sales tax is not a uniform tax, as it bears at different rates on different types of goods.
At the moment about half a dozen separate rates of tax are in force, and are covered by five of six schedules in the Sales Tax (Exemptions and Classifications) Act 1935-1959. The measure now before us proposes to vary a few of the rates. Some goods are to be exempt from sales tax, and some rates of tax are to be changed from 25 per cent, to 121 per cent., whilst in one instance - electric razors - the rate is to be increased from 121 per cent, to 25 per cent. Sales tax does not bear with equal impact on all industries. About £90,000,000 in tax, which is roughly half of the yield for this year, will be collected as a result of the sale of motor vehicles - either private cars which bear tax at the rate of 30 per cent., or commercial vehicles and spare parts for motor vehicles which bear tax at the rate of 16$ per cent. The commissioner’s statistics show that the major item that bears tax at 30 per cent. - motor cars - in the last year for which figures are available - was responsible for sales of a total value of £130,000,000. On that basis tax of 30 per cent, would yield about £40,000,000 out of the total receipts of £137,000,000. Similarly, the tax on commercial vehicles and spare parts, of 16J per cent., would mean a yield of one-sixth of the total sales value of £115,000,000. The tax collected in that instance would be about £20,000,000. This year- two years later than the year to which these statistics relate - the yield from sales tax has risen by about one-quarter from roughly £140,000,000 to £180,000,000. It can be estimated that the tax yield from motor vehicles, although it may not be as high as £90,000,000, will be at least in the vicinity of £75,000,000.
Here we have an example of an indirect tax in respect of which it is very difficult to assess, with any degree of finality, where the final impact of the tax really rests. It may be said that when a person buys a motor car for pleasure he takes the tax into account when he is making his purchase. Whether the tax is a determining factor would depend largely on the person’s choice of a motor car as against some other object on which to spend his income. In regard to the tax on commercial vehicles one hears argument about how this tax can be passed on. Does the tax bear only on the person who buys the vehicle? If the vehicle is used commercially either in delivering other goods sold, or in taking raw materials from one place to another, the tax ultimately forms part of the final cost of the goods produced from the materials carried by the vehicle. It is impossible to determine just where the final impact of the tax is felt. Again, there seems to be very little logic in the way this tax is applied on certain other articles.
I have no doubt that most honorable members are peppered around Budget time with the sort of pamphlet I have now in my hand, which was issued by the Toilet Preparations Association of N.S.W. There do not seem to have been quite as many of these pamphlets sent to us on the present occasion as there were on previous occasions. The one I hold now was sent around the time of last year’s Budget! It shows a picture of a young woman, supposedly a young mother. I do not know whether the young woman illustrated is actually a mother or a model engaged for the purpose of the picture, but at any rate the illustration shows her as a young mother. It shows also that neither the hat nor the coat she is wearing has sales tax imposed on it, but the handbag that she carries is subject to sales tax of 121 per cent. The weather must be doubtful, because she is carrying an umbrella, which also bears tax of 121 per cent. The stockings she wears bear no tax, nor do the shoes and the gloves; but the toys with which the child in the pram is playing bear tax at the rate of 121 per cent.
At the bottom of this circular there are highlighted some significant sales tax anomalies. A cosmetics bag carries tax of 121 per cent., but the cosmetics carried in it bear 25 per cent. tax. Party decorations attract a rate of 121 per cent., but the lipstick worn by the girls at the party carries a 25 per cent. tax. A baby’s toys, rattles and sweets are taxed at 121 per cent., but the talcum powder applied to the baby carries 25 per cent. tax. Women’s hairnets are exempt from sales tax, but cosmetic hair spray bears tax at the rate of 25 per cent.
The present measure proposes to alter the rate of tax in respect of shaving accessories. Last year, electric razors were taxed at 121 per cent., but razors and razor plades were taxed at 25 per cent. The Treasurer’s method of solving this dilemma is not to reduce the tax on razors and razor blades from 25 per cent, to 121 per cent., but to raise the tax on electric shavers to 25 per cent. At the same time, as he is raising the tax on that essential item, he gives another rather exotic example by reducing the tax on pewter ware, crystal ware and platinum plated articles. I am wondering how he carefully weighs the question of whether it is desirable to raise the sales tax on electric shavers and reduce the tax on pewter and glass ware. Those are points of very nice calculation, I have no doubt, but I suggest that not often is there very much logic involved in it.
– The logic in the case of razor blades was that if we brought the sales tax down to 121 per cent, the ladies would have had a grievance, because we would have been discriminating between men and women in the sales tax on toilet ware.
– I am glad the Treasurer realizes that some grievances do exist in the community in relation to taxation. But I suggest he has not a very good perspective about the grievance that exists. According to his own figures, as they appear in the Budget, a reduction of the rate of sales tax from 25 per cent, to 121 per cent, is proposed for silverplated ware, pewter ware and cut glass ware. The estimated cost of this reduction is £150,000 in a full year and £120,000 in this financial year. The increase in the rate of sales tax proposed on electric shavers, from 121 per cent, to 25 per cent., will remove a competitive advantage that those articles now have over safety razors, but I submit that it is only one way of removing that advantage. The Treasurer could have brought the sales tax on razors and razor blades down, because they are already being taxed at the rate of 2’5 per cent. The estimated gain to revenue from this item is £290,000 in a full year and £230,000 for 1960-61. In other words, the Treasurer gains almost twice as much by putting up the tax on electric shavers as he loses by removing the tax from pewter, silver ware and cut glass ware. 1 cannot at the moment argue what are the social niceties about the grievance that .is removed and the new burden that is added .by this type of approach to the question. -It is a little bit too fine a point for me to be able to adjudicate .upon.
I commend the Treasurer on his action relating to that item which assists certain disabled people who have to use motor vehicles and, in the opinion of the DirectorGeneral of Social Services, are unable to use public transport. That is a worthy move, because there is at least :an obvious grievance and almost an injustice in a tax of that kind. That grievance or injustice is removed now at a cost to revenue of £265,000 in a full year, and £210;000 for the residue of this financial year. All these things are pretty small indeed in relation to the total amount of taxation levied by the Commonwealth Government, which is something like £1,600,000,000. Other than that genuine instance and these other trivialities, there is very little in -these alterations of sales tax to remove injustices and grievances.
However, this does give us an opportunity to look a bit more closely at the structure of taxation as it exists in Australia. Sales tax is an example of indirect taxation and it is significant that in this year the sales tax, with an aggregate estimated collection of £180,000,000, will account for £1 in every £8 that the Commonwealth Government raises. In 1951-52 or thereabouts the proportion of the revenue raised by means of sales tax was a little over 10 per cent. To be exact, I think 10.2 per cent, of total
Commonwealth revenue was raised by sales tax ten years ago. It then amounted to £1 in every £10 of the total revenue, and this year £1 in every £8 will come from this indirect and* not very precise kind of taxation.
As I have tried to indicate, the position is hard to assess when you take some of the more significant items into account. It is easy enough to jest about some of these items and ask why one has sales tax placed on it and another has not, but there are some items on which the tax is much more significant than it is on others. It seems difficult to understand - when we have a government which claims that it is impressed by the distortions in the economy following on inflation - why nothing is done to remove the tax on items such as foodstuffs which people must buy. Any one who has a young family or the members of whose family take lunches to work each day knows that biscuits are a significant enough item in the family budget. The biscuit manufacturers estimate that biscuits, as sold to the consumer, are, according to the quality and nature of the product, some 2d. to 3d. per lb. dearer because of sales tax than they would be without it.
One would have thought that the removal of the sales tax from this item would be a very good way to begin to alleviate some of the effects of inflation on the cost of living. The removal of the tax would not amount to much in the terms of the aggregate of £1 80,000.000 which is to be raised by means of sales tax. but it would remove a grievance and do justice to many people in the community who are not very well able to protect themselves in other ways. The wage-earner, has no means of pushing prices up and must take the wage which the court determines for him. The Pastry Cooks Association argues that a pound of fruit cake sold over the counter, instead of being sold for 3s. 6d., has to be sold for 3s. lid., because a tax is imposed on certain of the ingredients. I think my friend, the honorable member for Mallee (Mr. Turnbull), raised the question of this kind of anomaly previously. He pointed out that there is a tax imposed on dried fruits which are put into cakes but not on dried fruits sold over the counter. Here we have one or two homely examples where there seems to be no warrant whatver for the tax to be continued.
It is burdensome to the people who have to compute the tax. Any pastry cook or baker who conducts a business in which he sells cakes - some he bakes .and some he buys from another manufacturer - or plain bread or raisin bread which he buys, can tell of these anomalies, particularly if he happens to be in a business of .the tuckshop variety across the road from a school and sells soft drinks, ice cream and lollies, of which some bear taxation and some do not. Besides having to get up in the early hours of the morning to bake, he has also to stay up late trying to work out what portion of his total sales for the day were subject to sales tax.
In terms of the total amount collected, the time is ripe for the Government to begin to eliminate some of the more obvious anomalies that have been created by sales tax. At this stage I shall not debate whether fewer motor cars should be sold in relation to some other commodity. There may be a case for imposing sales tax on certain items when the Government wants to control the expenditure of the community and to have less going, perhaps, into fur coats and more into savings or some other channel. The matter does not end with the sale of motor cars. The building of bridges, the provision of more adequate roads, competition with public transport, and various other elements of public policy are involved, and there may be some case for imposing a sales tax on certain selected items.
The major part of sales in Australia is not directly subject to sales tax. The tax is levied on relatively few items, some of which are much more significant than others and some, as I have tried to indicate, are .almost so trivial and petty in themselves as to make one wonder why the tax was ever imposed on them in the first place and why it should not be removed now. Of course, we had the legacy of the war . and post-war periods. During the war we wanted to regulate the sale of particular items and to .divert as much money from normal consumption channels into the Government’s hands for the better prosecution of .the war effort. Although that circumstance no longer exists there seems to be a tendency, which is more manifest under this Government than under any previous administration, to solidify taxes at the particular level and in the particular form in which they happen to apply. The Government is prepared to allow the status quo to remain, apparently believing that because the people are at present paying the tax, and because they do not groan very loudly under the grievous burden which it imposes, it can be continued for another year. lt is true that the Treasurer has set up a committee of experts to study the impact of various taxes in Australia. It may be that the committee will direct its attention to the kind of problem that 1 have mentioned, but as a Parliament we need to look at this question a little more closely because, no matter how many .experts you may have to help you, ultimately decisions affecting revenue on one hand, and social policy on the other hand, must rest with the Parliament which has to ratify any measure involving finance or the imposition of a tax. I know that my venerated friend opposite, the honorable member for Warringah (Mr. Bland), who was formerly the chairman of the Public Accounts Committee, holds different views from mine about the role of taxation in an economy. But you must recognize that the mere imposing of a tax alone is not significant; taxation, if used intelligently, can be an instrument of social policy in an advanced community. If some people are getting too much too easily, you can take it from them by means of a tax imposed in the right direction. ‘If you feel that a certain avenue of consumption, of which liquor is a pretty good example, has certain evils attendant upon it, a tax can be imposed on that commodity. We hear a good deal to-day about the number of road deaths and the fact that alcohol is one df the principal contributors to this problem. It must be recognized that a social cost is attendant upon the use of that kind of commodity, and ‘that ‘therefore “there is not necessarily an injustice in imposing a heavy tax on it.
There is a controversy at present as to whether -smoking increases the incidence of certain diseases. I know that the’ tobacco interests are doing their best by large-scale advertising to counter the suggestion that it does. But if it is correct that smoking causes diseases, a burden is placed upon the public hospitals which must treat those diseases. Of course, there is not necessarily always an open and shut case for imposing a tax on such items as tobacco. Matters of this kind, it is true, come within the realm of the Department of Customs and Excise, but I am using them simply as examples of the way in which the Government can use the taxing machinery for social purposes.
It is very difficult to find much logic in the imposition of tax on the majority of items contained in the five schedules to the Sales Tax (Exemptions and Classifications) Act. Obvious anomalies arise and they should be corrected. But even in those cases which are not regarded as anomalous it is very difficult to know what real benefit is obtained by the imposition of a tax of one penny or two pence here and there. Possibly there is a much better way of getting that revenue, if you need it, than by resorting to sales tax.
Those are the kind1 of matters to which the House should give consideration. Very little change of any significance is involved in the proposed amendments to the legislation, but neither is there any change in the great substratum of items on which the tax is imposed. This legislation is typical of the Government’s stay-put attitude in the face of the great national problems with which it should be grappling.
There is no doubt that the section in the community which, I suppose, is the most hard-pressed economically is carrying the burden. I refer to the young married man in the income group between £16 and £25 a week, who has two or three young children. These families buy most of the articles upon which sales tax is imposed if we exclude from consideration for the moment the motor car. I refer particularly to items of household expenditure. Surely in this day and age a wireless set should be regarded as an essential rather than a luxury item, but when you buy a wireless set the price includes 25 per cent, sales tax.
– You should be talking about television sets now.
– I know that the honorable member for Mallee lives in a more arduous climate and a less salubrious area than I do, but surely there should be no burden upon his wife if she persuades him to buy a washing machine. However, the washing machine will cost nearly £100 instead of £90 because it carries sales tax of about 8 per cent. Sometimes we in the metropolitan area complain that we do not get enough sunlight. The honorable member for Mallee, however, sometimes thinks there is too much in certain parts of his district, but if his constituents want to put blinds on their windows to shut it out, they are charged extra because of the operation of the sales tax. I will not go into details about such homely items as room heaters and mattresses, which are also mentioned, except to say that they also attract a certain amount of sales tax.
I cannot see any logic at all in the imposition of taxes on items of this kind. If one makes a quick calculation, one will find that these items will yield, by way of sales tax, only about £10,000,000 or £11,000,000 at the most. It is very difficult to segregate particular items, but included amongst the goods that attract sales tax of 8£ per cent, are household furniture, floor coverings, domestic refrigerators, washing machines, cutlery and crockery, blinds, mattresses and room heaters. I sound like a lift driver in Myers. The aggregate sales for a twelvemonth period of those articles are worth about £120,000,000, and the sales tax on them would be about £10,000,000. If the Treasurer can, as he claims, make the careful kind of calculation that convinces him of the desirability of increasing the tax on electric razors so as to yield an extra £250,000, in order to put these items on the same footing as safety razors and blades, and of reducing the tax on pewter and cut glassware and silver-plated goods to the extent of £160,000, can he not look a little more closely at the real anomalies that exist, and perhaps come to the conclusion that he should abolish the tax on household items, affording relief to the extent of £10,000,000 or £12,000,000? This would give a reasonably significant measure of justice to the people in the community who are most in need of it, the young couples who are endeavouring to provide for themselves and their families as decent, intelligent citizens in a modern community. I suggest that this should be the attitude adopted by any socially responsible government in considering problems of this kind.
I ask the House to look a little more closely at the kinds of items that attract tax under this schedule of the act. Some people would say, from considerations of convenience, that one of the best methods would be to impose a flat rate of sales tax on all items. They would say that we should not discriminate in any way, and that this would be an easy way of raising taxes. It is, in fact, the sort of device that is used by a number of the American States, because in the American federal system the power to levy a sales tax resides in the States, whereas in Australia it is exclusively within the province of the Commonwealth. If a person goes into a store in Chicago and buys an article that sells for a dollar, he may find that he has to pay a dollar and six cents, because a flat rate of 6 per cent, sales tax is imposed on all items.
As I have said, there are some who maintain that this is an easy method of collecting the tax, and not an unjust one. I would not share their point of view, but recently in England quite a well-known economist, Mr. N. Kaldor, suggested that some kind of a sales tax ought to replace other taxes. He has not made very much headway as yet in convincing the authorities in Great Britain that they should adopt that method of raising the revenues of the United Kingdom; nor do T think he would get very far with that kind of doctrine in Australia. However, this does show the kind of consideration with which parliaments and governments should be concerning themselves. We should ask ourselves, when considering the imposition of taxes, “ Where will the major part of the burden ultimately fall? Will it fall on the people who are able to afford it or who, in justice, should be asked to bear it before other persons? “ It does seem to me to be unjust to suggest that these essential household items, with which the family groups are more concerned than others are, should bear sales tax, while other items that might be considered luxuries do not bear tax at all.
We submit, therefore, that although a certain measure of justice has been done with regard to the tax on motor vehicles to be used exclusively by incapacitated persons who cannot use public transport, there is still a great deal of injustice with respect not only to this tax but also to some others. The Treasurer has not given much attention to these injustices, and I think he should be condemned for not giving the proper degree of consideration to the most urgent cases.
.- The honorable member for Melbourne Ports (Mr. Crean) has given us an interesting summary of some of the anomalies that exist in connexion with the operation of the sales tax. I hope that when these matters are next under consideration the department will give very careful attention to many of the comments of the honorable member. He spoke of many matters that have worried quite a number of us for a long time. His attitude is not entirely identical with that of some of the other members of the Opposition, or perhaps I should say of some of the Opposition spokesmen. I recall that just after the Budget was presented a certain article appeared in one of our Melbourne newspapers. It was in a column entitled “ Labour Voice “, which is devoted to happenings in Canberra. The person who wrote it adopted a rather sarcastic attitude, implying that what we were doing in this Parliament was not very helpful. He said: -
To be quite fair, we should say that if you’re one of those people who are planning to buy a bulk milk tanker, you’re lucky - you won’t have to pay sales tax on your new purchase. And, if you intend to stock up with some nice silverplate that may be cheaper too, because the sales tax has been cut by half.
Then he goes on to say -
If you are like most other Australians, this great saving won’t mean much to you.
These sales tax provisions were not introduced for the purpose of saving money. It will be found that when all the sales tax measures included in the Budget are taken into account, the savings will just about balance the remissions. The purpose of these provisions was to correct anomalies and to ensure fair treatment in the case of different articles designed for the same job. The electroplating industry has been very heavily hit by the 25 per cent, sales tax that has been imposed on its products for some time. The tax varied a good deal in former years, and it has been as high as 66$ per cent. The result of these high rates of tax has been a very effective reduction of the number of persons engaged in the industry. Production planning schemes, plans for modernization of equipment, and, in fact, all preparations for future activity, including the training of apprentices, were swept aside because of extreme uncertainty as to what the rate of sales tax might be at any future time.
In 1950 the electroplating industry was active and prosperous, employing some 2,000 persons. These were not unskilled process workers, but they were people who had been engaged in the trade for years and had become high-class tradesmen. Their skill was very much in demand during the war. This number of 2,000 has now been reduced to less than 250. Of the 24 firms that were engaged in the trade in Melbourne - where, incidentally, 90 per cent, of the production is carried on - eight have been forced right out of business. Some of those have been able to employ only skeleton staffs, whilst others have reduced their staffs to one-third of their former strength. This much needed relief will correct an injustice to many of these skilled craftsmen and encourage the introduction of beauty and graciousness into our living.
Utilitarianism can be carried too far altogether. The mellowing effect of silverware in its appropriate setting is much more pleasing than the cold durability of stainless steel. People have got out of the habit of buying silver, but this concession to what is, after all, one of our oldest industries - I believe it was started away back in tha 1870’s - will result in a lowering of prices overall by about 10 per cent. I am very hopeful that it will have the effect of lifting the industry back on its feet. It has been quite unfair that locally made silverware, in the manufacture of which many of our people, are employed, and the materials used for shaping and silver for plating are produced in Australia, should be penalized in comparison with competitive lines which are imported. I refer, for example, to the high-grade pottery from England, stainless steel from Sweden or cheap earthenware or plastics from Japan.
As to the milk tankers, the uninformed gibe of “ Labour Voice “ shows how little appreciation the Australian Labour Party has of the problems of those who live in the country. This particular concession is not a monetary concession. It is not going to cost the Treasury anything; these milk tanks are being brought into line with all other equipment for handling milk on the farm and in the factory which is tax free. The bulk pick-up system of milk marketing is a new development; it is only now being integrated into our dairying industry.
I am very happy to state that this modern system was first introduced in a progressive factory in the electorate of McMillan, which is the leading dairying area in Australia. Four years ago, when Mr. Joe Wilson put in the first tanker at Archie’s Creek in South Gippsland, he was looked upon as being a little odd; but this was not the only innovation he made that was destined to produce a great change in the industry. This factory also introduced the first machinery for producing “instant mix “ skim milk powder which is simply stirred into water to produce an easy-to-use palatable milk without nasty lumps floating on the top. It retains all the good qualities of milk - all the minerals and vitamins - without the over-weight dangers associated with fat. To-day, Archie’s Creek has five tankers on the road and two on order. These tankers pick up from 240 suppliers who, as well as being pioneers of this system through which the industry is emerging from the dark age to the atomic age are enjoying a saving in transport costs of at least 2d. a gallon. That is a very important item in an industry where costs are bearing heavily on the producers.
– Indirectly, the consumer gets the benefit also.
– Certainly. Refrigeration is the greatest single factor in raising the quality of our dairy products, and the completed system of refrigerated bulk milk vats on the farm, and these specially produced bulk milk pick-up tankers are the greatest step forward since the application of electricity in the milking sheds. It has always been held that these tanks should be exempt from sales tax just as are milk cans, replacing as they do, the old-fashioned milk cans. In the past few days I have made further inquiries about these tanks, and I have found that throughout South Gippsland practically all the factories are putting in the bulk pick-up system. I am sure that this move will be appreciated throughout the dairying industry.
Every one is familiar with the old set-up. The cows are milked and the machines run the milk over some inadequate cooling device into cans which the farmer has to deliver down the road. There, a flat-top truck from the factory picks up the milk and transports it to the factory, where each can is tipped over the scales into holding vats. Under the new system, the farmer installs a modern refrigerated bulk holding vat on the farm. He holds the milk in perfect condition, and the factory replaces the old can system with these bulk milk pick-up tanks which go right into the property, pump the milk from the holding vat and transport it to the factory. There it is again pumped into the holding vat for processing. The old milk cans were free of all tax and it is logical that a similar concession should be given to this modern equipment in which milk is conveyed from the farm to the factory. It will be noted that the exemption applies only to the tanks used in this particular operation. The transport of milk from factory -to market is an entirely different operation, quite separate from the round of operations in the factory-processing of milk. The actual vehicle on which the tank is mounted is, of course, subject to ordinary tax. As will be seen, both of these alterations to sales tax have been made on the basis of levelling up what would otherwise be anomalies. Similarly, in increasing the sales tax on electric razors, the reason has been to place all shaving gear on the same competitive level. I am very pleased to see that Government thinking has at last got round to this point of view.
Any one who has the misfortune to have to refer to the volume which contains the sales tax exemptions and decisions must be appalled at the glaring discrepancies that occur because of the system under which it has been evolved. Sales tax rates are laid down definitely for some items, such as motor cars, at 30 per cent. Anything else that is not specifically mentioned must pay the standard rate of 121 per cent. That has led to the building up of a system under which you have to get an item nominated before you can get away from the payment of sales tax. As a result anything new - any new machine or any advance in technique - must be submitted and go through the extremely arduous process of winning an exemption. The cost to the commercial world0 must be terrific, and the work involved in making returns to the department places an unnecessary cost on industry as a whole. Surely, a better approach would be to tackle this problem by placing each class of goods - or in some cases specific industries - on an equal level.
If dairying is to be an industry which, by its nature, is freed from sales tax, everything that the industry uses to process its product should be given the same treatment. If mining is to receive substantial concessions because of its nature - and we exempt a very wide range of goods and machinery used in mining operations - :for goodness sake, do not let us persist in pinpricking annoyances such as exempting paper used by geologists for making a map of the topography of an area that is being developed and demanding tax on the same paper when it is used by the same geologists in the same area in making a seismographic survey and producing what is virtually a map of the diagrammatic cross-section. From an exploration point of view, the map and the cross-section are equivalent documents. One records the surface and the other the sub-surface findings. But the regulations refer only to map paper, so a request for the same treatment for cross-sections is rejected.
I find it impossible to work out the departmental viewpoint in connexion with the tax charged on the big trucks used in the mining industry for either the removal of over-burden or the carriage of ore from the face to the mill. These trucks never go off the property. They are entirely a part of the operating machinery. If the company buys and operates them it can claim exemption, which carries through to tyres and parts that may be required. But if the company finds it more convenient and efficient to employ men who do this identical work under identical conditions on a contract which requires the men to buy and operate the trucks, the men are liable for the payment of tax on the trucks that they buy. The trucks still never go on the roads. They are bought for identical purposes and are operated in a completely identical way. Naturally this is considered to be a very glaring and annoying anomaly. Oil exploration companies, too, which have imported special trucks for special jobs connected with the setting up and running of their drilling rigs, are mystified at the departmental attitude which penalizes these vehicles as being trucks ordinarily used for the carriage of goods or passengers, when there is no possible connexion with that type of work. It is very obvious that the departmental officers who decide what classification applies to individual items, do not appreciate just how various items of equipment fit into a mining or oil exploration operation and consequently use much too literal classifications for tax purposes.
I am most grateful to the Treasurer (Mr. Harold Holt) for his action in levelling up the three items mentioned in the Budget this year. Workers in the silverware industry will be very happy to know that their industry is to be given a new lease of life and every one in the dairying industry will appreciate the gesture which will assist in producing a better quality product at a lower price. I commend to his consideration the suggestion I have made for simplifying the method of classifying goods, and I earnestly request him to carry on this levelling-out process that he has started, so that we will no longer have so many unfortunate discrepancies.
The honorable member for Melbourne Ports mentioned quite a few of these discrepancies. I should like to give some examples of anomalies that I consider should bs very carefully considered when these matters are being reviewed for the next Budget. Hair nets are free of tax because some officer decided that they are apparel, but combs and bobby pins are taxed. Shaving brushes are taxed, but tooth brushes are free. Toilet soap is taxed, but dog soap is free. Canned meat packs are free, but plum puddings are taxed. The addition of sultanas or seeded raisins to bread immediately makes this essential food a taxable item and no food should be taxed. Biscuits are taxed, unless they are dog biscuits and then they are free. Surely the Treasurer must have some sympathy for the unfortunate pastrycook making out his return; he must distinguish between meat pies, which are free of tax, and apple pies, which are not.
.- The honorable member for McMillan (Mr. Buchanan) has my sympathy on this very quiet after noon in the House of Representatives for having to confine his attention to the narrow limits of the bill before the House. I suppose on a quiet Wednesday hardly anything would be more appropriate than a very narrowly based and superficial sales tax amendment such as this.
I want to deal with four points that have been raised by the honorable member for McMillan. He suggested that there was some difference between the honorable member for Melbourne Ports (Mr. Crean) and “ Labour Voice “, which is published in a newspaper that circulates in his electorate, lt seems to me that a good many honorable members on the Government side misunderstand the honorable member for Melbourne Ports. He is just as radical in his economics as are those of us who disturb Government supporters a good deal; I assure honorable members of that. There is no difference between the views of the honorable member for Melbourne Ports and the article to which the honorable member for McMillan referred. In that article, the question of priorities was raised, and the writer said, if I understand the honorable member correctly, that the purchaser of a bulk milk tanker or silverplate and pewter would receive some benefit from this legislation. He went on to say that that would not benefit the great majority of Australians. That is precisely the kind of criticism that the honorable member for Melbourne Ports made of the legislation. He said that it showed that the Government has no social priorities at all or it has bad ones, and that is precisely the criticism made in the article “ Labour Voice “.
The honorable member for McMillan said that there had been a great decline in the silverplate and pewter industry. Although some 2,000 people had been employed at one stage, only about 250 were employed to-day. He said that the people were entitled to have the products of this industry, which employs skilful workers, because they need beauty and grace, and he thinks that utilitarianism can go too far. The economic system in which we live has an awkward habit of knocking back an industry such as this if it is not efficient and if it relies on outdated methods. That is what has happened in the silverplate and pewter industry. It has been relying upon outdated methods, and I do not think it is appropriate that we should overdo the job of keeping in existence industries that are not efficient. I think we overdo this both, by this kind of tax and by customs duties.
The honorable member said that we should give people more of beauty and grace. Of course we should, but the people who are missing beauty and grace most in this country are the many hundreds of thousands who live in industrial suburbs where there are slums and narrow, dirty streets and where there is very little beauty and grace. In solving, this problem of beauty and grace by reducing a tax on silverplate and pewter to the extent of £150,000, and not attempting to solve these other basic problems, the Government is refusing completely to recognize the real problem. I think what this country wants is not promises but challenges. What we want is not a government that says, “ This is what we intend to offer “, but a government that says, “ This is what we intend to ask the people to give “. The problem of putting beauty and grace into the lives of the majority of people cannot really be solved unless it is put in the way that I have suggested. We want a government that will appeal more to pride than to pocketbooks, that will appeal more to what will be put in than to what will be taken out.
Let me refer to the third point raised by the honorable member for McMillan. This relates to the question of milk tankers. He said that it is logical to match milk cans that were free of sales tax with tanks on bulk tankers that are free of sales tax. One can see the logic of this struggling through the jungle of the sales tax structure. How many years has it taken to struggle through? I would suggest at least ten years. It has taken at least ten years for the Government to appreciate the logic of exempting the large tanks on milk tankers from sales tax, after having exempted milk cans from this tax all that time.
– Longer than that, surely.
– Probably longer than that. I refer now to another point made by the honorable member for McMillan, a point with which some honorable members have signified their agreement by interjection. He has stated that this proposal will Benefit both the consumers and those whose milk is being picked up by the tankers. That does not necessarily follow, especially at such places as Archer’s Creek, where there are five tankers and 240 suppliers. Anybody who knows anything about economics knows that when you have a situation in which there are five on one side and 240 on the other there cannot be any true equilibrium. In other words, the 240 will not be in as good a position to influence prices as the five will be. The five are in what is called an oligopolistic situation, and it should not be assumed that this reduction in sales tax, which the Treasurer (Mr. Harold Holt) says will amount to £20,000, will be passed on quickly to either suppliers or consumers. Far from it!
The last point raised was that electric shavers should be placed in a more competitive position with ordinary razors. Surely the honorable member does not miss the point made by the honorable member for Melbourne Ports (Mr. Crean) that the Government could have achieved this end by reducting the tax on razors to 121 per cent, instead of pushing that on electric shavers up to 25 per cent.!
– He could not understand that.
– I should think that it would be simple enough for anybody to understand. There is no doubt that this is a superficial piece of legislation introduced at a time when something far more radical, something far more fundamental, is required and has been required for many years now. It involves an aggregate of increases and decreases of only £1,000,000, or 1/ 180th of a total sales tax revenue of £180,000,000. This Government has been in office for so long that it has reached the stage where it is prepared now to change the tax on only a few items, and that in the ratio of only as one is to 180.
I have not the time to refer to all items involved, but I shall mention some. First, it is expected that in a full year approximately £265,000 will be lost to revenue and gained by those taxpayers who are disabled persons and require to use motor cars. This benefit has been required for many years. I know that for each of three or four of the five years during which I have been a member of this Parliament we have seen representatives of these disabled persons in King’s Hall seeking some relief and now, for the first time, the Government is responding to their legitimate request.
– Labour would not respond at all.
– To say that is quite purposeless. How do you know what Labour would do?
– They would not respond when they were in office.
– Your memory is not good enough to remember what Labour did because we have not been in office since 1949. Therefore, I do not see how your interjection is relevant. On the other hand, the Minister for Supply (Mr. Hulme), who is sitting at the table, and is interjecting, gives me the impression that he has been here for half a century. After having considered the matter for at least three or four years, the Government has at last decided to concede only £265,000 out of a Budget of £1,600,000,000 to these unfortunate people who are disabled and require to use motor cars. After taking all that time to make this slight concession, the only thing the honorable member for Mallee (Mr. Turnbull) can say is, “What would Labour have done? “ Such a reply only adds strength to the point I am making. In any event, I think it might not be very long before he will have the opportunity of seeing what Labour will do.
– He did not say that.
– I am sorry, if he did not say that. I did my best to listen to him, but he does not speak very clearly.
– You did your best to twist what I said.
– If there were fewer interjections, I might be able to hear the relevant ones.
– Order! There are far too many disorderly interjections.
– I should like now to deal with, the contrast between the Government’s decision to remit sales tax amounting to £150,000 on silver plate, pewter and cut glass in one full year and its intention to impose an increase of £290,000 in the sales tax on electric shavers. This is only a small matter, but it adds weight to the point raised by the honorable member for Melbourne Ports who suggests that either the Government has no social priorities or those that it has are bad ones. On the one hand, it proposes to grant a benefit of £150,000 on something, which, by any test, is not essential; whilst, on the other hand, it imposes an extra burden of £290,000 on electric shavers which are essential to those who use them. That should give honorable members some idea of the order of priorities favoured by this Government. Again I suggest that if the Government wants to put electric shavers on the same level as ordinary razors it should reduce the sales tax on ordinary razors to 121 per cent. When we consider the kind of social priorities involved in decisions such as these, we cannot help but agree with the honorable member for Melbourne Ports that the Government either has no social priorities or those which it has are bad ones.
I reiterate that this is a very superficial piece of legislation. To illustrate that, I mention that it seeks to reduce the sales tax on some articles and to increase it on others and, disregarding reductions in other forms of taxation, the net benefit accruing to the Government under this bill by way of sales tax will be £149,000, and this at a time when the correct thing for this Government to do is to reduce, not increase, sales tax! Last year, sales tax revenue totalled about £180,000,000, or approximately 3 per cent, of total market expenditure. At the same time, it is significant to note that last year the retail prices index increased by something between 3 per cent, and 4 per cent. If it had been possible to reduce sales, tax instead of increasing it, it is conceivable that the increase of from 3 per cent, to 4 per cent, in the prices level would have been avoided for it would seem that the volume of sales tax approximately equalled the volume of inflation last year. Instead of seeking: ways of reducing this transferable, inflationary tax, the Government increases it by £149,000 this year. Sales tax is clearly one of the most indirect and most transferable of all! taxes. The important point is that every person who pays sales tax adds it to his cost structure, and this in turn is reflected in the prices charged for goods. And this transferable tax is either being increased, or not being reduced, at a time when the Government alleges that its main problem is inflation! Although its main problem is said to be inflation, the Government declines to decrease or remove an inflationary tax. In 1956-57, sales tax returned £125,000,000 to the Government. This represented about 11.5 per cent, of the total tax revenue. The honorable member for Melbourne Ports pointed out that a couple of years before that sales tax represented only about 10 per cent, of total revenue. In the financial year 1959-60, sales tax revenue had risen to 13.2 per cent, of the total Commonwealth revenue, and in the current financial year it will be about 12.8 per cent, of the total. This means that between 1956-57 and 1960-61 - a period in which, we suppose, the Government has been concerned primarily with inflation - the proportion represented by the most inflationary of all taxes has risen 1.3 per cent.
Had the Government chosen to reduce the sales tax in the aggregate, what could it have done? It could possibly have increased direct taxes. The position with regard to direct taxes is this: In the financial year 1956-57, £403,000,000 came from income tax on individuals. This represented about 37 per cent, of total tax revenue-. In 1960-61, the proportion will still be about 37 per cent. Last financial year, it was 35i per cent. In other words, the Government has left income tax - a direct tax and the most difficult of all to transfer in the existing situation - returning about the same proportion of the total tax revenue while it has increased the most inflationary of all taxes until it now represents 1.3 per cent, more of the total tax revenue than it did in 1956-57.
What is the position in relation to company tax? In 1956-57, company tax produced £216,000,000, or 19.7 per cent, of total tax revenue. The proportion had fallen to 17.6 per cent, last financial year, at a level of £229,000,000. This financial year, company tax is expected to return about £268,000,000 ‘or 19 per cent, of total tax revenue - still .7 per cent, less than five. years ago and li per cent, less than seven years ago.
What is the key to this situation, Mr. Deputy Speaker? Surely it is this: The Government uses the kind of tax which seems easiest to impose on the community, the kind of tax which is least noticeable, the kind of tax which will lose fewest votes, and refuses to use the kind of tax which is anti-inflationary, which is much more equitable, which is positive, of which people are aware and which, because of this, may lose votes and support, particularly among the people with higher incomes who would pay it. All that the Government does about this situation, which has fundamental weaknesses, is to introduce a measure which affects the sales tax only by increasing the revenue from it by £149,000 a year.
I want to refer again in passing to the question of total priorities raised” by the honorable member for McMillan. He thinks that by tinkering about at the sales tax and making it easier for people to buy a few pieces of silverware the Government will make a significant contribution towards increasing the amount of beauty and grace that can be put into the community. If that is correct, it would justify the Government’s looking at the total situation of priorities. What is happening to education? What is happening to housing in the industrial areas? I sometimes wonder whether those people who live in the country know what is happening in the industrial areas to-day. I sometimes wonder whether they know that people with incomes of £16 or £17 a week are being compelled to pay £6, £7 or £8 a week in rent, or in weekly repayments on a house that they have purchased. What kind of beauty and grace can there be in the lives of those people? The Liberal Premier of Victoria has said that if this problem of housing is to be solved we have to get a totally new basis of co-operation. In other words, we need the kind of priorities that the honorable member for McMillan recognizes in the beauty and grace of silver ware, but we need them on a national level - on a level, which would require, this- Government, to give the kind of lead that the honorable member - assumes it can give.
The Treasurer, when foreshadowing this measure among other things in his Budget speech, said -
More than ever these days, the Commonwealth Budget has to be regarded as a means to guide the broad trend of the economy in the direction of certain well-established goals.
The Government, first of all, thinks in terms of aggregates. As long as it does not have too much inflation and too much unemployment, it is satisfied, and it pays little attention to what is going on within the aggregates. The sales tax is a kind of tax which can be of particular significance in relation to this. It should not be considered as some kind of easy way of raising revenue. It should be considered in terms of whether it is the kind of tax which will make a material contribution towards achieving the sort of goals upon which we are supposed to agree and which the Government says the Budget can achieve if it sets out to do so. In relation to this, what I suggest is a reduction in the aggregate of indirect transferable taxes. A reduction of the sales tax could make an important contribution to this goal, but all that the Government is doing is increasing by £149,000 the aggregate sales tax revenue.
The second thing that I think we have to face up to is that the sales tax must be a more selective, discriminatory and incisive instrument of social policy than it is at the present time. It is not meeting current needs. The principal act and the schedules to it are of amazing complexity. They are almost impossible to sort out. They represent the kind of thing that finds its way on to the statute-book after many years of amendment and change as a result of pressure, counter-pressure, concessions and so forth. There is not in the act any real logic other than the logic of continued pressure at a sensitive point. It is the legacy of the war-time situation, as the honorable member for Melbourne Ports pointed out, with the added effects of pressure and counter-pressure by people who have been able to catch the Government’s ear over the years. The existing act does not in any way meet the selective social needs that should be met by a tax act of this kind. Instead of producing a completely superficial and minor measure such as the one now before us, the Government should, I suggest, produce a quite fundamental amendment of the whole sales tax law.
– In what way?
– I shall try to give the honorable member an answer. What are the contemporary economic needs? The Governor of the Reserve Bank of Australia, who was formerly Governor of the Commonwealth Bank of Australia and Chairman of the Commonwealth Bank Board, has spot-lighted speculation as the main economic problem of to-day. The sales tax is based upon manufactured products. It is concerned only with them. Being concerned only with them as a selective instrument of tax policy, it completely ignores the speculation factor, because speculation in manufactured products is not taking place. The speculation that occurs is taking place in relation to products that are turned over time and again in the speculation process of jacking up prices.
I think that the sales tax is not a tax on sales. It is a tax on manufactured goods and is therefore a manufactures tax. It is levied at the point of sale because that is convenient. To refer to it as “ sales tax “ is to use a complete misnomer. I suggest that the tax, in principle, should be a sales tax. If, of course, you wanted to meet current economic problems with this sales tax, the first thing you would do is identify the speculative factor and impose sales tax upon speculation.
Why not include a tax on land sales as part of the sales tax legislation, and why not make it as stiff as you can? I think that if the majority of people understood such a proposal they would agree to it, because they recognize the danger of inflation and speculation and the way in which it is putting money into the pockets of people such as Hooker who are closely asosciated with a former member of this Government - an association which does not seem to me to be at all appropriate - and because it is imposing upon small people who are endeavouring to buy land for homes an impossible burden which they will carry for me next 30 or 40 years.
– They may be big people by then.
– Then they will pay a greater proportion of taxation. But if we can impose sales tax of up to 30 per cent, on manufactured goods, why can we not impose a sales tax of 25 per cent, or 30 per cent, on the re-sale value of land? That would make it less profitable to turn land over and over again in a jacking-up process. The Government refuses to come to grips with that situation.
– Mr. Warren McDonald says that the cost of land for housing has risen by from 14 to 23 per cent.
– Yes. I shall leave Government supporters to consider the case that I have put forward and find an alibi for it. I am sure that they will be able to do that.
The next point that I want to make is that the first schedule contains a very wide range of goods which look essential and which are essential in many ways. The schedule includes primary products, mining machinery and equipment, irrigation, water “ supply, drainage and sewerage equipment, agricultural machinery and implements, and building materials. This unselective, sledgehammer tax exempts all these equally, irrespective of what they are used for or how they are used.
I believe that when you have to try to deal with the economic system on a basis of social priorities, you cannot afford equally to exclude everything in Division 1. You have to exclude many of these items from sales tax, but I think that you have to tax some of them. I think we have to find a way to do this. It might be difficult, but government is a difficult matter. It is only easy when you look at it as this Government does, and, of course, many of our social problems largely result from regarding government as an easy matter. I. think we have to try to design a tax which can be imposed on high-cost unit spending so ° as to discourage spending in that direction.
The answer given to people who say that there should be more money for low-income housing, very often, is that more money would not result in more housing because all building resources are taken up in the building industry. There is a lot in that proposition. But if the tax is imposed in a selective way it will discourage the use of resources by some sections of the building industry and make those resources available in other sections. Unless the Government is prepared to tackle this problem in a more selective way, it will fail to meet the requirements of the community.
– Order! The honorable member’s time has expired.
.- The honorable member for Yarra (Mr. Cairns) concluded by dealing with items in Division 1, and his last remark dealt with building materials. He said that a selective sales tax should be applied to them. I should like to ask the honorable gentleman what sort of person he would appoint to determine priorities in this matter. He advocated a sales tax on land. This was because of his dislike for one particular company. If there were a sales tax on land, people would still want to buy land for building blocks. They would buy it and would be in no better position. But what would be the effect on our efforts to entice overseas capital to this country in order to build up our secondary industries, provide employment for the work force, and develop this nation? It is obvious that the honorable member for Yarra and the honorable member for Reid (Mr. Uren), who is trying to interject, are not anxious about the employment of the rising generation in this country.
The honorable member for Yarra dealt with a host of things. He rambled through Division 1 and made no specific proposal relating to any item on. that list. At some time in the near future I should like to hear from the honorable gentleman or his colleagues what items they would like to see excluded from Division 1. Unlike the honorable gentleman, I should like to see more items there. He criticized the sales tax. Apparently he has forgotten that when Labour was in office it used this machinery very effectively and1 extensively. It had to do that in order to get money. If honorable members read the Budget speech they will find that payments to the States, expenditure on defence and so on are increasing.
I could not follow the honorable gentleman when he said that reductions in sales tax would result in money going into the pockets of the people. I doubt it very much. I believe that a reduction in direct taxation would have a better chance of going into the pockets of the people. If any government wants to make a move in relation to sales tax, I would like to see the tax abolished completely and a commensurate increase made in income tax in order to make up the revenue deficiency. No government, up to date, has been prepared to face up to that situation. I know that it would be quite a move, but I feel that the cost of living would then come down and that a host of other benefits would result.
Me. Cairns. - It would be very drastic.
– I agree. But sometimes very severe diseases require drastic cures.
– What is the object in taxing sales? Is it to discourage sales?
– Various arguments in that respect have been put forward from both sides of the Parliament since I have been here. Some members see sales tax as a general revenue tax; others see it as an opportunity to stop expenditure on nonessentials.
– Sales tax was introduced by the Labour Government.
– That is so. But it was done in a time of emergency back in the 1930’s and we still shoulder it. I support the amendments to the act proposed by this bill because, at long last, something is being done for people who are paralysed from the waist down and who are unable to use public transport. This is not a very big burden on the revenue. Nevertheless, the action will be appreciated to a very large degree by the people who will benefit from it. The bill provides for the exemption from sales tax of milk tanks, if that is the proper term. In this regard, I feel that some benefit will accrue to people in the metropolitan areas who are the final receivers of milk. I think that, by and large, it is a move in the right direction. Personally I should have liked to see more done in this direction, because I notice that the increase in this year’s .receipts over last year’s is expected to be about £16,000,000. This increase would have enabled a few more concessions to be given.
One concession which would help the man in the country, and which I would like to see given very soon, relates to the sales tax on station wagons - not necessarily on all these vehicles, but on some of them. The tax on station wagons, over the whole field of such vehicles, was altered in November last year because certain small distributors of estate vans were selling such vans without door handles, rear seats and so forth. These sales involved tax of 16$ per cent., with the consent of the taxation authorities, because it was ruled at that time that that was the proper rate of tax on such vehicles sold without door handles, &c. One of the big manufacturers of motor vehicles indicated that it would adopt a similar practice. I realize that, in view of this, it was quite proper for the Government to alter the position. Only yesterday I reread the speech made by the Treasurer (Mr. Harold Holt) on 17th November, 1959, in relation to this matter. He said -
By these means, it has been possible to obtain a fully finished station wagon-
That is, after alterations had been made - subject to considerably less tax than is intended to apply to such vehicles. The difference in tax on some models has been as much as £188 and it is estimated that the loss of revenue has been of the order of £300,000 per annum. If legislative action is not taken on the lines now proposed, it is understood that the larger manufacturers, who have not yet engaged in this marketing practice, will fall into line with their competitors. This would cause such an increase in the number of vehicles affected that the revenue lost could rise to £3,000,000 per annum.
With the increase in the sales of station wagons that has occurred over the last twelve or eighteen months the loss to the revenue would be more than £3,000,000 per annum if the larger manufacturers engaged in the practice I have mentioned. It was possible to buy a package unit which also carried sales tax on spare parts which 0 was, I think, at the rate of 16J per cent, and then have it converted. I took the opportunity to find out the facts regarding the sales of such vehicles in Western Australia before the introduction of the amending legislation in 1959. In the year preceding the legislation total sales of station wagons in Australia were about 22,000. One big manufacturer handled 17,000 of the vehicles involved, so there were not many left to the small distributors. In the eight months from 1st January to the middle of September, 1959, 281 estate vans, the vehicles without the door handles and so on, were sold in Western Australia. Of that total 139 were country sales and 142 were metropolitan sales. A survey of the end use of the vehicles sold in the metropolitan area showed more than 95 per cent, of them were used for business purposes - which included such activities as market gardening, poultry raising and so forth. I obtained some later figures in order to see what the trend had been from 1st January this year to the end of August. I found that 109 station wagons of a certain make were sold in the metropolitan area, and 66 in country areas. Forty-three of those sold in the metropolitan area were for private use, and 62 were sold for business use. Primary producers obtained four. Of those sold in the country eighteen were sold for private use and 39 were sold for business purposes. Nine were sold to primary producers. So it is obvious that the request I am about to make of the Government would not be difficult to meet. Unfortunately small primary producers, who are having a pretty difficult time, as I hope to demonstrate, are faced with a problem that is becoming severe. Statistics issued by the automotive people show that in the last year the station wagon has become the glamour vehicle of Australia - yet it is carrying sales tax of 30 per cent. I will prove that, by quoting from the Australian Automotive Year Book of 1960, figures which show how in the last five years the sales of these vehicles have increased. The figures given in the year book are as follows: 1955, 3,326; 1956, 2,942; 1957, 6,235; 1958, 20,424; 1959, 33,815. Anybody who keeps his eyes open in Canberra will see as many station wagons as motor cars around this city.
A station wagon costs about £150 more than an ordinary car, according to type. I doubt very much whether a primary producer would buy a station wagon if a car would suit him as well, because the primary producer has to watch his finances these days. Some people may ask why the primary producer does not buy a utility instead. The ordinary small utility of about 10 cwt. is going out of use. It is being replaced by a vehicle which has a carrying capacity of from 15 cwt. to 1 ton. and is somewhat large for the small producer of whom I am speaking. In the same five-year period for which I have already given the figures for station wagon sales the sales of utilities were, respectively, 38,545, 33,684, 33,361, 32,787 and 33,785. So these sales have remained more or less stationary. Utilities carry sales tax of 161 per cent. Incidentally, motor cycles also carry sales tax of 16$ per cent., and I do not think that any of us would assert that, generally speaking, a motor cycle or a motor scooter is a commercial vehicle.
Station wagons carry sales tax of 30 per cent., the same as the rate imposed on motor cars. In 1956, when we introduced the little Budget the Prime Minister, as reported at page 788, in volume 9 of the House of Representatives “ Hansard “, said on 14th March, when speaking of the motor industry -
We are well aware of the benefits which will ultimately flow from this great industry, but we are convinced that proper counter-inflationary action requires that some temporary Restraint should be laid upon it. Commercial motor vehicles and motor cycles now carry a sales tax rate of 12$ per cent. There is a powerful case for imposing as small an’ additional burden upon commercial motor vehicles as possible.
I want to put a case on behalf of the small primary producers generally, who have to pay the ordinary commercial rate of sales tax when they buy a vehicle. I want to point out that these station wagons now are just about the most versatile vehicles that the primary producers can obtain. These vehicles can be used during the week for the cartage of their produce, not in large quantities because they do not move large quantities at the one time. They can be converted at the week-end so that the farmer can take his family for an excursion in order to get away from the property for a little while. They are of the utmost importance to the bigger farmer - the man on a wheat and sheep property of perhaps 2,000 acres - because he can fold down the back seat and use the vehicle to carry whatever equipment he may want when he goes to inspect his sheep. It saves him rounding them up and bringing them back to the homestead, and it enables him to do repairs to machines, and so on, in the field. These vehicles are much cheaper to operate than are the bigger vehicles which such men have on their properties. 1 would not be making this claim if the position of our primary industries to-day was not somewhat serious. In the White Paper on National Income and Expenditure, we read -
Farm income, after recovering in 1958-59 from the low level of 1957-58, was little changed in 1959-60. . . .
Despite the higher prices and increased production of wool, farm income in 1959-60 was only slightly higher than in 1958-59. Wool production totalled about 1,690,000,000 lb. or 6 per cent, above production in 1958-59. The average auction price was 57.8 pence per lb., compared with 48.6 pence per lb. in 1958-59, and the total value of wool produced increased by 27 per cent. The increase in the value of wool and meat production was in part offset by a decline in the value of agricultural production. Many commodities were affected. The value of wheat production was about £11,000,000 less, and the quantity and value of barley production were only about half the 1958-59 levels.
I point out that a great deal of that reduction would be caused, in respect of barley, oats and so on, by the drought in South Australia. The White Paper continues -
The value of oats, hay, sugar, and grapes produced all declined significantly, and the total value of agricultural production fell about 14 per cent, to just below £400,000,000. Dairy production was about the same in value as in 1958-59.
The document shows that while costs, such as wages, depreciation and other costs and income referring to companies, which the farmer has to pay, have gone up in the last three years from £782,000,000 to £806,000,000 in 1958-59 and £838,000,000 in 1959-60, unfortunately the farmer’s income has not risen to the same extent. In fact, for 1959-60 there was an increase in farm income of about only £3,000,000 over that for 1958-59.
The situation is so serious that the Treasurer (Mr. Harold Holt) himself has warned the people of Australia about it. In a “ Meet the Press “ interview on Channel HSV 7, I think, on 28th August last, the right honorable gentleman is reported as having said -
But I would just add at this point something, I think, for all Australians to think about, and that is the situation of our primary industries. We rely for our standards of living upon selling our primary industries’ products overseas. Now, the cost level inside those primary industries is reaching a point of great difficulty for them.
Those words are true. I recall that when we were debating the Japanese Trade Agreement, the Treasurer said that our standards of living, our prosperity and everything else are so closely associated with the income of the farmer that if the agreement did any good at all for the farmers we should welcome it. Those may not have been the right honorable gentleman’s exact words, but the truth of what he said has been proved to the hilt. I do not want anybody to defeat the law and I will not be a party to any legislation or any scheme that will enable people to escape their just dues under the economy of this country in any shape or form. But if it is possible to grant any easement at all to our primary producers, that should be- done. I suggest that the necessary legislation should be passed quickly, as was the amendment last year which altered the sales tax so as to correct an anomaly which existed at that time, and which, had it remained, would have endangered the revenue to the extent of some £3,000,000.
I suggest that the sales tax legislation, should be amended to include these vehicles in any relief granted the primary producers and, if the Government so desires, self-employed small businessmen such as carpenters, plumbers, or electricians who use their vehicles to carry their wares for the purpose of renovations or repairs during the week, and desire to use them for other purposes at the weekend. I would support such a movewholeheartedly. Let the purchaser of thevehicle pay the full sales tax at the time of purchase and then let him apply to the Taxation Department for a refund of thedifference between the commercial and the passenger rate. In that application he should’ state his bona fides, and if they be acceptable to the department he should receive a refund of 14 per cent, on the condition that the vehicle was not sold within a periodof two years or, alternatively, until it had covered a distance of 25,000 miles. That kind of concession is already given in respect of local authorities and limbless soldiers; and it is also given under the customslegislation under which people who bring vehicles into this country from overseas have an indemnity, but if they dispose of thevehicle within a certain period they must pay the full customs duty on it. That should be done so that the position could be policed: in case anybody, to use a colloquialism, tried to put one over the Government by giving false information. The Government should hit such a person as hard as it can; then it would not be long before he came up for air, and he would not repeat the offence.
There is a precedent for what I suggest, because it was done when the sales tax was first introduced in 1930. There were then a few people who tried to get away with evasions, but once they had suffered the penalty provided for that sort of thing they did not offend again. I am very glad that the Treasurer is present. I was not able to be here when the amending legislation was passed last year, because I was absent doing a job for the Postmaster-General (Mr. Davidson). However, I raised the matter one Grievance Day, but I did not have much time to deal with it. I therefore make this appeal to the Government to-day. In view of the circumstances pertaining to our primary industries at present, and knowing their value to our livelihood, comfort and prosperity, if there is any way at all in which an easement of sales tax on these vehicles can be given to the bona fide primary producer or to the small man, I urge the Government to give it as quickly as possible in order to ease their costs in the work they are doing in producing foodstuffs, wearing apparel and so on for the community.
– I can well understand the very genuine appeal of the honorable member for Canning (Mr. Hamilton) on behalf of those engaged in rural industry. But I was disappointed that he confined it to the sales tax that applied to a particular vehicle. I notice that he added the words “ the small man “, and I presume he referred to the small businessman.
– I did.
– The small businessman is suffering at this level equally as much as any one engaged in primary industry. If the honorable member was making a case for the small businessman I am surprised that he limited his appeal for a review of sales tax to the type of vehicle to which he directed attention. If the small businessman is to get some relief, -there must be a review of the application of sales tax on a much wider scale than that proposed by the honorable member for Canning.
At the commencement of his speech, he said that Labour apparently was not very much concerned1 about the employment of the young Australians who will be coming into the work-force. He commenced on that note and concluded by appealing for a reduction in sales tax on a particular kind of motor vehicle. If he were as concerned about the future employment of young Australians as are honorable members on this side of the House at all times, he would consider the many items in the third schedule to the act rather than pick out one item. I shall have something further to say about that matter later.
The honorable member stated that sales tax was first introduced by a Labour Government. Then he agreed with an interjection from a member of his own party to the effect that we had used sales tax extensively. Because that statement has been made, it is important to consider Labour’s record in relation to sales tax. It is a fact that Labour introduced sales tax in 1930-31 and that revenue in that year amounted1 to £3,500,000. It is a fact also that the rate of sales tax was 2i per cent. But it is equally factual that Labour went out of office in 1931 and that the anti-Labour Government which came into office found at its disposal immediately a new medium of taxation which suited it better than Labour’s principle of imposing taxes on those best able to pay. Sales tax does not incur the political odium that direct taxation incurs.
Turning to the history of sales tax, I remind the House that in 1930-31, Labour collected £3,500,000. But in 1931-32, after Labour had gone out of office, the rate of tax jumped from 2i per cent, to 6 per cent, and the revenue- rose correspondingly to £8,400,000. From that year, the 2i per cent, tax disappeared completely. In 1932-33 the then anti-Labour Government, admittedly using the machine that had been set up by Labour, collected more than three times the sales tax revenue that Labour had collected in 1930-31. It was not until 1933-34 that an anti-Labour Government decided that 5 per cent, was a sufficiently high rate of sales tax. The tax continued at that rate until 1936-37 when it was reduced again to 4 per cent. But in 1939-40 an anti-Labour Government increased the rate of sales tax from 4 per cent, to 6 per cent, and then to 8i per cent. Then in 1940-41 the same Government increased sales tax to 15 per cent. That is the answer to the challenge which has been thrown in our teeth this afternoon. We agree that because of the war it was necessary to find some means of obtaining additional revenue. That was when Labour commenced to use sales tax extensively. But let us analyse what Labour did. In 1942-43, the worst years of the war, sales tax of 12i per cent, and 25 per cent, was imposed. In its period of office, even during the worst years of the war, Labour never increased sales tax beyond 25 per cent.
– What did Labour do in 1947-48?
– If the honorable member will be patient for a moment I shall tell him. In 1942-43, when the war was practically at our front door, Labour collected £28,800,000 in sales tax. The honorable member for McPherson wants to know what we did in 1947-48. I am very pleased1 to tell him. In 1947-48 Labour reduced the 121 per cent, category to 10 per cent. In addition, whereas in 1946- 47 Labour had collected £8,700,000 on items in the 25 per cent, category, it collected only £4,000,000 at that rate in 1947- 48 because it brought almost the whole of the sales tax items into the 10 per cent, bracket. That is what we did in 1947-48. Then for good measure, Labour brought about the only reduction that has ever taken place in the total revenue from sales tax since it was first introduced. Total revenue from sales tax was reduced from £36,000,000 in 1946-47 to £34,000,000 in 1947-48. I think that the honorable member, for McPherson, like some other people, must have in mind seeking endorsement soon as a Labour Party candidate otherwise he would not have asked what Labour did in 1947-48. In 1948-49, the year in which Labour presented its last Budget, we proposed to collect only £3,000,000 from the 25 per cent, sales tax and £35,000,000 from the 10 per cent. tax.
We come now to the time when this Government took office. In 1950-51 - the war had ended five years previously - this Government retained the maximum rate of 25 per cent. Then in 1951-52 it introduced the little horror Budget which provided for a maximum imposition of 66i per cent, on some commodities. In that year - in peace time - sales tax collections rose to £95,000,000, whereas Labour, in the height of the war, raised only £36,000,000 in this way. Despite the comments that were made from the Government side while the honorable member for Yarra (Mr. Cairns) was speaking to this measure, it can now be seen that it took a government of the political colour of the present Administration to inflict upon the people the burden that they now have to carty. I agree with the honorable member for Canning that the elimination of sales tax would be a boon to the cost structure of this country. However, he said that he appreciates the danger of eliminating this tax. Apparently he is worried about suggesting the elimination of something that has been created by the Government of which he is a supporter.
From 1951-52 the amounts collected in sales tax have progressively increased. It is true that the maximum rate remained at 66f per cent, for only two years, that it then remained at 50 per cent, for only three years, and at 33i per cent, for four years. But now we seem to have a permanent maximum of 30 per cent. Looking at the figures for 1957-58 we find that the amount of sales tax collected on items carrying tax at the rate of 30 per cent, was greater than the total amount collected in any one year from all items of sales taxation by the Chifley Government at a time when the war was at its height. We are told that it is expected that sales tax collections for this year will be £180,000,000. It is obvious that the sales tax will become a permanent medium of revenue-raising for this Government.
– The more the Government inflates the currency the greater will be the snosvballing effect of sales tax on the inflationary trend.
– That is correct. The interjection correctly states the position. I have dealt with the remarks of Government spokesmen concerning Labour’s views on sales tax. Let me now consider some of the provisions of the measure before us. It is a fact that some few invalids will receive some benefit, and I am happy that this is so. But let us look at the procedure that will have to be followed. First, a person who wishes to obtain relief under this provision will have to produce a certificate to the effect that a motor vehicle is necessary for him or her to travel to and from work. The next requirement is a certificate from the Department of Social Services to the effect that he or she cannot travel by public transport. If this is the deciding factor, I do not think that the benefit should be confined to those suffering from leg injuries. I suggest that if a person can obtain a certificate from the Department of Social Services that a vehicle is necessary for him to travel to and from work, this should be sufficient in itself, and there should be no restriction of the benefit to persons suffering leg injuries. I suggest that the Minister might consider that aspect of the matter as soon as possible.
The abolition of sales tax on bulk milk tankers has been given a good deal of consideration. I would like to think that this remission is really going to bring relief to the dairyman. As I know the position, however, particularly in the metropolitan area of Sydney, the relief will be enjoyed by the milk-selling combine, and not by the dairymen themselves. The honorable member for Canning obviously has some doubts about this provision, because he said he hoped the people in the metropolitan area would gain some benefit from the abolition of sales tax on bulk milk tankers.
Then we come to the reduction of sales tax on items of silver plate. I find it difficult to understand the Government’s reasons for introducing this provision. The Minister said, of course, that this measure is necessary to help employees in the silver plate industry, and that it is for this reason that it was decided to reduce the rate of sales tax from 25 per cent, to 12i per cent. He then said that it had been considered advisable to bring pewter and cut glassware into the same category, to bring all these items into line. That is the only reason he gave, and the effect is to bring the three items into a lower bracket. But if’ it was the policy of the Government to bring the various items into a lower bracket, then it would have done so in the case of electric shavers. But this is not the policy of the Government. Its policy is to continue to use the sales tax as a revenue raiser and for no other purpose.
If one analyses the various sales tax measures included in the Budget, one finds mat the increases and remissions will juli about balance. Nevertheless, we will this year have an all-time high sales tax collection of £180,000,000. This will represent an increase of £16,000,000 in the financial year. The inflationary pressure that is already strongly felt in the country will receive a boost to the extent of this extra £16,000,000^-and this at a time when we are told that it is necessary to do all we can to lower the inflationary pressure. I was surprised to hear the honorable member for Canning make the bald admission that if we could eliminate the sales tax it would prove a boon to the national economy. If we had gone only half-way towards the elimination of it, we must have rendered considerable assistance.
When the honorable member for Yarra was making his speech, an honorable member opposite interjected and said, “ Tell us how you would do it”. 1 will tell the Government immediately how I would do it. If I remember the figures correctly, we are budgeting this year for a surplus of £15,000,000. The items in the third schedule to the act attract sales tax at the rate of 8i per cent. I think it was the honorable member for Melbourne Ports (Mr. Crean) who told us that the sales tax collections on items in the third schedule amount to about £10,000,000 a year. If the Government had given relief to those who buy items contained in this schedule it would have provided a good measure of assistance to those who are finding the inflationary pressures most difficult to withstand. Without disregarding the urgent problems of the primary producer, which the honorable member for Canning pressed so strongly, let me say that there is a section of the community that we should always be trying to help. I refer to young Australians who are about to be married and who have to set up homes and commence bringing the next generation of Australians into the world. Almost all the items in the third schedule must be bought for the homes of newly married couples. They include, for instance, furniture, crockery, cutlery and cutlery sharpeners, refrigerators and even ice chests. Is it conceivable, at a time when we are concerned with the activities of the World Health Organization, that there should be a country in the free world, known as Australia, that is imposing sales tax on home refrigerators, and even on the ice chests that are used in the homes of the very poor members of the community?
The effects of these sales tax impositions are felt, of course, by many other persons than the young Australian couples I have mentioned. The sales tax reaches out and catches every immigrant that we bring to Australia and who wants to set up a home. When we could do something to render real assistance to Australian families we completely neglect to do so. I know the honorable member for Canning was genuine in saying that he hoped the remission of sales tax on milk tankers would help people in the metropolitan areas. He would be the first to agree, surely, that the people in the metropolitan areas who most need help are those who are setting up homes and who have to furnish them. They are the people who have to buy the goods enumerated in the third schedule.
I heard an honorable member say something of the need for some relief from the sales tax on radio sets. Radio sets are a necessary for some sections of the community. I was surprised that the honorable member for Canning did not raise this question, because I know it is important for the primary producers to have a radio set so they can listen to weather reports from hour to hour. Radios are equally important to waterside workers who rise at 6 a.m. and listen to the radio to ascertain whether they are called for duty. Radios are part of the home to-day. They are essential; and the imposition of sales tax on something which is so essential in the home is unfair, particularly when the Government is budgeting for a surplus.
I refuse to believe that the removal of sales tax would have an inflationary effect; the effect would be just the reverse. It would be a boon to sections of the community which urgently require relief from taxation. Again, there is an imbalance in the incidence of sales tax. The first schedule shows that there is no sales tax on cushion covers and tea towels; but in the third schedule, bedding, cushions and pillows carry 8i per cent, sales tax. In 1960, the Government is retaining sales tax on bedding and pillows. The result is that every time a family brings another child into the world, the parents who buy an extra bed for the new member of the family have to contribute something to government revenue by way of sales tax. Surely, honorable members who occupy the back benches on both sides of the House should resist such legislation. If supporters of the Government accept such impositions, I am afraid my thinking would not be satisfactory to this Government.
Australia will develop and progress only if the little man is given a fair go. When the honorable member for Canning referred to the little men, he meant - or I hope he meant - not only the small farmers but also the businessmen in a small way. I know their problems because 1 came from a family of small business people. They have their difficulties, just as the exservicemen who are trying to buy a war service home have their problems, such as the sales tax on a bed that is needed for a young child who has just been brought into the world. This Government neglects thinking along those lines. It thinks only in terms of matters far removed from every-day human life. It gives no consideration to those who are most entitled to concessions.
In 1931, sales tax yielded £3,500,000. Collections rose to £33,600,000 in the worst period of the war, and in 1957-58 sales tax revenue totalled £137,800,000. Immediately after the Second World War, the Labour Government reduced sales tax collections from £36,200,000 to £34,700,000. The Labour Government was on the road to placing taxation in its proper perspective, lt imposed taxes on those who were best able to pay. But this Government applies the reverse policy. Sales tax reaches into the home. The larger the family unit, the more it pays in sales tax. This is an inhuman tax. If the Government had any trace of humanity, it would taper off the imposition of sales tax as it applies to the family man.
I agree with the honorable member for Canning that to deprive a government of revenue totalling £180,000,000 in a year would create difficulty. But would the effect be so bad if sales tax were reduced from £180,000,000 to £150,000,000, along the lines I have suggested, when we are budgeting for a surplus of £15,000,000? Such a concession would be a partial boon to the economy. The honorable member for Canning agreed that a reduction would be useful to our standards, the cost of living and’ national costs. Let us go part of the way in 1960-61 and follow on from there. I am convinced however, that this imposition is such a political advantage to the Government that the problem will remain until Labour occupies the treasurybench and repeats what it did in 1947-48. In that year, the Labour Government started to put taxation into proper perspective. Its objective was to place taxes on the shoulders of those best able to bear them, and not on those who were least able to carry the burden, such as the family unit.
Sales tax places an undisclosed burden on purchasing power. It is sucking the lifeblood of the community. I hope that the committee of taxation experts which has been set up by the Treasurer (Mr. Harold Holt) will perform useful work. I hope it will review this form of taxation. I nope that it will place humanity first and free the community of an imposition which places an undisclosed burden on the people. I hope it will start to bring taxation back to where a Labour government will put it - squarely on the shoulders of those who are best able to bear it - while yielding revenue sufficient to run the country.
– The honorable member for Blaxland (Mr. E. James Harrison) made great play on what the Labour Government had done in reducing sales tax in 1947-48. He also said that the Labour Government had reduced income tax in that year. But how did that Government do those things? We all remember the war disposals sales following the close of the Second World War. The Labour Government collected something like £30,000,000 from those sales. Instead of using that money to pay off part of the war debt, that Government reduced income tax and sales tax. We have to pay that money back now because the Labour Government would not do the decent thing and reduce the war debt. Instead, it played at party politics.
– Why does not the honorable member catch up with events?
– If the honorable member for Wilmot would catch up with the facts he would find that I am correct. The honorable member for Canning (Mr. Hamilton) put a good case for relief for small farmers and selfemployed men, such as painters, businessmen and carpenters. He asked that they be given some relief from sales tax on vehicles which are commonly known as station wagons. As the honorable member said, these vehicles cost £150 to £200 more than a motor car. The majority of people who operate these station wagons own only one vehicle. They use the station wagon for business and pleasure as well. They should be encouraged. By using a station wagon, they reduce their business costs. I believe that the self-employed man should be given some relief. When the Government introduced an amendment to remove the sales tax concession on station wagons, I spoke and voted against it. I am very pleased that the honorable member for Canning has so ably put the case to the House, and I ask the Government to give serious consideration to it. Relief from sales tax would help to reduce the costs of these people.
I want to raise the matter of sales tax on road trains that transport stock in the Northern Territory, western Queensland and Western Australia. To illustrate the point here, I shall break up the cost of a road train into the various components. The total cost of a modern road train is £I8,2?0, without sales tax. The price of the various components and the sales tax on them are given in the following table: -
The total cost of the train, including sales tax, is £20,950. The sales tax represents an additional 14.5 per cent, on the price of this road train, which is a typical road train used to transport stock. The people operating these road trains provide a service purely and simply for the transport of stock they have very little back-loading. The vehicles are made and equipped for this purpose only. The costs could be considerably reduced if sales tax on the vehicles were abolished. In addition to sales tax on the vehicles, tax is also paid on the diesel fuel used in them. Sales tax and diesel tax together represent 9.2 per cent, of operating costs. As the honorable member for Canning said, the White Paper shows how costs are re-acting against primary producers. Some of these costs could be reduced if sales tax were eased for this industry which produces a large part of our export earnings. I ask the Government to consider this matter.
In addition to all this, the roads in most of the areas I have mentioned are not very good. Some are bitumen, but if the road trains could run consistently on good roads, operating costs could be reduced by 20 per cent., or by £372 per annum. Costs could be reduced if the vehicles operated on good roads, but they could also be reduced if sales tax on the equipment were eased. The people in this industry carry a terrific burden, which adds to the cost of primary production. If honorable members want figures on this matter, they can obtain from the Division of Agricultural Economics a complete survey of the effect of road transport on the costs of the industry.
I want to mention another matter briefly. I have raised this previously. I refer to sales tax on agricultural machinery. This is a bit difficult to follow and it ‘is causing a lot of confusion to primary producers and to engineering firms and garages in country areas. The act provides exemption from sales tax for agricultural machinery, implements, equipment, materials and spare parts, but does not mention exemption in respect of materials used in repairing these items. However, the department’s administration of “ aids to manufacture “, for which there is exemption, extends this provision to include machinery used in sowing and harvesting. Therefore, materials used in the repair of such machinery would be granted exemption from sales tax. There is certainly a fine distinction drawn here when repairs to ploughs and tillage implements are excluded from exemption, since without these there would be no crop to harvest.
– But what have you done about it, apart from make flash speeches?
– I have made representations, as the honorable member should know, I have been very concerned about this. I know that exemptions are granted in certain instances, but the provision in the act is not clear. The people concerned do net know how to go about obtaining an exemption. Before I can get an exemption, I must prove that the material will go into a particular machine. If I go through a lot of red tape and fill in a lot of forms, I can get exemption from sales tax for material to repair a particular machine, and then probably the quantity of steel I purchased would not matter. But if I buy the steel in bulk for general repairs, I can get exemption from sales tax only for the material that I can show has been used to repair particular machinery of the type I have mentioned. I know that complete exemption from sales tax here would provide a loop-hole and abuses could arise. I am quite aware that unscrupulous people would probably use this provision and sell material so obtained at a profit. But why put a blanket provision over the whole of the industry? Why penalize the honest people? I believe that there are more honest people in the community than dishonest people, and I cannot understand why those who would not abuse the privilege should be penalized. If the provision I seek were granted, it could be policed. If one or two offenders were caught and punished, any abuse would be stopped.
I would like the act to be clarified, because it causes a lot of frustration to people living in country areas. I shall give an illustration. Last harvesting season, a man broke an axle of a tractor. If he had bought a new axle - it was available only in Melbourne - it would have cost more than £100, but the purchase would have been exempt from sales tax. He had an axle made by an engineering firm in the local town for £60. The person who made it filled in the necessary forms and thought that exemption from sales tax would be granted. But the inspector told him he had to find the money for the sales lax. Of course, the matter was rectified later.
– Did he actually pay?
– He paid, and the matter was fixed up eventually. A discretion exists, but whose discretion is it? Many inspectors go around the country and they have a job to do, but the position with sales tax on this machinery should be more clearly stated. I again ask the Government to consider the matter raised by the honorable member for Canning and the matter that I raised of sales tax on road trains used for transport of stock in inland areas. I ask for clarification of the position in relation to sales tax on agricultural machinery. If the Government favorably considers at least the first two matters, it will relieve the burden placed on primary producers and will carry out its policy of trying to reduce the costs of this industry. After all, this industry is earning much of the export income that we so urgently need.
.- The honorable member for Maranoa (Mr. Brimblecombe) criticized the statement of the honorable member for Blaxland (Mr. E. James Harrison) that the Chifley Government had reduced sales tax revenue from £36,000,000 in 1946-47 to £34,000,000 in 1947-48. In 1946-47, the gross national product was £1,624,000,000. In 1947-48, it increased to £2,001,000,000, despite the fact that in that year there was a reduction of £2,000,000 in the amount of sales tax levied. That is the only time in the history of the Commonwealth Parliament since the introduction of sales tax in 1930-31 when any government reduced the amount collected by way of sales tax. In that same year, the Chifley Government reduced individual income tax from 10.3 per cent, to 8.8 per cent, of the gross national product. The honorable member for Maranoa (Mr. Brimblecombe) said that the Chifley Government was able to do that because it had derived a considerable sum from the disposal of war materials. Let me remind the honorable member that the
Chifley Government, while it was in office, reduced the internal national debt of the Commonwealth by £180,000,000, the overseas sterling debt by £80,000,000 and our overseas dollar debt by £15,000,000. In addition to that, it made a gift of £45,000,000 to the United Kingdom Government. As against that, this Government has increased our overseas debt to the New York Stock Exchange by 153,000,000 dollars, that to the International Bank by 318,000,000 dollars, and our sterling debt by £80,000,000. Where the present Government has increased taxation at ail levels, and also increased our overseas debt, the Chifley Administration reduced both taxation and the overseas debt.
Sitting suspended from 5.59 to 8 p.m.
– Mr. Speaker, 1 think that the discussion on this bill exemplifies the difference between the policy of members of the Australian Labour Party and that of the members of the Liberal Party of Australia and the Australian Country Party, which form this coalition Government. The policy of the Australian Labour Party is progressively to reduce and eventually to abolish sales tax on all goods with the exception of those in the luxury class, whereas the policy of this Government has been to increase the sales tax and all indirect taxes more and more. We all know that the sales tax is a hidden tax, and any hidden tax bears more heavily on the masses of the people than on the wealthy persons in the community. The masses of the poorer people who can least afford to pay this tax and who consume most of the goods bear the greatest burden by way of the sales tax.
I propose to give the House a few facts and figures in support of my contention that the sales tax is an unjust tax. This tax helps the present Government. Admittedly, the sales tax was introduced in the financial year 1930-31 by the Scullin Labour Government. The purpose for which it was introduced was to try to divert money from non-essential goods to essential goods. But this tax has not done the job that was needed. As has been proved, in most instances it has been used by governments as a revenue-raising tax. In 1930-31, the Scullin Government collected1 £3,500,000 by means of this tax. The present Government estimates that in 1960-61 it will raise £180,000,000 by means of this tax. This indicates how the revenue raised by this means has increased since the tax was introduced in 1930-31. I propose to show, a;so, how the revenue raised by means of this tax has increased during the administration of the present Government. In the last year of the Chifley Administration, only £39,000,000 was raised by way of the sales tax. The present Government, in 1949-50 -its first year in office- raised £42,000,000, and it hopes to raise £180,000,000 in the current financial year.
We know that a strong inflationary trend has existed in recent years. Indeed, inflation has been galloping, and the sales tax has in fact helped it along, because the sales tax is an inflationary tax, which is used by this Government purely to raise revenue. What percentage of the actual tax revenue is raised by way of the sales tax? Some interesting figures are given in the report of the Commissioner of Taxation for the financial year 1958-59.
– On a point of order: Is the honorable member speaking to the bill or not?
The honorable member for Reid is in order.
– If Government supporters would read the bill, they might learn a little more about the sales tax and enlighten themselves on the matters that we are now discussing.
The report of the Commissioner of Taxation for 1958-59 indicates that in the financial year 1950-51, sales tax revenue represented 9.5 per cent, of the total tax revenue collected by the Commissioner of Taxation. The proportion had increased to 16.1 per cent, in 1957-58. These figures do not take into account collections of customs and excise duties, for those duties are not collected by the Commissioner of Taxation. If we take those duties into account, we find that in 1951-52 sales tax revenue represented 10.2 per cent, of the total tax revenue. In 1958-59, the proportion was 12.8 per cent. These are just some of the figures that show the record of this Government in the raising of tax revenue.
The Treasurer (Mr. Harold Holt) dealt with the Government’s sales tax proposals in his Budget speech. He mentioned several matters, the first being the proposal to exempt from sales tax motor cars used by certain disabled persons for transport to and from work. We on the Opposition side commend the Government on this. We are grateful for these crumbs that fall from the Government’s table. And that is all that these proposals are - just crumbs. This assistance to disabled persons is long overdue. We on this side of the chamber consider that this exemption should have been granted many years ago. Many Opposition members have made representations to the Government on this matter in the past, and the representations have been rejected. I am pleased that at long last, like water dripping on a rock and wearing it away, our representations have had some effect and that the Government had agreed to come to the help of these disabled people who need assistance.
I wish to mention particularly two other matters. One of them is the contradictory approach of this Government to the sales tax. It proposes to reduce the rate on silver-plated ware, pewter and cut-glass ware from 25 per cent, to 12i per cent. The estimated cost of this reduction is £150,000 in a full year, and £120,000 in the current financial year. I ask, quite frankly, whether luxury items - at this stage of our development these are only luxury goods - such as silver-plated ware and cut-glass ware are essential to the needy people. I do not think there would be any argument about this. T am sure that needy people worry very little about these goods, and in my view, at this stage of our development, the higher rate on these goods should be retained.
There is another anomaly - the proposed increase of the rate of sales tax on electric shavers from 121 per cent, to 25 per cent. In respect of this proposal, the Treasurer said -
This will remove the competitive advantage those goods now have over safety razors and safety razor blades which are already taxed at 25 per cent. The estimated gain to revenue is £290,000 in a full year and £230,000 for 1960-61.
That is just indicative of this Government’s attitude. Instead of reducing the rate of sales tax on safety razors and safety razor blades from 25 per cent, to 12$ per cent., it has decided to increase the rate on electric shavers from 12$ per cent, to 25 per cent. That indicates the Government’s approach to priorities. Let us examine the issue of priorities. Safety razors and safety razor blades are essential to the community, because the demands of cleanliness and neatness of appearance require men to shave. Yet the tax on non-essentials such as cut glass and silverware is to be reduced.
Does a person with a salary of £5,000 a year consume five times more than a person with a salary of £1,000 a year? Does a man in receipt of £10,000 a year consume ten times more than the man with £1,000 a year? Does a man in receipt of £10,000 a year shave himself ten times as often as a man with £1,000 a year? No. This illustrates the fact that the burden of sales tax is thrown on to the masses of the people in the lower income bracket.
The position is aggravated by the fact that retail firms base their profit on the cost price of goods plus the sales tax. If an item cost 8s. a dozen and the retailer’s profit margin of 50 per cent, were based on that figure only, his selling price would be 12s. a dozen, giving him a gross profit of 4s. But if 12$ per cent, sales tax has to be added to the cost price, the retailer’s profit margin is based on a cost of 9s. a dozen. Consequently, his selling price, after adding a 50 per cent, profit margin, is 13s. 6d. a dozen, and his gross profit is 4s. 6d. instead of 4s. This increase of 6d. in the profit may not seem very much, but small items are sold in hundred’s of dozens. As well as paying the sales tax, the consumer has to pay an additional profit to the retailer. Is not that an inflationary practice?
In the first year of the Menzies Administration, sales tax revenue amounted to £42,000,000. In the current financial year it will be an estimated £180,000,000. This increase in sales tax revenue has a great deal to do with the inflationary trend of our economy under this Government. In 1950-51 sales tax revenue was £57,000,000. In 1951-52, the year of the horror Budget, it was £95,000,000, an increase of £38,000,000 in one year, which has not been refunded to the people. In 1955-56 sales tax revenue was £110,000,000. As a result of the little horror Budget, in 1956-57 revenue rose to £126,000,000, an increase of £16,000,000. These figures highlight one of the problems with respect to which this Government has failed to take action.
The Opposition believes that indirect taxation, wherever possible, should be abolished progressively and replaced with direct taxation. We have stated our belief that, in certain circumstances, sales tax should be retained on certain commodities, particularly on luxury items. We believe that the main objective of the sales tax should be to try to divert the expenditure of money from non-essential to essential items.
At the present time, sales tax at the rate of 30 per cent, is payable on private motor vehicles. On commercial vehicles the rate is only 16$ per cent. There is a little common sense there. But the rate of 30 per cent, is applied to a private motor car whether it be a Rolls Royce costing £5,000 or the smallest Morris Minor. Here there is scope for more common sense. I believe that a higher rate of sales tax should be imposed on luxury cars than on the cars of the working man because we are a petrol importing country. The smaller cars give more miles to the gallon of petrol and we should encourage their purchase by applying to them a lower rate of sales tax than is applied to luxury cars which give only about 15 miles to the gallon. This would assist our balance of trade, but unless we do something about the flow of money from this country as a result of foreign capital being invested here we shall fail to solve our balance of payments problem.
We must face the issue of imposing priorities in the taxation field as recommended by the Opposition. The honorable member for Yarra (Mr. Cairns) gave an example of how the sales tax could be used in relation to purchases of land. We have to do some fresh thinking on this subject. We must be honest about it. Sales tax is a dishonest tax because it is a hidden tax. The taxpayer does not know that he is paying it yet, this year, he will pay £180,000,000 in sales tax!
I shall cite some sales tax revenue figures as a proportion of the gross national product to illustrate the inflationary trend which has occurred in this country. In 1948-49, the last year of the Chifley Administration, sales tax revenue represented 1.7 per cent, of the gross national product. By 1958-59 the proportion had risen to 2.6 per cent, of the gross national product, an increase of nearly 1 per cent., and in that period the gross national product increased from £2,283,000,000 to £6,197,000,000. One per cent, of that has been an increase of sales tax yield in the period in which the Menzies Administration has been in power.
– That is indicative of the great prosperity of this country now.
– All right, let us talk about the great prosperity of this country. Let us talk about the fact that this Government should be doing something about redistributing the wealth of Australia among all the people of Australia. At the same time as the yield from sales tax was increasing under this Government the yield from income tax, which is the only equitable tax since it hits the taxpayer according to his ability to pay, fell as a proportion of the gross national product from 9.4 per cent, in 1948-49 to 7.2 per cent, in 1958-59- a fall of 2.2 per cent. If time permitted 1 could give honorable members a very complete picture of the effect of indirect taxation on the community. At the moment I shall content myself with pointing out that in the same period in which the sales tax yield, as a proportion of the gross national product, increased by .9 per cent, the yield from income tax, as a proportion of the gross national product, dropped by 2.2 per cent.
When I started my speech to-night I said that the great difference between the two major parties represented in this Parliament was that Government supporters believed in socking the great mass of the people of Australia through indirect taxes, whereas we do not. This Government has been a government of indirect taxation. As such, it has helped to accentuate inflation, because the cost of indirect taxation goes into the cost of the commodities made in this country and forces up prices to the consumers. The masses of the people produce most of the revenue, but they do not control the real wealth of the country. That is because the Menzies Government is a “ 5 per cent.” government. It is concerned with the 5 per cent, of the population who are in the top income brackets and receive over 20 per cent, of the total national income. The money made by prosperous firms like Broken Hill Proprietary Company Limited is being paid out through the issue of bonus shares to this 5 per cent, of the community, who are, in fact, evading taxation.
I say that, with every breath we have, we on this side of the chamber ought to condemn this Government for its record in the field of indirect taxation, because indirect taxation is indirect robbery of the people. I hope that honorable members and the citizens of this country will read the “ Hansard “ record of this debate. They will find that, on every occasion, members on this side of the chamber have spoken with sincerity, and have taken their full speaking time in order to express views, because they want to see that real justice is done to all. But the Government side has been scratching to get enough Government supporters to speak in this debate. The honorable member for Canning (Mr. Hamilton) rose and spent a few minutes pushing his own barrow for his own electorate. The honorable member for Maranoa (Mr. Brimblecombe) got up and made some wild accusations about the Chifley Administration, which were quickly repudiated.
– And now you are up.
– Well, I have given some cold, hard figures. I have quoted from the report of the Commissioner of Taxation, which is an official document issued by the Government. It has nothing to do with our side. All the rest of the figures that I have taken are Budget figures. So I say that this Government has no record of which to be proud in respect of taxation. In my view, taxation, especially indirect taxation, should be progressively reduced. There should be a change of policy so that the revenue now obtained by indirect taxation will be obtained instead by direct taxation, which is a more just form of taxation.
.- I think it is a great pity that the honorable member for Reid (Mr. Uren) cannot get 40,000 copies of the report of the Commissioner of Taxation printed so that he could deliver them personally to all his electors along with copies of his speech to-night. If the honorable gentleman’s electors could study that report along with a copy of the report of his speech to-night they would soon see how ridiculous are some of the things he has said.
This afternoon the honorable member for Yarra (Mr. Cairns) said, in effect, “ This is Wednesday afternoon, the time for a quiet debate on a quiet subject”. But suddenly the debate has livened up, as I am quite certain honorable members appreciate. The strange thing is that not one honorable member on the other side of the chamber has made a speech that has any connexion with the bill. It is true that the honorable member for Reid mentioned razor blades once, but that was the only time anything in the bill has been mentioned by an honorable member opposite. Out of the whole field of taxation that was the only thing mentioned.
– What about glassware?
– As an acting deputy lance-corporal chairman the honorable member for Scullin should know the rules. Let the electors study the bill, then look at the speeches made by the Opposition. Not one honorable member opposite has made a speech on the bill. Honorable members opposite have used the bill as an excuse for making general speeches. The honorable member for Reid said that the Government had difficulty in finding members on this side to speak on the bill, but that the Opposition’s speakers were using the whole of their speaking time. If the rules had been applied to this debate, and honorable members opposite had had to confine themselves to the bill in their speeches, the debate would have been over before the suspension of the sitting for dinner.
I wish to make only a couple of points. The honorable member for Reid mentioned that sales tax on electric razors had been increased. It is interesting to note that one firm - probably the one that sells most electric razors - absorbed the increase and charged the public no more for its product. The honorable member “also said that a man on £10,000 did not consume ten times as much as the man on £1,000 a year. I think that it is a good idea to apply one’s own conditions to those problems and see what happens. I do not know what the salary of the honorable member for Reid was before he became a member of this Parliament. I have heard him say that he was a junior executive of a firm, so I suppose that on the ordinary standards he would be getting about £1,300 a year.
– That would be underpaying me.
– He might have received some bonus payments. His present salary would be about three times the amount I have mentioned, so, using his own argument, it could be said that he is three times better off. Not one member of the Opposition, and I do not think one member on this side, would apply that reasoning, because it is quite fallacious. As a man’s income increases his responsibilities and his expenditure increase. 1 suppose that for his ordinary purchases now the honorable member for Reid has to spend two or three times as much as he did when he was in his previous occupation. This applies to the man on £10,000 a year. Ordinarily, a man on £3,000 a year has a motor car. It could be said that a man on £10,000 a year does not have to have two or three motor cars, but the fact is that such a man normally has two motor cars. He has reached the situation where he must have two motor cars.
– Utter rubbish!
– Of course, it is rubbish according to the honorable member for Scullin. To become a Minister he will have to live to about the age of 105. I have not given up hope of his reaching that age, in view of the wonderful strides science has made in recent years. If he becomes a Minister he will receive a high salary and will have a ministerial car. However, let us look at the subject of sales tax. Let us examine what the bill is about. In the thirty-eighth report of the Commissioner of Taxation - this copy is not as beautifully bound as that exhibited by the honorable member for Reid (Mr. Uren), although I think it is the same report - we find information about both sales tax and ordinary taxation. The whole tenor of the honorable member’s argument-
– Why do you not quote the figures?
– I will quote plenty of figures before I conclude. The honorable member for Reid used the argument that what the Government is doing by means of sales tax or indirect taxation is imposing a hardship on the working man - the wages man - which is not in proportion to the hardship which should be inflicted on those in the higher income groups. He says the solution is slowly to reduce sales tax, which was originally imposed by a Labour administration which must have seen some benefit in it, and to raise an equivalent amount by way of direct taxation on those who can well afford to pay it.
Let us examine the figures. I will quote from the thirty-eighth report of the Commissioner of Taxation dated 1st June, 1959, although for the purposes of the arguments used by the honorable member for Reid it does not matter from which year’s report I read, because his argument does not vary at all. In that report we see that taxable income commences at not more than £100, with taxation at the rate of Id. in the £1 on every £1 over £100. If we take the average taxable income at £1,400 a year, we find the tax is £198 15s., plus 65d. on each £1 in excess of £1,400. Now let us take the income group of £10,000 to £16,000 a year.
– Order! I hope the honorable member can relate his remarks to the bill.
– I bow to your ruling, Mr. Speaker. I am replying to the arguments of the honorable member for Reid, and I think what I am saying is related to the bill. The man on £10,000 a year buys more articles on which sales tax is imposed than does the man on a smaller income, and therefore he pays much more in sales tax, For that reason I believe that what I am saying has direct relation to this sales tax bill.
The man with an income of from £10,000 to £16,000 pays £4,617 in tax, or nearly 50 per cent., on an income of £10,000, and 152d. for each £1 of income in excess of £10,000 up to £16,000. We have a very much higher imposition of tax the higher the income gets, and it is direct income tax. The argument of the honorable member for Reid is that we should remove sales tax and obtain the necessary revenue from direct taxation.
– You are hard to follow.
– And you are even harder to look at, my boy. The report of the Commissioner of Taxation shows the sources of income taxation revenue. In 1957-58, there were 832,500 taxpayers in receipt of taxable incomes between £105 and £499. This table is very extensive and it goes in rises from £500 to £1,000 and then to £2,000, £5,000 and so on. As I have said, there are 832,500 taxpayers with taxable incomes of between £105 and £500, with an aggregate income of £267,000,000, from which £6.800.000 is taken in tax. For the sake of those honorable members who are apparently hard of hearing, I am quoting from the report of the Commissioner of Taxation, copies of which are available to honorable members who care to press the little white button beside their desks. In the income group of £5,000 to £10,000 there are 19,800 taxpayers earning, in the aggregate, £131,000,000 and paying £43,300,000 in taxation. If you make a graph of this you will see that it rises steeply. Most of the taxpayers are in the £1,000 to £2,000 taxable income group. In the group earning taxable income of £50,000 and over there are only 50 people in Australia; and they have an aggregate income of £3,500,000 and pay £1,900,000 in tax. In the £20,000 to £50,000 taxable income group there are only 500 taxpayers, and in the £10,000 to £20,000 taxable income group there are only 3,300 taxpayers, whilst in the £5,000 to £10,000 taxable income group there are 19,800 taxpayers.
I believe that the revenue from sales tax collections in 1948-49 was approximately £39,000,000, and in 1957-58 approximately £1 37,000,000. The argument of the honorable member for Reid is that we should slowly wipe off the sales tax and recoup the revenue thereby lost by increasing income tax to a corresponding degree. In that way, the honorable member seeks to lighten the burden on the working man. In Australia to-day, the average income - the income of the junior executive - which pre-war was about £400, is from £1,300 to £1,500; and any increase in income tax would fall mostly on this income group as it embraces the greatest number of taxpayers. The honorable member for Reid quoted figures from the annual report of the Commissioner of Taxation to show that sales tax has gone up and up and said that that was because this Government was always hitting at the man who could ill afford to pay-
– What about company tax?
– That matter is outside the scope of this bill. Under the heading “ Revenue from Sales Tax Collections “ we read that sales tax collections rose by £12,026,172, or 9.6 per cent., in 1957-58, compared with collections in 1956-57; and in the same period total revenue collected by the taxation office increased by 5.5 per cent. The percentage of sales tax collections of total revenue collections by the taxation office rose from 15.5 per cent, in 1956-57 to 16.1 per cent, in 1957-58.
Here is the answer to the argument that this Government is grinding the poor working man into the ground. The increase in sales tax collections was due to increased sales of goods subject to that tax, particularly goods such as motor vehicles and television sets. The honorable member’s arguments remind me of the fellow on the Esplanade in Perth who kept saying to a crowd around him, “When the new order comes you will all ride around this Esplanade in those great big motor cars “. As he did so he kept pointing at one man who at last interjected, “ I do not want to ride around in a motor car “. The speaker then said to him, “ When the new order comes you will do as you are told “. Go to a football match in Western Australia and you cannot park your vehicle within 2 miles of the football ground. That is not because the 50 persons in Australia with taxable incomes of £50,000 attend, but because there are in attendance 40,000 people in the £1,000 to £3,000 taxable income group. They are the working men of Australia. Public transport is suffering badly to-day because most working men in Australia, whom the honorable member for Reid says We have ground into the dirt, drive their own motor cars.
– Why put sales tax on their motor cars?
– It was imposed for the simple reason that we have to budget according to the country’s needs. It is the easiest thing in the world to say to the people, “ You are not going to pay any tax at all. We will let you live without tax.” But let us be realistic.
– Who said that?
– That argument has been raised often during this debate and we will hear it again before the debate concludes.
– Do you say that we on this side of the House have said that we want to abolish taxation?
– I am quoting the argument of the Opposition. As the report of the Commissioner of Taxation shows, the rise in sales tax has been due not to a rise in the rate of sales tax, but to the fact that the requisite purchasing power has been in the hands of the people. Yet the honorable member for Reid says that the Government has taken purchasing power from them. But they have been able to buy television sets and motor cars despite the sales tax. Honorable members should study these reports keenly and intently before they make statements which are not related to the facts.
.- I plead guilty to having been in the House most of the afternoon. I have been able, therefore, to follow the general line of argument that has been advanced. I do not think that honorable members render any great assistance to the House by quoting masses of figures. There are tons of them for any one who wants to use them.
– There is a fair amount of reasoning behind them.
– I agree that there is a fair amount of reasoning behind them, but there is not a fair amount of reasoning behind the interpretation that some people put upon figures.
At the outset, I remind the House that we have indicated, through the honorable member for Melbourne Ports (Mr. Crean), that we are not opposed to this measure, but we feel - and this, I think, is the attitude of the Country Party also - that we have an opportunity now to point out some of the differences that exist between the present system of indirect taxation and what we regard1 as the correct principle to apply to taxation generally. The honorable member for Melbourne Ports stated our views in this regard. He said that sales tax, according to the Estimates, will yield £180,000,000 this year. But it is an indirect tax, and we cannot allow the opportunity to pass without pointing out the anomalies and injustices that exist in indirect taxes.
The honorable member for Perth (Mr. Chaney), and other Government supporters, gave what they regard as answers to our questions. The honorable member for Perth discussed the salary of the honorable member for Reid (Mr. Uren) and also told us what occurs on the Esplanade in Perth. He even found1 time to make some reference to the debate which has taken place on this measure. He said that although the Labour Party claims to be opposed to indirect taxation - which, incidentally, is not confined to sales tax but includes payroll tax, excise on beer and cigarettes and so on - it was a Labour government which first imposed sales tax in 1930-31. The Government should not take any consolation from that because, although a Labour government was the first to impose this tax, particular circumstances existed at the time, apart from the desirability of imposing taxes on certain luxuries. Although Labour was the Government we were in the minority in the Senate. We were 3 against 33. We could have done nothing in that year without the consent of the present Government parties which then controlled the Senate. They used their majority in that place to frustrate every attempt that we made to solve the problem of obtaining additional revenue. Ultimately they were successful and defeated us. So honorable members on the Government side should not place the whole of the blame for any legislation that was passed in that year on the shoulder, of the Labour Party. If there is any blame for the imposition of sales tax, the present Government parties are equally guilty with the Labour Party. The legislation could not have been passed without their assistance and support.
We believe that, basically, indirect taxation is wrong because it is applied on a flat-rate basis. 1 am not persuaded by the argument of the honorable member for Perth, who said that the sales tax applies with equal fairness to the man on £1,000 a year and the man on £10,000 a year. Obviously, the man on £10,000 a year does not have to buy ten times as many razor blades, for instance, as the man on £1,000 a year. For all we know, the man on £10,000 a year might even be a beatnik who wears a big ziff. But supposing all things are equal, the man on £1,000 a year probably has to shave as frequently as does the other man and, therefore, one is taxed as heavily as is the other.
The honorable member for Melbourne Ports was followed in the debate by the honorable member for McMillan (Mr. Buchanan), who took the trouble to point out many of the anomalies and dangers that indirect taxation create. He referred particularly to the electro-plating industry, and stated that because sales tax went as high as 66J per cent, under a Liberal government that industry which, at one stage, employed 2,000 persons was reduced to the stage of being able to employ only 200. He said that because the Government recognized that this industry’s plight was largely due to the incidence of sales tax, it was reducing the tax on silver-plate ware.
The honorable member for McMillan also pointed out a stupid anomaly that has existed - it will, of course, be changed as a result of this bill - and which concerns dairy farmers. No sales tax has been payable on milk cans used to contain their product, but sales tax has been payable on bulk milk tankers used for a similar purpose. The honorable member also referred to a similarly ridiculous situation in the mining industry. If a geologist used a certain type of paper to make his drawings, paper normally used for the representation of surface features, he had to pay sales tax on it. But if he used another kind of paper, normally used for drawing sub-surface features, the paper was tax free. Let me also point out that even to-day every shopkeeper is faced with similar anomalies. Certain articles used to contain the goods that a retailer sells are tax free, yet sales tax is payable on the string used to tie the parcels or the adhesive tape used to seal them.
The honorable member for McMillan also pointed out the ludicrous situation in which toilet soap attracts sales tax while dog soap does not. What are we to do in these circumstances? Are we all expected to use dog soap? Exactly the same position applies with regard to biscuits. Biscuits for human consumption carry sales tax, while dog biscuits do not. Shall we all have to eat dog biscuits in order to dodge an iniquitous tax? I have given these examples merely for the purpose of pointing out one or two anomalies.
The honorable member for McMillan was followed by the honorable member for Yarra (Mr. Cairns), who suggested that if sales tax were to remain in operation at all - and he did not agree, of course, that it should - some social priorities should be laid down. Another honorable member, who spoke on the Government side - I think it was the honorable member for McMillan - said that sales tax should be levied only on products of particular industries. He suggested that the products of the dairying industry, for example, should be free of sales tax, as should those of other industries, while luxury industries should expect to have sales tax levied upon their products. The honorable member for Yarra said there should be some kind of priority, and I thoroughly agree with that suggestion. I go further, and say that when we are devising priorities we should consider the cardinal principle endorsed by honorable members on this side of the House, that tax should be levied on those best able to pay. We think that this is common justice.
On 12th August, 1960, for reasons best known to itself, the Commonwealth Bureau of Census and Statistics adopted a new method of determining cost-of-living figures, and it issued figures based on the new system.
– A very realistic document.
– I agree with the honorable member that it is- a very interesting document. It seems that, at least in the opinion of those who devised the new system, the old C series index is outmoded. As the honorable member says, it is a very interesting document and contains some interesting tables. The document states that it does not purport to establish- a standard of living, but it is obviously an attempt to provide a basis for detecting changes in the cost of those articles which might be considered the commodities used day by day by ordinary persons. There is no doubt that this new method will be used sooner or later - and sooner, I think - for the purpose of assessing the workers’ basic wage.
– It could give a truer, picture. It follows the modern trend.
– I do not want to enter upon a debate with the honorable member on that point. It is evident that the commodities listed represent, according to the best judgment of the Commonwealth Statistician, the commodities that ordinary people live on - the necessaries of life. It is quite a long list, and as I go down it I find that many of the items - too many - are subject to sales tax. These are the ordinary commodities upon the basis of which we should determine the cost of living of people on the lowest wage rates. I put it strongly to honorable members opposite that at least these items should be free of sales tax. If they cannot be exempted from sales tax on simple humanitarian grounds, then let me remind honorable members thatthe prices of these commodities are increased because of the imposition of sales tax on them. Is that not inflationary? If you increase the sales tax on these items, as this Government has been doing for years - and let me remind the House that the Labour Government progressively reduced sales tax during the years it was in office - then you are increasing the cost of living as determined by your own new-fangled index. As a consequence, inflation must automatically increase.
I admit, as did the honorable member for Reid (Mr. Uren), that a Labour government did introduce sales tax, but I have reminded honorable members of the circumstances in which it was introduced. The history of the tax, as outlined this afternoon by the honorable member for Blaxland (Mr. E. James Harrison) shows that under a Labour administration the sales tax was progressively reduced. We always wanted to reduce- it. That is in accordance with our general attitude towards indirect taxation. On the other hand, sales tax has been progressively increased under the present Government.
It is an unfair and iniquitous tax. We on the Opposition side are not opposing the bill, but it is our duty to explain our attitude towards the sales tax in the hope that the Government might amend the legislation.
The sales tax has an adverse impact on the economy because a large number of tradesmen’s tools are subject to this impost. If a tradesman buys a new tool that will enable him to turn out better work more quickly, why should he have to pay sales tax on that equipment? Many articles of machinery that would help industry are also taxed. We say it is wrong to tax at the source of production in such circumstances, and that a tax which deters a tradesman or an industry from securing the best equipment and machinery is bad.
The honorable member for Maranoa (Mr. Brimblecombe) said this afternoon that if a Queensland firm owned the trucks it used in its colliery, the trucks were free of sales tax; but if the company sub-let the cartage of its commodity to a private contractor, lo and behold, sales tax was imposed on the truck. Surely enough has been said in this debate to show that there are so many anomalies and injustices inherent in this form of indirect taxation that it should be progressively reduced. The burden is unfairly placed on some sections of the commuity, including farmers and industrialists. The burden should be removed from the sources of production and those least able to bear it, and should be put fairly and squarely - gradually if necessary - on the shoulders of those who are able to pay, and at the source where the impost can be most easily and scientifically borne.
.- I have listened to every speaker in this debate and I am convinced that every honorable member in this House would appreciate the abolition of the sales tax or its reduction. But the problem is not so easily solved as that. Those who have spoken in this debate have represented both the Government and the Opposition. The Government has the responsibility of its programme, but the Opposition has no responsibility to carry out what it advocates. No honorable member has suggested what benefits should be eliminated if revenue from sales tax were reduced by £20,000,000, £30,000,000, £50,000,000 or £100,000,000. On one side, we have those who are responsible for collecting and spending the money and on the other side we have those who have no responsibility. If you do not collect a certain amount, you cannot spend so much. You must cut down somewhere. The Government has presented its Budget, in which it states how the money it collects will be spent in this financial year. The Budget has passed through this House and has been approved by the Parliament.
So I ask the Opposition: What does it suggest should be eliminated from the programme of expenditure? If the Opposition would reduce sales tax by £100,000,000, what would it eliminate? That is the logical question to ask after listening to the debate and knowing how this House operates. Labour, of course, has its own plans. If it could force the Government to reduce sales tax and if the Government then had to withdraw certain benefits, the Opposition would really go into action. It would not matter what benefit was affected. The Opposition would say, “ The people should have this benefit”. The Government is providing finance for many benefits. Whatever it curtailed, the Opposition would say, “ This is wrong”. I know that the Opposition would adopt those tactics because I have been in this House fourteen and a half years and I have watched both sides at work. I am not attacking the Opposition alone. If the present Government were out of office, it would do the same thing as the Opposition is doing now. That is the way the Parliament works.
Supporters of the Labour Opposition have not advocated any practical way of cutting expenditure. I believe that the only practical way is to cut expenditure on public administration, but in all the time I have been in this place, I have never heard a Labour supporter advocate that course. We must tackle this problem from the right end. If we can cut expenditure, we can cut taxation straight away. I believe that if an efficiency expert went through every department - it would not matter whether the present Government or Labour was in office - the aggregate cost of public administration could be cut by many millions of pounds. But Labour will never advocate that course although it is the logical and obvious thing to do. The Labour Party has never mentioned it. It never asks, “ What about cutting the cost of public administration? “
When the Government was first elected to office, it had a scheme to cut certain costs and reduce expenses. The Labour Party moved against it by proposing the subject for discussion as a matter of urgent public importance. There are only a few honorable members in this House now who were present in 1946. None of the Government supporters in the chamber at present were in the House in 1946 when I first came to this place, and only a few of those now on the Opposition side were here. None of those who have spoken in this debate on the Government side except the honorable member for Canning (Mr. Hamilton) has had any experience of working in Opposition. The new members come to this place not realizing that what they believe to be new ideas have been threshed out over and over again. The older members know the answer. I have not seen the Leader of the Opposition (Mr. Calwell), the Deputy Leader of the Opposition (Mr. Whitlam) or any man who has any great responsibility speak in this debate. The honorable member for Lalor (Mr. Pollard) might go into action soon.
– The honorable member for Melbourne Ports has spoken.
– He has never been in government.
– The honorable member for Yarra (Mr. Cairns) has spoken.
– He is quite a new member. We can save a lot of money in the field of public administration. If we did that, we could reduce certain taxes.
I want to refer to the speeches that have been made by some honorable members. The honorable member for Yarra spoke about a provision in the bill which he said he appreciated, and I agree with him. I refer to the proposal to exempt from sales tax the following item: -
Motor vehicles (and parts therefor) for use in the transportation to and from gainful employment of a person in respect of whom the DirectorGeneral of Social Services, or an officer appointed by him for the purpose, has certified that he has lost the use of one or both legs to such an extent that he is permanently unable to use public transport, not being goods for sale.
The honorable member said the representatives of disabled persons had been coming to Canberra and asking in King’s Hall for this concession for years. Of course, that is quite true; but Opposition members said these representations had been made for ten years and eleven years only. Why, these people had been coming here for fourteen, fifteen or twenty years probably. The honorable member said, “The Government has only now decided’ to grant this concession after all those years “. I said that Labour would not make any move at all to abolish this tax. Then, of course, he twisted that around to make me say, “What would Labour do if it was in office? “ Of course, I did not appreciate that and I said so at that time.
The honorable member for Blaxland (Mr. E. James Harrison) said that this tax adds to the costs of the consumer. The honorable member for Reid (Mr. Uren) and the honorable member for Darebin (Mr. Courtnay) also said this. Of course, I agree; sales tax certainly does add to the cost of goods. But it was very queer thinking by the honorable member for Yarra, who also stated this fact, when, in the next sentence he used these words - I have written them down - “ We should have a tax on land sales, and make it as stiff as you can “. Fancy that! After saying that we should not have sales tax because it increased costs, he said that we should have a tax on land sales and “ make it as stiff as you can “. He did not leave it at that. He said, “ 25 or 30 per cent.”. He was speaking about young people who wanted land on which to build a home. This is very queer logic by the honorable member for Yarra, who apparently believes that a tax of 25 or 30 per cent, on sales of blocks of land - he did not say broad acres, he said blocks of land - would reduce the price of land being bought by people who wanted to build homes. Honorable members say that such taxes are passed on to the buyers. A tax such as this would mean an increase of 20 or 30 per cent, on the cost of land to people buying it. What kind of logic is that from a man who in this House has often put forward propositions which seem to be quite logical?
– You are misrepresenting the position.
– The honorable member for Lalor says that I am misrepresenting him. Honorable members can read it in “ Hansard “. I wrote down his statement word by word as he said it, and my quotation of it is absolutely true in every respect. It is no wonder after that that a very prominent Labour personality on the broadcast “ Labour Hour “ in Melbourne said, “ It is most fortunate that Labour has not been elected to government in the Federal Parliament at the last few elections “.
– Who said that?
– I will say it if you want me to do so, but I do not want to cause embarrassment to the man who said it. You can ask your leader.
– Nobody said it.
– Do you want to know the name? Opposition Members - Yes.
– Mr. Speed, a prominent Labour man in Victoria. He said, “ It is fortunate that Labour has not been elected because Labour could not hold inflation as well as the present Prime Minister has under this present system “. He also said that Labour in the first three years would not be able to change over to the Socialist system, which was the only system under which their policy would work. He said that in a broadcast. I did not want to mention the gentleman’s name in case I embarrassed him, but Opposition members forced me to say it. That is who it was. The honorable member for Yarra has said in this House - this is in “ Hansard “ - that Labour at election time offers all kinds of benefits but never says where the money will come from.
– Who said that?
– The honorable member for Yarra said it when he was speaking from where the honorable member for Newcastle now sits. This is in “ Hansard “, word for word. Then he said, “ I will tell you where the money will come from “. Other honorable members also have said this. The honorable member said, “ We would tax those best able to pay”. The honorable member for Reid said that there are two differences between the attitude of the Opposition and that of the Government. I am not exactly sure what he said the differences were, but I will tell the House. The difference is that Labour is a Socialist party; the Government parties are for private enterprise. When the honorable member for Yarra says, “ Tax those who can pay “, he means that he would tax those in the higher-income bracket. He would tax those who provide employment. After all, in a developing country such as Australia is, if a man gets a little money together, he puts it into some business and provides employment. It is significant that only this week we have heard in this Parliament and outside that more jobs are now available in Australia than there are workers to fill them.
Labour would tax out of existence these men who are making some money. Included amongst them would be the good primary producer who makes some money this year and next year suffers the effect of drought. If he is taxed very heavily in the first year when he makes some money, Labour would not get anything in taxes in the bad year, but the primary producer would soon be out of business. That would be a very definite stepping-stone used by the Socialists to take charge of the country. I listened very closely to the broadcast over “ Labour Hour” of the recording, brought from England, of a speech made by that famous Labour leader, Mr. Aneurin Bevan. Members of the Labour Party have said that this man is the very essence of the Labour movement. I give Mr. Bevan every credit; he was a sincere man who stood for what he said. At a big conference, he directed attention to poverty and other matters, and said, “ That is why I am a Socialist “. There was tremendous applause. Then he said these historic words, “ If I was not a Socialist, I would be a Communist “. And the applause was just as deafening as it was after his first statement. I have often said that socialism is not only a stepping-stone but is also the springboard to communism, and that is why we fight these things in this country.
I want to deal now with some of the remarks of the honorable member for Reid. After all, he is a pleasant fellow. He gets a bit of humour into his speeches, but sometimes he does not know that he has cracked a joke. He certainly cracked one to-night. Let me tell the House what it is. To-night, he said quite seriously - there was not a smile on his face, though he can smile - “ This is an unjust tax “. At another stage another honorable member said, “ This is a dishonest tax “, but I want to deal with the comment of the honorable member for Reid. He said, “ This is an unjust tax. In fact, it is a tax that helps this Government.” Anything that helps this Government is, in the eyes of the honorable member for Reid, unjust.
– Where is the joke?
– That is the joke. You may not see it. Anything that helps this Government is, in the eyes of the honorable member for Reid, unjust. That is the best joke that he could make. He said that Labour reduced the national debt, Labour reduced this and Labour reduced something else. But he did not go far enough. He could have added that Labour reduced our petrol supplies and Labour policy reduced the number of tractors that farmers could get. When I first entered Parliament almost the whole of my time was taken up in making representations on behalf of people who were wanting farm implements and other essential goods. The Labour Government stifled enterprise in this country, it discouraged settlement and retarded progress. Honorable members opposite say that revenue from sales tax has increased greatly since the present Government attained office. Do they remember the pitiful plight of the people during the last few years of Labour’s administration when a black market atmosphere prevailed, when one had to plead, almost cap in hand, for goods from under the counter?
– I rise to order. Is the honorable member in order in referring to sales tax? I did not hear one word about sales tax from the Minister.
– Order! I think the honorable member for Mallee is keeping reasonably close to the provisions of the bill.
– Contrast the position which obtained during the last years of the Labour Government’s term when primary producers were in dire need of tractors, harvesters and so on with that which obtains to-day when one may walk into almost any store of any prominence at all and buy whatever one wants. As a matter of fact, I think perhaps we may be going a little too far the other way to-day when we see that at such places as Chadstone in Victoria millions of pounds being spent on one big store. But all that is the result of progress and prosperity, whereas during Labour’s regime progress was retarded. More sales tax is being collected to-day because more goods are being sold. Statistics disclose that factory production alone has increased by about 40 per cent.
– And so has our population.
– Our population has increased tremendously. I remind honorable members that as against this increase in revenue from sales tax the Government is faced with an ever-increasing expenditure to meet the needs of a rapidly increasing population.
Honorable members opposite have said that they would tax the people most able to bear the burden. I remind them that those people who have money, and who create employment by establishing industries, do not hold their money for so very long. Eventually the Government derives revenue from them by way of probate and death duties. For instance, the probate and death duties on one estate valued at £400,000 in Penshurst in Victoria must have amounted to a tremendous sum. In that way the Government is levelling down inequalities as much as is reasonable. We believe in a fair thing, but we do not believe in a Socialist state. Certainly a reduction in sales tax would be appreciated by every one, but if sales tax is reduced the Government will have to find some other way of obtaining the revenue necessary to enable it to carry out its programme effectively.
The honorable member for Darebin (Mr. Courtnay) spoke about the sales tax on dog biscuits. He has not been a member of this Parliament for very long, and I suggest to him that if he cares to read “ Hansard “ he will see that I spoke to Mr. Scully about that back in the days when the Labour Government was in office.
– And you are supporting a Government which persists in imposing sales tax on dog biscuits?
– I do not think the matter is important enough to justify putting a government out of office. The honorable member for Lalor (Mr. Pollard) knows as well as 1 do that it is all a matter of tactics, that certain tactics are adopted by all honorable members irrespective of the side of the chamber on which they sit.
I come now to another important matter. Many primary producers do not realize just how much advantage may be derived by them from sales tax exemptions. It has been pointed out to me recently that many primary producers have been paying sales tax on articles that are exempt from this tax if they are to be used in connexion with primary production. I suggest to the Treasurer (Mr. Harold Holt) that he issue a booklet listing the items which are not subject to sales tax if purchased for use in primary production. After all, Opposition and Government members alike are anxious to do everything possible to foster those industries such as wool-growing, wheatgrowing, dried fruits production, dairying and sugar production that help to build up our national wealth. Members of all parties are equally anxious to assist our secondary industries, and I suggest that a booklet of the kind I have proposed would do much to help the primary producers.
This speech would not be complete if I failed to express disappointment at the fact that my advocacy of the exemption from sales tax of foodstuffs containing dried vine fruits has not met with the Government’s approval. The dried fruits industry earns about £8,000,000 annually in Australia, and for some time now I have advocated that foodstuffs such as plum puddings, hot cross buns, raisin loaves and so on which contain dried fruits should be exempt from sales tax. Again I ask the Government to reconsider the matter, and I suggest the honorable member for Lalor support me. This industry is struggling to exist, and merits every possible assistance from the Government. In conclusion, let me say that I feel that most of the opposition to our proposals to-night has been offered merely for the sake of opposing. When some of the new members of the Opposition have been here a little longer they will realize that at times arguments are put forward merely for the purpose of playing the role of an Opposition, and then they will not be so dogmatic in some of their advocacies.
.- At the outset, I feel that perhaps I should apologize to the honorable member for Mallee (Mr. Turnbull) for being a comparatively new member of this Parliament. Like the honorable member for Reid (Mr. Uren), the honorable member for Darebin (Mr. Courtnay) and one or two others, I was fortunate or unfortunate enough to be elected to this Parliament on 22nd November, 1958, and in those circumstances, Mr. Speaker, I am confident that you will permit me to apologize to the honorable member for Mallee for being a comparative youngster here. But I would suggest to the honorable member that the introduction of new blood into the House might lead the older members, such as the honorable member for Mallee, to snap out of their old, staid way of thinking and to adopt some of the new ideas being advanced by the younger members of the Opposition, and certainly by the younger members on the Government side who have clashed from time to time with the old fellows who are in Cabinet.
The honorable member for Mallee has stated that increased revenue from sales tax is the result of increased sales of goods. During the whole of this debate, the Opposition has condemned sales tax whether the rate be 8b per cent., 12i per cent., 16$ per cent., 25 per cent, or 30 per cent. We do not believe in sales tax, as the figures which I am about to quote amply illustrate. Between the years 1930-31 and 1941-42 the effective net rate of sales tax imposed increased from 2.5 per cent, to only 11.2 per cent, whereas, under the Government which is supported by the honorable member for Mallee, who asks “ What did the Labour Government do when it was in office?”, the net effective rate of sales tax steadily increased from 9.6 per cent to 16.8 per cent. The Labour Government sought to reduce the rate of sales tax wherever it was possible to do so. During the war years, naturally, it was necessary to impose sales tax, for in those days it was essential that every possible avenue be exploited to ensure that the Government would be able to obtain the revenue necessary for a maximum war effort in defence of the country. If the honorable member will only study the statistics that are available he will see that when Labour was in office it reduced the percentage of tax revenue collected by means of the sales tax. Later, I shall deal with the way in which this Government has shifted the burden of taxes from those who can afford to pay them to those who cannot afford to pay.
The honorable member for Mallee also dragged out the old Communist and socialist bogy. I make no bones about it, Mr. Deputy Speaker: I am a socialist. I believe in socialism. I believe that socialism is the only thing that can prevent communism from taking control, not only in Australia, but throughout the world. Every country taken over by Communist doctrine, whether it be Russia, China or any other country, was in the same position. What was the position in all those countries before they were taken over by communism?
– They were socialist countries.
– They were not socialist countries. That is a lie, and the Minister knows it. Those countries were capitalistic.
– Order! The honorable member may not use the expression, “ That is a lie “.
– I withdraw it, Mr. Deputy Speaker. Every country that has been taken over by communism was a capitalistic country where the people were suppressed and where poverty and degradation were the order of the day. That was the position in all those countries where the Communists have taken over.
The honorable member for Mallee said that Labour would tax businesses out of existence. What did the honorable . member for Perth (Mr. Chaney) say this afternoon in his comical contribution to the debate on this bill? He said that the 12i per cent, increase in the rate of sales tax on electric shavers had not been passed on by one company - that that company had met the increase out of its profits. Is that not a clear indication that that company had been making much more than it should have been making and that it could long ago have reduced the price of its electric shavers? It had an opportunity to reduce the price, but it was not prepared to do so. As we on this side of the House have said time and again, the policy of monopolistic capitalism pursued by many Australian companies has resulted in them making profits to which they are not entitled. Many of these concerns have formed rings and agreed on the prices to be charged for certain goods. As I pointed out some time ago on an occasion when the Government tried to gag me, the tire manufacturers have formed a ring and determined the prices to be charged for their products. Obviously, the same thing has been done by the manufacturers of electric shavers if they can meet out of their profits the additional sales tax imposed on those appliances in this Budget. I shall deal a little more with that later.
The honorable member for Mallee also distorted the statement made by the honorable member for Yarra (Mr. Cairns) about the imposition of a tax on land sales. What the honorable member for Yarra was trying to point out was that L. J. Hooker Limited and its associates, and similar organizations, have a continual turnover of land. If the Government were prepared to impose a tax at a reasonable rate on land sales, much of the speculation in land sales now taking place in Australia would be prevented and so would much of the inflation that results from this speculation. This Government or any other government would be entitled to take whatever action it deemed necessary to prevent the current speculation in land, and we believe that a sales tax on land would help to ease the inflationary spiral which has forced the price of land so high. We could impose a tax on land sales over a minimum of perhaps £2,000, £3,000 or £4,000 and in this way home-builders would be adequately safeguarded. For my part, that is what I would do. Sir Arthur Fadden runs one of the Hooker companies. He was one of the bosses of the present Government until a short time ago. Apparently he considered that there were more lucrative fields.
The honorable member for Mallee also asked what Labour would do if it abolished the sales tax and increased income tax. He said that we would impose additional tax on persons with a taxable income of between £1,500 and £2,000 per annum.
– 1 did not mention any figure.
– The honorable member mentioned a figure. He said that we would impose an additional tax on persons with a taxable income of between £1,500 and £2,000 per annum. We say that every one should pay tax according to his ability to pay it, and we would abolish the sales tax and in effect transform it into an income tax. I have no hesitation in saying that.
A person with a taxable income of £10,000 a year pays income tax at the rate of about 12s. in the £1. At present he pays sales tax at the rate of 8-1 per cent, on toilet soap, ordinary household soap and various other things that are necessary in a home, such as washing machines, radios and television sets. He pays in sales tax no more than is paid by person with a taxable income of £400 or £500 per annum. What is the position of the man with a taxable income in that class? I emphasize that I am dealing with taxable income and not gross income. The Commissioner of Taxation bases his figures an taxable income. The figures that I have obtained are taken from his report, and so we can take them as being correct. Persons on taxable incomes of £400 or £500 are the ordinary men in industry, and most of them have a wife and a couple of children.
– How many people are now getting only £8 a week?
– If the honorable member had listened to me he would have heard me say that I was referring to people with a taxable income of £400 or £500 per annum. That is the income on which tax is paid, and it is arrived at by making certain deductions from the gross income. A person with a taxable income of £400 or £500 a year pays income tax at the rate of about 2s. 2d. in the £1. Yet he pays sales tax at the rate of 8$ per cent, on toothpaste, toilet soap, ordinary household soap, a television set if he wants one, radios and the various other things that are so necessary in a home to-day. After all, television sets, washing machines and refrigerators are no longer luxury items. They are necessaries in the modern home. We recognize that they should be in every home and not only in those of people with incomes of £5,000, £6,000 or £7,000 per annum. The recog nized standard of living to-day requires that these things should be in every home. Yet Government supporters want to tax persons on low incomes at the same rate as is paid by people on high incomes.
As I have said, Mr. Deputy Speaker, we would switch over from the sales tax to income tax. We would tax every one according to his ability to pay. We also believe in giving to each according to his needs. We know that Government supporters do not agree with that. The honorable member for Mallee has asked what we would do, and I have no hesitation in telling him what we would do. What we would do is what should be done by any government which is interested in discharging its responsibilities properly and which is cognizant of the needs of the people. If this Government were fair dinkum, it would look after the people on low incomes as we would do, instead of looking after only one section of the community.
I have dealt with the points raised by the honorable member for Mallee, and I propose to deal with the bill now.
– Points were raised by other honorable members on the Government side.
– I do not propose to deal with them all. Those of my colleagues who have already spoken have adequately taken care of the rest. The honorable member acted the clown best of all, and I have dealt with him.
Any one who heard the speeches made by Government supporters would think that the Government was giving something to the people - that it was really reducing sales tax impositions. But what do we find if we examine the Budget speech made by the Treasurer (Mr. Harold Holt)? We find that the concessions amount to £441,000 a year and the increases to £590,000 a year. So the net result is that sales tax impositions are being increased by £149,000. In the final analysis, the Government has not given anything to the people collectively. It has given some benefit to certain classes of people who it feels should receive preferential treatment, and it has treated others harshly.
I shall be quite fair about the sales tax exemption for motor cars used by disabled persons for transport to and from work, Mr. Deputy Speaker. I congratulate the Government on that concession. It should have been put into operation years ago. People who have lost the use of their limbs will now be permitted to obtain a taxation exemption in purchasing a car which is to get them to work. I think every one will agree that it is desirable that, instead of being paid the invalid pension, these people should go into industry in order to become useful citizens. They should be allowed to become normal citizens instead of being confined to their homes and having to depend upon relatives and friends to provide their enjoyment by taking them out. This proposal is a step in the right direction and should have been taken long ago.
For the life of me, I cannot see any justification for the proposal to reduce the tax on silver ware. This represents only a cut in taxation on some luxury0 goods which can well be done without. What is the use of dealing with sales tax piecemeal and reducing the tax on items such as silver plate ware, silver ware and glass ware? If the Government wants to abolish sales tax completely, by all means abolish it and impose taxation on the basis of the ability of the individual to pay. The Government’s present policy is merely to play around, giving preferential treatment to some and ignoring the just claims of others. Other honorable members have spoken on anomalies such as those relating to dog soap and dog biscuits. I shall have a few thoughts to offer on this subject later.
It can be seen, from the general taxation schedules, than an attempt is being made to give favorable treatment to the dairy industry. With that I agree. It is in conformity with Labour’s policy of completely abolishing sales tax. Bulk milk tanks are to be exempt from sales tax. But will the Treasurer (Mr. Harold Holt) state what would be wrong with exempting the vehicles that carry them? In response to a request by the dairy industry, the Government is offering a paltry concession which represents only £20,000 per annum. Spread over the whole of the dairy industry, it cannot amount to very much.
I have already pointed out that radio sets and television sets no longer are luxury goods. They are to-day recognized as normal household equipment, just as is the kitchen sink. Why should this luxury tax not be removed so that the person who needs a radio or a television set may get it at a fair and reasonable price? The tax on electric shavers has been increased from 12$ per cent, to 25 per cent., because safety razors are taxed at the rate of 25 per cent. If the Government is really trying to reduce sales tax, but wishes to retain parity between electric shavers and safety razors, why has it not proposed a reduction in the rate of tax on safety razors to 12$ per cent.? It is ridiculous to increase the tax on electric shavers by 12$ per cent, to 25 per cent. Once again, the question arises whether shavers - electric shavers, the ordinary safety razor or the old cut-throat razor - are a luxury. Obviously they are not, unless some other way of getting the whiskers off, such as that used by the New Guinea natives, can be devised.
The various sales tax schedules are in no way consistent. The Government has granted a concession here and a concession there, but its revenue from sales tax continues to rise. Like other members of the Opposition, I am concerned at the way in which this Government has shifted the responsibility for providing the finances of this country from the shoulders of those who can afford it to the shoulders of those who can ill afford it. According to figures provided by the Government, in 1951-52, when the Government was well installed in office, sales tax yielded £95,000,000, or 10.2 per cent, of total taxation revenue. In the same year, individual income tax yielded £386,000,000, or 42 per cent, of total taxation revenue. Gradually we have seen the whole position change. This year, sales tax revenue will be £180,000,000, or 13 per cent, of total taxation revenue, whereas income tax will yield £510,000,000, or 36.4 per cent, of total tax revenue.
On this side of the House, we believe that taxes should be imposed in accordance with the ability of each person to pay. Those who can most afford to pay tax should be charged higher rates, and those less able to pay should be charged according to a lower taxation scale. The Government has changed the basis of the distribution of the wealth of the nation. Those in receipt of higher incomes are in a more favorable position as a result of this change than they were under any previous government, particularly, under Labour Governments which have always given taxation relief to those in the lower income groups. I ask the Treasurer to have the Government consider replacing sales tax by income tax so that the main burden of taxation may be placed on those best able to bear it.
– Replace all indirect taxation with direct taxation.
– T agree with that. The Labour Party believes that that is the correct policy and the best policy for the mass of the people, although it would not suit those in the high-income groups. The fellow on £16,000 per annum pays income tax at the rate of 13s. 4d. in the £1. The ordinary tradesman and the ironworker on about £20 a week pays 2s. 2d. in the £1 because he is far less capable of paying than the fellow on £16,000 per annum. But under sales tax legislation, they both have to pay the same if they buy a radio set. They pay a tax of 8i per cent., irrespective of their income, and the man with a high income does not wear out a radio any more quickly than does the man with a low income.
– The pensioner has to pay the same, too.
– Yes. The poor old pensioner has to pay the same as every one else. If the Government is not prepared to waive sales tax completely, one bite of the apple would be better than none. The Government should examine the possibility of a gradual reduction which Opposition members would be happy to support. For instance, it would be a generous gesture if the Government were to waive sales tax on furniture and household equipment, which is purchased, in the main, by newly married young couples. The Government should consider this proposal, which would be of great assistance to these people. When a company buys furniture for an office, factory, or other part of its business, it is able to claim a depreciation allowance on it. As a result of concessions granted by the Government the businessman is, in effect, able to avoid the payment of sales tax. Not only do business people get furniture, refrigerators and so on, which they need for their businesses, at a considerable trade discount, but they also have the benefit of the depreciation provisions of the income tax laws. All I am asking the Government to do is to put the average man in the street on somewhat the same basis as the man in business. Let the Government give the average man some assistance when he gets married, and some encouragement to get married, by helping him in the way of price reductions on the furniture he must buy. This could be achieved by allowing him some concession in respect of sales tax.
Now I turn to the subject of motor cars, on which the rate of sales tax is 30 per cent. The man in the street has to pay this rate of sales tax on the car that he buys. But where a car is registered as a commercial vehicle a businessman pays only the 16f per cent, rate of sales tax. Not only that, but the businessman also has the benefit of a tax rebate in respect of his expenditure on the car. Once again we see business and commerce being given every assistance by this Government, while it gives no assistance to the average person. The Government has certainly done something regarding sales tax on motor cars bought by incapacitated people, and T commend that action, but it forgets the ordinary man in the street.
An important consideration in this matter is that to-day many workers have to own cars in order to drive to work because they live so far from their places of employment. In my electorate and in the Shortland electorate there are many men who live anything from ten to fourteen miles away from their places of employment. They find it better to buy a motor car and drive to work, because sometimes bus transport is not always available at the times that they need it, especially when they are on shift work. I can see no difference between the position of these fellows and that of business people. Why should they not be given some rebate of tax in the same way as businesses are given rebates of tax in respect of vehicles to be used for commercial purposes? In any event, the top brassin various industries use the firm’s car to transport themselves to and fro. So we have one set of privileged persons who enjoy the benefit of tax rebates and another set of less privileged people on lower incomes who have to pay the full rate of sales tax. The Government should examine the possibility of making some tax concession in respect of working people who have to use their own motor cars to get themselves to and from their places of employment in cases where public transport is insufficient or runs at unsatisfactory times.
Other speakers in this debate have pointed out some sales tax anomalies, and I shall add a few to the tally. For instance, when phenol is labelled as phenol it carries sales tax of 12i per cent.; but if it is labelled as sheep dip it is exempt from sales tax. This is an actual example of which I know because a member of the Labour Party is associated with a firm dealing in this commodity. But what is the difference between phenol and sheep dip? Apparently the fact that sheep dip is untaxed is a sign that the Australian Country Party has been at work. When a thing sounds as if it has some rural connotation it must be free of tax, but if it goes under another name it is taxed.
The Government claims that it is trying to assist the dairying industry. There is no tax on butter and other dairy products, but ice cream, ice cream mixtures and junkets, which are products which directly derive from dairying, carry sales tax of 12i per cent. Yet the great enemy of the dairying industry - margarine - is free of sales tax. So where is the sincerity and the honesty of purpose of this Government when it claims that it is trying to assist the dairying industry? All the boys in the Country Party corner here claim that they support the countryman, but their city brothers on the’ other side of the chamber, who control the margarine industry, apparently rule the roost, since margarine is exempt from sales tax although ice cream, ice cream mixtures, ice blocks and junkets are all taxed at 12i per cent.
Then we have the old story of biscuits and similar things. It is obvious that if the Government really wants to reduce the cost of living generally it could do so quite easily by reviewing the incidence of sales tax, not necessarily on luxury goods, which are referred to particularly in schedules 2, 3 and 4, but on normal household equipment such as soap, soap powders, toilet soap and arrowroot.
– And fruit cake.
– That is a beauty as an example. Packet fruit is 95 per cent. exempt from sales tax. It pays 12i per cent, on 5 per cent, of the price per packet, the reason being that the packet contains crystallized cherries, and crystallized cherries have sugar in them, and sugar is subject to sales tax. Then we have the Government’s policy in relation to such items as bird seed. This is obviously a humanitarian government which is greatly concerned with the policies and principles of the Society for the Prevention of Cruelty to Animals, because sales tax is not charged on dog biscuits and dog soap - and now the Government is even looking after the birds.
– Order! The honorable gentleman’s time has expired.
.- I shall detain honorable members for only a few minutes, and I hope that the Opposition will do likewise during the remainder of the debate and give us a few more facts and far less of the political propaganda which has been evident in every speech made from the Opposition side to-day.
– If the honorable member had been in the chamber he would have heard the facts given.
– I shall deal with the honorable member for Reid now. He said that the differences between the parties in this House is that the Government is soaking the worker and helping the rich in contrast with the Labour Party’s policy. Of course, the Australian people have shown at the ballotbox that they regard that as utter nonsense. Another particularly absurd statement that the honorable member for Reid made was in relation to the provision to reduce sales tax on silver plate and pewter. The honorable member for Newcastle (Mr. Jones) used the same argument. He tried to show that the Government was giving preferential treatment to the rich by reducing sales tax on these commodities. You will recall, Mr. Deputy Speaker, that when the Treasurer presented the Budget he said that action was being taken to assist the particular industry concerned, and that is what is being done.
Let us look at the Labour Party’s record in this matter. I quote from page 257 of “Hansard” of 8th September, 1948, from the report of a speech by the then Prime
Minister and Treasurer, Mr. Chifley, as follows: -
Plate, plated ware and pewter are being omitted from the Third Schedule . . . thus reducing the rate of tax thereon from 25 per cent, to 10 per cent.
That statement speaks for itself. The honorable member for Reid claimed that he himself spoke with sincerity; but he spoke with neither sincerity nor knowledge of the history of his party in the taxation field when he made his statement.
.- The briefness of the contribution of the honorable member for Stirling (Mr. Cash) to this debate is in consonance with his knowledge of taxation. Since he made some historical references in his short speech it might not be a bad idea to remind honorable members of what the right honorable member for Cowper (Sir Earle Page) had to say on this very subject away back in 1930. He said -
Primage and sales tax oppress the poor much more than the well-to-do.
So it is a great day for historical allusions and statistics. I think it might be appropriate at this stage to remind the House of some of the general principles of taxation, how they ought to be applied from the Labour Party’s point of view, and how this Government departs from every principle of equity in its tax policy and produces instead a capricious and arbitrary administrative monstrosity as we have shown this afternoon. I thought the honorable member for Newcastle (Mr. Jones) spoke most vividly about the nonsense involved in an attempt to produce this kind of system. We have only to look at the principal act, the Sales Tax (Exemptions and Classifications) Act, to see its immense complexity. It consists of some 55 pages - schedule after schedule, with hundreds of items, differentiations, divisions and categories galore; and one would need to use a slide rule to find where one stood when buying currant buns or dog biscuits, or manufacturing anything.
There are, however, some points in this bill on which we are prepared to support the Government. For instance, there is the reduction of sales tax on motor vehicles for the physically handicapped. That is an essentially humanitarian provision which should have been made long ago. We agree, of course, with the reduction of sales tax on milk tankers. As the honorable member for Newcastle pointed out, it is significant that these reductions in taxation apply to people involved in business whilst the ordinary person who has to pay tax at the consumer level is not being assisted at all. In the ups and downs of this kind of taxation, on this occasion the ups include electric shavers and radio valves and the downs affect only the small categories of physically handicapped persons who need motor vehicles and users of milk tankers. These are some of the oddities you get when the Treasurer (Mr. Harold Holt), in an attempt to explain this, has something like this to say, “These goods are those placed on the same level of sales tax as safety razors and safety razor blades “. I have a lot of respect for the Treasurer, not as the Treasurer, but as a man, and I think he ought to be able to stand up here and say, “ I do not know why I am doing this. I have to raise the shekels, and this is what I am doing “. There is no need for him to rationalize his financial fantasies in this way. I hope he did much better when he was overseas, because the people there probably could not understand him and might credit him with more than his statement seemed to justify. It is pointed out that he is a skin-diver. What has he done about the taxation on the articles used in that sport?
The complexities of this act have been outlined this afternoon, as well as the anomalies it has produced. Nothing better illustrates them, perhaps, than an administrative interpretation of manufacturing which was issued last year, and which resulted in a sales tax levy on duplications. I quote from the “Daily Telegraph” of 25th June, 1959. There we read -
The Taxation Department said yesterday that as from July 1, sales tax would be levied on documents duplicated by a company or a person for their own use. The rate of tax that will be charged on duplicated office memoes and instructions will be 12i per cent. A quick survey yesterday afternoon showed there is hardly a business of any size in the city that does not own and use its own duplicating machine. Many of the bigger companies own more than one machine. In future, if these companies wish to duplicate a document for their own use they will have to go through the following rigmarole: Assess the sales value of the paper and ink used. Assess the wages cost of the typist in (a) cutting the stencil and (b) operating the duplicator. Add 20 per cent, of the sum of these values. Charges themselves 121 per cent, of this calculation and eventually send it to the Taxation Department. Most city businessmen are either angry, amused or ignorant of the proposed tax.
I think those terms define the whole system which has developed around sales tax and taxation generally by the pay-as-you-go and do-it-yourself methods. There are some principles of taxation which any government with a consciousness of its duty of administration ought to carry out. A person paying tax should know what he is paying and should make his contribution at a time which is clearly denned and not in accordance with the haphazard nature of his daytoday consumption. I am supported in this by an authority none other than Adam Smith, who years ago, in 1776, about the time when the political philosophies of the Treasurer were developing, wrote a book called, “ The Wealth of Nations “. In it he said -
The subjects of every State ought to contribute towards the support of the Government, as nearly a possible, in proportion to their respective abilities. The tax which each individual is bound to pay ought to be certain and not arbitrary. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it.
Let us examine those principles for a moment. They are fairly ancient principles now, as this book was written nearly 200 years ago; but I think they are valid as the kind of principles which ought to be applied. How does sales tax measure up to these principles? It has been outlined here that a man on an income of £10,000 would probably operate only one electric shaver. There is a clear-cut case where he will pay only the same taxation in- that regard as the man on £2,000 a year. This is a simple and clear-cut example of levying taxation, not according to ability to pay but according to the whim of the taxgatherer. Then there is the principle that all should pay equally. This is an unequal kind of equality. It is an equality which places sacrifices on everybody in the community. In this case the person on £1,000 a year, £1,200 or £1,500 a year, who has. a family to keep, is least able to pay.
So we say that on any basis of judgment, sales tax is unjust and that there is no justification for its continuance. We believe the policy of this Government ought to have been to continue a gradual diminution of sales tax as a percentage of the total revenue, which was the policy of the Chifley Government. It is blatant nonsense to come here an J quote what was done eleven, twelve, fifteen or 30 years ago - different times and different places. Surely, after fifteen years of peaceful operation of government, and when, as the Treasurer is so fond of stating unless we happen to want something for somebody we are prosperous, it is time we started to apply principles and not expediency. Sales tax was an expedient when it was introduced. I think there is now in the House only one of the members of the Government at that time. He said it was unjust. During the war it was logical for the Government to use every resource at its disposal to increase its revenue. Sales tax was one of those resources, and it crept up as a proportion of the total revenue during the war period. From 1946 onward, it decreased gradually until 1949. Since 1949, with the return of this Government to the treasury bench, it has continually increased.
We say it is a bad thing and that there is no justification for it. In a community such as this, which is basically democratic and in which the people are prepared to face up to their duties if they are clearly put to them, there is no need to indulge in the whims and fantasies of taxation that you do not know you are paying. Sales tax is a concealed tax. I have faith in the people of Australia and see no reason why, if they are faced with the responsibility of finding this £180,000,000, and if it is clearly put to them, they would not agree to pay it. Of course, it is not the kind of adjustment that could be made to-morrow without upsetting the community, but as a general principle if the Government said, it would raise the sum required by some kind of direct taxation, I believe the people of Australia would support it.
We will deal with some of the alternatives in a moment. We live in communities, particularly is this the case in Victoria, where we have things such as private street construction. In most of the suburbs of Melbourne, if you want a street you have to foot the bill for it amounting to perhaps £5 or £6 a foot. You pay directly for a public utility which you can see and which you are going to use. Although it imposes a serious burden on them, the great proportion of the people are prepared to pay perhaps £250 for the construction of the street and they do it with a sense of responsibility to the community in which they live. I have even taken part, in my own- humble way, in an operation in which citizens were petitioning the council to strike an extra rate to meet the cost of erecting a public hall. On one day in a small community 400 people signed the petition. The average citizen in this country is prepared to pay if he sees what he is paying for and if he knows that he will get value for his money.
I regard sales tax and all other forms of indirect taxation as an act of distrust of the community. I regard direct taxation as an act of faith and a concession to the maturity of the community. One of this Government’s weaknesses is that it does not trust any one. It does not trust the people and, in most of these matters, it is not prepared to trust itself. We oppose the whole basis of this form of taxation. As Adam Smith pointed out, taxation ought not to be arbitrary; it ought not to be capricious. What is the position with sales tax? Unless you have with you the schedule, your lawyer, your accountant and your slide rule, you cannot work out whether you are paying sales tax. So it is arbitrary; it is capricious.
If you buy an- article to-morrow which carries sales tax, you pay it. If you are able to get through to-morrow without having to purchase something which is included in the multiplicity of schedules and categories, you do not pay sales tax. At the moment of greatest need - when you are setting up home and embarking on a career and raising a family - almost everything you purchase attracts sales tax. That is the time when you need the most help, but that is the time when you have to pay most in sales tax. So it is arbitrary and capricious, and we ought not to tolerate it. Sales tax is a symbol of this Government.
As any kind of economic measure, sales tax fails even more significantly in other ways. How can any one justify it as an anti-inflationary measure? I know that the Prime Minister (Mr. Menzies) has done this, but he is always doing unjustifiable things. It is worth while considering for a moment this simple fact - we have had on the treasury bench of this country for eleven years a Government which imposes taxes that force up prices and then claims that it is combating inflation. How can you put up prices and thereby reduce prices? This is a fantastic financial policy. It is a piece of doctrinaire economics which has been found to be unjustified and which has produced no results. That is why, on every occasion on which legislation relating to sales tax comes before the House, we on this side are prepared to rise in our places and speak our piece. We are not deterred by the fact that the honorable member for Mallee (Mr. Turnbull) claims to speak with authority because he has been here for fifteen years. Unfortunately he has not gained any political wisdom in that time. He recites things that were said ten or twelve years ago and uses those statements as an explanation for the Government’s deficiencies. Plenty of alternatives are available if the Government is prepared to adopt them. If the Government wants to raise £180,000,000, it could turn its attention to a direct land tax, a tax on capital gains and so on. On some occasions at least the Government has conceded that taxes of that kind have some validity. Huge gains are being made in the community out of capital, appreciation of land and share values, dealing in shares, lottery wins, and the rest. Huge gains will be made on the first Tuesday in November and they will be completely tax-free.
It is time that the Government appreciated the need for a more mature approach to taxation. It is time that it removed itself from this field of button-pressing economics in which it expects that some day somebody will go off and do something to the advantage of the nation. If the Government wants the people to do something, it should ask them directly. It should not try to impose upon them by such financial fantasies as sales tax.
The whole structure of taxation, as exemplified by sales tax, crystallizes the Government’s approach to economics and to the people generally. This is an error in principle. The Government is imposing a burden where a burden ought not to be imposed - on those who are least able to bear it. The whole system is maladjusted. Instead of taxation being based upon a redistribution of income, it is being imposed on that section of the community which receives the lowest income. This is a doityourself kind of taxation.
The Minister for Trade (Mr. McEwen) said on one occasion that if you felt it your national duty to pay an additional £500 tax to kick the Government along a little, you bought another couple of Holdens. That is a nonsensical approach to the matter. The maturity of the community demands greater respect than that. Therefore, the taxation system as exemplified by sales tax ought not to be continued. Sales tax is a tax on consumption and is not levied in accordance with ability to pay.
During the course of one’s life the use of consumer goods is related very closely to the size of one’s family. The family man can least afford to subsidize the eccentric behaviour of this Government in the various fields in which it has wasted millions of pounds. I repeat that sales tax ought not to be tolerated.
I have been disappointed that honorable members opposite have paid less attention to the principles of taxation than they have to attempting to prove from the past why they should continue this folly in the future. If the people of Australia were offered a simple straight forward alternative - “ Would you rather pay £250 less for your Holden or pay another £70 income tax? “ - I think they would prefer the direct tax. Therefore we on this side of the House will continue to use every opportunity to criticize these financial fantasies which the Government sets up as policy.
.- Opposition members have advanced logical reasons why the Government should consider seriously a progressive diminution of sales tax. At the end of the war, and in the immediate post-war years, the Chifley Government’s policy was directed towards a reduction of indirect taxes. Regrettably, this Government has accepted sales tax as part and parcel of the taxation structure. More than that, it has decreed that sales tax should become an increasing part of the taxation structure. For example, in 1949- 50, the year in which the last Budget of the Chifley Government was presented, sales tax revenue of £42,000,000 represented 8.4 pes cent, of the total tax collection. This year the Government expects to collect £180,000,000 in sales tax, and I have no doubt that that figure will be exceeded because the Government always estimates that it will receive £8,000,000 or £10,000,000 less than it actually does. But even if the Government collects only £180,000,000 this will represent 12.8 per cent, of the total tax collection. In other words, sales tax revenue, as a proportion of total tax revenue, has increased by 50 per cent, since this Government came to office. Apparently the Government regards sales tax as an inevitable part of the taxation structure, and the people can expect no relief from the incidence of indirect taxes while this Government remains in office.
One honorable gentleman opposite said that while it is true that the Government estimates that it will collect £180,000,000 in sales tax this year, far more goods are being sold than previously was the case. But I should like to point out that the general rate in 1949 was only 8$ per cent. This rate was increased to 12$ per cent, in 1951 and has remained unaltered ever since. So, leaving aside greater purchases and an increased population, the incontrovertible fact is that the general rate of sales tax has increased from 8 J per cent, to 12$ per cent.
A very strong case against sales tax has been advanced to-day by the Opposition. Suffice it to say that sales tax contravenes every sound principle of taxation. I am prepared to admit that in certain circumstances - I use the words advisedly - it can be justified and condoned. Government supporters have stressed the fact on quite a number of occasions during this debate that it was the Scullin Government that introduced the sales tax. It is quite apparent either that they were speaking with their tongues in their cheeks or that they were not acquainted with the circumstances of the introduction of the tax. Tt is true that the Scullin Government introduced the sales tax in 1930, but the circumstances that dictated its introduction in that year are not paralleled by the circumstances of to-day. The tax was introduced in 1930, as Commonwealth fiscal policy, in a period of depression.
The Australian Government was not alone in introducing such a tax at that time. Governments all over the world were faced with the problem caused by a drying up of the sources of direct taxation brought about by the depression. Unemployed men and women could not pay income tax, and when the Government found its sources of income tax rapidly drying up it obviously had to find other means of collecting money. Governments all over the world, as well as the Scullin Government, found that they had to look around for other channels through ordinary devices. They realized that if they failed to do so they would have to fold up completely.
When the Scullin Government introduced the sales tax it made no secret of the fact that it was doing so as a temporary measure to obtain desperately needed revenue, because at that time there was no other source from which to get it. When men were unemployed or only partially employed something had to be done to get money, and obviously the people who spent money in buying goods represented a source from which some ready money was available. The Scullin Government, therefore, not because it believed in the policy of indirect taxation but because it was forced by economic circumstances outside its control, initiated the sales tax legislation. Practically every other government in the world did likewise. But the Scullin Government and ‘the Labour movement at that time recognized the fact, as the Labour Party has recognized it ever since, that sales tax should be a temporary measure. This Government, however, has looked upon it as a permanent revenue-raising instrument. Because of this Government’s insistence on its retention, sales tax has proved very difficult to abolish. We on this side of the House have pointed out its inequities and defects from time to time over many years. The Government realizes, however, that because of its indirect nature and veiled effects, the tax is often unnoticed by the taxpayer.
Whilst sales tax was justified during the depression, it cannot be justified to-day because the circumstances are entirely dissimilar. Nobody could suggest that the levels of income tax revenue to-day are low, as they were in the days of the Scullin Government during the great depression.
Income tax revenue in those days practically faded out of existence. To-day income tax levels are at an all-tune high in every wage-earning group.
Many speakers on the opposite side have asked why the Labour Government did not do something about reducing sales tax during its eight years in office. Surely no one would suggest that we should have reduced taxation during the war. Vast amounts of money had to be found in order to carry on our war effort, and for this reason sales tax rates were increased. Nobody could possibly have objected to the increase of sales tax by the Curtin Government in the circumstances that existed in 1941 and in 1942. More and more money had to be found to keep the enemy from our shores. For this reason the general sales tax rate was increased to 10 per cent, and then 12i per cent. The Labour Government recognized that the increase to 12i per cent, was only a war-time measure, and after the war it reduced the general rate to 8£ per cent, as an indication of its bona fides. Unfortunately, however, this Government increased the general rate to 12i per cent, in 1951, and this has remained the rate for nine years. It is quite apparent to the general taxpayer that as long as this Government remains in office the general rate will stay at 12i per cent.
Labour’s main objection to the sales tax is that it does not accord with the principle of equitable taxation. Taxing the purchase of goods goes further than simply ignoring tax-paying ability. It runs counter to the principle I have enunciated and levies the heaviest burdens on those least able to bear them. Sales tax is a kind of gross income tax that affects the payer in inverse proportion to his income. The less a man earns, the greater is the proportion of his income taken in sales tax. That fact cannot be denied, and it is for this reason that the Labour Party opposes a further imposition of these unjust burdens. It has been calculated by reputable authorities that the average person spends half of his income on goods on which sales tax is levied, but that the wealthy man spends as little as 5 per cent, on goods which attract sales tax. This being so, how on earth can Government supporters claim that it is an equitable tax?
It is impossible in present circumstances to assess the economic position of persons making purchases, and so we find that sales tax imposes the same burden on the millionaire as on the pensioner, the rate being uniform for all buyers. It ignores the principle of levying taxation in accordance with ability to pay.
In earlier years, when the rates of sales tax were low, such as in the time of the Scullin Government, when £3,000,000 a year was raised from sales tax levied at 2i per cent., there was no hostility towards it, because the indirect and concealed payment passed almost unnoticed. Until 1951 the consumer generally was ignorant of the sales tax that he had to pay when purchasing an article, but he certainly received a rude awakening in 1951. Until that time the inexorable collection of comparatively small amounts of tax from a multitude of buyers, and in respect of millions of purchases, more or less amounted to a painless extraction. The taxpayers .generally did not object. But in 1951 the people had brought home to them just how savage sales taxation could be. They then realized that sales tax was responsible for a heavy reduction in the purchasing power of consumers.
It is reliably estimated that almost 80 per cent, of the tax to-day is extracted from the ordinary wage and salary earners. These are the people who are struggling to maintain a meagre standard of living in a period of high prices, which are made even higher by sales tax. People to-day are clamouring for an increase in real purchasing power. They find that this is particularly necessary because when they go to the Commonwealth Arbitration Commission and ask for an increase in the basic wage their claim is denied.
What the worker wants above all else is an increase in real purchasing power. An all-round reduction of sales tax rates over a wide range of consumer goods would be a boon to all. It would, in fact, be more beneficial than an increase in the basic wage, because we know that when the basic wage is increased, the higher costs are passed on to consumers. A sales tax reduction would represent an increase in real wages for the workers, and if this Government is really sympathetic towards the workers, as it claims to be almost ad nauseam, then one way in which it could help them would be to reduce sales tax, thus giving them an increase in real wages. The increased purchasing power would not be inflationary, because in conditions such as exist at present the extra money available would be spent on essential consumer goods, and there would be no discernible increase in inflationary trends..
Any tax that is imposed should be judged according to its impact upon our economic wellbeing and its effect on the stability of the economy. Judged by these standards, sales tax fails. On the other hand, personal taxation of high incomes and wealth, on a wide scale, appears to furnish the best instrument available for the accomplishment of the desired ends without greatly damaging our economic system and our productivity.
I suggest that there are three points of view to consider when examining any form of tax imposed on the community. First, we should ask ourselves in what way does any tax apportion the burden among persons of differing incomes? Sales tax throws on the backs of the poor a burden out of all proportion to their ability to pay. The acceptance of the idea of taxing people according to their ability to pay taxes, rather than in proportion to their inability to resist the taxes, is a tremendous social achievement that must be safeguarded at all costs. It is on that axiom that the Labour Party bases its objection to sales tax and most forms of indirect taxation. The recognition of this vital principle has been painfully approached, and because the sales tax cuts across this principle, the Labour Party must indict it.
The second question I want to submit to the House is this: What is the effect of sales tax, and what is its efficiency as measured by costs of administration in relation to the revenue produced? We find that sales tax, with its wide ramifications and differing rates ranging from 10 per cent, to 30 per cent., compels firms to employ people to do nothing more productive than the accounting involved in submitting sales tax returns to the Taxation Branch. The small businessman - and this Government claims to represent those in that class - who has to do this work himself is in a veritable nightmare.
An army of public servants is required to supervise the administration and to see that the correct rates are charged and collected. Thirdly - and this is a most important factor - we should ask ourselves of any tax on the community: What is its effect upon the productivity of the economic system? Experience of the past with sales tax shows that the effects have been followed by a decrease in production of not only socalled luxury goods but also of goods that come within the category of essential consumer goods. To-day, we find that principle operating throughout the community. The Government has recognized that axiom because it is decreasing sales tax on silverware. The Government has told us that the justification for the decrease in the tax on silver-ware is that the tax has caused unemployment in the industry. If it is good enough to reduce sales tax because it has caused unemployment in the silverware industry, why not apply that approach to other industries which have been forced to reduce staff because super-taxation has caused a diminishing public demand for the goods?
I suggest, therefore, that the Government should have an entirely new look at this very vexed question of sales tax. After all, the Chifley Government showed the way with a progressive diminution of the tax. We do not suggest that the Government should throw overboard £180,000,000 and then look around for other methods of raising that money in twelve or eighteen months. Nothing of the kind! We say that over the years, there should be a progressive decrease of the rate of sales tax. We say that the rate should be decreased first on essential consumer goods that affect the ordinary members of the community such as toilet requisites and electrical goods for houses which were mentioned by the honorable member for Newcastle (Mr. Jones). We suggest that the Government should reduce the rates on those articles that are in constant demand by the average members of the community. That would give the workers some real increase in purchasing power.
That is the first thing the Government should do. It should also go into the question of rectifying the numerous anomalies and absurdities that abound in the sales tax schedules. Honorable members are inundated with requests and correspondence from commercial bodies which point out the inequalities between the rates of sales tax imposed on various sections of commercial goods. There appears to be no intelligent reason why this should be the case. The Government should make a studied investigation of all implications of the sales tax. If it left sales tax on luxury goods, it would still get a reasonable slice of revenue which could be used for general purposes; but so far as the general rate on ordinary consumer goods is concerned, the Government should grasp the nettle in both hands at the first opportunity and appoint a select committee of the House or a royal commission to inquire into the effects of the impost.
The Government appears to have decided that, while it is in power, the sales tax will remain a permanent feature of our taxation structure. So far as the Government is concerned, the tax is there for all time. The only party that stands for justice in the imposition of the sales tax is the Australian Labour Party. We showed that after the Second World War when we progressively reduced sales tax rates. I have not the slighthest doubt that if a Labour Government had been in power for five years after 1949, the sales tax would have been a thing of the past except for its application to luxury goods. While the Liberal-Country Party Government remains in office, it is intent on taking as much revenue as it can from the pockets of those who can least afford to pay this tax.
– I will not keep the House long, but I rise to support the honorable members for Wills (Mr. Bryant) and Batman (Mr. Bird). The Labour Party is completely opposed to this form of indirect taxation which imposes upon the poor a burden that is equal to that imposed on the very wealthy. It is a tax that compels the poor man to pay as much for the salt he has to use, the sugar he has to consume and the cake he has to eat as does the rich man. Since the amount of sugar and cake that a human being can consume is approximately the same, whether rich or poor, it follows that the rich man pays no more of the £180,000,000 of sales tax that is raised by this means than does the poor man. We believe that indirect taxation - a tax on things that men and women have to use - is unjust. It is a tax that forces the very poor to pay as much as the very wealthy. It is a tax that imposes on the millionaire the same level of taxation on the things he has to buy as is imposed on the poor old pensioner trying to live on £5 a week. For this reason, we say that sales tax is entirely unjust.
Then we turn to the family man. The application of the sales tax on consumer goods is such that a man who is single pays less than a married man. A married man with one child pays less than a married man with two children, and the married man with two children pays less than the man with five children. The bigger the family, the higher the tax payments and the greater the injustice. The Labour Party directs attention to the fact that this year, approximately £180,000,000 is to be collected through this iniquitous form of indirect taxation. This is equal to approximately £18 a head for every man. woman and child of the 10,000,000 people in Australia. Therefore, a man with a wife and two children, making a family unit of four, has to find about £72 a year to meet what is the average tax per head of population as a result of this iniquitous impost.
The Government would be thrown out of office at the next election if it dared to introduce a tax of 30s. a week on every family man with two children, irrespective of his means, and more if he had a bigger family. The Government would not dare to do such a thing. But in the words of William Pitt, the Government realizes that by this secret tax, it can take the shirt from a starving woman’s back without her knowing how it has been done; so the Government maintains this form of taxation. It is inflationary, as the honorable member for Wills pointed out so ably and aptly. At a time when we are pretending to be trying to reduce prices, this tax has the effect of increasing them. The purchaser must not only pay the tax on the goods that he buys but he must also pay the retailer’s profit on the tax that is imposed on the goods. So this tax has a cumulative inflationary effect upon prices at a time when the greatest need of all in the community is to reduce prices; at a time when inflation is sapping the value of wages; and at a time when wages are pegged at a certain figure and when, regardless of increased costs of living, wages will go no higher. It is outrageous for the Government, when it pegs wages, deliberately to impose a tax that has the effect of increasing prices.
I believe the Government would do far more good for itself and for the community, especially for the little farmer - the pensioner, the family man and the man who has no more than the basic wage and his margin on which to live - if it were to abolish sales tax completely. The Labour Party believes in the abolition of sales tax.
– Will you do that if Labour is ever in office? Will you abolish sales tax?
– Have a look at our platform. It is in the platform of the Labour Party. Our policy on sales tax is clearly stated in our platform, and the leader of the Opposition (Mr. Calwell) made this perfectly clear when the Government repealed the Commonwealth land tax. His statement then can be found in “ Hansard “. He said that a Labour government would reintroduce the Commonwealth land tax, a tax on the unimproved value of land. That is what the Labour Party believes in.
We should have a tax on the unimproved value of land so that people like Hookers and other land sharks would make some contribution for the good of the community. These land sharks have bought broad acres at as much as £1,000 an acre, which seems a lot of money, and even for as much as £1,700 an acre, which seems outrageous. But despite the high prices that they have paid, they have made fabulous profits. They split the land into building blocks, perhaps four blocks to an acre, and sell it for £4,000 an acre. But not one penny of tax do they pay on the enormous profits that they make. This Government should look at the policy of the Australian Labour Party and follow our suggestion to impose once again a tax that operated from 1910 until this Government came into office. In that way a tax would be imposed upon these land sharks who make enormous profits from dealing in land. The Government would then take from these people in taxes for the community that which belongs to the community - the unearned increment of land. Then and then only will the Government be dealing with the problem that we must face.
– A Liberal member is a director of Hookers.
– The honorable member for Kingsford-Smith asks whether a Liberal member is a director of Hookers. As far as I know that is not so.
– Yes, it is so.
– Who is he?
– A former Leader of the Senate.
– Senator Sir Neil O’sullivan?
– Yes.
– I did not know that.
– And the former Treasurer, also.
– That is news to me; I did not know that. But that does not matter; any one can be a director of these companies. It does not make the position any worse or any better. The fact remains that to-day individuals and companies of speculators are making fortunes, literally, from dealing in land and they pay not one penny in compensation. Who would be hit if a tax on the unimproved value of land were imposed? Such a tax would not hit the little farmer or the big farmer with land in the low rainfall areas. The tax would hit most of all the people who own valuable city sites in Rundle-street, Adelaide, Pitt-street and Castlereagh-street, Sydney, Collins-street and the golden mile of Melbourne. Why, even in little Adelaide, the unimproved value of the Beehive corner is £5,000 a foot! That is to say, if the buildings on the Beehive corner in Adelaide were pushed over with a bulldozer, leaving the” vacant land as it was in 1 836 when the blacks were pushed out of it, the land would still be worth £5.000 a foot without a building on it. Can any one tell me-
– Order! The honorable member rose to say a few words about sales’ tax.
– Then I will finish on this note; 1 want to make the point. Can any one tell me that the person who holds the fee-simple to the Beehive corner has himself contributed in any way towards the value of £5.000 a foot that now attaches to the land there? Of course he has not! The land tax that we say should be imposed would place on land-owners in Collins-street and others like them a fair share of the burden of taxation- and the people that you represent in Gippsland, Mr. Deputy Speaker, would then be called upon to pay less than they now pay. I conclude by saying that I am completely opposed to sales tax. As the Leader of the Opposition said when the Government repealed land tax, instead of having this iniquitous form of indirect taxation, there should be a direct tax placed, upon the unimproved value of valuable city land so that those who reap the benefit of an expanding community will pay to the community that which rightly belongs to the community.
Question resolved in the affirmative.
Bill read a second time.
In committee:
Clauses 1 to 5 - by leave - taken together.
.- Provision is made in the bill for the exemption from sales tax of motor vehicles purchased by a person who has lost the use of one or both legs and who requires a vehicle so that he may get to work with ease. I ask the Treasurer (Mr. Harold Holt) whether a similar concession will be granted to blind persons. I believe that a special case can be made for these people and that they are as deserving of the concession as are those who have lost a limb. I ask the Treasurer to consider the very worthy claim that blind persons have.
– Do you mean exemption from sales tax on motor vehicles?
– Yes, those blind persons who purchase a motor vehicle and who, of course, will have others to drive it for them. They are the owners of the vehicle and need it to convey them to their place of work. I believe that this is a concession that they could rightly expect from the Parliament now that it has been given to other invalids.
.- I also wish to speak to clause- 5. First, I congratulate, the Government for the thought behind the granting of this concession to people who have lost one or both legs. 1 am, however, somewhat concerned at the wording of the provision. The idea behin the clause is undoubtedly to assist those who suffer a disability to become gainfully employed. 1 am concerned to know whether this provision will apply, not only to those travelling to and from gainful employment, but also to others engaged as salesmen, commercial travellers, and so on who may not be employees, but who are conducting their own businesses. There are many small businesses which can be carried on by people with this disability provided they have a truck or a car. I point out that the clause as it is now worded refers to transportation to and from gainful employment. I understand that this provision would cover the self-employed person as well as the employee.
The provision continues - and in respect of whom the Director-General of Social Services, or an officer appointed by him for this purpose, has certified that he has lost the use of one or both legs to such extent that he is permanently unable to use public transport.
I point out that men in country areas would not necessarily be using public transport at all. I know of several farmers who require transport in the conduct of their farming operations. Whilst a person might be able to drive a truck down the paddock to his tractor and then operate the tractor, he would undoubtedly be at a very great disadvantage in trying to hobble down the paddock on crutches. It might be difficult to extend the provision, as worded, to cover such people, and I suggest that if they are not covered now, the Minister might give serious consideration to doing something for them.
– I rise to support the honorable member for Lawson (Mr. Failes). Only this weekend I had brought under my notice at home the case of a blind man who is working for General Motors-Holden’s Limited. His wife has to drive him to work in the morning and from work at night. These people wanted to know whether they may be granted a concession on. the purchase, of a new car as the present one is almost worn, out. I told them that I did not think there was any provision under which they could be helped. I agree that once the door to these things begins to open it is very hard to close it again, but I do suggest that the Treasurer (Mr. Harold Holt) might give, serious consideration to doing something: for blind persons situated in the circumstances in which the people to whom I have referred find themselves. The husband is unable to drive himself because he is blind, and the car is kept specifically for driving him to and from work. If such a case is not covered now, I ask that special consideration be given to the matter.
, - I do not believe that the legislation as framed would cover the cases mentioned by the honorable member for Bonython (Mr. Makin) and the honorable member for Port Adelaide (Mr. Thompson), but I shall examine the position. I could not undertake to incorporate any provision in this legislation. It is a matter that we shall have to look at when we next come to deal with these things.
The honorable member for Lawson (Mr. Failes) and others have asked whether the exemption of motor vehicles used for the transportation of persons with disabilities would be available to self-employed persons or persons living in areas not served by public transport. The answer is that both cases would be covered. The exemption will be available to self-employed persons who satisfy the conditions of disability expressed in the provision, and who require a vehicle to transport them to and from their own businesses and in the course of carrying out their businesses, occupations or professions.
On the question of ability to use public transport, the test in all cases is the nature of the disability, without regard to the area in which the person lives. If a person is suffering from the loss of the use of a leg to the extent which renders him unable to use public transport and he requires a vehicle for travelling to and from gainful employment, the exemption will be allowable even though he might live in an area where there is no public transport’ service. If that does not cover the point raised by the honorable member for Lawson, I shall have a look at the matter again.
Clauses agreed’ to.
Clause 6 -
The Second Schedule to the Principal Act is amended -
by omitting from item 2 all the words before paragraph (a) and inserting in their stead the following words: -
by inserting after item 52 the following item: - “ 53. Thermionic valves of a kind used in apparatus for radio or television transmission or reception, but not including -
cathode ray tubes;
rectifying valves in respect of which the product of the peak inverse voltage rating and the peak plate current rating exceeds 10,000; or
other valves in respect of which the rating for plate dissipation under Class ‘ C ‘ Telegraphy continuous carrier wave conditions exceeds 25 watts “.
– 1 move -
In paragraph (e), omit paragraph (b) of proposed item 53, insert the following paragraph: - “ (b) rectifying valves in respect of which the product of the number that is the peak inverse voltage rating expressed in volts and the number that is the peak plate current rating expressed in amperes exceeds 10,000; or “.
This is a highly technical amendment and I shall read to the committee the explanation furnished to me. I hope no one will require a more detailed explanation than that which has been supplied to me because, frankly, I should find it very difficult to give because words that I have never heard of before appear in it. The new item 53, inserted by paragraph (e) of clause 6 of the bill, has the effect of imposing sales tax at the rate of 25 per cent, on wireless valves, subject to the exclusions specified in paragraphs (a), (b) and (c) of the item. Wireless valves were previously exempt from sales tax because of the special revenue duties charged on those goods. These duties are now superseded by a sales tax.
The object of paragraph (b) of the item is to exclude from the 25 per cent, rate certain large .rectifying valves of a kind used in radio transmission and not in radio reception. The paragraph was drafted in the light of expert technical advice and on the understanding that the peak inverse voltage rating of these valves would invariably be expressed in volts, and that the peak plate current rating would always be expressed in amperes. It has since been revealed that the peak inverse voltage rating of valves is sometimes expressed in kilovolts, and the peak plate current rating is, in some instances, expressed in milliamps. The amendment I have proposed is necessary to ensure that effect is given to the original intention that the ratings be measured in volts and amperes respectively. The rectifying valves excluded by paragraph (b) are taxed at the general rate of I2i per cent., which is the rate applicable to other classes of equipment for use in radio transmission.
Now that the matter has been satisfactorily cleared up, I hope the committee will adopt the amendment without further debate.
.- That is just a bit too easy. I should like the Treasurer to explain in ordinary lay terms just exactly what that means. For instance, it could be alleged that his suggestion is a snide proposal submitted by the Government with a view to giving radio transmitting stations which, in the main, are owned by the press, some advantage which the committee would not be prepared to give if the Minister was capable of explaining the position in terms which we could understand.
Mr. HAROLD HOLT (HigginsTreasurer, [11.0]. - Mr. Temporary Chairman, I am appalled to think that even at this late hour the honorable member for Lalor (Mr. Pollard) imputes to me a snide motive or a snide action. The original object was to exclude from the imposition of sales tax at a rate the same as that imposed on what are considered to be luxury items a commercial commodity in the form of large radio valves. However, although we had acted on the best technical advice, it was found that these valves were defined in a manner which did not fully cover the Government’s intentions. What we are doing now is to express in no less precise but more accurate terms what it was that we originally intended to achieve. I hope that honorable gentlemen will accept this explanation.
Amendment agreed to.
Clause, as amended, agreed to.
Remainder of bill - by leave - taken as a whole, and agreed to.
Bill reported with an amendment: report - by leave - adopted.
Bill - by leave - read a third time.
page 2187
Motion (by Mr. Osborne) proposed -
That the House do now adjourn.
.- Mr. Deputy Speaker, this evening I wish to direct attention to a take-over which has been highly publicized in the daily newspapers and by word of mouth throughout the country. Because of the peculiar circumstances of this take-over, I wish to bring it particularly to the notice of the Prime Minister Mr. Menzies), as chairman of the committee of the Commonwealth Literary Fund, of the Leader of the Opposition (Mr. Calwell), who also is a member of that committee, and of those who are associated with the progress of Australian writings in order to see whether something cannot be done on the moral front, if not on the business front, in regard to a take-over which is so insanely opposed to common justice and common sense that something should be done about it.
I refer to the taking over of Angus and Robertson Limited by Consolidated Press Limited, the company which owns the Sydney “ Daily Telegraph “. This company has consistently excluded from its newspapers and other publications any Australian content, and it wishes now to take over Angus and Robertson Limited, which has been in the forefront of Australia’s cultural development - of the development of Australian novels, Australian poetry, Australian literary research, the publication of Australian books and dictionaries and the whole of the publishing side of Australian literature generally. I am not just levelling some sort of criticism at Consolidated Press Limited or the Packer interests. I am directing attention to the insanity of the kind of cannibalism represented by this take-over by interests which, when they see something quite different, get a mad idea and want to take over the thing which is different and transform it completely from its original form. This sort of thing has reached the highest peak of absurdity.
Angus and Robertson Limited is the mainstay of Australian literature, and has been so for more than 70 years. It began to publish books in 1888. Together with the “ Bulletin “ of those days - a journal which is now to be taken over by the Packer interests, though God knows what will happen to it - this publishing firm gave to Australian letters the democratic touch which distinguished the Australian scene in the 1890’s. This firm had what has come to be known as the Anzac spirit - a spirit that was bold, vigorous, dynamic, cheeky and libertarian. In 1895, Angus and Robertson Limited first published the works of Henry Lawson and Banjo Paterson. Since then, thousand’s of books on Australia have rolled off its presses. Many of these works have not been successes, but it has never been the object of the firm, since the days of the late George Robertson - a colleague of Henry Lawson and Banjo Paterson, and of Archibald, the original editor of the “ Bulletin “ - to print for profit alone.
Angus and Robertson Limited has been in a sense the spearhead of our cultural effort in the production of our books - some good, some bad and some indifferent. The risk has always been taken by these publishers, and they have grown in this work. Some of the publications for which the firm has been responsible have been successful and some have not been so successful. But what was lost on the swings was absorbed by the gains on the roundabouts. It has become a tradition accepted by every writer, every reviewer and every newspaper in this country that this firm is an institution. It is more than a business. It represents the great cultural front of Australian writers and of Australians generally in the literary game.
– Who is taking over the firm?
– The honorable member apparently was not present when I said that the Packer interests - Consolidated Press Limited and Conpress Printing Limited - are taking it over. The lamb may lie down with the lion, but in this instance the idea is completely farcical. Never have the Packer interests shown any concern for
Australian writers. In the syndicated material in the various magazines which they publish, and in the “ Daily Telegraph “ and the publications .produced by their publishing house, which is known as Shakespeare Head Press, the whole emphasis has been on getting material from overseas as cheaply as possible - on getting it wholesale. They have adopted the axiom and principle of getting their material from Yaffa Syndicate Proprietary Limited, and every Australian writer battling to sell an article, a short story or any other Australian material has for many years been virtually excluded from the publications conducted by the Packer interests, including the “ Daily Telegraph “, the “ Sunday Telegraph “ and the magazines published by ancillary organizations which the Packer interests control.
Now there is another move. The “ Bulletin “ which was once in the forefront of Australian culture and served as the trumpet of the radical and the republican in this country has died on the vine. As the final tragedy, it is to be taken over on behalf of the Packer interests by Conpress Printing Limited, and it, too, will be added to this list of the publications which are steadily squeezing out Australian writers altogether. If the take-over of Angus and Robertson Limited ,is completed, what sort of Australian novels and general literature can we expect. We should not forget that from the days of George Robertson, that outstanding figure, and other directors like Tad Cousins, Mr. Ferguson and Mr. Ritchie, a path has been worn up the rickety stairways of the firm’s building by the miners, the men from the luggers, the shearers, the wool men and other men of the outback. Anybody who represented any aspect of Australian life and who took along tucked under his arm a little brown paper parcel containing the epic story that he had written was welcome.
– It was a great Australian tradition.
– It was. Angus and Robertson Limited is a great Australian publishing firm, and it has never by any means decided always in favour of profits as the first principle. In the publishing of books, it has looked for the good Austalian flavour and the good descriptions of
Australian life and has not worried so much about the eventual market. In the long run, in selling the books it has published, it has carried the burden and kept the banner of Australian literature flying. Down the years, it has published miraculous novels and many other fine works. We would never have heard of many great poets such as Chris Brennan, Judith Wright, Douglas Stewart, R. D. “ Fitzgerald and Kenneth Slessor, had it not been for Angus and Robertson Limited. You cannot sell poetry at a profit, but this company decided that the world should know what sort of native wood-note wild was issuing from the pens of Australian poets. By virtue of the publicity the firm gave our poets, many of them have become world figures.
This is a strong heritage and a noble one, fostered by an ordinary business which decided to dedicate itself to Australian letters. Because of the vagaries of business, deaths in the original company, and the intrusion of a man called Mr. Burns, a felt textile manufacturer who decided to go in for books, we find these manoeuvres to take over this old firm.
One has to ask himself and the Prime Minister (Mr. Menzies) as the head of our literary organization, what will be the difference when the take-over occurs. Let us look at what is published by the Packer press. You have that sex-crazed paranoiac American literature, looking for the quick quid. It has no artistic value. I would never censor anything of that sort, but my preference would be for the good, steady, in-the-round, Australian literature, rolling weekly and yearly off the presses of Angus and Robertson, building up something real, putting something into the national ethos of Australia itself, and building around us the true spirit of Australia as revealed in its literature.
This is not a question of making money. I do not suppose that the Federal Parliament can become involved in the question of whether this company or that company should take over. But surely there is required some chiding, some feeling of concern that the whole of Australian literature and the whole of the writing game which is so strongly involved in Angus and Robertson, will be affected. The new takeover involves Robertson and Mullens
Limited’ in Victoria, and other printers and publishers in South Australia and, indeed, in Western Australia. The whole fearful gimmick of the take-over has involved the writers of this country.
One of the our greatest Australian novelists telephoned me and said, “ This is worse than the day when Hitler burned the books because we have no place to write any more “. We know that the new takeover will be a matter of pounds, shillings and pence. The Packer organization received a licence from this Commonwealth to run a television station on the solemn promise that in 40 per cent, of its programmes it would use Australian actors and producers. It has completely broken down on that promise.
Order! The honorable member’s time has expired.
– I desire to say a few words in support of the case put up by the honorable member for Parkes (Mr. Haylen). Angus and Robertson Limited, as the honorable member said, is one of Australia’s oldest, if not its oldest, publishing house. Only a year or so ago, this very old firm absorbed the firm of Robertson and Mullens Limited, another publishing house in Melbourne. Now it seems that the amalgamated business is to be taken over by a newspaper company which received from this Government a few years ago a gold mine in the form of a television licence. I understand that the profit made from that television licence in the first year of operation was £300,000 although it had been suggested that losses would be the order of the day for a number of years. The “ Bulletin “, which started off as a red republican rag and finished up as a pink atrocity, has gone out of existence.
– It is a good job that it has gone, for all the use it was.
– For all the use it has been since World War 1., it is a pity that it did not go long ago. But in one sense I regret its departure because even with all its viciousness and narrowness, all the things that it said against members of the Labour Party, and all its cartoons and its caricatures, we could still see in the “ Bulletin “ traces of the past. It did bring to the Aus tralian people stories of the outback. There was something about it still that was reminiscent of Archibald and the people who established it. 1 think it is a pit)’ that this paper is now to be absorbed by the very same company that has taken over Angus and Robertson.
In a very few years, there will be no publishing companies except those under the control of big newspaper interests. These interests own every television station. They own and control most of the radio stations and, of course, they have the control of the great metropolitan dailies. With the exception of Rupert Murdoch who is fighting against the other companies in Sydney and in Melbourne, there is no real opposition to these giants who rule Australia. Not merely is the Government doing nothing to prevent it, but it is encouraging the aggregation of more and more power in the hands of fewer, and fewer people. It is not good for democracy; it is not good for the culture of Australia, and it is not good for the youth of Australia. 1 can see the youth of the future being supplied with literature by those who have a very big stake in this country but whose money is made in New York, whose homes are in New York, and whose interest in Australia is largely that of exploitation and not the encouragement of our own culture and development. I think that we have been slipping badly over recent years in a field in which we ought to be making great progress, providing our own literature, providing an inspiration to our own people, and providing our own historians, poets and writers to tell future generations of Australians more and more of the glory of Australia.
By virtue of my position, I happen to be a member of the Commonwealth Literary Fund. Applications are coming in to the fund regularly. There is always a large number of them awaiting consideration and decision at every meeting of the committee. All the members of the committee are most anxious to give full weight and consideration to every work that comes before them, but, of course, there is not enough money to provide for the needs of all those who want assistance. The people who put forward their works are good Australians and, according to those who are competent to judge, the work submitted is first class. Up to date, the committee has generally sought quotations for the publication of work from some firm such as Angus and Robertson or F. W. Cheshire Proprietary Limited. It will be more difficult in future to have works published.
I hope that the day will come when we will be able to get our own Government Printing Office to help in work of this sort and so make ourselves independent of a lot of the big firms which will certainly refuse to publish works by Australians if they are in any way critical of the existing order, or of the people who own and control all the media of propaganda in Australia. I speak strongly on this subject because I hate to see this constant accumulation of more and more power by fewer and fewer people which can only be detrimental to the interests of Australia, no matter how much it may pander to the egotism of those’ who control much of the media of publicity, propaganda and education in a country in which all these things ought to be more diversified and far less concentrated than they are.
– I think the honorable member for Parkes (Mr. Haylen) and the Leader of the Opposition (Mr. Calwell) have drawn attention to a question which is of very considerable national importance. At the same time, I do not feel that it is a political question in the sense that it can be regulated or controlled by legislation or by administrative action. In fact, legislation or administrative action to control these things would run directly counter to the ideal which both speakers on the Opposition side have put before us. I agree, however, with their fundamental proposition that this matter deserves the serious consideration of all thoughtful Australians who are concerned about the development in this country of a strong national tradition and a truly Australian culture.
Now, a strong national tradition and a broadly-based Australian culture can come only if there is opportunity for every citizen of this country, no matter of what shade of opinion, no matter what the level of society to which he or she belongs, to express himself or herself, and to find the opportunity of getting that expression com municated to a large body of citizens. We have reached the position in the newspaper world in Australia to-day where freedom of the press, unfortunately, means only freedom to express those things which a comparatively small number of people decide should be expressed.
By and large, freedom of the press to-day means that if you say something, or do something, or represent something which is agreeable to a comparatively small number of people who control newspapers, there will be publicity for that. If you happen to say something, or do something, or express a point of view of which they do not approve, there is no outlet for it to the people. That is a position with which we are quite familiar, and I would not myself advocate for one moment that we should do anything which would attack the fundamental freedoms of the press or interfere with those freedoms, however much we may deplore the results that they may produce. But I am concerned - just as gravely concerned as is any member on the Opposition side - about the possible consequences of some of the developments in the field of book publication, and I do not think that the members of the Opposition who have spoken have fully represented the difficulty. The difficulty is not only in getting something published; it is also in getting the book sold. It is the tie-up between the publisher and the book-selling industry that limits the opportunity of getting new thoughts, whether they are the thoughts of genius or just the callow thoughts of youth, over to your fellow Australians.
– Would you say that no young writers have shown genius?
– No, but youth is often callow. The Deputy Leader of the Opposition is trying to distract me, as he customarily does, to a side issue. But no matter whether he is a sage or just a young writer, what the writer wants is to be able to communicate to his fellow Australians the thoughts that are precious to him. The difficulty that is now emerging is the narrowing down of the publishing field, of the number of people who publish books, and the fact that in the book-selling side of the whole industry there is also a narrowing down of the outlet for published works. But I do not take the gloomy view that the honorable member for Parkes and the Leader of the Opposition took. I believe that the Australian people will break through this. I believe that the Australian people will not be content with the sort of situation where only one or two firms control book publishing, and only one or two firms control book selling.
Book publishing is not in itself as difficult as newspaper publishing. It is possible for a comparatively small organization to publish books. It is possible, with a comparatively limited capital, for a man to open a book shop, and I believe that the solution to this problem lies in the energy and the independence of the Australian people. 1 think that in this country we do have young writers - groups of people who have thoughts that they want to express. Those thoughts are not going to be bottled up simply because some great combination of financial resources has taken command of one outlet of publishing and bookselling. I think - and I say this quite seriously to the members of the Opposition who have spoken - that the answer to this is not to go counter to the principles which they hold as sincerely as I hold them, by trying to direct or to legislate to control the people who have taken command of great resources in publishing and bookselling, but to ensure that there are opportunities for the people who want to break new ground. I can think of many young persons of my acquaintance who, I am sure, have the wish to write, who have the thoughts bubbling up inside themselves, who will do the writing and, having done the writing, will themselves create the opportunity, through independent publishing and independent book-selling, to get their works over to the Australian public. I fervently hope that every one of them who has that sort of energy inside himself or herself will find a successful outlet, because that is something that we need almost desperately in the development of our Australian way of life. What we need to ensure is that not we old fogies, not those of us who perhaps have got into set ways of thinking and writing or of research or of study, but that the young generation, when some impulse moves them, when something stirs them internally and they feel they have something they want to say, will have the opportunity of saying it in print and that, having said it in print, they will have the opportunity of seeing that their published works do reach a wider public.
That is the way in which a healthy Australia will be built. It involves, and always will involve, a great number of sacrifies on the part of the writer and the reader. It is easy enough for any one who wants to play along with the popular demand, or any one who wants to enter into the service of the powerful combination of book publishers or book-sellers, to produce something to order, to write the sort of thing that will readily be accepted; but if we want to get anywhere we will need, and I am sure we will find in Australia, not merely dozens and scores, but hundreds of young people who will not look to make a great deal of money out of writing, who will not look to make a great deal of popular success out of writing but, with a sense of integrity and with great sincerity, will write what they feel like writing and what they believe to be true, and will take their own measures to see it is published. I also have great confidence that hundreds of thousands of Australian people will have enough integrity and honesty in themselves to search out what is good and not be misled by what is widely advertised. [Extension of time granted.]
I thank the Deputy Leader of the Opposition for his consideration. I have not a great deal more to add but would round off my remarks by saying that there are many in this House who, irrespective of party politics, have given some of their time and thought to the historical foundations of Australian life. Their own hopes for the future of Australia are bound up with the development of a distinctive Australian culture. Those of us who feel that way look forward to an opportunity for all those who will build a distinctive Australian culture to break completely free from the bounds that are set by the possession of printing presses and the means of distribution being in the hands of comparatively few people. Each, in his own channel, will find his way of reaching his own public. There is a great deal to be said for the person who can organize even a little magazine which reaches perhaps only 100 or 1,000 people. He is doing something. There is a great deal to be said for the person who can produce a pamphlet which reaches only 500 people, or for those who produce a little student magazine which is produced with sincerity and with the real intention of saying what is in the minds of those who produce it, in order to get over to a group.
All this sort of thing has a cumulative effect. There is a great deal to be said for the fact that you can get past the person whose only qualification is that he possesses money. He has no right to be the dictator of Australian literature or to be the shaper of Australian culture. The shapers of Australian culture are the Australian people, but a group wholly different from those on behalf of whom the honorable member for East Sydney (Mr. Ward), who is interjecting, customarily speaks. They are .a group of whom he has no knowledge at all. The Australian people will break free of that. There is an energy, an intensity and a sincerity in this country which will <win through in the end.
.- I wish to support the remarks of two of my colleagues who have expressed great concern regarding Australia House in London. I ask this question: Is there anything wrong with Australia House? I believe Australia House is the nerve centre of Australia in England. I believe it is the frontier post of the Commonwealth in both England and Europe; it is where Australian sentiment, loyalties and friendship should find expression 13,000 miles away from home. Australia House should, in fact, be a home away from home to the 30,000 Australians who visit the United Kingdom and Europe each year. It has a tremendously important role in London. The High Commissioner’s Office in the United Kingdom costs over £900,000 a year, and of this amount Australia House accounts for £79,000 for maintenance alone. Australia House is the nerve centre of .the whole migration programme and has been. so .for a long time. In view df these generally recognized purposes of Australia House, it is disturbing to hear criticism of it from returning Australians.
I refer to the latest comment, which was made four weeks ago by Mr. H. C. Mallam, M.’L.A. ‘for Dulwich Hill, Sydney. 1 quote from Mr. Mallam’s press statement. He is reported as having said -
State Government offices were leaving for dead ^Commonwealth offices in publicizing Australia. Australia House, London, is in a backwater and its officers seemed more interested in cocktail parties than in giving information about Australia. It -was bulging with staff but there was still poor service. I watched queues lined up wanting particulars of work and conditions in Australia, trade possibilities and the like - but the people were not being given the information they sought Business people in London told me that Australia House had a reputation for too many cocktail parties.
He went on to say -
It would be interesting to know how much duty-free alcohol goes into Australia House. They have Australian books in the window, but if you want to buy one you can’t. If you want an Australian newspaper you have to search for it.
If Mr. Mallam’s criticism is true, then something is wrong at Australia House and needs correcting. If his criticism is false then his statement is mischievous and damaging. I see certain, trends in his criticism. Is it that Australia House has become a bulwark of bureacracy? Is it so overstaffed that passing the buck has become a disease, thus breeding exasperating delays and -the dodging of responsibilities? Has Australia House become coldly impersonal? Has it lost touch with the common humanities? Has its staff lost touch with Australian realities? Have they lost the capacity to care ‘for people as individuals? Has Australia House become an island of insularity? Has it become -mechanical and chilled in its treatment of those needing guidance and help?
I believe it is a bad thing to keep staff too long in a place like Australia House. They could become stuffy, blase, arrogant, insular, officious, out-of-date, out of touch and stale. There should be a roster of change with regard to the staffing, with regular injections of new blood from Australia, as that would establish a freshness. a newness and an up-to-dateness about Australia ‘House. Choice of staff should be a vital process involving the selection of men and women with special gifts and special know-how in human relations. This is not a specific criticism of Sir Eric and Lady Harrison, because they inherited a colossus Of bureaucracy and, with the best will in the world and a full knowledge of the weakness at Australia House, our High Commissioner would take a lot of time to effect reforms. He must get his lead in this matter from the Government.
This Government should encourage him to make any changes necessary to make Australia House a bastion of friendly, efficient service to fellow countrymen visiting our Old Country and to make it a centre of up-to-date and accurate information for all the hundreds of people who are seeking to migrate to Australia. For a member of Parliament to come back from overseas and make such trenchant criticisms of a place he has been to only a few weeks before indicates either that he is wrong or that there is something wrong at Australia House. As Australia House is the bulwark of our work overseas, carrying out a tremendous range of activities - not only the Department of Immigration but many other departments are associated with Australia House - it behoves the Government to examine the criticisms of returning Australians as they appear in the press from time to time. I do not bring this matter forward in any spirit of bitterness, but if something is wrong the Government should initiate action to put it right and not leave the blame on the shoulders of the High Commissioner.
I think that my suggestion in relation to changing staff more often would be one solution to the problem of bureaucracy which has entrenched itself there. After all, the cost of maintaining Australia House is enormous - £79,000 a year for maintenance alone. It is a pity that it is only a place of bricks and mortar and not a place of human relations where people seeking news about Australia can get it freely and cheerfully and be sure that it is accurate. If the officers are not giving satisfaction, it is obvious that they are not getting uptodate information from Australia. I am not sure which department is responsible in this regard, but surely the Government is able to keep the Australia House staff posted with the complete week-by-week picture of events “here. “When people in England are told by the Australia House staff that certain conditions can be expected in Australia, and when they arrive here four weeks later those conditions do not exist because changes have occurred in the meantime, I believe that the fault lies here and not with Australia House.
.- I support the -point of view which has been put forward by the Leader of the Opposition (Mr. Calwell) and the honorable member for Parkes (Mr. Haylen), and which has been so ably avoided by the Minister for Territories (Mr. Hasluck). The Minister’s contribution would have been acceptable if he had been addressing a gathering of the local mothers club at the opening of the new school library, when sentiments are expressed without the intention to take any action in regard to them. After all, the Minister is in charge of one of Australia’s greatest empires, its proudest jewel.
– The world’s largest.
– Yes, almost the world’s largest. The Minister spoke in terms of Australians breaking through, natural initiative, enthusiasm, &c, &c. But only recently the Government rejected the recommendation that it sponsor a newspaper in New Guinea to spread literacy and knowledge in that area.
– That is false.
– If it is false, why did you not say that it was false when you were questioned about it last year? According to “ Hansard “ the Minister, in reply to a question from this side of the House, said that because this was opposed to his policy he did not allow the proposal to proceed.
In any case, as has been put by the honorable member for Parkes, we believe that an old-established and traditional Australian publishing firm with a tradition of sponsoring Australian literature and with a proud record of 70 or 80 years’ publishing behind it, is now to be taken over by one of the monopolies which has been fostered by this Government. The Minister himself said that the organization in question is a monopoly. He said with regret that he did not approve of the way in which the freedom of the press was becoming the freedom to publish, but the Government has sponsored this monopoly by granting it a television licence.
In Australia, we face two great difficulties in the literary field - the difficulty of publishing and the difficulty of distribution. We on this side of the House believe that this is only a crystallization of some of the financial and economic policies that the
Government has pursued. But I believe that it is possible for the Government to do something out of its own resources. You, Mr. Speaker, as one of the chairmen of the Library Committee, have something to do with the cultural activities of this nation. We would like you to examine the general structure of this matter. The Commonwealth Government can do a good deal to foster publishing. It can assist the Melbourne University Press. One might say that the universities of Australia are the logical field to which one would turn in a case such as this. The Government has some means to take the initiative and it ought to sponsor publishing of this nature in the same way as the Commonwealth Literary Fund is supposed to sponsor literature. These are the things which the Government can do.
The Government is a great publisher in its own right. The British Government and the United States Government publish numerous periodicals, journals and books. All we are asking is that the Government take some cognizance of the fact that the monopolies in newspaper production are taking over the specialized field of book production. I do not care that the ordinary citizen and writer in Australia will find an easy method of publishing books. I agree with the honorable member for Parkes that the record of the company which proposes to take over Angus and Robertson is not good when it comes to sponsoring Australian productions. You have only to look at our television programmes to see that Australian productions receive very little sympathy. The channel which the company operates in Sydney has put on only one Australian drama.
This is a matter of great concern to us. I pay the Minister this tribute: I believe, first, that he is intellectually interested in this question, and secondly, that his scheme to sponsor Australian literature is sound. But the Government cannot rest on platitudes. It must take some definite administrative action. If you examine the Government’s resources and the fields which are open to it by subsidy, grant and so on, there is a good deal that the Government can do. It could interfere immediately and save this old-established publishing firm from moving into other hands as the result of its own financial and economic policy.
I had hoped that the Minister, with his record of scholarship and general interest in things of the intellect, would have introduced a more concrete proposal for the consideration of the House. I hope that the Government will give earnest consideration immediately to the question of increasing its grant to the Commonwealth Literary Fund. This is an important way in which the Commonwealth can take immediate action.
During the debate on the Estimates last week I mentioned that “ Meanjin “, a literary quarterly in Melbourne, is in urgent need of support. The University of Melbourne is doing more than its fair share in sponsoring this publication. Australia has not a great public which purchases these periodicals, and something must be done to assist this one.
I hope that the Minister will convey the sentiments which he has so ably expressed to-night to Cabinet to see whether something can be done generally to sponsor Australian publications, and to respond, in effect, to the appeal which was made by the honorable member for Parkes.
.- I join with the honorable member for Parkes (Mr. Haylen) and the Leader of the Opposition (Mr. Calwell) in lamenting the tragedy that has befallen Australia in the death of a great Australian publishing firm at the hands of a financial monopoly which looks to the United States of America and to reactionary ideas for its inspiration - a monopoly which, by no stretch of the imagination, could ever be so interested in the control of the firm of Angus and Robertson Limited as to be willing to encourage it to publish the Australian traditional point of view. We recognize the greatness of Angus and Robertson. For 72 years it has published books in Australia. It is an establishment where the most significant Australian works have first found expression. This great organization is in effect going out of existence. It is being destroyed by a financial monopoly which has a point of view that is un-Australian. It is being destroyed by this takeover.
Angus and Robertson have published recently the Australian Encyclopaedia in twenty volumes, a publication that has received world acclaim. But the financial returns from this publication no doubt will be very slight. Who can imagine the incoming financial monopoly undertaking a work of that kind? This takeover exhibits the growing power of finance in which the only consideration is the point which was made by the Minister for Territories (Mr. Hasluck). The power of finance shall rule and determine everything; all things shall be based upon the principle of a maximation of profit. As has been pointed out, this is an extremely rotten principle which will now find its way into the greatest of the Australian traditional book publishers where you will have a conservative and reactionary editorial line which will have no room for the Australian traditional point of view. It has been bad enough to have this reactionary editorial line being taken in the newspapers published by the company in question, and for which its leading director has received honours at the hands of this Government. I repeat that those honours were granted only for his running of that conservative and reactionary line in the columns of his newspapers. Not only has the Government done nothing to obstruct or delay the growth of this monopoly power; it has encouraged it in every conceivable way, by its economic policy and by the handing out of honours.
– What would you do about it?
– That is a very relevant question. Let me remind the honorable member of what his own Minister said he would do about it.
– I asked what you would do* about it.
– I will come to that shortly. I still have a few minutes at my disposal. The Minister for Territories (Mr. Hasluck) delivered a speech which, as the honorable member for Willis (Mr. Bryant) said, one would have expected him to deliver at a mothers’ club meeting. He spoke of Australians breaking through with their student magazines, and with their 500 leaflets here and there. He may not know of the increasing difficulty, and1 almost the impossibility, of publishing anything upon such a basis. Although we have a level of national output which is, in money terms, higher than ever before, the difficulties of publications are increasing every day.
The Government has been telling us for a very long time that it is going to introduce legislation to deal with monopolies and restrictive trade practices. It has found time to do many other things first, and we have challenged the Government because it has not yet honoured its promise. Honorable members opposite realize the importance of these problems, or so they say. They come in here and make meek laments about the situation, but what have they dona to show any indication of an attempt to design legislation to stop this kind of practice?
– What would you do?
– I will tell you a number of other things that can be done. The Government has provided a miserable £10,000 or £20,000 for the Commonwealth Literary Fund. It could increase this five or six or even twenty times over without even noticing the extra expenditure. It could provide a subsidy for the publication of books by the various university presses in Australia, without even noticing the effect of the expenditure. But none of these things will you do, or even attempt. Instead, when an event occurs such as the one we have brought to your attention to-night, you will simply get up and lament the fact. It is worth noting that a Minister of the Crown in this House has been prepared to admit to-night that the freedom of the press is the freedom of just a few people to determine what will be published, and in nine cases out of ten this is a freedom to which you would subscribe only if it is based upon your own particular conservative and reactionary political point of view.
– Would you take freedom away from the press? What would you do?
– I think that we could set up an Australian press commission to give such organizations as Consolidated Press a bit of competition. Such a body will be set up when a Government is formed of members who now sit on this side of the chamber. We will install such a press commission to provide competition and to give some assistance to people who are prepared to put forward an alternative point of view. But this Government, of course, is prepared to see the power of the press and of publication slowly and definitely concentrated in the hands of a few people. You are prepared to see the whole of our economic system gradually but definitely monopolized, and this, you say, is occurring in the name of competition.
– What would you do about this sort of thing?
– 1 have already told you. If you had not been talking to the gentleman sitting next to you you would know what we would do about it.
– You are dodging the issue.
– We are not dodging the issue. We are putting forward substantial proposals. The Government has said that it would produce legislation to deal with restrictive practices and monopolies. It has had ten years in which to do so, but it has done nothing about it. If we had been in occupation of the treasury bench action would have been taken long ago. We would have produced legislation designed to make this kind of take-over unlawful.
– How?
– I will design an act for you one of these days, when we are on the other side of the House, which will show you how it can be done. I have already suggested .that the Government can help by subsidizing people who can produce the kind of publications that Angus and Robertson will no longer be able to produce. If honorable members opposite were prepared to make some material move in this direction, then we might believe there was some reality and sincerity in the protests of liberalism that they so easily make. But as we see them to-night, it appears that honorable members opposite agree fundamentally with the case put forward by the Opposition, but what do they do? They wring their hands and say that there is nothing that they can do about it. I believe that they will not even express the opinion that it is a retrograde step that Consolidated Press should be taking over Angus and
Robertson. They will merely agree that Angus and Robertson have done a great job in the publication of Australian works, and perhaps they will agree that in the future Consolidated Press will not be able or willing to do that job.
The case that has been brought forward by the honorable member for Parkes and the Leader of the Opposition throws the spotlight on what is occurring in every other industry in Australia. The small people all over the country are being forced out of existence by the power of big business and monopoly. What is happening in the publishing trade is happening everywhere else. One of these days the evil the Government is sowing now it will reap. The day will come when economic power will no longer be allowed to concentrate to an ever-increasing extent in a few hands. One day we will see the re-instatement of the principle that the smaller people, the individuals in the country, should have their rights and beliefs protected by the Commonwealth Government.
The answer that the Government has given to our case is a complete and absolute negative. The honorable member for Parkes has done the House a great service to-night by bringing to our notice the great tragedy that is involved in the death of Angus and Robertson, the traditionally Australian publisher, at the hands of this bushranging monopoly, which has no principle whatever but the principle of maximum gain, and the principle of reaction, of the attempt in fear to hold back the tide of progress. It was the honorable member for Parkes who brought this matter to the attention of the House. It was not any honorable member on the opposite side. Government supporters would have accepted this move as a matter of course and would have said nothing about it.
– Order! The honorable member’s time has expired.
– I extend my congratulations to the honorable member for Parkes (Mr. Haylen) for raising this issue, but I should say that there are very few people on the Opposition side, if any, who know exactly what they are talking about. The simple fact is that at the present moment no one knows what the negotiations are about. We have been told that Consolidated Press is negotiating with the “ Bulletin “ and with Angus and Robertson, but we do not know how far the negotiations have proceeded, and we are not. certain on. what basis there may be a take-over if one does take place.
I could say immediately that I naturally like to see the production and dissemination of information- in as wide a number of hands, and in as powerful hands, as possible. We like to think that those who are producing and distributing information are sufficiently powerful to collect and distribute the news and that there are sufficient of them to be able to give the widest possible coverage and to publish as many different ideas as possible, if they exist in the community. This is the ideal, but we all know that there are great practical problems at the present time. As costs and wages increase it sometimes becomes well nigh im: possible for companies to continue, and I am sure the honorable member for Parkes would be the first to admit that so far as the “ Bulletin “ is concerned, it was practically impossible for it to continue; and that in conditions of sharply rising costs, both of production and distribution, many of these companies either could not continue or would not be as profitable as one would expect having regard to the capital employed. They have been constantly finding difficulty in making ends meet, and even in the case of Angus and Robertson-
– That is not true.
– Even in the case of Angus and Robertson there was a reconstruction of the board, and such people as Mr. Cowper came on to it in order to ensure that every avenue for improving the returns was explored. It is far better to have this company in existence than to have it, in the future, not prosperous and possibly compelled to curtail, its activities. I put that as a perfectly logical argument; but I take it a stage further. Naturally, I want to see dozens of people in this business of publication and distribution.
– Oh yes?
– Of course I do; but if I felt that these companies were going to the wall, I would think it would be very wise in the nation’s interests that Consolidated Press should come in and should attempt to keep them going. I take issue with the honorable member for Parkes in two respects. He said - and I do not agree with him here - that Consolidated Press has never made real efforts to sustain the output of Australian authors and that, in effect, it is always ready to take the output of the syndicates. I do not think that is correct. On the contrary, I think Consolidated Press goes to great lengths to ensure that Australian authors have opportunities. I am prepared to make this statement: If Angus and Robertson is taken over by Consolidated Press, the company’s activities will be maintained on a wider scale in terms of publications.
– Nobody could believe that. ) Mr. McMAHON. - It is ia matter of opinion. You may have one view; I express the opposite view but I am prepared to make this case - and I think it is as good as that made by the honorable member for Parkes - that there would be an expansion of the publications and distribution activities of Angus and Robertson and also of Robertson and Mullens Limited if they were taken over. If that is so, it is something we should welcome. I believe - and I say this with no reservations at all - that the head of Consolidated Press has a real desire to give Australian authors opportunities to express themselves-
– How silly!
– Maybe. I express my view because I believe it is correct. Personally, I believe there is a real opportunity for an expansion of these activities. The honorable member for Yarra (Mr. Cairns) worked himself into a fine frenzy of Marxism, and quite frankly he became quite incomprehensible. I could not understand what he was talking about. It is perfectly true that at one stage he recommended a form of government entry into publicity. 1 can only say that on this side of the House we hope that we will never see government publicity, particularly if there should be any one like the honorable, member for Yarra making a contribution to it. If there is a group of people you want to watch in this House, it is what might be called the Burton group opposite.
If you want to see the trend of mind of the honorable member for Yarra, have a look at the questions he is putting on the notice-paper, in which he asks if we would publish our suspicions of those who have committed crimes, why they committed them and why we have not published our suspicions. It is not a question of proof or evidence, but whether there are suspicions and why they are not published. I invite the attention of all honorable members to the questions the honorable member for Yarra is asking. And honorable members should ask themselves: From what sources does the honorable member get these things? Does he get them from the Civil Liberties League and those who write articles for it? If we can take any notice of this fellow from Yarra, get the questions he has asked. If we put into the hands of a gentleman like the honorable member from Yarra an opportunity to publish in a government paper or by a government press, every Australian would know exactly what he could expect, and the kind of propaganda the honorable member would deal out. I leave it on this note: If it would be bad luck - I believe it would be bad luck - that Angus and Robertson should lose its separate identity, it may be an inevitable state of affairs. If this is so, then I believe the company will be taken over by some one who will expand the business and will give increasing opportunities to Australian authors to do the work we would like them to do.
– Mr. Speaker-
Motion (by Mr. Harold Holt) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. John McLeay.)
AYES: 47
NOES: 15
Majority 32
AYES
NOES
Question so resolved in the affirmative.
Original question resolved in the affirmative.
House adjourned at 12.13 a.m. (Thursday).
page 2198
The following answers to questions were circulated: -
d asked the Acting AttorneyGeneral, upon notice -
– The answer to the honorable member’s questions is as follows: - 1 to 4. On 21st September, 1960, the Prime Minister wrote a letter to the New South Wales branch president of the Adminstrative and Clerical Officers Association in which he stated that members of the Commonwealth police force were present at the meeting in question and that a partial record of the proceedings was taken. The Prime Minister added that there was nothing in the record which had not appeared in the press and that the branch president could take it for granted that the record would not be used as a basis for administrative or any other action by the Public Service Board or Commonwealth departments against any employees who were present at the meeting. A copy of that letter was forwarded by the Prime Minister to the Leader of the Opposition. I need add but little to what the Prime Minister has said. The branch president of the Administrative and Clerical Officers Association had invited members of the Commonwealth police to attend the meeting in their capacity as members of an association of white-collar workers, and several did attend. The fact that a typist in the employ of the Commonwealth police also attended and took notes of the meeting was quite- exceptional, and there is no such “ practice “ as the honorable member’s question assumes. Having stated what happened on this occasion, I cannot see that any useful purpose would be served by pursuing the matter further.
d asked the Acting Prime Minister, upon notice -
– The answer to the honorable member’s questions is as follows: - 1 to 4. As my colleague, the Treasurer, observed when introducing the Budget, speculation in shares and other securities and in land is disturbingly active and prevalent. Transactions in land in a State are directly matters for the State Government concerned and any action by the Commonwealth could only be through the indirect effects of general measures. The pressure of demand for land due to the high rate of dwelling construction has, I understand, caused sharp increases in the prices of some land, in particular the price of land in desirable localities near capital cities, and this has provided opportunities for land speculation. During I960, the Commonwealth has adopted budgetary and other measures with the object of securing a moderation of those pressures within the economy which operate to push up costs and prices and to provide the opportunity for speculative transactions.
d asked the Acting Prime Minister, upon notice -
– The answers to the honorable members questions are as follows: -
m asked the Acting Prime Minister, upon notice -
How many full-time scholars are receiving
What will be the cost of (a) scholarships and
n. - The answers to the honorable member’s questions are as follows: -
m asked the Minister for Shipping and Transport, upon notice -
– The answers to the honorable member’s questions are as follows: -
y asked the Minister representing the Minister for the Navy, upon notice -
– The Minister for the Navy has supplied the following answers: -
s asked the Acting Prime Minister, upon notice -
– The answer to the honorable member’s questions is as follows: - 1 and 2. Some files in government departments are, of course, classified for security reasons and, for these reasons, the system of security classification is not disclosed.
Cite as: Australia, House of Representatives, Debates, 19 October 1960, viewed 22 October 2017, <http://historichansard.net/hofreps/1960/19601019_reps_23_hor29/>.