24th Parliament · 1st Session
Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 2.30 p.m., and read prayers.
– I desire to ask the Treasurer a question. The “ Monthly Review of Business Statistics “, which I received this morning, shows that the value of treasury-bills held by the Commonwealth has fallen and the value of seasonal notes has increased. Will the Treasurer explain why treasury-bills on which we pay 1 per cent, interest fell in the month of January from £303,000,000 to £248,000,000 while seasonal notes on which we pay 3.7 per cent, interest rose from £49,400,000 to £95,900,000? Does this mean an increase in profits to the trading banks of about £300,000 and if so, why has this been done?
– The honorable gentleman tries to introduce some political argument into a question seeking information. His general antipathy to the private banking system is, of course, notorious and indeed the nationalization of banking remains a fundamental feature of the programme of the Australian Labour Party, as is cited in the official platform of the party. If the honorable gentleman is seeking a categorical reply about some statistical movement, I shall see that precise particulars are supplied to him.
– I direct a question to the Minister representing the Acting Minister for Trade. I noticed over the weekend that the world price of wheat will apparently be increased. Can the Minister say whether Australia is making any active move at the conference in Geneva of parties to the General Agreement on Tariffs and Trade to increase the price of other agricultural commodities and minerals?
– The honorable member for Richmond has touched on a subject that is very important to Australia. It is a fact that for almost a decade the terms of trade have turned against the principal primary producing and exporting countries whilst the terms of trade for the more highly industrialized countries have improved. The matter has been taken up very strongly by the Minister for Trade on quite a number of occasions. The House will recall that in 1958, when a very important conference was held at Montreal, the Minister for Trade was principally responsible for raising the problem of stability and the increase of world commodity prices with the Commonwealth countries concerned. Resulting from this, a wheat utilization committee was set up including representatives of the Commonwealth countries and the United States. This has already had some effects.
However, the Government since then has not rested. On many occasions, it has raised the subject at conferences at Geneva on the General Agreement on Tariffs and Trade, and has had bilateral discussions with representatives of other countries in an endeavour to improve the general situation. Such an improvement would, of course, assist this great Australian primary industry. Recently we gained a new ally in our efforts. France initiated a discussion some weeks ago in the Gatt session in Geneva. As a result of that, a further discussion may be held in Geneva shortly. The principal commodity to be discussed at the outset is wheat. If that discussion is successful, then the way will be open for discussion of other commodities in Gatt.
– In addressing a question to the Postmaster-General, I refer to the announcement last week that there is to be an increase in the number of commercial television stations in the metropolitan areas where already there are alternative programmes. I now ask the PostmasterGeneral: What is the date on which the Newcastle national television station will commence transmitting? Where are the studios and transmitter to be located? Will this station originate programmes, or will it only relay Sydney programmes? Will Newcastle and district artists be given the opportunity of appearing in the programmes of this station?
– I think that in the original announcement about the third phase of television, I made some reference to the dates upon which the various stations would begin to operate. However, I can inform the honorable member for Newcastle that it is expected that the national television service for Newcastle should come into operation about April next year. The site chosen for the transmitter- is on Great Sugarloaf, and the station will be operating, at least in the early stages, on relay from the Australian Broadcasting Commission’s station in Sydney. In other words, the viewers in the Newcastle area will get the complete national service which is provided for viewers in Sydney and other places. Because of that, there will not be studio facilities at the start of the service. Undoubtedly, as the service develops, provision will be made for items of local interest, just as has been done in connexion with the development of the national broadcasting system.
– I ask the Minister for External Affairs whether he can give any further information to the House on the statement purported to have been made by the Netherlands Prime Minister, Professor de Quay, that Holland would accept all suggestions made by United States officials concerning secret preliminary talks between Holland and Indonesia on the West New Guinea question.
House will remember that last week I said in answer to a question that there were solid reasons for thinking that negotiations would commence in connexion with this dispute. To-day, there is this report that the Prime Minister of the Netherlands has said that the Netherlands Government is willing to enter into some talks with the Indonesians. At the present moment consideration is being given to the choice of a suitable place and time, and to the identity of the third party to be present at the talks.
Mr. Speaker, I think that in answering the honorable member I should take the opportunity to say that I had proposed to make a statement on Indonesia to-day with a view to its being debated on Thursday.
The Opposition finds it inconvenient to debate it on Thursday.
– Who said that?
– It. seems to me that a statement of this kind ought to be made.
– Who said that?
– He is a liar!
– Order! The honorable member for Parkes will withdraw that remark.
– I withdraw the remark.
– I was saying that I thought that a statement on the New Guinea dispute, regarding which the situation is so fluid, ought to be followed by debate as soon as possible, because the statement is likely to become out of date very soon. The announcement by the Prime Minister of the Netherlands to-day is an indication of the extremely fluid state of the dispute. As the statement could not be debated this week I propose to make it not to-day but on Thursday evening, when I will bring it up to date as well as I can in the hope that the shortest possible time will elapse before the Opposition does debate it.
– I ask the Prime Minister: In view of the importance of making a thorough scientific examination of the monster which apparently was washed up on the beach in an isolated part of the west coast of my electorate, will he use the Commonwealth Scientific and Industrial Research Organization and other Commonwealthagencies to carry out this important work before it is too late? Will he consider suggestions made by scientists, and sanction the use of helicopters belonging to the Department of Defence, or- to any other department, in order that the remains may be examined on the spot and then brought out for the fullest possible examination?
– I will convey the honorable member’s suggestions to my appropriate colleague.
– My question is addressed to you, Mr. Speaker. Are you aware that last week the honorable member for Parkes referred in derogatory terms to a product called “ Dawn “7 In view of the fact that this product is an excellent one and that it is produced by a firm which has had the enterprise to establish an industry in the country in the south-east of South Australia, which provides substantial employment, will you give consideration to having expunged from “ Hansard “ the honorable member’s flippant and damaging reference?
– It would be completely out of order to expunge the reference from “ Hansard “. I might say that the “ Hansard “ staff polished it a little.
– I direct a question to the Minister for Supply. On Thursday next tenders for the purchase of the naval frigate H.M.A.S. “ Barwon “ will close. Has any attempt ever been made to find possible uses for obsolete naval vessels other than to sell them to the highest bidder as scrap metal?
– I would be glad to hear any suggestions the honorable member may have to offer. It seems to me that the best thing to do with obsolete naval vessels is to sell them as scrap.
– Can the PostmasterGeneral say what progress is being made with the survey which is being carried out at Narrabri to determine the suitability of Mount Kaputar as a site for a television transmitter?
– Officers of the Australian Broadcasting Control Board in conjunction with engineers of the PostmasterGeneral’s Department have decided on Mount Kaputar as a suitable site to serve the upper Namoi area. That has been stated on several occasions, but in actual fact I find that this is a area in which there are several prominent peaks, all of which have been investigated to see exactly where the transmitter should be sited, and the site tentatively chosen is one about half a mile from Mount Kaputar. It is on a peak known as Mount Dowe. This site has been tested by the use of suitable equipment to determine the field strength; and the site itself has been’ inspected. If the local licensees desire to make any representations about an alternative site, the Australian Broadcasting Control Board will be prepared to consider them. But as yet, apart from this initial work, no actual structural work has been started.
– Does the Prime Minister recollect an occasion late on a night in December last on which he and Sir Philip McBride, the federal president of the Liberal Party, together with the leader of the Australian Country Party, the Minister for National Development and a number of others, were assembled in his office, anxiously awaiting the result of a survey of the Communist candidate’s preference votes in the seat of Moreton upon which the fate of his Government depended? Will the Prime Minister state whether, for the national records, he had a photograph taken of this historic meeting? If so, is the Prime Minister able to say whether the photograph accurately portrays the tension, anxiety and strain as the outcome was awaited and the relief and exultation of himself and his friends when-
– Order! I think the honorable member is making his question far too long. He is now making comment. I ask him to conclude his question.
– Does the photograph accurately portray the tension, anxiety and strain as the outcome was awaited and the relief and” exultation. of the Prime Minister and his friends when it at last became known that his Government had been saved by the Communists?
– As is not at all uncommon, the honorable member’s question is based upon a completely invented occurrence.
– My question to the PostmasterGeneral is prompted by a desire to help that enthusiastic and ever-increasing band of people who like to indulge in the hobby of colour photography. Is the Minister aware that the ordinary letter receptacle will not admit a 35 millimetre cassette and that these have to be posted at post offices which are often some distance away? Will he consider having the slots in receptacles enlarged so that they will be wide enough to accept these cassettes?
– I have recently heard some comment on the matter raised by the honorable member for Henty. At present, I have no information from my department, but I assure the honorable member that I will have his suggestion investigated.
– In view of the visit of the Minister for Shipping and Transport to Brisbane on Friday last to consult the Premier of Queensland on the shipbuilding industry and unemployment in that industry, will the Minister inform the House what proposals were .submitted by the Premier and what action the Government proposes to take to relieve unemployment in the industry?
– The Premier of Queensland had quite a lot of information to give me concerning the shipbuilding industry and his ideas for its future. That information has been noted by me. Shipbuilding, the world over, is in a depression. The amount of building in Australian shipbuilding yards in past years has compared more than favorably with the amount of construction in the rest of the world.
– Turn that one up!
– If the honorable member examines the statistics he will find that my statement is quite correct. This Government has paid a subsidy of up to 33i per cent, on ships built in Australia and, with the Government’s encouragement, the shipbuilding industry has done a firstclass job. The Premier of Queensland recognizes that. I shall pass the information that he Las given me to the Prime Minister and the Cabinet. The purpose of the visit was to obtain this information. I am quite sure that, as it has done in the past, the Government will do anything that it can to keep the industry going.
– My question is addressed to the Minister for Shipping and Transport. As a standard-gauge railway between Melbourne and Sydney is now operating, what reductions in transport costs are expected as a result of the heavy capital expenditure that was involved? Is it expected that in the near future there will be a heavy increase in the quantity of goods transported by rail in Victoria and New South Wales? If so, would this tend to reduce costs?
– We are still in the early days of rail standardization, but already there are indications that the standardized service is proving extremely popular. It is expected that between £300,000 and £350,000 will be saved in trans-shipment costs at Albury alone. On the present indications - and naturally we are dealing in conjectures at the moment - we are expecting that probably 1,500,000 tons of freight will be carried each year, producing a revenue over working expenses of some £3,000,000. The savings resulting from the methods of packaging now possible, the lessening of pilfering and the rapidity with which goods will be carried between their points of despatch and destination undoubtedly will have an effect on the costs to the people using this means of transport. It is too early yet to say what variations in freight rates there could be, but unquestionably on present indications the standardized service is an excellent proposition. Whether or not there will be a reduction eventually in freight rates will be a matter for decision by New South Wales and Victoria. As I have said, on the early indications the standardized service will be well used and will be quite profitable.
– My question to the Postmaster-General deals with the decision to grant an additional television transmission licence in each of five State capitals. In granting the third commercial licence for Sydney will the Minister consider viewers in the fringe area of reception in the folds of the Blue Mountains and the Great Dividing Range? Will he see to it that the new transmitter is located in such a position that it will not only give a further choice of programme to Sydney viewers, but will also provide a service to a large number of people who are at present denied satisfactory reception?
– The honorable member knows the procedure adopted for the provision of licences for commercial television stations. He knows that applications have been invited from those interested in the provision of a third commercial station in Sydney and in each of the other capital cities. It will be appropriate for any person or any organization desiring to obtain a licence to make an application and, in the statement accompanying that application, to state the coverage which the proposed station would give, its site and so on. If any applicant comes forward with a proposal which will give a greater coverage than that already available from the existing stations, I have no doubt that the Australian Broadcasting Control Board will pay particular attention to that fact, and will refer to it in its recommendations to the Government. It will be the Government’s prerogative, finally, to decide where the station shall be. So I suggest to the honorable member that this is a matter properly within the province of applicants, who may submit any proposition that they think fit.
– Will the Postmaster-General ask the officers of his department to test the strength of the Mount Buangor television signal in western Victoria as soon as possible after the station there begins operating in the next few weeks? If, as is likely, some areas are not adequately covered by the signal, will the Postmaster-General consider calling tenders, as soon as practicable, for an additional station to cover western Victoria?
– Before the choice of Mount Buangor as the site for this station was made, considerable field tests were carried out to determine the field strengths available from various sites. It was decided that the best and most extensive service could be provided from Mount Buangor. Certainly, when the station commences operations, further tests will be made to see whether the expectations of the Australian Broadcasting Control Board and the Postmaster-General’s Department have been realized. It will then be decided what further service should be embarked on. That stage, I should say, will be reached when the board has decided on the applications which will shortly be before it in the fourth stage of country television development.
– I direct a question to the Minister representing the Minister for Health. Is he aware that air pollution in various industrial centres of Australia - notably, Port Kembla, Newcastle and Sydney - has developed to a most serious degree and is contributing to varied and widespread illnesses, and in certain cases is the cause of death? Will the Minister study relevant reports emanating from the clean air conference which is being held at the University of New South Wales with a view to informing the House whether the Government proposes to take any positive action, such as convening an all-States conference, for the purpose of deciding upon uniform action in an endeavour to solve this serious and growing problem?
– I appreciate the concern of the honorable member about this problem, which is certainly grave in his electorate, and, indeed, is becoming serious in most highly industrialized areas throughout Australia. The honorable member will be pleased to know that four conferences have either been held or will be held in the near future in Australia at which this problem has been, or will be, discussed. The first was the conference to which the honorable member has referred. It was arranged by the New South Wales Government and was held in Sydney about the end of February. Dr. M. Katz, of Canada, was present at the conference by invitation. He is the consultant on atmosphere pollution in the Department of Health and Welfare in Canada, and he addressed the Sydney conference.
Dr. Katz was also invited to attend a meeting which was held about two weeks ago at the School of Public Health and Tropical Medicine in Sydney. That meeting was proposed by the Occupational Health Committee, which is a committee of the National Health and Medical Research Council of Australia. Dr. Katz also addressed the scientists at that meeting on industrial hygiene. About the end of next week, a further meeting of the Occupational Health Committee will be held and this problem will be discussed. After that conference, a report from those three meetings will be submitted by the Occupational Health Committee to the next meeting of the National Health and Medical Research Council which, I understand, will be held in May next.
Representatives of all States are members of the Occupational Health Committee. In addition, the council is the adviser to the Commonwealth and State governments on public health; so I suggest that this would be an appropriate opportunity for this matter to be brought forward so that it can be ascertained whether some coordinated and stable policy can be evolved by the Commonwealth and State governments. I shall see that the proposal advanced by the honorable member id submitted to the Minister for Health for consideration in relation to the next meeting of the council.
– I direct to the Prime Minister a question which is, to some extent, supplementary to one that was asked earlier by the honorable member for East Sydney. Is it a fact that the Australian Labour Party confidently expected to receive 100 per cent, of the second preferences of the Communist candidate in Moreton?
– Order! The honorable member should keep his question in order.
– Is it a fact that the Labour Party received approximately only 86.2 per cent, of Communist second preferences in Moreton, causing concern to the honorable member for East Sydney and other honorable members?
– There was a good deal of noise and I could not hear all the question, but I gather that my friend was directing attention to the fact that the Australian Labour Party gets the bulk of the Communist preferences.
– It received 86.2 per cent, in this case.
– Of course, I would take that for granted.
– Does the Prime Minister recall that in May last year, when replying to a question I asked of him concerning the permanent employment of physically handicapped persons in the Commonwealth Public Service and the recommendations in the Boyer report relating to Public Service recruiting, he said that he hoped the report of a special committee would be available soon, and that upon receipt of that report he would give an indication of the Government’s intentions. Does the Government intend to implement the recommendation on the permanent employment of physically handicapped persons in the Commonwealth Public Service? If so, may we expect that the Public Service Act will be amended during the next sessional period?
– Within the last few days I have been reminded by officers of my own department that this matter is still in the air. I will put myself in a position to deal with it as soon as I can.
– I preface my question to the Minister for Territories by referring to the impressive film on the political development of the Territory of Papua and New Guinea which was displayed at the United Nations last year. Have steps been taken for this film to be shown in various countries, particularly those in South-East Asia and Africa, to demonstrate Australian leadership in this trust Territory?
– My department has not taken any steps in this matter because it comes, I think, within the scope of the News and Information Bureau and the Department of External Affairs. I agree that the film is . well worthy of being shown overseas. The more overseas people who see it the more content we shall be.
– I direct my question to the Minister for Shipping and Transport. As two of the River class ships, namely, “ River Hunter “ and “ River Norman “, which were sold to Albert G. Sims Limited, supposedly as scrap, are trading at present to Australian ports, does this constitute a breach of the contract of sale?
– I should be surprised if there has been any breach of contract. However, if the honorable member puts his question on the notice-paper, I shall have the matter investigated.
– Will the PostmasterGeneral give an assurance that the decision to establish additional television stations in five State capitals will no.t attract resources which otherwise might have been used in establishing country stations in localities which were selected and announced last year?
– I can assure the honorable member that the availability of resources and technicians required for the construction of country television stations will not be affected adversely by the establishment of five additional stations in the capital cities. Not only is there a considerable amount of overseas equipment available, but Australian manufacture has developed very rapidly to keep pace with the development of television, and such essential equipment as transmitters is now being manufactured in Australia in considerable quantities.
Technicians, after several years’ training, sit for examinations, and competent men are being turned out steadily each year to promote the development of television. It must be recognized that the developmental programme is being carried out in stages for the express purpose of ensuring that equipment and trained technicians are available as required.
It is not expected that building operations will be commenced on the proposed new stations in the capital cities until some time next year, and there will be no broadcasting from them for a considerable time after that. The Australian Broadcasting Control Board intends to process the first batch of country applications in the fourth stage before the applications for the new capital city licences are dealt with, so it will be seen that the whole matter has been carefully staged in order to avoid any development such as that which the honorable member for Barker is inquiring about.
– I direct a a question to the Minister for Territories. I refer to the proposal that the Territory of Papua and New Guinea should become an Australian State. If this proposal were put into effect, would the Minister favour a non-discriminatory situation in which complete equality would prevail as between the indigenous people of the Territory and the people of the mainland States, such equality extending to social services, electoral franchise and freedom of movement throughout Australia?
– The honorable member has directed attention to some of the problems that would necessarily arise if a proposal of this kind came under consideration. The House should realize that the present position is this: The people of Papua and New Guinea, or those of them who are articulate and take an interest in their future, have expressed the view that if the Territory is to be self-governing at some time in the future, they should undertake self-government on terms which would permit them to remain in continuous and close association with Australia. In attempting to think their way through the problem of how, after undertaking selfgovernment, they could remain in close association with Australia, they themselves have hit upon the idea of having the Territory become one of the States of Australia. This is a proposition that would have to be considered carefully by the Government and the people of Australia, as well as by the people of Papua and New Guinea, when the time for negotiation between the two communities arrived.
– Is the AttorneyGeneral aware of the lack of uniformity in stamp duty procedures as between the various States and the Australian Capital Territory? Has this matter been discussed at meetings of Attorneys-General? Does the Minister consider that this is a field in which the Commonwealth might display some initiative?
– Uniformity, or lack of it, of stamp duty procedures is not a matter that comes within my jurisdiction as Commonwealth AttorneyGeneral. It is a matter for consideration by the Treasurers of the States. The committee of Attorneys-General endeavours to confine itself to legal matters.
– I direct my question to the Treasurer. I preface it by saying that recently a loan of 40,000,000 guilders was raised in Holland by the Australian Government. Is it a fact that one of the conditions under which the loan was negotiated was that a double taxation agreement would be entered into between the Governments of Holland and Australia, to give Dutch investors tax concessions similar to those granted to American investors under the United States of America-Australia double taxation agreement?
– The answer, Mr. Speaker, is “ No “.
– I direct my question to the Treasurer. I have received complaints from solicitors over quite a considerable period of undue delays in obtaining probate in connexion with small estates. Will the Minister have an inquiry conducted within his department with a view to reducing such delays? I may say that in many cases there seem to be long and unnecessary delays between the issuing of probate by the State authorities and the obtaining of probate in the Federal sphere.
– I shall certainly make inquiries along the lines suggested by the honorable member. When I looked into this matter on an earlier occasion I found that the delay was not at the Federal end. Whether that situation has changed, as is implied or expressed in the honorable member’s question, is a matter worthy of investigation. My understanding is that once the State probate authorities have satisfied their interest in these matters, Federal probate is issued quite shortly thereafter. However, I will give the honorable member a more detailed reply later.
– I address my question to the Treasurer. Earlier this afternoon, he gave the impression that he did not understand the import of the question asked by the Leader of the Opposition about the relation between treasury-bills and seasonal treasury-notes. Are we to assume therefore that such an important change in the direction of public financing is being made by the Department of the Treasury without his knowledge? Are we to assume that the right honorable gentleman does not understand this field of public finance? Has he abdicated his position as Treasurer by allowing the Treasury to make decisions of such importance without reference to him?
– The question is not a very sensible one. The Leader of the Opposition knew quite well that he was citing only a very small fraction of the total series of Commonwealth transactions in this field. Owing to his experience, as I recall it, as an officer of the Victorian Treasury, he is well informed on Treasury matters. I said’ that to the extent that he wanted specific information on the points that he raised, I would get an answer for him. To the extent that the honorable gentleman gave a political twist to his question, 1 gave him a political answer. I do not quite know what sort of answer to give to the honorable member for Wills. His question was so inane as not really to warrant taking up the time of the House.
– My question is addressed to the Minister for Primary Industry. Since it is desirable to expand the production of cotton, I ask: Is there any special reason for limiting the import of seed cotton, subject to quarantine regulations, by the Australian growers?
– Quarantine is a matter for the Department of Health, which, obviously, does its utmost to ensure that imports of seed are not made from any country from which there may be a danger of introducing disease. I rather think that that is the reason for any limiting of the import of seed cotton.
– My question is directed to the Minister for Air. I preface it by stating that the question is a political one and that I would like a political answer. Are any non-service personnel permitted to use Royal Australian Air Force crash boats for pleasure purposes? If not, how has it been possible for the Treasurer to use an Air Force crash boat at Townsville for spear-fishing purposes in the Townsville and Bingil Bay areas?
– It would give me great pleasure one day to take the honorable member out on a crash boat. That would give me an opportunity which so many would like to have.
– I wish to ask the Minister representing the Acting Minister for Trade a question. Is it a fact that a recent trade mission to the Middle East visited ten countries in that area? If so, was Israel the only country in that region which was not visited by the mission? Can the Minister say why Israel was not included in the trade mission’s itinerary?
– I think that the House and the honorable member are pretty well aware of the situation in the Middle East. When the itinerary of the trade mission was prepared, cognizance had to be taken of the political situation in that part of the world, and in determining the countries that the mission would visit, consideration had to be given to the advantage that Australia was likely to gain. The itinerary was prepared and adhered to on that basis. I think that the results indicated by the report of the mission are very satisfactory indeed. I appreciate the interest that the honorable member has shown in this matter, which is of vital importance to Australian trade in the future. He may rest assured that the Department of Trade carefully examined the situation and, on the basis of the greatest advantage to be gained from our future trade relations, determined the countries to be visited.
In Committee of Ways and Means: Consideration resumed from 6th March (vide page 501), on motion by Mr. Harold Holt-
Question resolved in the affirmative.
Standing Orders suspended; resolution adopted.
That Mr. Harold Holt and Mr. Townley do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Harold Holt, and read a first time.
– I move -
That the bill be now read a second time.
Before the debate proceeds, I should like to explain that this bill and the Income Tax and Social Services Contribution (Provisional Tax) Bill are complementary measures. It would no doubt suit the convenience of the House if honorable members were permitted to refer to both measures. I suggest, therefore, Mr. Speaker, that you permit the subject-matter of both bills to be discussed in this debate.
– Is it the wish of the House that both measures be debated together? There being no objection, the course suggested by the Treasurer will be followed.
– I do not wish to speak at any length now or to repeat what was said earlier. I remind the House that the purpose of the bill is to authorize a 5 per cent. reduction in personal income tax for the current income year, 1961-62. Honorable members will recall that details of the proposed rebate were given in my speech introducing the resolution.
While I am on my feet, 1 would like to correct what appears to be a serious printing distortion which appears at page 501 of the daily “ Hansard “ proof for 6th March last. As the passage stands, it does not make sense and has no continuity. I shall quote what I said on that occasion. I think the honorable member for” Melbourne Ports (Mr. Crean) will have had a roneoed copy of the speech I made at the time and will not have been inconvenienced or misled by this unfortunate misprint. What I actually said was this -
Re-calculation of this provisional tax will be authorized and, when this bill becomes law, existing nation provisions will authorize a refund . he excess payments that have been made.
That sets out accurately a sentence which has become distorted in the daily *’ Hansard “ proof.
. - On behalf of the Opposition, I move -
That all words after “That” be omitted with a view to inserting the following words in place thereof: - “ this House notes with approval that, in response to public pressure, the Government has introduced the bill but the House condemns a proposal which although it provides for a 5 per cent, reduction of taxation, does so on an inequitable flat-rate basis which fails to extend an adequate share of the reduction to taxpayers with dependants and taxpayers with small incomes, and is of opinion that legislation to correct this injustice should be introduced immediately “.
Income tax, of course, provides the greatest amount of revenue to the Commonwealth. Of the total revenue of £1,697,000,000 shown in the Estimates for this year, £576,000,000 is expected to come from income tax levied on individuals and £291,000,000 from income tax levied on companies. The proposal before the House will reduce the assessments of all taxpayers equally by 5 per cent, for the current income year. In order to ascertain how inequitable this proposition is, some consideration must be given to the structure of incomes as they exist in Australia. The latest available information is contained in the report of the Commissioner of Taxation. His thirty-ninth report, dealing with income derived during the year ended June, 1958, contains quite voluminous information regarding income distribution in Australia. To some extent, it is unfortunate that the information is now some three years old. At the time to which that report relates, the annual revenue from income tax was only about £360,000,000, whereas, this year, it was envisaged initially that it would be £576,000,000.
That reflects two things. First, it reflects a growing population with more people becoming taxpayers. Secondly, it reflects the fact that, because of the effects of inflation, incomes have increased as the result of adjustments made by the arbitration tribunals, higher profits, and so on. Nevertheless, certain conclusions can be drawn from the figures as published by the Commissioner of Taxation. Perhaps the simplest way in which to get the picture in a nutshell is to examine the table contained on page 118 of the report to which I have referred. It discloses that for the year ended! 1958, there were 3,916,000 taxpayers, and these are divided into many grades. From £105 to £1,000, the figures are given for incomes increasing by £100 a year. Then the grades are classified at every £200 and finally at every £500. In the year in which this report was published, the minimum income attracting income tax in Australia was £105, and it has stood at that figure for a considerable number of years.
The first group I have taken for the purpose of my argument is that in which the incomes range between £105 and £700 a year, the £700 a year representing approximately £13 10s. a week. In that category are listed 1,434,000, or 36.6 per cent, of the total number of taxpayers. In the group in which incomes range between £700 a year and £1,300 a year, or between approximately £13 10s. and £25 a week, we find the great bulk of the Australian work force. These people number 1,848,000 or 47 per cent, of the total number of taxpayers. In the group earning from £25 a week to £29 a week, or £1,300 to £1,500 a year, there are 228,000 or a shade under 6 per cent, of the total number of taxpayers. Then we come to what might be called the fortunate people of the community, those who enjoy incomes ranging from £1,500 a year or £29 a week upwards. They number only 406,000 .of the total of 3,916,000 taxpayers. So that only 406,000 people in Australia enjoy incomes in excess of £29 a week.
We of the Australian Labour Party believe that a progressive rate of income tax is the most equitable method of raising revenue, because under that system, the higher one’s income the greater the proportion of income taken in tax. This will be seen from the fact that only about 10 per cent, or 406,000 taxpayers in receipt of incomes in excess of £1,500 a year paid slightly more than half of the total amount of income tax paid in Australia for the year ended 30th June, 1958. From these facts we have a clear indication of who will derive the greatest benefit from a fiat rate reduction of income tax. The great benefit will go, not to those on the lower incomes, but to those enjoying high incomes.
The measure under discussion must be judged for what it is. It is part of the remedial measures being taken by the Government to correct certain economic disabilities existing in Australia at the moment. The Treasurer (Mr. Harold Holt) has indicated that this measure will result in an immediate increase of about £30,000,000 in the spending power of the community within the next four- months. As honorable members know, its operation is to date as from the beginning of March.
– Who said that?
– I suggest that the honorable member read the Treasurer’s secondreading speech. Although the Treasurer corrected part of what he said, he did not want to correct this part because his words have gone on record. He says in effect that as a result of this measure some £30,000,000 will be added to the spendingpower of the Australian community during the remainder of the financial year. But what has to be noted by the House is the fact that the greatest part of that increase in spending-power will fall not into the hands of those people whom we can be sure will spend it, but into the hands of those in the higher income groups. I repeat, the great masses of consumers in Australia who, we can be sure, would spend the additional money if they got it will get very little benefit, indeed.
Just how this kind of taxation concession will be distributed may be ascertained from a perusal of a very small table appearing on page 2 of the issue of the “Taxpayers’ Bulletin “ published on 10th March. That table makes a comparison of the benefits to be derived by a single person, a man with a wife, a man with a wife and one child, and a man with a wife and two children, at various income levels. For instance, the single man who was earning £10 a week prior to the granting of this reduction, paid lis. 6d. a week in income tax. Under this measure, he will pay only 9s. 9d. The benefit to be enjoyed by the single man is ls. 9d. a week. The man who was unfortunate enough to be married and earning only £10 a week - I do not know how he would manage if he were in that position - will benefit by only 9d. a week’. A married man with a wife and one child will benefit by only 6d. if his income is £10 a week. In other words, the heavier a man’s family responsibilities, the smaller the benefit he will receive under this measure, which the Treasurer claims will stimulate consumption.
– But that is typical Liberal thinking.
– Exactly. If we take those in receipt of a more reasonable income, those earning £20 a week or £1,040 a year, we come to the group nearest to £21, which is the average weekly wage in Australia at the moment. A single man earning £20 a week will benefit by 6s. 9d. a week under this measure. The married man on the same income, but with no children, will benefit by only 5s. a week. The married taxpayer who has one child will enjoy a benefit of only 4s. a week, while the married than who has two children will benefit by only 3s. 6d. a week. The Treasurer suggests that measures such as these are designed to give the greatest lift to consumption in Australia. We of the Opposition do not think that this kind of inequitable, flat-rate reduction is the correct way to increase consumption. You have to go to a quite high level of income before you get any real degree of benefit. Does the other side of the House really think that the Australian economy is going to be lifted because the majority of families in Australia are treated in this way? In a moment I will give some figures which show that those with the greatest family responsibilities in the community at the moment will derive very little benefit from this measure. There are better ways to go about this matter. In fact, the Government is reducing its tax collections by £30,000,000, half of which will fall to about 90 per cent, of the taxpayers, while the remaining half will go to the fortunate 10 per cent, of the taxpayers.
AH we suggest is that there is far more certainty that if twice as much were given to the family groups, that amount, at least, would circulate. There is no certainty of that happening as far as people on higher incomes are concerned. The fortunate person, on perhaps £5,000 a year, will benefit to a considerable degree under this measure. At the moment a taxpayer whose income is £5,000 a year pays £1,700 a year income tax. As the result of a 5 per cent, remission, his tax bill will be reduced by £85 a year, or 30s. a week. And because it is being remitted three times as fast as it ordinarily would, his pay envelope will be increased each week by something in the region of £5. But you cannot guarantee that a man with an income of £5,000 a year, who receives an additional £5 a week as a result of this reduction, will necessarily spend that money. I suggest that you could be reasonably certain that a married man with a wife and two children, given a few shillings extra a week, would certainly spend it, because most of these people are finding it extremely difficult to make ends meet as it is.
– They will save a lot.
– That is the point we have to get at - who is saving and who can save. That is of some significance in this matter. At least the figures of income distribution which I cited earlier show that there is a great deal of inequity in the distribution of income in Australia. To some extent the progressive income tax goes some way along the road to redressing that inequity. I am pointing out that some 10 per cent, of the taxpayers, with incomes in excess of £29 a week, pay just more than one-half of the total income tax collected; but there is still a great deal of inequity, even after the taxation machinery has come into play.
In estimating the amount that an individual must pay in taxation his family circumstances are taken into account. We have a scheme of deductions or concessional allowances which operates in that respect. Again, in the report of the Commissioner of Taxation, one can ascertain to some extent how that scheme has operated in Australia in recent years. A deduction of £143 is allowed for a wife, £91 for the first child under sixteen years of age and £65 each in respect of other children. In addition to those concessions amounts are allowed as deductions for such items as medical expenses, which include hospitals, chemists, nursing and the like. Allowances are made for educational purposes, covering fees, fares, books and uniforms for children attending school. Deductions are also allowed for life insurance premiums - bound up to some extent with the theory of saving which the honorable member for Barker (Mr. Forbes) referred to by interjection. These various concessions, covering nearly 4,000,000 taxpayers, aggregate some £750,000,000 in round figures, according to the latest report of the Commissioner of Taxation. An initial total income from 4,000,000 taxpayers, amounting to £3,750,000,000, is whittled down by onefifth by reason of the various concessions that are allowed. In other words, what we call the tax base, upon which we erect our structure initially, is reduced by one-fifth by reason of these various concessions.
Twelve months or so ago my colleague the honorable member for Yarra (Mr. Cairns) asked the Treasurer (Mr. Harold Holt) a question and the answer was given in “ Hansard “ of 31st August and 1st September, 1960, at pages 662 to 664. It showed that in the year then under consideration, which is a year earlier than that which I am talking about, these total concessions, which at face value were worth £682,000,000, meant a loss to revenue of £149,000,000 odd or, in round figures, £150,000,000. That is getting pretty close to one half of the total amount actually collected in that year from individual income tax. I think it is a reasonable assumption that last year these various concessions cost the revenue some £165,000,000. Again, if one looks at the details supplied to the honorable member for Yarra on the occasion I have mentioned, one finds that the concessions in the case of wives meant a loss to revenue of £36,000,000, and this year the figure would be approximately £40,000,000. The concessions given in respect of the first child then involved the revenue in a loss of £20,000,000 and to-day the figure would probably be £22,000,000 whilst for the second and subsequent children the concession which previously cost the revenue £14,000,000 would probably cost it nearly £16,000,000 this year. Thus the concessional allowances for wives and children aggregated nearly £70,000,000 for the year ended June, 1957, and will probably cost about £77,000,000 this year, which is far more than the annual expenditure in Australia on child endowment. I sometimes think the public is not precisely aware of the effect of things of this sort. If no income tax concessions at all were allowed in this regard and people paid the same tax whether they were married or single the revenue would derive some £70,000,000 more in tax collections and in consequence it would be possible to more than double child endowment payments. In a moment I hope to be able to show that that would be far more equitable as far as the majority of families in Australia are concerned than is the concession that is given to them at the moment.
In the year ended 30th June, 1957, the deductions that were allowed for medical expenses cost the revenue nearly £19,000,000. The cost in the next year was probably about £21,000,000. A bill was introduced into this House a few months ago to put a charge on prescriptions because it was claimed that we could not afford another £1,000,000 or £2,000,000 for pharmaceutical benefits. The various concessions that were allowed for education purposes cost the Government nearly £11,000,000 during the last financial year. They will probably cost over £12,000,000 in this financial year. We find that the Government will not give to the States directly, or indirectly via the universities, any money additional to the usual State grants. Yet there is to be an indirect subsidy of about £11,000,000 or £12,000,000 by way of income tax concessions.
I suggest, Mr. Speaker, that perhaps the time has come when we should look a little more closely at this subject. When you take into account where the majority of these concessions go you see that, under the guise of what is sometimes called “ equity “, a great deal of inequity has crept in. It arises in this way: In computing a person’s taxable income various deductions are made from the actual income. Of course, the higher the actual income the higher the taxable income and, therefore, the higher the rate of tax to which concessions apply.
– Are you suggesting that the tax concessions for education should be cut out?
– I am simply trying to show that, over the years, a great miscellany of deductions has grown up. The purport of my remarks, broadly, is that the majority of families would be a great deal better off if the Government doubled the ordinary concessions for dependants and ignored altogether a lot of these special concessions. On the surface, it looks very good to Mrs. Jones that her husband can claim £45 for Johnny’s school fees, fares, books and uniforms, but all that this means to Mr. Jones is that his income tax is reduced by 45 times whatever his marginal rate of tax may be. He would have been a lot better off if, instead of having a concession for education expenses, his deduction of £143 in respect of Mrs. Jones had been doubled. That is one possible alternative solution. In a moment I want to show what these concessions mean to people in the various income groups. Again, honorable members will find voluminous information contained in the Thirty-ninth Report of the Commissioner of Taxation to which I have referred. At page 123, the report shows the amount of income tax concession allowed in respect of a spouse at all levels of income.
– Which concessions do you suggest be cut out?
– I am not being categorical at this stage. I am simply calling into question the haphazard system that has grown up over the years. I am using the debate on the proposal for a flat-rate reduction of income tax to highlight some of the disadvantages that have operated.
– The honorable member should make categorical suggestions.
– The honorable gentleman would have others be categorical, but he prefers to be delightfully vague himself on matters that are of large significance. I want to make this speech in my own way without any help from the other side of the chamber.
– You have suggested cutting out concessions. We would like to hear which ones you would cut out.
– 1 am not sure which ones I would cut out, but I am sure that each one would need to be closely reviewed in the light of circumstances. If I might be allowed to proceed in my own way, Mr. Speaker-
– Do not run away from it.
– I am not running away from it. If the honorable gentleman were fair to me, he would admit that I am not in the habit of running away from what I regard as principal issues.
– I agree with that.
– I do not think that any one will deny that the standards in our community ultimately depend on the family group. Most family groups come within two ranges of income. The first is from £105 to £700, which is equivalent to £13 10s. a week an-d the second range is from £700 to £1,500 a year, which is equivalent to just under £30 a week. About 75 per cent, of all married taxpayers are in this second group, and they have about 80 per cent, of the children in the community. The amount lost to revenue by giving concessions in respect of wives and children to taxpayers in these two groups, for the financial year ended 30th June, 1961, was, in round figures, £50,000,000. The amount lost to revenue by giving such concessions to those with incomes over £1,500 was, in round figures, £20,000,000. The cost of other concessions such as medical and educational for the £105 to £1,500 income group was £43,700,000, making a total of about £94,000,000 for this group. The loss to revenue on account of other concessions given to those in receipt of incomes above £1,500 amounted to £35,500,000.
It is when you take into account the fact that these concessions are supposed to provide equity to those with family commitments that you find that inequity has crept in. Life insurance is a good example. The taxation law allows a maximum deduction of £400 a year from taxable income on account of life insurance. This is equivalent to about £8 a week. Just ask yourself: How many people are there able to take full advantage of that sort of claim? Those with higher incomes are perhaps able to send their children to the sort of schools which charge high fees, so they are more fortunate than others by reason of their income in the first place; and their good fortune is rewarded by their being able to claim more under the education expenses concession than can people in the poorer section of the community.
– Those who claim the life assurance deduction are the people who do not get a pension later in life.
– I know that that is the sort of argument that the honorable member for Fawkner would like to intrude into the discussion, but someone asked me to be specific. All I am suggesting is that the Government could be specific to this degree: That, on the basis of the latest information available, if we decided to double the concessional deductions for wives and children and do away with all other kinds of concessional allowances, people in the £105 to £1,500 income group, who are those with the greatest family responsibilities, would gain some £6,000,000 to £7,000,000, and those in the higher income groups would lose probably £16,000,000. I am not suggesting that that is necessarily the most desirable pattern. In other words, the allowable deductions for dependents would be doubled and every other kind of deduction would be abolished. On the figures I have, this would involve a saving of some £6,000,000 or £7,000,000 in the revenue. Here we have a proposal in this legislation for a flat rate, on an equitable basis, which will cost the revenue £30,000,000.
By adopting the proposition I have mentioned the Government would alter the incidence of taxation as between single and married people. There are obviously too many imponderables here for me to be able to argue them out in fine detail at this stage, but at least it is time that we thought about those things. During the last general election campaign the Labour Party proposed that child endowment payments should be doubled. We believed that that was a sound measure economically at the time, and it would have given more purchasing power to those people who most needed it. We estimated that such a proposal would cost from £56,000,000 to £60,000,000 a year. You on your side urged that that would have been a wrong thing to do, that the country could not afford it. Now, a few months later, you come along with a proposal - of which the present measure is only half, the remaining half - which will involve a loss of some £50,000,000 in revenue. The other proposal will deal with certain concessions to industry, and will come before us in a later measure. You apparently believe that you cannot afford to pay increased child endowment directly, but that you can afford to make reductions of taxation which will have somewhat the same effect on the revenue, because of the way in which the tax structure stands at the moment.
I suggest that the whole tax structure has grown up haphazardly over the years, and that we have never stopped to give it comprehensive treatment. Can anybody explain why, for instance, the sum of £143 was set as the allowable deduction for a wife. This works out at £2 15s. a week. What that means precisely I do not know, but it does not mean that the taxpayer’s liability to tax is reduced by £143. You get the strange anomaly that for a married man on £1,200 the concession is worth £31; for a married man on £1,000 the concession is worth only £26 10s.; and for a married man on £2,000 or more it is worth £46. But why the sum of £143 in the first place? Does anybody suggest that it is possible to keep a wife these days on £2 15s. a week? The concession rose progressively from £52, to £104 and thence to £130, then a fiddling increase of £13 was given to bring it to £143. But what is the logic behind it?
Similarly, what is the logic behind setting the deduction for the first child at £91, or 35s. a week? There is perhaps some little logic in the fact that the deduction for the second child is less, because the taxpayer has the benefit of more child endowment. I suggest that, in effect, these various concessions whittle down the conventional tax yield by 50 per cent, and cut down your tax base, to the extent to which you can use your progressive rates, by nearly onefifth. So we have this hodge-podge, which has grown up, under which you say that you cannot afford to pay increased child endowment directly while, indirectly, you are lending countenance to a scheme which will cost the revenue more than increased child endowment would. If child endow- ment payments were increased directly to the extent to which the Government’s proposals will cost the revenue there is no gainsaying that most families would be better off in consequence. That is why we on this side regard that as a more equitable way in which to go about the matter. It is not our job to say precisely what measure ought to be taken, but at least we can be critical of the precise measure that is taken here. We regard flat rate taxation deductions as inequitable, particularly in the light of the claim that the Government is using to justify them at the moment - namely, that the economy will be stimulated. We suggest that the economy will not be best stimulated by £30,000,000 being spent in this manner, because half of it will go to one-tenth of the community and the other half to the remaining nine-tenths. It is the people in that proportion of nine-tenths who have the greatest family commitments and the greatest needs. It can be guaranteed that such benefit as they receive from the concessions they will spend, and that is the kind of lift that you claim the economy needs. The Government would have found it just as easy to adjust the taxation schedule on the basis of doubling the concessional deduction for a wife for the remainder of the financial year as to have this proposed flat rate basis of concession. If it had done that, instead of giving 3s. or 4s. a week extra to taxpayers in the section of the community which has the biggest families - the people on £1,200 or £1,300 a year - it could have given them perhaps an advantage of 10s. or 15s. a week. Therefore, I repeat the amendment that I have moved, which reads as follows: -
That all words after “That” be omitted with a view to inserting the following words in place thereof: - “ this House notes with approval that, in response to public pressure, the Government has introduced the bill but the House condemns a proposal which, although it provides for a S per cent, reduction of taxation, does so on an inequitable flat-rate basis which fails to extend an adequate share of the reduction to taxpayers with dependants and taxpayers with small incomes, and is of opinion that legislation to correct this injustice should be introduced immediately.”
– Is the amendment seconded?
– I second the amendment, and reserve my remarks upon it
.- I support the two income tax measures that have been introduced by the Government; and now that the Opposition has moved an amendment, I wish to express my forthright opposition to the wording and the intention of the amendment. In moving the amendment, the honorable member for Melbourne Ports (Mr. Crean) referred to “ public pressure “ which had necessitated the action being taken by the Government. I remind the House that there is no apparent public pressure at all in this connexion. There has been no outcry regarding taxation. There was no pressure for a rebate of taxes. This amendment is purely a party political device. In my opinion, the honorable member for Melbourne Ports has defeated his own arguments. He said the basis for our income tax system was progressive. If a general rebate is to be introduced, how can one argue logically that the rebate should be on a variable basis when fundamentally our income tax system is progressive?
The honorable member also needs to be corrected in his thinking having regard to some facts that I shall now present to the House. It is estimated that the taxpayers will benefit to the total extent of £30,000,000 from the proposed rebate. The taxpayers in the lower incomes ranges, earning from £105 to £999, will benefit to the extent of £4,600,000. The next group, with incomes ranging from £1,000 to £1,499, will share in the £30,000,000 rebate to the extent of £7,400,000. The third category - those with incomes ranging from £1,500 to £1,999- will benefit by £4,300,000. It is a significant fact that taxpayers with incomes up to £2,000 a year will benefit by £16,300,000, which is 54.5 per cent, of the total amount that will be injected into the economy by the rebate.
– That means nothing, unless you relate the figures to the numbers of taxpayers.
– Taxpayers with incomes in excess of £5,000 will receive £6,000,000 of the total of £30,000,000, or 20 per cent, of the total. I shall come back to this for the benefit of the honorable member for Barton (Mr. Reynolds), for it is an important point and merits emphasis. The honorable member for Melbourne Ports devoted a lot of his time to it and 1 shall be justified in reverting to it at the appropriate time. I also propose to answer the honorable member adequately.
Only last week the Prime Minister (Mr. Menzies) correctly emphasized the fact that the Commonwealth Government did not assume the sole responsibility for everything in the community. It does not assume the sole responsibility for finding employment for everybody. However, quite rightly, the Commonwealth Government has accepted the responsibility for creating favorable conditions throughout Australia to achieve the highest possible level of employment compatible with the ideas that it has accepted. These include the tax rebate, and the growth and maintenance of reasonable stability. With these objectives in mind, the Government has proposed a 5 per cent, rebate of income tax as an immediate measure with a view to injecting spending money into the economy. It plans also a reduction of unemployment as speedily as possible, for the two plans are related. The Prime Minister has said that we must do all we can to reduce the unemployment figures as quickly as possible. The measure before the House will have an influence in that direction. The two bills before the House will put into effect the Government’s announced, intention to allow a rebate of 5 per cent, on personal income tax for the year 1961-62. Those who pay as they earn will benefit from the rebate from 1st March. Appropriate adjustments will be made in respect of provisional tax payments. I think the House needs to be reminded just how the procedure will operate. The application of the rebate will differ according to whether the taxpayer’s income is derived from salary or wages or from non-employment sources. The salary or wage-earner will get the benefit of the rebate from 1st March. The old rates have applied for eight months of the financial year. So that taxpayers in that category will get the benefit of a rebate of 5 per cent, over the whole year, they will be allowed a rebate of 15 per cent, for the remaining four months of this financial year.
The provisional tax applies to nonemployment income, and the Government has arranged that those who pay taxation on that basis will benefit similarly. Of course, provisional tax has already been assessed and in most cases notices have been issued. It is proposed now to issue notices of reductions in tax. Where the provisional tax has actually been paid, refunds will be made. However, the effect of the proposal is that all taxpayers, whether they pay provisional tax or are taxed on wages or salaries, will benefit from the rebate of 5 per cent, for a full year.
Because of the basic intention of this rebate, it is appropriate to remind the House of the change in tradition regarding budget construction. It is interesting for us to recognize that back in the ‘thirties there was a discarding of much of the traditional attitude towards the budgets. Then from a theoretical point of view new ideas which developed subsequent to those depression years - the Keynesian concept of the economy - had an effect. Honorable members will remember that this theory abandoned the traditional emphasis on productivity and thrift as the mainsprings of our economic activity, and introduced the notion that the act of spending has a very important place in our economy. That shift of emphasis should be noted.
I want to develop the thought that governments have come to recognize that they can push in one direction or another, according to the need of the economy. This can be done by encouraging or discouraging private spending by the lowering or the raising of taxation. In this instance we have a rebate which, as I have said, is spread equitably over the people who actually pay taxes. By releasing this £30,000,000, which it is estimated will be added to the disposable income of the taxpayers, the Government is pushing in the direction of increased spending in the community. But if it is simply a matter of lowering taxes to build up idle balances or perhaps to repay debt, the rise in consumption, and thus of output, will fall short of that expected in normal circumstances from a given tax reduction.
We must bear in mind that the conditions of the economy naturally affect the release of an amount of money like this. About £30,000,000 will be injected into the Australian economy in a relatively short period, that is, up to 30th June this year. It will represent disposable income in the hands of the taxpayers. The people who pay taxes will share m this rebate. In that relatively short time there will be a very strong tendency to spend the increased amount available rather than to put it away as savings. I suggest that in most cases it will be used to supplement the family budget. Of course, the Government is aware that if the money is not put to use it will limit the effectiveness of the basic plan but I repeat that the injection of a rebate of this kind totalling some £30,000,000 should have an immediate effect upon the business life of the Australian community. I believe that it will reach, as it has done usually in the past, to the grass roots of the economy.
The Treaurer made a very important point in his speech. Although it is not a major one, it is one which gives a clear indication to the public of the thought that has been given to the application of the rebate so that other rebates will not be affected unduly. The right honorable gentleman said - i should explain that there is no impairment of the value to taxpayers of other rebates and credits to which they may be entitled.
He went on to refer in particular to the rebate of 2s. for each £1 of interest on Commonwealth loans that is included in taxable income. We want to be perfectly clear that other rebates or allowances to taxpayers will apply after this 5 per cent, rebate so that the effectiveness of the existing rebates will not be minimized in any way.
At this point, I should like to stress that, in my assessment, the rebate, coming as it does over the short-term of the remaining four months of the financial year, really represents to the taxpayers a worth-while bonus. It should be accepted in that light. It is for a prescribed period and every taxpayer in Australia will know that this bonus will not continue beyond 30th June.
Let me turn now to concessional deductions. I note, as I invariably do, with a great deal of interest and respect, the emphasis placed by the honorable member for Melbourne Ports on concessional deductions. I am one who believes that we must see that our concessional deductions, to the family man in particular, are fair and are adjusted from time to time to meet the demands of the economy. But these are policy items.
– The honorable member for Scullin, in his more sane moments, will recognize that these are policy items. We do not believe in the adjustment of concessional deductions willy-nilly during the year. Invariably they are adjusted according to the wisdom of the Government, taking into account the national situation at Budget time. I believe that the present concessional deductions are overdue for adjustment, and, with my friend the honorable member for Melbourne Ports, I hope that at Budget time we shall see the dependants’ allowances, for one, increased.
Now I return to the point that this 5 per cent, rebate has general application. It must be recognized that it gives no additional benefit to the family man as against the single man who has less responsibility. But let us be clear that criticism by the honorable member for Melbourne Ports, and those associated with him, of the proposed S per cent, rebate is on the ground that the reduction is greater for the taxpayer who has a large income than it is for a taxpayer who has a small income. I trust I made it perfectly clear earlier in my speech that in my opinion the honorable member defeated his argument because he constructed the early stages of his speech upon the fact that ours is a progressive system of taxation. His criticism flows directly from the fact that under our progressive system of taxation the higher incomes attract more than a proportionate increase in taxes. It is generally agreed that a progressive system of taxation is the most equitable. In fact, this system was endorsed by the Labour Government during its term of office.
The current proposal in relation to the 5 per cent, rebate grants equal proportionate relief to each and every taxpayer. I referred to that point earlier when I took the various categories of taxpayers and indicated how they would benefit. I referred also to the relatively low percentage of the total rebate - namely, 20 per cent. - which will be the share of those taxpayers whose income is £5,000 a year or more. I repeat that this current proposal grants equal proportionate relief to each and every taxpayer. Naturally, in absolute terms, the amount of the reduction will vary with the amount of tax payable at the present rates. Those who get no reduction will be those who pay no income tax at all. Those who receive a small reduction will be those who contribute only a small amount in income tax. Those who benefit by a large reduction will be those who pay very substantial amounts of income tax.
Let me develop this aspect of the matter a little further. Let me remind the House that whatever financial benefit, in the way of an increase of disposable income, is granted by this bill, taxpayers will still be paying nineteen times as much as the amount of the benefit that they will enjoy. It has been pointed out that a taxpayer with a dependent wife and two children, receiving an income of £1,000 per annum, will benefit by a reduction of £2 14s. under the provisions of this bill. A taxpayer with similar family responsibilities, whose income is £5,000 a year, will enjoy a reduction of £77. According to the criticism we have heard by the honorable member for Melbourne Ports and those who support him, there is something wrong with this arrangement.
– My word, there is!
– There is not; that is just where the honorable member is wrong. It is not surprising that the taxpayer with the larger income will receive a larger absolute reduction in tax payable. We must remember that that taxpayer, earning £5,000 a year, will still pay £1,470 in income tax, while the man earning £1,000 a year will pay only £51. By granting a flat reduction of 5 per cent, in the amount of tax payable, the Government will preserve the relationship between the income tax payable, on various income levels. That brings me back to the matter that I emphasized early in my speech, when I said quite bluntly that the honorable member for Melbourne Ports had defeated his own argument that the flat rate reduction discriminated in favour of the wealthier classes. That argument is quite without foundation.
I think, Mr. Deputy Speaker, that I need add no more on this aspect of the matter. I remind the House that this measure is part and parcel of the Government’s plan to inject spending’ power into the economy at a time when that extra spending power will help increase the level of employment throughout the country. The effect of this legislation will be to provide an extra amount of £30,000,000 as disposable income during the next four months. It is in the form of a bonus. People who have been wanting to acquire certain goods to meet the requirements of their households will gladly take these few extra pounds and use them to meet those household demands. If this is done, and if the money is not just allowed to accumulate in idle savings, then the Government’s object will have been achieved.
I argue strongly against the amendment introduced by the honorable member for Melbourne Ports. I believe the honorable member to be basically wrong. We have shown that his argument is unsound and that there is no merit in the Opposition’s amendment, which Government members will, of course, strongly oppose.
I speak on this bill with a good deal of confidence and sincerity. I believe that the reduction of 5 per cent, is justified. I believe the measure is a wise one and that it will result in the achievement of one of the Government’s objectives, which is part of its overall scheme to assist the Australian economy.
.- The honorable member for Swan (Mr. Cleaver) has told us that public pressure was not responsible for this legislation that is now before us.
– That is perfectly true.
– All I can say is that the honorable member must be deaf, dumb and blind if he does not know that this bill is one of the changes decided on by the Government as the result of public pressure. All was well until the recent federal election was held. The Prime Minister (Mr. Menzies) said during his campaign, “ Leave it to Bob. Everything will be all right. We will face the electors on our record.” After the election results were announced, he wanted to consult everybody he could get hold of, from trade union representatives to manufacturers’ organizations. We know what happened; the various groups represented by the Liberal and Country Parties failed to agree. The farmers wanted to retain import restrictions. Local manufacturers wanted to abolish them. One section of the community was at the throat of another section.
Only a person of the mental calibre of the honorable member for Swan would make such stupid statements in reply to the constructive criticism that we heard from the honorable member for Melbourne Ports (Mr. Crean), who moved the amendment on behalf of the Opposition. This proposal to grant a 5 per cent, reduction in income tax is part of the Government’s onagainoffagain and stop-and-start policy. But in all the on-and-off moves made by this Government one consistent feature is clearly discernible. The Government always slugs the worker, the underdog, the person who can nl afford to make sacrifices. As a result we see the present situation, in which, in this land of magnificent opportunity, where there should be full employment, 131,000 persons are out of work. We also know that people who were previously working overtime are now forced to work short hours - and we must remember that those people previously found it necessary to work overtime because of what might have been referred to as economic unemployment, brought about by this Government’s inflationary policies. If I may make a passing reference to general economic matters, let me say that this Government is responsible for the inflation that has been with us, because it has imposed indirect taxation to a greater extent than any other government in the history of the Commonwealth.
It has been said that an extra £30,000,000 will be added to available spending power in the community as a result of this measure. I say, first, that I do not accept the figure of £30,000,000. The Leader of the Opposition (Mr. Calwell) moved an amendment, which amounted to a censure motion, during the debate on the motion for the adoption of the Address-in-Reply, and during his speech he said that, because of the condition of recession prevailing in Australia, the amount involved in the proposal now before us would probably be about £25,000,000, not £30,000,000. However, for the purposes of my argument I will accept the Government’s figure of £30,000,000.
It is clear that the Government has introduced this measure in an attempt to stimulate the economy. When the Government provided on a previous occasion for a 5 per cent, reduction in income tax, it suggested that revenue would not be affected because the amount involved would be made up by increases in total collections of income tax. On this occasion the Government has made no such claim. In normal circumstances this reduction would have been granted at the rate of ls. in the £1 over the full period of twelve months. However, as two-thirds of the financial year have gone by, the Government has decided that it will allow the reduction at the rate of 3s. in the £1 for the remaining four months of the year. The Government says it believes that this extra money will stimulate retail purchases. It says that it wants to put money into the hands of the people in order to stimulate the economy. I believe that in this case pressure has been brought to bear on the Government, as was the case in respect of the sales tax on motor vehicles, which resulted in the rate for motor cars being reduced from 30 per cent, to 22i per cent, and that for commercial vehicles from 16! per cent, to 12i per cent.
The Government has also increased the unemployment benefit, of course, but this simply means that persons who previously were trying to live on starvation wages will now have to live on semi-starvation wages. Grants have also been made to the States, and we have supported that proposal. We say, however, that these measures do not go far enough.
Mr. Deputy Speaker, I want to cite some figures from a very important document which has been published by the Government - the report of the Commissioner of Taxation. I do not intend to use figures that I have prepared myself but figures prepared by the Commissioner of Taxation. Some of these figures have been used by the honorable member for Melbourne Ports in a slightly different way from the way in which I shall use them, but the story that they tell is the same in both instances. As the honorable member has said, there are 3,900,000 taxpayers in Australia. A total of 2,500,000, or 65 per cent., have actual incomes of £1,000 a year or less. That is approximately £19 a week.
They will receive £6,900,000, or 23 per cent., of the total proposed rebate of £30,000,000. Another 1,000,000 taxpayers earn incomes of between £1,000 and £1,500 a year; that is between about £19 and approximately £29 a week. This group of taxpayers will receive £7,500,000, or 25 per cent., of the total proposed rebate of £30,000,000. The Government claims that most of the rebate will be equitably distributed among the broad masses of the people so that they can spend the money to buy goods and thereby stimulate the economy. It is interesting to note that 3,500,000, or 90 per cent, of the total number of taxpayers, will receive £14,400,000 of the total proposed rebate of £30,000,000 and a mere handful of about 400,000 persons in the highest income groups, or 10 per cent, of the taxpayers, will receive £15,600,000.
This situation conforms to the Government’s policy on indirect taxes. Does the person with an income of £10,000 a year buy ten times as much toothpaste, for example, as is bought by the person on an income of £1,000 a year? Of course not. The purchases of toothpaste in both instances are about the same. I have had experience in the retail trade, and I know that this is so. I shall deal with this point more fully later when I relate it to child endowment. We know that the supporters of the Menzies Government in receipt of high incomes who will get most of the tax rebate will not spend it on goods.
About 37,500 persons, or 0.7 per cent, of the taxpayers, have incomes of £4,000 a year or more. They will receive £7,500,000 of the total rebate. A comparison of the figures reveals an ironical situation. The 1,000,000 taxpayers with incomes of between £1,000 and £1,500 a year will receive £7,500,000 of the total rebate - exactly the same amount in total as will be received by the select 37,500 people who have incomes of £4,000 a year or more and who are far from being on the breadline. Apparently, the Government suggests that these well-to-do people need more money so that they can go out and spend it and thereby stimulate and boost the economy. What hypocrisy is talked by the honorable member for Swan when he states that this tax rebate will stimulate the economy! It is ‘just a hand-out to those who are already well off - just a greasing of the palm for those who support the Menzies Government and its policies.
This Government is the guilty element in the community, because it has induced mass unemployment of 131,000 persons. Furthermore, it has put out of work, according to estimates, between 50,000 and 100,000 married women and it has restricted overtime. This Government says that it will give a tax rebate of 5 per cent., which will be distributed fairly to those who need it and who will spend it and stimulate the economy. I ask honorable members to be reasonable. Let us consider the figures again. About 37,500 selected supporters of the Menzies Administration with incomes of £4,000 a year or more will receive £7,500,000 between them, and 1,000,000 battlers, many of whom have big families, with incomes of between £1,000 and £1,500 a year will receive between them the same amount.
Let me go a step further and discuss some more particularly interesting figures. A group of 44 chosen persons will receive rebates of £2,212 each. Just imagine it! It is like winning a lottery. However, in this instance, the lottery is won by the wrong persons. They do not need their win. These 44 taxpayers who will benefit so greatly are those in the top income bracket. They receive incomes of many thousands of pounds a year, but “ Old Bob “ has to do the right thing by them.
– That sort of language is not parliamentary.
– I hear a few murmurs from the ranks of the graziers. Let me just remind them that, as they can read for themselves, the greatest defaulters among those listed at the back of the report of the Commissioner of Taxation are farmers and graziers. I suggest that the graziers in the corner keep quiet on this matter. The honorable member for McPherson (Mr. Barnes) may well look light-hearted about it. He will get a good cut out of the tax rebate.
Surely the Treasurer (Mr. Harold Holt) does not think that the people in the highincome bracket will spend the money that they receive in tax rebates and thereby stimulate buying and boost the economy. The Attorney-General (Sir Garfield Barwick), who represents the Parramatta electorate, which is adjacent to my own constituency, in the “ Advertiser “ newspaper which circulates in the Parramatta district, threw down a challenge to the Australian Labour Party to stop talking gloom. He declared that what we have to do is convince the people that they ought to buy. I would like to know how my supporters in my electorate can buy more goods. I would like to be able to tell them to buy more, but they say to me: “ Tom, how can I buy? I have not the money.” Certainly, the Menzies Government will not give them the money. Its hand-out represents only a few pence a week for the workers but tens of pounds a week for the people on the top incomes. The Treasurer knows that the deposits in bank accounts are at a very high level. This may be the highest level they have ever reached.
– You said there was no money in the community.
– I ask my friends in the old gardeners’ section to let me finish my story. What do big investors do during a recession or during a period when they cannot obtain good returns for their money? They keep their money in the bank. This is just like a hen sitting on its eggs. Because of the policies of the Government, big investors do not want to circulate their money. Those who will receive a big hand-out from the Government under this legislation will put it in the bank and keep it there.
Before I leave this aspect, let me give an idea of what people will receive as a result of this 5 per cent, rebate. A person receiving £18 a week and with no dependants will have a rebate of 5d. 6d. a week. A person with the same income and with an average family - say, a wife and three children; that is not a very big family - will receive 2s. 3d. a week. The big boys in the top income bracket, the Menzies supporters to whom I have referred, will receive a rebate of £2,200 a year. That is not bad money. In fairness, let me point out that the rebate of £2,200 is for twelve months and that the rebate of 2s. 3d. is for a week, but that is how this inequitable flat-rate rebate of 5 per cent, works.
During the recent election campaign, the Leader of the Australian Labour Party said that the economy needed a stimulus. We were prepared to double child endowment and to increase pensions. We believe that the family group and age and invalid pensioners are not receiving sufficient assistance. If more money were given to them, they would spend it and this would provide the stimulus that the economy needs. I said earlier that 90 per cent, of taxpayers have incomes of less than £1,500 a year. Most people earning between £105 and £800 a year are teenagers, retired persons in receipt of superannuation and casual workers. An examination of the report of the Commissioner of Taxation discloses that only a few of these people have dependent children. Therefore, I want to discuss the group earning between £800 - only a few shillings more than the basic wage - and £1,500 a year. On a weekly basis, this is from £15 10s. to £29. Approximately 1,800,000 persons, or 45 per cent, of taxpayers, are in this group. They have amongst them 827,000 dependent first children, or 66 per cent, of dependent first children. They have 866,000, or 69 per cent., of all other dependent children. Labour’s proposal on child endowment would have cost, as we said at the time of the election, £66,000,000. The group to which I have referred would have received £44,000,000 of this amount, because they have in their care at least 66 per cent, of all dependent children. What would they have done with this money? They would have spent it on clothing, food and education for the children and in this way would have created the stimulus that the economy needs. , ,e
I said earlier that 90 per cent, of the taxpayers earn less than £1,500 a year. These people have control of 82 per cent, of all children in the community. Under the Government’s tax rebate system, they will receive only £14,500,000. The people earning more than £1,500 a year, who have the care of only 18 per cent, of children, will receive £15,500,000 in tax rebates. We on this side of the House say that the Government’s economic proposals will not provide the stimulus that is needed and so make employment available to all the people. We want full employment before anything else.
I see the Minister for Social Services (Mr. Roberton) is in the chamber. I hope something will stir him, because he is a cold and calculating man. We said during the election campaign that we would increase the supplementary assistance to pensioners by £1 a week, making a total of 30s. a week. According to a report on social services, more than 66,000 people now receive supplementary assistance. The increase of £1 a week proposed by Labour would have brought another £3,500,000 a year into circulation and would have put it into the correct hands - the hands of pensioners, particularly those who are struggling most. They would have had greater purchasing power and so would have helped to stimulate the economy and assisted in bringing about a state of full employment.
We said also in our policy speech that we would increase pensions by 5s. a week. This would have involved a further expenditure of £6,500,000 and again would have been in the hands of people who would spend it and so stimulate the economy.
– Order! I think the honorable member for Reid is getting a little wide of the subjectmatter of the bills now before the House. He is using certain arguments to emphasize the point he is making but I think he has now given sufficient emphasis. I ask him not to devote the major part of his speech to these arguments.
– I was making only a passing reference to these matters. I want to stress the point that the Government is not putting money into the proper hands. This tax rebate will result in only a very small amount being placed in the hands of pensioners. We say that the Government is not tackling the problem that is before it in the proper way. It is- not giving money to the section of the community that needs it most. The money to be provided by the Government under this measure will not stimulate the economy.
Let us analyse the groups who will receive this proposed concession of £30,000,000. And I emphasize “proposed” because, like my leader, I believe that the figure will be nearer £25,000,000 than £30,000,000. Those earning incomes ranging between £105 and £799 a year, who represent 45 per cent. of the total number of taxpayers, will in fact receive £3,300,000 of this hand-out. If we add to those the persons whose incomes range between £799 and £999 a year, we get the figure for 65 per cent. of the total number of taxpayers. They will receive £6,900,000 of the proposed hand-out. If we go still further, and add those in receipt of incomes ranging between £1,000 and £1,499 a year, we have 90 per cent. of the total number of taxpayers, and between them, they will receive £14,400,000 by way of rebate. The remaining 10 per cent., those earning £1,500 and more a year, are to receive a total benefit of £15,600,000. Honorable members on the Government side are struggling for survival, but I think that the figures quoted by the honorable member for Melbourne Ports (Mr. Crean) and by me prove conclusively that this proposed 5 per cent. is only a gimmick, a hand-out. It represents nothing more than an attempt to grease the palms of those who have lost faith in Mr. Menzies. It represents an attempt by the Prime Minister to get back into the good books of these people, and to have them smile on him again.
I do not believe that the Government’s proposals will create the stimulus which the Government suggests will stem from them. Any honorable member on the Government side who has had any experience in business, in the retailing business in particular, will know that the best way of putting money into circulation is to increase such benefits as child endowment. At one time, I worked for a capitalist organization. After all, one has to live under this capitalistic system and I was a manager of a chain-store. I know that on every day on which child endowment was paid the figures for that chain-store went up. The figures for such businesses increase on these days because, once the workers get the money they go straight to the shops to spend it.
– They have to spend the money.
– Of course they have. They can only live from week to week.
During a recession such as this, many people are forced to exist on unemployment benefit. Such people look forward eagerly to child endowment day for a little more spending money; yet, since 1948, this Government has made no attempt to increase child endowment, with the exception of the grant of 5s. for the first child in the election year of 1951 when it sought to buy votes by any means whatever. Inflation has run rampant since then, yet the Government has done nothing to assist those who are struggling under economic difficulties. Nothing has been done for the great mass of unemployed in Australia. This proposed 5 per cent. reduction in income tax will not give the stimulus that is necessary. The only way by which our economic problems can be solved is for the Australian Labour Party to take over the government of the country. Then, by positive leadership, and a positive economic policy it will restore full employment in Australia.
Sitting suspended from 5 to 8 p.m.
Address-in-Reply: Presentation to the Governor-General.
– I desire to inform the House that, accompanied by honorable members, I waited to-day upon His Excellency the Governor-General at Government House, and presented to him the Address-in-Reply to His Excellency’s Speech on the Opening of the First Session of the Twenty-fourth Parliament, agreed to by the House on the 6th instant.
His Excellency was pleased to make the following reply: -
Thank you for your Address-in-Reply which you have just presented to me.
It will be my pleasure and my duty to convey to Her Most Gracious Majesty the Queen at once the Message of Loyalty from the House of Representatives of the Commonwealth of Australia, to which the Address gives expression.
Debate resumed (vide page 733).
.- First of all I shall reply to some of the points made by the honorable member for Melbourne Ports (Mr. Crean) and Reid (Mr. Uren), who criticized this bill. Both those honorable members stated that the measure treats unfairly people in the lower income brackets, compared with those in the higher income brackets. Of course that is the way in which they view this legislation. We, on this side of the House, believe that the bill is designed not only to relieve those people who are in the lower income brackets, in the sense of stimulating spending- but at the same time to add to the incentive of those in the higher income brackets to increase their endeavours to create greater employment in industry. There is a great difference between the point of view of membets on this side of the House and that of members on the Opposition side.
Quite a lot of history is available to show the results of the thinking on the other side of the House. Honorable members opposite are more concerned about spending money contributed by the people than they are about the people who provide the means by which it can be spent. As the honorable member for Richmond (Mr. Anthony) stated some time ago, there has been a great increase in expenditure on social services. It has risen from £80,000,000 a year when Labour was last in power, to £358,000,000 a year to-day; and that is the reply for the honorable member for Griffith (Mr. Coutts). The honorable member for Richmond pointed out that when Labour was last in power expenditure on social services amounted to 4.1 per cent, of the national income whereas to-day it amounts to 5.7 per cent. The fact that people have a greater incentive to earn, under this Government, means that there is a greater cut-up of income for every one in the community.
The honorable member for Melbourne Ports pointed out that half of the revenue from taxation comes from people in the under-£15-a-week income group. I would also point out that the 1 per cent, of the people who have an income in excess of £4,000 a year pay 25 per cent, of our taxation.
– Why should they not?
– The honorable member for Griffith, with his narrow view of these matters, would not realize that there are people in the higher income brackets who pay in taxation up to 13s. 4d. in the £1. In addition, most of them, if they hold shares in companies which have paid 7s. or 8s. in the £1-
– Not too many of them go bankrupt.
– The honorable member refers to their going bankrupt. Quite a few of them, such as the Korman group, have gone bankrupt through over-expansion; and undoubtedly, if the Government had not introduced its economic measures, hundreds of others, like the Korman group, would have gone bankrupt. We were reaching a stage where the situation was similar to that in America in 1929, when there was tremendous speculation and overspending. I point out to honorable members opposite that you have to look after the people who supply the means of stimulating our economy.
I have some sympathy with the views of the honorable member for Melbourne Ports. In fact, I have supported those views. But I agree with the honorable member for Swan (Mr. Cleaver) that this is not the occasion for such measures; and I sincerely hope that the matters embodied in the amendment will be considered when the Budget is being prepared. I hope also that taxation relief for primary producers will be considered, because of their very serious position brought about by increasing costs, the 40-hour week and so on. The farmer is also faced with unfavorable overseas prices for his products. The 20 per cent, income tax depreciation allowance for farm improvements granted by this Government in the early 1950’s saved the primary producers, but I believe there is now opportunity to give them further taxation relief. Having regard to the history of the last eighteen months, every one must realize how much we are dependent upon our exports of wool, wheat, meat and so on.
The honorable member for Reid said we should double child endowment and greatly increase pension rates. That is probably all right, too, but this Government has brought relief to those people by means of this measure. Neither the honorable member for Reid nor the honorable member for Melbourne Ports stressed the fact that deposits in our savings banks have risen to a large degree, which indicates that the spending-power of the community to-day is very strong - an all-time record, in fact. 1 thank the honorable member for Indi (Mr. Holten) for reminding me of this fact. This position has been brought about by the Government’s measures. As I have said, it is the people in the top income brackets who pay up to 13s. 4d. in the £1 income tax who really venture their capital and build new industries in Australia. I think it was the honorable member for Reid (Mr. Uren) who suggested that we should again increase that tax rate. If we did, we would not have any industry in Australia.
The honorable member for Griffith is a Queensland member of the Australian Labour Party. History shows that it is because the policies that he advances were applied for 40 years in Queensland under Labour governments that that State has no secondary . industries to-day. Also, under Labour governments in the days of State taxation, Queenslanders had the highest income tax rate in the Commonwealth. Company tax, too, was very high. That is the policy which the Labour Party wishes to impose on the people of Australia. 1 know that Opposition members, who are interjecting, do not like this. These truths are very hard to take, and honorable members opposite cannot face up to them. The stagnation of the aborigines of Australia is an example of the fate of a truly socialist community. That should be a warning to anybody who advocates socialism. The people of Queensland would be suffering from the same stagnation were it not for the vast natural resources of that State. Those resources have kept Queensland afloat, and the Queensland Government is doing its best - and is succeeding very well - to stimulate the development of Queensland. After 40 years of Labour rule, during which nearly all Australia’s new industries were attracted to the Southern States, Queensland now has a Liberal-Country Party Government, and there is some hope for the people of that State. Unfortunately for the people of New South Wales, they have just returned a Labour Government and they will experience further stagnation, while Victoria goes even further ahead. As the honorable member for Bruce (Mr. Snedden) has reminded me, Melbourne will be bigger than Sydney by 1970. I have no doubt that, by the time the next election is due, the people of New South Wales will have awakened to their plight, but it will probably be a little too late, because they will have lost a lot of ground. Fortunately for the people of South Australia, they still have a Liberal Government.
I support the bill. I think the Government has made a very good effort in bringing it forward.
.- Fortunately - or unfortunately - I cannot share the feelings of deep commiseration of the honorable member for McPherson (Mr. Barnes) for those people who pay 13s. 4d. in the £1 in income tax. After all, if they pay that much they must receive at least £5,000 or £6,000 a year, which is over £100 a week. They receive that amount clear of all commitments necessary for the expansion of any business in which they are engaged. The Australian Labour Party, of course, believes that taxation should be equitable. It should be based upon ability to pay.
This Government, like most governments, at budget times fixes the amount of taxation necessary to carry it through the financial year. In August, 1960, after consultation with its experts, the Government determined the amount of money that would be necessary to carry out all its obligations to the community for the ensuing twelve months. It fixed taxation rates accordingly. In November of the same year, however, it raised sales tax on motor cars to 40 per cent. A few months afterwards it restored the rate to 30 per cent. Then, a little later, it lowered the rate by a further 7i per cent.
– Order! The honorable member is referring to a bill which has already been passed by this House.
– If you examine the bill before the House, Mr. Speaker, you will realize that what I am saying is relevant to this legislation. The point that I make is this: The Government did these things. Why? It decided that it had to lower taxation, not because it thought the people who bought motor cars could not afford the existing rates but in order to stimulate the industry. Now the Government has decided to reduce income tax, but not because it feels that the poor taxpayers have been overburdened. It has not decided, out of the goodness of its heart, that it was taxing people top much and should reduce taxes before the end of the financial year. That is not the reason why the Government proposes to reduce income tax. The reason, according to the Government’s statement, is that it is necessary to stimulate industrial activity and to create employment. If that is the only reason for reducing taxes, then taxes should be reduced in such a way as to bring about a maximum increase in employment and give the greatest stimulus to industry. But what has the Government done? The Government has provided that if a man receives £21 a week and is single, his taxation will be reduced by 7s. 3d. per week. If he is married and has five dependants, his taxation will be reduced by 2s. 9d. a week. So there is 7s. 3d. a week for the single man and 2s. 9d. a week for the married man with five dependants. Is that justice?
– It seems to indicate that bachelors are peculiarly investors.
– What it means is this: This Government regards children as luxuries. It puts children in exactly the same category as tobacco, beer and whisky. It has decided to tax them more heavily than other commodities because otherwise, it considers, there will be too many of them. That is the logical deduction from the action of the Government.
A single man in receipt of £40 a week will benefit to the extent of £1 ls. a week as a result of the proposed reductions in taxation. A married man with one dependant on the same wage will benefit to the extent of 19s. a week. A married man with five dependants will benefit to the extent of 15s. a week. As the number of dependants increases so taxation, under this measure, proportionately increases. Persons receiving £40 a week will have their tax reduced by three or four times as much as the taxpayer in receipt of £25 a week. This action is not. in accordance with the concepts of the Labour Party.
The honorable member for Melbourne Ports (Mr. Crean) put the case clearly to-day when he pointed out that the Government, in effect, says that it wants to put £30,000,000 more of purchasing power into the community. Therefore it proposes to reduce taxation at a flat rate of 5 per cent. That 5 per cent, reduction is intended to increase purchasing power by £30,000,000. Of course, it creates the purchasing power but it does not create the purchasing. The reason is that more than half of it will go to people who have no needs left to satisfy. Do you increase purchases by giving more purchasing power to the person who, because he has an income of £5,000 or £10,000 a year, has all that he requires? He has a home. He has a washing machine. He has a television set. He has all those things that are requisite to a comfortable existence. So many things has he that the money that he at present receives as income he does not spend, and cannot spend. He uses it for investment. Perhaps he buys an addition to his farm, as in the case of the honorable member for Mcpherson. Such a man’s position in the squattocracy becomes better, and the price of land goes up so that the poor son of some cocky cannot afford to buy the piece of land he wants. Or a man who has all the requisites of a comfortable life invests his money in a trip abroad for himself and his wife. Perhaps he sends his children overseas for a trip. But he certainly does not spend the extra money in a way that provides employment for people in Australia. He does not buy any more lawnmowers. He does not buy another washing machine or another refrigerator. He does not buy any of the ordinary tools of production, nor does he buy goods that create employment among Australians. But give the extra money to persons receiving less than £2,000 a year in income, married men with children to maintain, and most of the total oi £30,000,000 will be immediately spent. Such people will spend it on clothes for their children. They will spend it on ordinary household goods. They will spend it in many ways that will promote Australian industry and increase employment in Australia.
Obviously, what ‘the Government should have done was to give this amount of £30,000,000 to those who have needs to satisfy. Under the distribution as proposed, half of the amount will go to people who have incomes of more than £2,000 a year - and those people, according to an official document supplied to me by the honorable member for Melbourne Ports, carry 25 per cent, or less of total family responsibilities in the community. Thus, taxpayers on £2,000 a year or less, who bear 75 per cent, of the community’s family responsibilities, will receive £15,000,000 in rebate and the other £15,000,000 will go to people who have far fewer responsibilities. And the people who have the least responsibility have incomes in many cases immensely higher than those of the people with the heaviest responsibility. This is not equitable. But why talk of equity to the present Government? Why talk of equity to the honorable member for McPherson, who has the audacity to suggest in this Parliament that people who pay 13s. 4d. in the £1 in tax are suffering considerable disabilities compared to other taxpayers who do not pay such a high rate of tax because their incomes are low. After all, what matters to me, what matters to any member of this community, is not what we pay in taxes but what we have left after we have paid our taxes. The people on small incomes have infinitely less left with which to buy their requirements after they pay their taxes than have the people on high incomes.
I do not want to take up all my time pointing out what is obvious to honorable members on this side of the House, and what is probably obvious to honorable members on the other side, although they do not admit it, and what is obvious to every one outside this House - that a flat rate reduction of 5 per cent, in taxes is unjust and inequitable. I want to point out that what the Government should have done, as the honorable member for Melbourne Ports said it could have done, was to increase concessional deductions for wives or children or both. By that means it would have given a bigger percentage of the total amount of rebate to the taxpayers on lower incomes who have needs to satisfy. Thus, the release of this extra amount of money would have stimulated industrial activity much more rapidly than will be the case under the Government’s present proposal. The Government could have done more than that. I am allowed a concessional deduction of £143 for my wife, for taxation purposes.
– Did you find somebody to put up with you?
– That is the point! The honorable member for Moreton has seen the point. My wife has to put up with me for only 143 times 5s.; the honorable member for Moreton’s wife, for putting up with a distinguished gentleman like him, probably gets 143 times 13s. 4d. That is, she gets three or four times as much for putting up with him as my wife gets for putting up with me. I appeal to you, Mr. Speaker; is that justice? Of course, it is not justice.
It is not only that the taxation authorities arbitrarily assess at £2 15s. a year the worth of the wife of a man on £20 a week, while assessing the worth of the wife of the honorable member for McPherson at £70, £80, or £100 a year - which, of course, is not equitable - but they deal with children in the same way. The Government allows a concessional deduction of £91 for the first child of a man earning £20 a week and, in fact this would mean probably about £4 a year to him; but to the honorable, member for Moreton, and to the Minister for Shipping and Transport (Mr. Opperman), who is now at the table, and to members of the Ministry generally, such a .deduction would mean 91 times 13s. 4d.- or about thirteen times as much as it would mean to the man on £20. a week. Is that equity? Is that justice? But, of course, we are not discussing equity and justice. What do equity and justice matter? What matters is that we have to stimulate industry, we have to put men into work. Well then, if that is the ground on which the Government wants its proposition judged, I say that if it were to value at £70 a year in actual cash the wife of the person on £20 a week, and value his children at £10 or £12 a year each instead- of the present much lower figure, the resultant release of money to people of that kind would lead to a stimulation of production and business activity. That would provide employment, which will not be provided under the Government’s proposal.
So I ask the Government - this Government which likes simple things like a 5 per cent. flat rate reduction in taxes: Why not do the simple thing by assessing, at the rate of another £5 or £10 a year, the worth of each wife in the community, irrespective of whether her husband’s income is £20 or £500 a week? Why not give an extra allowance of £5 a year for each child regardless of whether the child’s parents are wealthy or not so wealthy? Although that would not be absolutely equitable or just, it would at least be more equitable and just than a 5 per cent. rebate as is proposed by the Government in this legislation. It would also have the virtue of simplicity that would make it easily understandable to all members of the Cabinet and supporters of the Government generally.I strongly support the amendment which states -
There can be no doubt that the Government’s proposals are unjust. The object of the legislation should be to stimulate industry and provide employment. To achieve that objective, this proposal should be withdrawn and assistance should be given for wives and children on the basis that I have suggested. That would mean an improvement on the methods that have been adopted by the Government and would lead to an immediate stimulation of industrial activity, thus increasing employment opportunities. We cannot improve the situation merely by giving £15,000,000 to those whose needs are completely satisfied.
– That is nonsense.
– The honorable member for Perth has said that that is nonsense. Of course, we could stimulate luxury spending by that means. The release of money to that section of the community would enable a man to buy a better type of wine imported from France. It would enable him to have frogs’ legs in aspic instead of good Australian dishes. Probably, he would be able to purchase some land and add to his estates; but it would not promote industry or give employment. I am reminded that the other night, the honorable member for Perth paid tribute to the honorable member for Moreton (Mr. Killen) for having introduced him to Edmund Burke.
– Who did? You have the wrong man.
– You did, or it was some one like you. He said that he was now reading the works of Edmund Burke who had been introduced to him by the honorable member for Moreton. If I have mistaken the variety and extent of the reading of the honorable member for Perth, I apologize. Edmund Burke was in many ways a reactionary, and in a speech he described taxation as the great Serbonian bog-
Betwixt Damiata and Mount Casius old,
Where armies whole have sunk;
I have no doubt that if this Government continues its manipulation of taxes as it has been doing for the past ten years or more, taxation will prove to be its Serbonian bog in which it will sink and, let us hope, never rise again.
.- The honorable member for Scullin (Mr. Peters) has made some extraordinary statements. Not the least of them was his statement that my honorable and gallant friend, the honorable member for Moreton (Mr. Killen), paid income tax at the rate of 13s. 4d. in the £1. The honorable member for Moreton and I have often commiserated closely with each other on the precarious state of our personal finances. If the honorable member for Moreton is in the position where he has to pay income tax at the rate of 13s. 4d. in the £1, he has misled me.
– Grossly so.
– I agree, and I do not think the honorable member would mislead me in that respect. I was rather interested in the extraordinary attitude that has been adopted by the Opposition to the question of income tax generally. After all, every honorable member, without actually putting a figure on it,, is in the income bracket, so far as salary is concerned, of £2,000 to £3,000 a year. I can only say that the experience of members of the Opposition must be very different from that of my friend and my own, if we can believe the honorable member for Scullin. Honorable members opposite believe that anybody who has an income of over £2,000 is a capitalist and has everything he requires. They believe he is able to meet every responsibility. He has refrigerators, washing machines, two cars - according to the honorable member for Scullin - holidays at the beach and money to invest. How many persons on that income can live like that? This is extremely germane to the debate because it fixes the point at which the particular income group is likely to spend the tax rebate it will receive as a result of this legislation. I challenge Opposition members who have been talking in this airy-fairy way about this matter to stand up and say what they will do with the rebate that they will receive. For my part, every penny that I receive will go towards reducing my bank overdraft.
I have heard honorable members opposite emphasize, particularly when they are interested in salary increases, that we have great responsibilities and a status in the community to maintain. I have heard the honorable member for Kingston (Mr. Galvin) say that many times, and the honorable member for Hindmarsh (Mr. Clyde Cameron)-
– You are a liar.
– I was not able to see who used the expression. Did the honorable member for Kingston make that remark?
– Yes. If I offended the honorable member for Barker I will withdraw it.
– Order! The honorable member, having admitted that he has used an unparliamentary expression, will withdraw unreservedly.
– The honorable member for Barker handled the truth very recklessly.
– Order! The honorable member for Kingston will withdraw the remark unreservedly.
– I withdraw it.
– I was pointing out that I have heard honorable gentlemen opposite, when they have been agitating, as they so frequently do, for an increase in their emoluments and allowances, talk in airy-fairy terms about the responsibilities that they have, the drain that those responsibilities make on their resources, and the position in the community that they have to maintain. Whilst I agree with that point of view, those who use that argument so often when their own interests are concerned should remember that there are very many other sections in the community to which exactly the same considerations apply. Therefore, for honorable members opposite to talk about any one who has an income of more than £2,000 a year as being a capitalist and a parasite on the community, and as some one who has a large disposable income to invest, is a sheer distortion of the truth and something which is controverted by their own experience. People in the income group to which honorable gentlemen opposite refer - those in the professional and junior executive classes - are the ones who provide the initiative, the organization, the energy and who take the risks and do the hard work which supplies the employment about which the Opposition professes to be so concerned. But every remark that those honorable members have made in this debate is contradicted’ by every argument that they have advanced when engaging in the business of increasing their own emoluments and disposable income.
The more reasonable members of the Opposition such as the honorable member for Melbourne Ports (Mr. Crean), who led the debate for the Opposition - I do not include the honorable member for Scullin in that category - appear to be extremely confused, to state the position charitably, in their understanding of what the Government is trying to do by introducing this measure. We .must understand why this proposal is before us. In this instance the Government has a purely economic purpose in mind. The purpose is not, as the Opposition would suggest, to give relief to needy people. The measure has no social justice purpose, nor is it intended to have. But this does not mean that the Government is not interested in social justice. It has a magnificent record in this field, even in relation to taxation. For instance, when the Government has pursued the particular purpose of granting social justice it has increased from time to time the dependants’ allowances to which honorable members opposite have been referring so frequently. During twelve years of office the Government has often pursued a policy of social justice and has sought the redistribution of income which, after all. is an effective means ot achieving social justice by way of taxation. The Government has gone a long way further in this regard than the Australian Labour Party ever did when it was in office. I need mention only the medical and hospital benefits schemes as illustrations of the fact that the Government is prepared to take the necessary steps when it seeks to achieve a measure of social justice. But let me emphasize that this is not the .purpose of the legislation now before us. It is no use the Opposition suggesting that the legislation is wrong because it does not achieve a purpose other than that for which it is designed, yet that is what honorable gentlemen opposite have been doing during this debate.
In this measure the Government is neutral in relation to social justice and equity. The relative taxation incidence remains unaltered. There has been no discrimination one way or the other between any sections of the community. The Government, and I assume the Opposition, believes in progressive taxation. Under the Government’s present proposals the progressive rates of tax which existed previously will remain unchanged. In other words, the taxpayer who paid ten times as much tax as his neighbour will continue to pay ten times as much as his neighbour when this legislation is enacted. Therefore, attempts by the Opposition to suggest that in some way this legislation favours the wealthy are absolute nonsense. Instead of changing the tax structure, this piece of legislation is inherently neutral and there will be no change.
This measure is designed to achieve a particular objective - the improvement of the employment position. It has no other purpose. If honorable gentlemen opposite had confined their criticism to the effectiveness of the bill for that purpose - I admit that some of them have - I would have regarded such criticism as legitimate, but to criticize the legislation and propose an amendment which amounts to a censure of the Government’s policy because the measure does not achieve a purpose for which it was not designed, seems to me to be absolute nonsense.
It has been argued that a proportion of the money involved in the granting of this concession will not be spent because it will go to people in the higher income groups. I think I have dealt adequately with that suggestion. All I will say is that it is anybody’s guess what a particular person will do with the extra income he receives as a result of this measure. After all, people in the lower income groups have been known to save, and those in the very high income groups have been known to spend everything they could get their hands on.
Perhaps I can cite a few figures to correct any impression that may have been created by honorable members opposite that almost the whole of the extra income to be made available to taxpayers will go to those in the higher income groups. The proposition put forward by the Opposition is that all those receiving an income of more than £2,000 a year will save the extra money or will invest it, because they have everything they want and have no economic difficulties, no matter how large their families may be. Even if we accept that contention, we must still take note of the fact that 54.5 per cent, of the tax revenue to be refunded will go to people with incomes of less than £2,000 a year. If you increase the limit from £2,000 to £3,000, you find that the proportion of revenue refunded to those in that group increases to 67.9 per cent. It is also worth noting that the concentration of the refund into four months for the current financial year makes it more likely that the money will be spent.
But it is not only in the spending of it that this extra money will affect business activity and, therefore, the level of employment. The Opposition has admitted that the object of the Government in granting this 5 per cent, reduction in income tax is to’ improve the employment position, but Opposition speakers have concentrated their arguments on the suggestion that the only way in which the employment position will be improved is by the increased spending of individuals who receive the benefit of this concession. I believe that honorable members opposite are mistaken in that opinion. I agree with the honorable member for McPherson (Mr. Barnes) that there is another, and perhaps even more important, element in the situation. The crucial factor is confidence. If this concession restores the confidence of those men who make decisions in relation to expansion of business activities, and gives them an incentive to get going, then it will have an effect upon the employment position as great as, or even greater than, the actual spending of the extra money.
I believe, Sir, that the members of the Labour Party, in their heart of hearts, know this. They would not be reasonable or intelligent men if they did not know it. Of course, in discussing these matters they talk about the capitalist class, but they did not hesitate to accept large contributions from the so-called capitalist class to further their election campaign. It is well known, for instance, that they received £100,000 from the motor industry for election purposes. However, we will leave that matter aside for the moment. Even the members of the hated capitalist class want some sort of reward for the money they risk, the skill that they bring to their jobs, the responsibilities they accept and the long hours they work. The members of the Opposition know this, I am quite sure, but in pandering to blind prejudice among the population of this country they delude even their own supporters into accepting a point of view which, I am sure they know, is opposed to the best interest of those supporters themselves.
Sir, I wholeheartedly support this legislation. I deprecate, the amendment, which attributes to this legislation a purpose that is in no way intended, a redistribution of income as between the various sections of the community. As I said earlier, the. Government has shown during the last twelve years that this question has constantly exercised its mind, but this is one occasion on. which the. Government has made no attempt to achieve such a purpose. The Government’s purpose has been to take action, by means of this and other measures, to improve the employment situation. The legislation was directed to that end and to no other, and it is therefore futile for the Opposition to suggest that the legislation should be condemned because it will not achieve a purpose for which it was never designed.
.- The honorable member for Barker (Mr. Forbes) has told the Opposition that it is absolute nonsense to criticize the measure because it does not achieve a purpose that it was not -intended to achieve. He added that it is not a social justice measure. The honorable member has given an instruction to the Opposition to debate this measure on the Government’s terms. We are quite entitled to believe that it ought to be a social justice measure, and to discuss it on those terms, and we will not be forbidden by the honorable member for Barker to discuss it on those terms.
The honorable member has skilfully argued that there ought to be an income tax reduction, but he has equally skilfully avoided saying why it should be a flat-rate reduction. The honorable member for McPherson (Mr. Barnes) has spoken of those in the higher-income groups, saying that they earn their incomes. He has also told us that when they get the extra money represented by this proposed income tax reduction they will invest it.-
Not a soul on this’ side of- the House, Mr. Speaker, referred to the “ hated capitalist class “. The honorable member for Barker, in defiance of all the intellectual standards that gave him a doctorate at a university, has set up a straw man to knock down. I have not any hatred of people with high incomes, and I do not know of anybody on this side who has. Whether particular persons earn their incomes or not I do not know. We are talking of thousands of taxpayers. Some people may derive their incomes from inherited undertakings, for all I know, but we do not have to evaluate classes of taxpayers. The honorable member for McPerson seemed to ignore the possibility that perhaps the man who works with a pick and shovel earns his income also, and that he is also taxed on that income. In spite of what the honorable member for Barker has said, we should discuss this matter not by praising or condemning any group of taxpayers, but from the point of view of equity.
The Government has said, Mr. Speaker, that a reduction of £30,000,000 in income tax will produce investable capital in the community. Only last week, the Government was extremely proud - and legitimately proud - of the enormous over-subscription of a Commonwealth loan. That does not appear to argue that there is a shortage of investable capital in the community. There may be a need for more confidence, as the honorable member for Barker has said, but confidence in business very often is created by a volume of demand.
We are now getting two contradictory statements from the Government. On the one hand, we are told that this tax rebate will stimulate purchasing power. In this case, the Government fails to face the argument that there would be better ways of stimulating purchasing power by concentrating the additional purchasing power in the lower income groups, since they must immediately consume. Alternatively, when confronted with the fact that a very small minority of taxpayers will get about £15,000,000 of the total rebate of £30,000,000, compared with the big body of taxpayers in the lower income groups, who will get about the same amount, the Government says, “ This is a device to stimulate investment “.
I should just like to make several points. These are things to be answered. It is of no use for an honorable member, in a speech in this place, to abuse the Australian Labour Party, as the honorable member for Barker did. The Labour Party may be as contemptible as he says it is. Let us concede that to him for the sake of this discussion. Having done that, can we now get back to analysing the tax situation which still must be analysed, whether or not the Labour Party consists of worthy people. If the tax curves arrived at by the Government were just before the making of these flat-rate deductions, these deductions mar the justice of those curves. If the flat-rate deductions that are being made now are just, the original tax curves which are being modified must have been unjusti fied. There seems to me to be no justification for reducing income tax while indirect taxes such as sales tax remain high. The taxpayer who is so poor that, when his family responsibilities are taken into account, he pays no income tax, is not benefited in any way by an income tax reduction. He would, for instance, be greatly benefited by increased child endowment, and increased child endowment would be more efficient as a stimulus to purchasing power.
The honorable member for McPherson told us that the people in the upper income bracket are more likely to invest the tax rebate that they receive and thereby stimulate employment than are the people in the lower income bracket. We shall accept that argument by the Government for the purposes of this discussion. But why is there this discrimination in favour of bachelors? At any level of income, the bachelor gets back much more than does the married man, and the married man without children gets back much more than does the married man with children. According to the deduction schedules published, on a weekly wage of £26, a single man will get back in rebate lis. a week, a married man without children, 8s. 9d., a married man with one child, 7s. 9d., a married man with two children, 6s. 9d., a married man with three children, 6s., and a married man with four children, 5s. 3d. The Scriptures say that to him that hath, more shall be given. But if what a man hath is children, he will be given less under the Government’s proposals, and there does not seem to be much to be said for that.
I am very glad that the honorable member for Barker said that we must not discuss this proposal in terms of equity, because it is completely impossible of discussion in terms of equity. But one can still argue that the tax reduction proposal ought to be equitable. A cut of £30,000,000 in income tax is proposed. Another flat-rate 5 per cent, cut was made in 1959. That reduction, as it operates to-day, would probably be worth £30,000,000 or more. The estimated cost of the child endowment proposals made by the Leader of the Opposition (Mr. Calwell) during the general election campaign was £62,000,000. If these two flat-rate 5 per cent, tax cuts had not been made, all those child endowment proposals could have been put into effect.
There is no question about what the electorate wanted. It has often been said on this side of the House that the Australian Labour Party received 300,000 votes more than the Government parties received, and that is true. , In addition, of course, nearly 500,000 votes were cast .for the Australian Democratic Labour Party. I suppose that the Government can legitimately point to the fact that the bulk of the preferences of the Democratic Labour Party went to Government supporters. To be quite honest about it, the Democratic Labour Party channelled its preferences as it did basically because it disagrees with the Australian Labour Party on ideological grounds, defence and foreign policy, but, when it comes to child endowment, the cold fact remains that the policy of the Democratic Labour Party was identical with that of the Australian Labour Party. That means that 3,000,000 people voted for parties which said that they would increase child endowment, as the Leader of the Opposition put it, and 2,100,000 voted against the proposal to increase child endowment. So there cannot be any question about a mandate to use child endowment and not income tax deductions as a means of promoting recovery from the crisis that this Government has brought about.
What we are faced with is a crisis resulting from an inequitable policy which favours queues of unemployed instead of queues of people seeking import licences, and this crisis is being surmounted by an inequitable means - income tax reductions. If child endowment were doubled,, as the Leader of the Opposition proposed, without this income tax cut and with income tax increased in the proportion by which it was reduced in 1959, there would be an immediate demand for goods. This would apply to every grocer’s shop and every clothing shop. It would be reflected in the turnover in every business. Would not this lead to increased investment? Over the last twelve years, of which the Government says it is proud, the enormous volume of internal investment in the country has resulted from the fact that, over most of that period, there has been sustained high purchasing power which has led, of course, to sustained high profits and to high levels of re-investment.
The taxpayer who is so poor that he pays very little in taxes is never benefited by any income tax reduction, and income tax reductions are not, self-evidently, the best way of removing those things which are clogging trade. Those things include usurious rates of interest and taxes such as sales tax which operate like an internal excise or an internal tariff. This Government’s decisions seem consistently to be going against families.
The Government has pointed with pride to the fact that when the Labour Government fell it was expending £88,000,000 a year on social services, whereas the present Government is spending £358,000,000 a year. Those who tackle the matter in terms of purchasing power are given the answer that, under Labour, expenditure on social services accounted for 4.1 per cent, of the national income, and, under this Government, 5.7 per cent. We ought to be careful of statistics like these. Of course, a smaller percentage of the national income will be spent on social services if only 702 people are drawing the dole, that being the number drawing the dole when the Labour Government fell, and a higher percentage will be spent on social services if, consistently over a year, 60,000 are drawing the dole. But the higher percentage would not reflect a more healthy situation. Rather would it reflect an unhealthy situation. However, I concede that the community’s concepts in the field of social services have advanced. I never believed the line of argument that was often put up by the Labour Party when, while it was spending £88,000,000 a year on social services, it said. to the present Government parties, “When you were in office, expenditure on social services was only £16,000,000 a year”. The Labour Party advanced social services in that respect. Many concepts have now come in. The names of people are bandied about here. We are told what the Scullin Government did and so forth. When I first came to this Parliament, Mr. Scullin was an elder statesman. In the many conversations that I had with him, he never suggested that he had not made any mistakes, and he did not suggest for one moment that Labour men who came 30 years after were to be bound by what he had done. Am I to believe that what I say to-night, though it may include fallacies, will bind a member of the Australian Labour Party in this Parliament in 30 years’ time? Of course, that is nonsense.
The community’s concept of social services is always moving. Sometimes this movement is expressed through the Liberal Party and sometimes through the Labour Party. However, it seems to me that the Government’s decisions are consistently against families, as they are in this tax proposal. The Government has consistently rejected any proposal to alter child endowment since 1950, although purchasing power has greatly changed and national income has greatly increased. This seems to me to be consistently a decision against families. I think the Government would find the business confidence about which it talks and the rise in profits that would lead to investable capital, if it switched its decisions to the social justice and equity that the honorable member for Barker says we must not discuss in this debate, and weighted its income tax reductions so that those with dependants gained more heavily than those without dependants. If it did this, it would find an attitude of confidence and a stimulation of business that would solve the problem of unemployment and the problem of investment.
.- -The purpose of the measure we are debating is to provide a rebate of 5 per cent, on personal income tax and social service contributions payable for the current year, 1961-62. The effect of the measure will be to increase by about £30,000,000 the disposable income in the hands of the community for the balance of this year, lt is designed to give the wage-earner more money to take home. If he takes home more money, he will spend it and by spending it he will help to create job opportunities for those who are seeking employment. This will have a snow-balling effect.
Labour apparently disagrees with the measure on the ground that it benefits persons on higher incomes more than those on lower incomes and that it reacts against the family. I have seen tables published in the journal of the Taxpayers Association which set out the old rates of income tax deductions and the new rates, for persons earning between £10 a week and £30 a week. The rates are set out separately for single persons, married persons, married persons with one child and married persons with two children. The tables were used quite extensively by the honorable member for Melbourne Ports (Mr. Crean) and again by the honorable member for Scullin (Mr. Peters). Certainly, they show that a single man in receipt of an income of £20 a week gains 6s. 9d. a week additional income as a result of this measure and that a married man with two children in receipt of the same amount of income gains only 3s. 6d. a week. A single person earning £30 a week gains 14s. a week and the married man with two children on this income gains only 9s. 6d.
On the face of it, this appears to be unjust. But like all arguments, there are two sides, and I suggest we now look not at what rebate is being gained but at how much tax people in these categories were paying prior to the introduction of this measure. The single person in receipt of £20 a week was paying £2 4s. 3d. in tax and a married nian with two children was paying £1 3s. 3d. In other words, the married man was £1 ls. a week better off than the single man. In addition, he received 15s. a week child endowment. Therefore, his margin over the single man was £1 16s. a week. The single person in receipt of £30 a week was paying £4 13s. in tax and a married man with two children was paying £3 3s. So, the married man was paying £1 10s. a week less and was also receiving 15s. a week in child endowment. His margin over the single man was £2 5s. a week.
In one respect it may be fair to look after the family man, because he has done his job for the community; he has had children. But I believe that there is already too great a margin in favour of the married man. I know that many people will disagree with me, but I say this fully aware of what I am saying and I want to give one or two examples. Since I have been a member of this House many young married couples have approached me and asked me to assist them to find a house. Some of them are living in one or two rooms and they either have no children or have one child. When they go to the Housing Commission for assistance, they are told that it is virtually impossible to help them because houses are provided on the basis of need. The person with four children always has priority over the person with three, and the person with two children always has priority over the person with one.
Honorable members may ask what this has to do with income tax. My point is that the dice are already loaded too heavily against the young married couple or even the bachelor. How on earth can young married couples with some sense of responsibility be expected to have families when they realize what is needed to educate and care for children in a proper environment? Some of these young people think it is wrong to increase their families while they are living in one or two rooms. If we tax them according to their ability to pay while they have no children, what hope have they of saving money to buy a home? It is time some one spoke up for these people. We should take care that we do not cripple them financially. They need every bit of help we can give them. Every shilling they can save out of their wages and every additional shilling placed in their hands by way of income tax rebate will help them to set up a home and to bring up a family.
Young people are sometimes blamed for inflationary booms. Some people say that single persons and young married couples have far too much money to spend and that this results in a boom. A television commentator in Melbourne suggested a scheme of deferred pay. The idea was that employers would not pay these people the full amount of their wages but would give to the Government an amount of deferred pay which would be credited to their account. Interest at special rates would be paid and deferred pay might even become a deduction for income tax purposes in the year in which it is deferred. On marriage, or in time of urgent need, the amount of deferred pay could be drawn. The honorable member for Mackellar (Mr. Wentworth) suggested a scheme such as this a few years ago, but apparently the scheme is opposed on the ground that it involves a principle of compulsory saving and that therefore it would not work. But I think the scheme has a great deal of merit and quite a number df young people favour it.
Many married people with three or four children claim that the tax rebate system is loaded in favour of the single man or the young married couple without children or with only one child. The older married people who argue in this way forget that they have already passed through the stage when they were single or had only one child. Although at this earlier time they received the benefit of income tax rebates which enabled them to establish a home, they now seek to deprive the young people of the same favorable treatment. As I said, I am quite sure we should look after the young married person better than we have up to the present.
I want to make it quite clear that anything I have said should not be construed as meaning that I am opposed to assistance to the family man through the medium of income tax rebates. But I believe the proper way to assist him is to increase the amount of the concessional deduction to which he is entitled. For instance, I have always believed that a married man should be entitled to deduct in full the cost of educating his children. It is ridiculous that a limit should be placed on this expenditure. I also think it ridiculous that a limit should be placed on the allowance granted to him for medical and hospital expenses, and so on. No person deliberately incurs expenditure of this kind just for the sake of doing so. I believe that every person should be able to deduct in full the cost of medical, hospital, dental and optometrical services. The time when a person needs help in connexion with these expenses is at the time when the expenditure is heaviest, but, unfortunately, he does not get it then. However, I believe that the time for providing for this help is not now. In my opinion, when the next Budget is being framed, consideration should be given to assisting the family man in these directions. What is needed immediately is the placing of more money in the people’s pay envelopes, and that is what the Government hopes to do by this measure. Only those wage-earners who contribute tax on a pay-as-you-earn basis will benefit immediately. The taxpayers in other categories will not enjoy immediate assistance. To the argument that the rebates will be higher for those who pay provisional tax, I point out that the beneficial effect of this measure to such persons will be delayed.
I cannot take the Labour Party’s criticism very seriously, for I believe that it speaks with two voices. I recall that only a couple of years ago, when this Government reduced income tax by a flat 5 per cent., the Labour Party trotted out exactly the same arguments as have been adduced by the Opposition to-night. As a matter of fact, the honorable member for Yarra (Mr. Cairns) quoted the extent to which people in various wage groups would benefit. He pointed out then, just as the honorable member for Fremantle (Mr. Beazley) did to-night, that the flat 5 per cent, reduction would be virtually worthless to the man who was paying only a small amount of tax. Yet, twelve months Hater, when the Government decided to cancel the 5 per cent, rebate, the honorable member for Yarra, who said earlier that the rebate was worthless, argued that to withdraw the concession was to impose a cruel burden on the working man.
Honorable members opposite cannot have it both ways. It is my view that the Labour Party regards income tax not as a revenue earner, but as a wage leveller, a means of bringing into being the welfare state. The theory of taxing people according to ability to pay is not without merit, but it would seem that Labour’s philosophy is that when extra tax revenue is needed the person who is already paying 10s. in the £1 or more should be required to pay, say, an additional 25 per cent., while the wage-earner in receipt of a lower income should be required to pay, say, only a further 5 per cent. I would not quarrel even with that if Labour stopped there, but when conditions become such that the Government deems it necessary to give a stimulus to the economy by reducing income tax, the Labour Party wants to reverse the process. It wants to reduce by 5 per cent, the man whose rate of tax had been increased by 25 per cent, previously and to reduce by 25 per cent, the tax levied from the man whose tax had been increased by only 5 per cent, previously.
Labour is entirely opposed to indirect taxation. It prefers a system of direct taxation, a system under which the industrious, the enterprising and the wealthy are taxed with a view to bringing them back to equality with the person who is in receipt of a lower income. But I remind honorable members opposite that if we kill in centive we shall not have any employers at all; there will be nobody to provide jobs for the workers - unless, of course, the state provides them, and that is what Labour wants, anyway.
By introducing this measure, the Government is endeavouring to put another £30,000,000 of spending money into the hands of the people within a period of three or four months. If it had merely announced at assessment time that it proposed making a rebate of 5 per cent, in income tax, that would not have had the immediate beneficial effect that this measure is designed to give. I do not believe that we should consider this measure in isolation. We should consider it in conjunction with the other measures which have been announced by the Government. I refer to the proposal to reduce the rates of sales tax on motor vehicles and to the proposal to grant a 20 per cent, investment allowance to encourage the purchase and installation of machinery designed to increase production. This measure is part of an overall scheme to give a stimulus to the economy and to increase the opportunities for employment.
The Opposition has criticized the proposed method of distributing the £30,000,000. The honorable member for Scullin (Mr. Peters) said that those persons who will benefit in the main have no needs to satisfy. He suggested that many of them could not spend the money. The honorable member for Melbourne Ports (Mr. Crean) and the honorable member for Fremantle (Mr. Beazley) said that the money could be better spent by the workers than by the wealthy. At least two honorable members of the Opposition have said that the wealthy either would not or could not spend it. I have never heard such cockeyed reasoning in all my life. It is the most ridiculous argument I have ever heard put forward. What distinguishes the wealthy man from his less fortunate neighbour? It is not his bank book or his investments, because nobody knows either his bank balance or how much he has invested. The wealthy man is distinguished by the amount of money he spends. For instance, he wears better quality clothes; his wife goes about in furs, as one honorable member opposite has stated. He dines at the most expensive hotels, he occupies the most expensive seats at theatres and drives around in a Buick while the working man drives round in a Holden. Again, he goes overseas for his holidays whereas the working man goes only to the beach. If that is not spending money, I do not know what is.
I point out that even the so-called luxury industries employ workers. The wealthy man’s bank book is of no use to him. He cannot eat it. His money is good to him only for what it buys. When he spends, he puts money into circulation, and when he puts money into circulation he creates employment opportunities for the working people. It is absolute rubbish to say that he does not spend his money. Whatever the Labour Party may think of these measures, I know that well-informed people believe they are good, that they are a step in the right direction. To support that assertion, I quote the following from “Canberra Comments” of 15th January, 1962-
A reduction in income tax . . . even if only slight, would be of direct benefit to the private sector and would go a long way to restore full confidence both in the business community and among the buying public.
And “Canberra Comments” is the official organ of the Associated Chambers of Commerce of Australia. One month later, on 15th February, 1962, the same publication contained this statement -
The Government’s decision to grant taxation concessions will undoubtedly give direct stimulus to increased activity in the private sector.
I congratulate the Government upon this and the other measures it has introduced to stimulate the economy, and I oppose the amendment proposed by the Opposition.
.- Before addressing myself to the bill, I wish to say a few words about the honorable member for Barker (Mr. Forbes), who spoke earlier to-night. I do not wish to be offensive to the honorable member for Henty (Mr. Fox), who has just spoken, but I could not work out whether he opposed or supported the bill, and like other honorable members on this side I do not propose to delve into that problem. But I do want to say something about the honorable member for Barker, who at least did tell us himself that he is an expert on finance and taxation. When he was speaking to-night, I could not help thinking of a statement made by the Prime Minister (Mr. Menzies) in 1945, at a rally of the New South Wales Division of the Liberal Party in Sydney, when he said that the Liberal Party was still handicapped by doubtful supporters and appalling half-wits. After witnessing the honorable member’s attitude in this Parliament to-night, and on other occasions from time to time, I am forced to the conclusion that the Prime Minister paid him a special tribute on that occasion. One cannot help but come to that conclusion after judging the honorable member on the knowledge he displays when discussing bills in this Parliament.
To-night, the honorable member said that we of the Opposition had a colossal hide to criticize this measure in any way, for in his opinion it was a complete and perfect financial exposition by the Government, which was in no way open to criticism. That absurd reasoning by the honorable member for Barker was answered most effectively by the honorable member for Fremantle (Mr. Beazley). I repeat that when I endeavoured to follow the reasoning of the honorable member for Barker, I could not help but feel that the Prime Minister had the honorable member in mind when he made that accurate statement so many years ago.
This bill relates to a proposed reduction of 5 per cent, in personal income tax and social services contributions for the remainder of this financial year. Accordingly the Government will put £30,000,000 back into the economy in order to stimulate confidence in industry and increase spending and correct unemployment. That is the basis on which the Government has announced this measure. How often have we heard similar things said by the Government in respect of direct taxation when it has increased taxation or reduced it and made constant changes that not only bamboozled the people and the electors in particular but also practically wrecked the economy? Therefore to-night I am more than ever of the view that the amendment moved by the honorable member for Melbourne Ports (Mr. Crean) should be agreed to by the Parliament. We of the Opposition say that public pressure is responsible for the introduction of this taxation reduction. And that is the case, because despite the fact that this Government came into office in 1949 pledged to reduce taxation, to-day we have the highest direct and indirect taxation in the history of this country. What is the Government bringing into force in this measure? The reason for the amendment that has been moved is that this measure introduces a flat rate deduction to benefit the wealthy, the powerful and influential at the expense of the poor, the needy and the low wageearner.
The basic policy of Liberalism in this country is to exploit the people who work on lower wages and at the same time give unlimited benefits to the wealthy monopoly interests who put the Government into office and to which many supporters of the Government to-day owe their position in the Parliament. That is one of the reasons why the amendment has been moved. We believe that this measure exploits the low wage-earner while benefiting those people who are well able to bear taxation increases. Furthermore, we believe legislation should be introduced to correct the injustices that have been outlined in the taxation measures under review. Already Opposition speakers have instanced dependants’ allowances and things of that nature which should be overhauled and reviewed in order to give greater benefits to the people. We have also instanced - I reiterate it - how this legislation will impose on those people who are least able to pay, the greatest burden of taxation at this time. The amendment should be carried by the Parliament as an indication to the Government of our dissatisfaction with a measure which provides for a flat rate deduction of 5 per cent, which will not produce the benefits which the Government thinks it will bring to the economy, because those receiving the greatest benefit from the legislation are those who will spend least from the taxation reduction that they are given.
Honorable members on this side of the House mentioned earlier to-night that the wage-earner on low income who will receive some meagre benefit or return from this measure will be forced to spend it in order to make ends meet, whereas the man on £10,000, £20,000 or £30,000 a year will have no need to spend his proportion but will save it and thus will make no contribution to spreading employment or towards carrying into effect what the Government said is the basic policy and principle of this measure - that is, to increase the purchasing power of the community. What is the position regarding this Government’s taxation policy? I took the trouble to review the Government’s policy and the question of taxation generally. When the present Government was elected each individual in this country was paying on the average £39 10s. 4d. a year in direct taxation. For the latest year I have available, 1959-60, the taxation per head of population had increased to £73 0s. 8d. and a rough estimate at this stage shows the figure at £80 per head of population in direct taxation alone. That is the figure, compared with £39 10s. 4d. when the Labour Government was defeated. Yet this is a government which came to power pledged to reduce taxation, but which has more than doubled it. Make no mistake; of that £80 per head, most is paid by people in the lower income brackets, particularly the married man with children, because this Government not only discriminated against people on the lower incomes but also gave the single man greater benefits than the married man.
That is the direct opposite of social justice in taxation. Who benefits under this legislation? Let us examine the situation and ascertain whom this Government serves in this Parliament. Take the case of a single man earning £1,000 per annum or £19 5s. a week. He gets a reduction of £5 6s. a year, or 6s. a week or lOd. a day. What a princely amount to give him. A married man gets a reduction of 8d. a day. A married man with one child receives a reduction of 7d. a day and a man with two children 5d. a day. One can imagine the spending spree which the worker will enjoy on a reduction of tax of 5d. a day under this Government’s tax reduction policy. Imagine the increased production that industry will effect through this miserly 5d. a day. Going up the scale we find that the single man on £29 a week will get a tax reduction of ls. lOd. a day. If he is a married man with two children the social justice policy of this Government gives him a reduction of ls. 2d. a day.
Further up the scale we find that the single man on £5,000 a year will get a reduction of £85 ls. a year, which is a great increase on the miserly 5d. a day given to the man with a wife and two children on £1,000 per annum. The single man on £20,000 a year who, I suppose, in the opinion of the Government, is a battler and up against it and does not know where his next meal is coming from, will get a reduction of £554 per annum from this Government. The man with a wife and two children on £5,000 a year will get a reduction of £77 7s. per annum which is a tremendous increase on the 5d a day which will be given to a man with a wife and two children on £1,000 a year. A nian with a wife and two children with an income of £20,000 per annum will receive a reduction of £544 per annum. Are more instances or examples necessary to show whom this Government serves at the expense of the people least able to bear it while giving great taxation concessions to wealthy interests? I wonder whether the Government ever thinks what the people who run the great companies could pay. The Labour Party is not opposed to a reasonable profit and we want that clearly understood; but we are opposed to the exorbitant profits earned by some companies in this country to-day. The fact is that those profits go unchallenged by this Government which refuses to make a suitable contribution towards the general welfare of those least able to pay.
We have only to look at the figures. Do not tell me that General Motors-Holden’s Proprietary Limited could not afford to pay, from its £15,000,000 profit, more than the worker on £1,000 a year, who will get a concession of 5d a day from the Government. Do not say that the Broken Hill Proprietary Company Limited with £10,000,000 profit could not afford to make a greater contribution than it does to the welfare of the people of this country and still carry on. And what about those other companies which we read of not so long ago? These are only instances of the profits which are accruing. I have here a list a mile long. No doubt some of them have slipped a little, but none of these companies is going broke. I refer to companies like Consolidated Zinc Corporation Limited, whose profit was up by 154 per cent., and Bitumen and Oil Refineries (Aust.) Limited, whose profits went up to £730,000. I instance also the oil companies which have plenty of money to buy service stations at unlimited cost and spend any amount of money on tennis and other sports tournaments to gain publicity and advertising. They could well afford to pay a higher rate of taxation in comparison with those in the lower income brackets. The profit of Broken Hill Proprietary Company Limited was up by 35 per cent, to a figure of £13,000,000 in about August of last year. Coles Limited increased its profit by 16 per cent, to £2,000,000. The list of companies which I have here gives an indication of the profits that are available and the huge untapped resources of taxation which might well be exploited before people on lower incomes are exploited by this Government. Time does not permit me to go through the long list of profits which is available for further taxation by this Government. There can be no justice while the needy are taxed out of all proportion to the wealthy.
I support the amendment because I believe that only by carrying it will we bring some measure of taxation and economic justice. The important question in relation to taxation is not what you pay but what you have left after you have paid. Therefore, those companies which are making £13,000,000 such as the Broken Hill Proprietary Company Limited, and those which can give £13,000,000 worth of shares away such as Broken Hill South Limited might well be able to afford further taxation.
– Order! The honorable member’s passing reference is taking a fair time. I suggest that he might now come back to the matter before the House.
– I thank you, Mr. Deputy Speaker, for your tolerance. As the honorable member for Kingston (Mr. Galvin) has said, I had a long way to pass. I did not think I had deviated far from the subject of taxation, but naturally, I bow to your wisdom in the matter.
I should like to see in this legislation further increases in taxation concessions for dependants. The Commonwealth Committee on Taxation recommended an increase in dependants’ allowance but that recommendation has been ignored by the Government. The taxpayer is having his benefits whittled away under the economic policy of the Government which has resulted in rising prices and decreasing purchasing power. The Government has failed to face up to this situation by increasing taxation allowances.
In debating this measure, we might well compare what was done under the Labour Government in 1949 with what is being done under this Government. In 1954-55 a man with an average income paid less than 10 per cent, of it in tax. To-day, he pays 13 per cent, of it. In 1954-55, after the horror budget, a married man earning the average income and having two children paid 4i per cent, of his income in tax. That figure has risen to 7i per cent, under this tax reduction Government. Under this Government, a married man on the basic wage, with two children, pays about 8s. a week in tax although the Government gives remissions to the B.H.P. and other huge companies. As I have already mentioned, concessions in respect of dependants have not been raised for almost five years. This shows that the Government is completely forgetting the family man. The present proposal indicates that, under the Government’s policy, the bigger the family the smaller the tax reduction and the smaller the income the smaller the tax reduction. This is opposed to every principle of taxation justice. In the last year of the Chifley Labour Government a man on average earnings with a wife and two children paid onethird of the tax paid by a single man. Under this Government, he will pay two-thirds which shows that the Government is not considering the family man as much as those with less responsibility and with greater income. Clearly the amendment moved by the Opposition should be supported.
The married basic wage-earner should be completely exempted from income tax at all times. Unfortunately, that is not the policy of this Government. In one of the daily newspapers, the following comment has appeared on the subject of the proposed tax cuts: -
Last year’s report of the Commonwealth Committee on Taxation pointed out the absurdity of levying tax on 158,000 people with incomes under £4 a week.
Fancy a government that calls itself “ Liberal “ levying tax on incomes under £4 a week! Why, it will be robbing the poor direct next. The newspaper comment continued -
Their tax averaged about 6d. a week, much less than the cost of collecting it. Several sections of the Committee’s report favourable to taxpayers have yet to be adopted.
The fact that the Government has taxed people receiving less than £4 a week proves that it is not concerned about the average wage-earner. This legislation has been forced upon the Government by the general election of last December. Not long ago, the Government granted a 5 per cent, tax rebate. Just as everybody got used to it, the Government announced that it was reimposing this taxation because the nation could not afford the reduction,
I warn the Australian people not to assume that the reduction of 5 per cent, under this bill will be permanent. The Government may some day think that the winds have become more favorable and the Treasurer (Mr. Harold Holt), with his changing mind, will re-impose the tax. Although this legislation has been introduced in order to put £30,000,000 in spending power back into the community, with the changing, day to day, flexible policies of the Government, the tax may be reimposed in the next Budget. It is impossible to follow the attitude of the Government on these matters for the reasons that I mentioned earlier. The Government does not know what it is doing on taxation. It seeks to please only those people who give it financial support.
I express my unreserved support of the amendment moved by the honorable member for Melbourne Ports. Before the last general election, the Leader of the Labour Party said in the course of his policy speech -
A Labour Government will re-distribute the burden of taxation. We believe that indirect taxation and injustices within the present deduction and rate structure of income tax bear heavily on the family man. These injustices must be remedied. . . . Our taxation laws badly need revising so as to ease the load carried by small and middle range income-earners.
That is the policy of Labour. Had we been elected we would have given effect to that policy, as we did in the days of the Chifley Government by imposing taxation on the people best able to bear it, and not burdening those on small incomes with family commitments. 1 place on record, again, my opposition to the policy of this Government in respect of taxation generally. The Government promised to reduce taxation but it has skyrocketed taxes beyond all levels anticipated in peace-time. Individually and collectively, the people are paying more taxation than ever. Those in the lower income groups, particularly family men and women, are being burdened to the full by the Government which is protecting the profiteers and exploiters, regardless of the effect of this action on the economy.
While the Opposition, naturally, cannot oppose a reduction in taxation, we think that this legislation should be reviewed. We support the proposed amendment because it would allow a review of taxation to be made in order to iron out anomalies and achieve a greater measure of social and economic justice for taxpayers generally. Opposition members will endeavour always to bring social and economic justice to the taxpayers, but we have no sympathy for people with unlimited profits who are not contributing a reasonable amount to the general welfare of the community.
I condemn this measure because, under it, people on lower incomes will suffer most. Those least able to bear the burden are being called upon to make the greater sacrifice. Those with family responsibilities are getting scant consideration from the Government. Those with wealth, power, and influence are enjoying this Government’s measures to the full because they are able to make greater profits without making any corresponding contribution to the solution of the economic crisis which has been brought about by the Government.
Mr. Speaker, I support the amendment. I hope that it will be carried as an indication that the stop-and-go policies of this Government, its unjust and unfair approach to economic policies and its downright exploitation of people on lower incomes ought to be condemned, are condemned and have not the support of anybody in this country.
.- As usual, we have heard from the honorable member for Grayndler (Mr. Daly) nothing but words, words, words. There was so little of value in bis remarks that one hesitates to waste any time in answering them. However, I should like to deal with one statement that he made - namely, that while this Government had been in power income tax had increased from £39 per head of population to £80 per head of population.
Let us assume for the moment that the honorable member’s figures are correct. If they are correct, the obvious reason is that under this Government there has been very great development, there have been substantial increases in nominal and real wages, and there has been great prosperity. It is quite patent that when things are prosperous and incomes are high a lower rate of income tax will bring in a very much greater amount of revenue per head of population than was the case before. Therefore, Sir, I suggest that the contention of the honorable gentleman proves nothing other than the fact that conditions have improved tremendously while the Menzies Government has been in office.
The purpose of this bill is to reduce income tax by 5 per cent. - by the identical amount by which it was increased in 1959. If, for example, a single man had his tax increased by £20 a year in 1959 this bill will reduce his tax by a like amount. If a married man had his tax increased by £10 in 1959 this bill will likewise reduce his tax by an identical amount. Therefore, to say that this bill is unjust because single people will get a greater benefit from it than married people is to miss the whole point. We did not hear the honorable member say in 1959, when taxes were increased by 5 per cent., that that was unfair to the single man.
The whole basis of our taxation is the ability to pay, and we have a graduated system under which people on higher incomes not only pay a greater amount in tax, but pay tax at a very much higher rate. The table that has been used by honorable members shows that a single person earning £20 a week pays £2 4s. 3d. a week in tax, whereas a man on the same salary, with a wife and no children, pays only £1 13s. 6d. A man who has a wife and one child pays only £1 7s., and a man with a wife and two children pays £1 3s. 3d.
It is very proper that a married man should pay less in tax than a single man, and that a man with a wife and one child should pay less than a man with a wife but no children. Also, it is only right that the more children there are dependent on the taxpayer the less tax he should have to pay.
Having once established that base for taxation, any increase or decrease in tax must have the effects that have been stated by honorable members. It is just ridiculous and childish to point to the fact that this benefit will help the single man more than the married man without at the same time pointing to the fact that when income tax was increased in 1959 by an identical amount the very converse was the case. So I think that all this playing of politics by the Labour Party will bluff nobody. The people know that a 5 per cent, increase such as occurred in 1959 affects every taxpayer according to the tax structure as determined by the Parliament; they know that, similarly, when tax is reduced, as proposed in this measure, by a like amount, the reduction similarly benefits, by a like amount, the people who previously paid the increased tax.
Now I turn to the amendment moved by the Labour Party. The effect of this amendment is that the Labour Party condemns the Government’s proposal to reduce income tax by 5 per cent. The Labour Party also asks this House to condemn the Government’s proposal. Then it asks that the Government immediately introduce legislation to correct the anomaly. As the Labour Party condemns the Government’s proposal and asks the Government to bring in new legislation the onus is clearly on the Labour Party to say what kind of legislation it wants in place of this present legislation.
The honorable member for Melbourne Ports (Mr. Crean), who led for the Labour Party, rather floundered in this respect and, when repeatedly asked to do so, failed to give a concise definition of what the Labour Party wanted in the way of legislation to replace the present measure; but he did make some rather astounding assertions about Labour’s policy. His first suggestion, Sir, was that the present tax concessions provided for wives and children, under the act, should be abolished and that the amount thereby gained in revenue by the Government be paid to wives in the form of child endowment. The actual words of the honorable member, as reported in “ Hansard “, were -
Labour thinks it is more equitable to pay child endowment than to give concessions to wives and children.
So, the first suggestion of the Labour Party is that we cut out all concessions provided under the act for wives and children and thereby save, according to the honorable member for Melbourne Ports, £36,000,000, which is the cost of the present concession in respect of wives, plus £20,000,000, the cost of the present concession for first children and £14,000,000, the cost of the present concession for second and subsequent children. Those are the honorable member’s figures, not mine. The honorable member rightly totalled these amounts to £70,000,000 and said, in effect, “There is the £70,000,000 that we can use to carry out Labour’s proposal for doubling child endowment.” I think that many taxpayers will be very interested in this proposal of the Labour Party. I ask all those taxpayers throughout Australia who are getting concessions for their wives and children whether they favour Labour’s proposal to remove those concessions. I leave that to the taxpayers and electors. The sooner the electors know what they may expect if ever a Labour government is returned to office the better. They will get some rude shocks if a Labour government carries out the policy that has been announced to-night by the man who obviously will be the Labour Treasurer - the honorable member for Melbourne Ports.
The honorable member also gave us a second alternative. He said, in effect, “ If you do not cut out the allowances for a wife and children and put the additional revenue into child endowment, you should eliminate the concessional allowances’ for students, medical and dental expenses, rates and taxes and life assurance. Cut out all those concessions and you could double the deductions for a wife and child.” So we have two alternative plans from the Labour Party. The first is to cut out the concessions for a wife and child and pay the £70,000,000 so saved in additional child endowment. The Labour
Party’s second alternative is to double the concessions for a wife and child and cut out all the. other concessions. I ask those parents who are receiving the valuable concession in respect of the cost of educating their children whether they favour Labour’s proposal to abolish the concessional allowance for students. Do those people who are sick or have dental expenses favour the proposal to provide additional concessional deductions for a wife and child instead of the allowance for medical expenses?
The honorable member for Melbourne Ports has told us how the Government would benefit. He has said the Government would save £19,000,000 if it abolished the allowance for medical expenses and £11,000,000 if it eliminated the allowance for education expenses. Apparently, the Australian Labour Party intends to make those changes if it attains office and would add the revenue so obtained to child endowment. That is its first plan. Its second proposal is to double the allowance for the wife and child. Labour’s ideas on taxation sound very attractive when we hear of the concessions the Opposition would give; but when we realize that a Labour Government Would raise money by increasing income tax and removing concessions, we realize what a disaster it would be for the people if they were ever bluffed into electing a Labour government.
What the Labour Party really proposes in its amendment is a general review of the Australian taxation laws. All honorable members will agree that there are anomalies in our taxation laws. It was for that reason that the Government appointed a committee in 1959, presided over by Mr. Justice Ligertwood, to investigate the whole of our income tax law and to make a report to the Government on the anomalies and inequities of the legislation. The committee, which was appointed on 3rd Decem- ber 1959, took evidence throughout Australia, and, in June, 1961, it submitted a very comprehensive report containing 153 separate recommendations. Obviously, when the enabling bill comes before the House, it will take many weeks, and probably months, to deal with those 153 recommendations and many other suggestions that will probably be made by honorable members. If there is to be a general review of . income tax, as’ suggested in the Labour Party’s ‘ amendment, could’, we ignore the recommendations of that committee? Of course, we could not. Therefore, if (his bill is to be withdrawn- and a new bill is to be introduced to deal with” injustices and anomalies, obviously we shall have to deal with the injustices and anomalies that are mentioned in the 153 recommendations of the committee. So, instead of the taxpayer getting a 5 per cent, reduction in taxes now, it would probably be months before the taxpayers would get any benefits if the Opposition’s amendment were carried. According to the amendment, certain things are unjust and inequitable. Probably there is merit in some of the Opposition’s statements. The committee on taxation referred to the same things. Every honorable member knows that unfortunately there are many injustices in the act. That is the reason why the committee was appointed; and this House will have the responsibility of reviewing the whole of the taxation law when the time is appropriate.
The Government proposes to inject £30,000,000 into the economy to stimulate the economy and provide employment. To suggest that such action should be delayed because there are some injustices and anomalies in the taxation law would simply defeat the purpose of the Government’s legislation. Therefore, I say that although not one of us could raise any criticism of an increase or a reduction of 5 per cent, in taxation until the many anomalies have been dealt with, we must realize that quick action is needed to deal with unemployment. The House has already passed a number of measures to provide employment and stimulate the economy. This is another similar measure. The Government proposes to reduce income tax by 15 per cent, over the next four months, which is equivalent to a 5 per cent, reduction over twelve months. As a result, £30,000,000 will be injected into the economy and this will give a great stimulus to employment. If the Opposition’s amendment were carried it would retard re-employment. I am amazed that members of the Opposition, who are always talking about unemployment, should oppose the Government’s proposals which will stimulate employment. I support the bill and oppose the amendment.
Question put -
That the words proposed to be omitted (Mr. Crean’s amendment) stand part of the question.
The House divided. (Mr. Speaker - Hon. Sir John McLeay.)
Majority . . . . 1
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Consideration resumed from 6th March (vide page 501), on motion by Mr. Harold Holt-
That the bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
Debate resumed from 7th March (vide page 517), on motion by Mr. Harold Holt-
That the bill be now read a second time.
– This is a machinery measure. Basically, it arises out of a bona fide mistake made in computing the amounts payable under the income tax reimbursement system to the States of Victoria, Western Australia and Tasmania. The Opposition will not hinder the passage of the bill.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Motion (by Mr. Davidson) proposed -
That the House do now adjourn.
.- Mr. Speaker-
Motion (by Mr. Davidson) put -
That the question be now put.
The House divided. (Mr. Speaker - Hon. Sir John McLeay.)
Majority . . .. 1
Question so resolved in the affirmative.
Original question resolved in the affirmative.
House adjourned at 10.28 p.m.
The following answers to questions were circulated: -
n asked the Minister for Primary Industry, upon notice -
What progress is being made in combating skeleton weed in northern Victoria?
– The answer to the honorable member’s question is as follows: -
As part of a co-ordinated programme of research into the problems of control or eradication of skeleton weed a number of research projects have been commenced or initiated. Funds for this research are being provided partly by the Wheat Industry Research Council and partly by State Wheat Industry Research Committees. I am informed that the Department of Agriculture and the Department of Crown Lands, in Victoria, are investigating various means of eradication or control of this difficult weed and that the Commonwealth Scientific and Industrial Research Organization will also be undertaking research into the problem.
Papua and New Guinea.
m asked the Minister for
Territories, upon notice -
Does he know of any non-self-governing territory other than the Territory of Papua and New Guinea in which all indigenous inhabitants are denied a direct vote for the legislature?
– The answer to the honorable member’s question is as follows: -
There is a number of non-self-governing territories other than Papua and New Guinea in which all of the indigenous inhabitants do not have a direct vote for a legislature. The system of indirect election used in Papua and New Guinea was adopted after the leaders of the indigenous people had themselves expressed a strong preference for it as being best suited to the present stage of their development.
d asked the Minister for Defence, upon notice -
– The answers to the honorable member’s questions are as follows: -
b asked the Minister for Shipping and Transport, upon notice -
– The answers to the honorable member’s questions are as follows: -
n asked the Minister representing the Minister for National Development, upon notice -
– The Minister for National Development has supplied the following information: -
n asked the Postmaster-General, upon notice -
– The answers to the honorable member’s questions are as follows: -
Cite as: Australia, House of Representatives, Debates, 13 March 1962, viewed 22 October 2017, <http://historichansard.net/hofreps/1962/19620313_reps_24_hor34/>.