7th Parliament · 2nd Session
ThePresident (Senator theHon. T. Givens) took the chair at 11 a.m., and read prayers.
” Anzacs “ onfurlough.
– I ask the Minister for Defence if he is prepared with any answer to the question I put concerning the treatment of returned Anzacs on furlough in Sydney?
SenatorPEARCE. - On Thursday last, Senator McDougall drew my attention to a paragraph appearing in the newspapers, in whichit was stated that fifty-two men of Australia’s First Division had returned tothe Commonwealth on furlough. Seven of these were said to be in New South Wales. It was stated that there was no welcome to them ‘of a public nature, as no one was aware of their arrival, and they were not treated as returned soldiers. There was a complaint that they were not supplied with tram passes. It was said that they were nearly all married men, were drawing only a fraction of their pay, and that no deferred pay was given to them. I made inquiries into the statements appearing in the paragraph, and the reply is as follows : -
The men referred to were shown on the ship’s Nominal Roll as on duty. No documents showing in what way they were to be disposed of were received from the General Officer Commanding, Australian Imperial Force, until some time after - having been, apparently, delayed in transit.
The correspondence showed that General Birdwood had decided to utilize on transport duty, with the object of giving them two months’ leave in Australia, officers and men who left Australia in 1914 and had not returned there since their original embarkation, preference being given to those married menwhose family circumstances are in any way distressful.
Instructions were immediately issued to District Commandants, explaining the circumstances of their return, and ordering that their leave should commence from the date of disembarkation, and be on full pay.
It will thus be seen that embarrassment was caused by the men arriving before their papers. As all future batches of men will be under the same conditions as this one, District Commandants will be in a position to make suitable arrangements for dealing with them as soonas they arrive.
In connexion with this policy of returning men on transport duty for leave, it should be clearly understood that, in the selection of the men to be so treated, no pressure can bo exercised from Australia, as the matter is entirely in the hands of the authorities abroad, who arc fully seized with the desirability of giving preference to married men and cases of family hardship and long service.
Representation: of Commonwealth at Washington.
– I ask the Leader of the Senate when we shall have disclosed to us, as promised, the intention and policy of the Government in regard to the representation of the Australian Commonwealth at Washington, in accordance with the terms of the resolution passed by the Senate? Some time ago, I think on the occasion of the last adjournment of our sittings, I addressed a similar question to the Minister, and I was promised a declaration of the policy of the Government on this very important question.
– If Senator Bakhap will repeat his question on the first day of sitting next week I shall be in a position to give him a more definite answer than I could give him now.
The following paper was presented : -
Employment on Kalgoorlie to Port Augusta Railway.
– I ask the Minister representing the Minister for Works and Railways if he has any further information to give the Senate on the question I put to him concerning men being required to produce rejection badges before securing employment on the Kalgoorlie to Port Augusta Railway?
– I have no further information on the subject.
asked the Minister for Repatriation, upon notice -
– The answers are -
SenatorFOLL asked the Minister representing the Prime Minister, upon notice -
What is the intention of the Government with regard to the future of the Commonwealth Police Force?
– An announcement on the subject will be made in the near future.
asked the Minister representing the Prime Minister, upon notice -
Will the question of the buildings proposed tobe erected as Wool Stores at Wentworth Park he submitted to the Public Works Committee?
– The answer to the honorable senator’s question is “ No.”
– I move -
That this Bill be now read a second time.
This measure is the outcome of recommendations made by the Royal Commission that inquired into Defence administration. The formation of the Business Board of Administration is one of the recommendations of that Commission which was adopted by the Government. When the Military Departments of the States were taken over by the Commonwealth, there were different practices obtaining in the States in regard to the employment of what might be called the civil staff of the State Defence Departments. Some of the employees were public servants under the Public Service Acts of their respective States. As honorable senators are aware, in the case of all transferred State Departments - and the Defence Department was one of them - the public servants of the States were taken over by the Commonwealth with all their rights under the State Acts. In some of the States certain of the employees of the Defence Departments were not public servants, but had been appointed under State Defence Acts. They were in a different category from the State public servants. These civil employees very frequently held clerical positions. There waa again another class of employees, who were semi-military officials, and were appointed under the Defence Acts of the various States. So that, as a result of the transfer of the State Defence Departments to the Commonwealth, we had a Commonwealth Department, on the civil side alone, with no less than three different classes of employees. It was frequently found that in one office three different classes of employees would be sitting alongside each other doing the same work, &ut subject to different conditions of service. When the first Commonwealth Defence Act was passed, no alteration was made, except to incorporate those who Bad been in the Public Services of the States in the Public Service of the Commonwealth. Those who were civil employees not under the Public Service Acts of the States came under the Defence Department either as civil employees or later as military staff clerks. In later years very few appointments were made to the Public Service Branch of the Defence Department, most of the new appointments being made under the civilian regulations of the Defence Act.
– The Bill applies chiefly to pay branches.
– It will apply generally to all clerical staffs of the Defence Department. When the war broke out, an enormous and obviously a temporary expansion of the staff of the Defence Department became necessary. The number of temporary employees to be engaged was so great that it was extremely unwise to appoint them under the Public Service Act. If honorable senators will refer to that Act, they will see that it is possible only to engage a temporary employee for six months, with the possibility of an extension for a further three months, or nine months in all. That would involve a continually changing staff, and the continuous engagement of new men, absolutely inexperienced in the work they would have to perform. In consequence of that, it was decided that these appointments should be made under the civilian regulations of the Defence Act. After some experience that method also was found to be unsatisfactory, for the reason that it was necessary that we should secure the benefit of the experience which the temporary employees gained in the Defence Department, and they should not, therefore, be in a position to leave the Department in the lurch when they wished, because, perhaps) they received a better offer elsewhere. To meet this difficulty, a Pay Corps was formed, in which men were enlisted for the term of the war, thus taking from them the option of leaving the Department, since they were practically enlisted as soldiers. The object was to secure a permanent staff during the war, and at the same time to reserve the power to dismiss those who proved to be inefficient. This has undoubtedly led, as the Royal Commission testified, to a very great increase in the efficiency of the Pay Branch.
Then, on the Ordnance side, in. both clerical and general divisions, we have public servants, many of them taken over from the State Departments, with all their accruing rights; men appointed under the Defence Act, both clerical and general; and others who represent military appointments.
Then there is a class known as military staff clerks employed under the Defence Act, and separated from the Public Service. The reason for this is that, in the event of an invasion of Australia, these men would have to be treated as soldiers. They would not have the right to resign in time of war, and would have to go wherever they were sent, since it is obvious that, in the event of an invasion, it might be necessary to shift the headquarters anywhere. It is, therefore, clear that the clerical side of the Defence Department should be under orders in the same way as soldiers. These men were therefore enrolled as military staff clerks. The conditions of their promotion, transfer, and so on, are governed by Public Service regulations. They are, in fact, public servants, but they do not come under the Public Service Commissioner.
Honorable senators can see that under a system such as that there is great diversity of control and, in consequence, inefficiency. It has been decided therefore to establish a Business Board of Administration which is to take control, under the Minister, of the civil and business side of the administration. It has been thought desirable that for the period of the war and twelve months afterwards all these varying classes shall be brought under the one set of conditions and the one control.
– How will that affect the future?
– I shall come to that presently. This will put them all on the one basis. There is not the slightest doubt that the reform is urgently required, and should be given effect to as soon as possible, especially as we now have a centralized form of control, through the Business Board, whereas previously the control was not centralized. There were numbers of different authorities dealing with different branches, such as ordnance, military staff clerks, pay, and the ordinary clerks staff. Wecould not have that uniform system in such circumstances. Now, however, all have been brought under the Business Board. And, having the centralized control, we should have a uniform policy also.
– What is the position of the Military Commandant under this?
– The military side will be entirely separate from the civilian side. The Commandant will retain full control and power in his district; and, for purposes of discipline, the civilian side will be under him, as previously. But all other considerations pass to the civilian control. It will be the duty of the civilian control to see that the Commandant has an efficient clerical staff, It will not in any way impair the efficiency of the military side, but will take away from it the control which it is the least fitted to possess - that is, the civilian control.
– Has the Minister consideredgiving non-combatant military officials a different uniform?
– That is a matter of detail which does not arise under thisBill; but the proposition has been made. There are certain advantages and certain disadvantages, and it is under consideration at present.
One of the recommendations which the Commission made was that Public Service officers employed in the Department should be brought under the Defence Act, and should be deemed to be persons employed in a civil capacity for purposes in connexion with the Defence Force. The Commission also recommended that arrangements be made for military staff clerks to be employed in a civil capacity in connexion with the Defence Force. It was pointed out that divided control of officers existed in the Department to-day, involving varied conditions of employment. This Bill is designed to abolish that divided control, and to bring all persons employed in the Defence Department in a civil capacity under the one set of regulations.
The Bill is intended to come into force upon a date to be fixed by proclamation, and will continue in force for the duration of the war and for twelve months thereafter, but no longer. If Parliament assents to the measure it will be necessary to make certain amendments in existing regulations; and, to give time for that procedure, the Bill will come into force by proclamation, and not automatically upon the signature of the GovernorGeneral.
– Who are the people who will not; come under the operations of this Bill?
– On the civilian side, none.
-Colonel O’loghlin. - How will it affect the Ordnance Branch ?
– The Ordnance Branch will come under this Bill.
Another consideration is that when this Act expires the persons who have been affected by it will revert to the Public Service, or to the corps of Military Staff Clerks, as the case may be; and they will retain such increase in their statusas they may have gained in the ordinary course of advancement in the meantime. Thev are, for the period of the war, and for twelve months thereafter, seconded from the staff of the Military Pay Corps, and they will all come under this enactment. Then, if during that term, they have received promotion - which will be upon the recommendation of the Business Board - or if they are transferred or are disrated, and are reduced in salary for some offence - all such considerations will be based upon the recommendations of the Business Board. When they return to the Public Service all officers will be treated as though they had been under the Public Service Act throughout; so that their positions will be the same.
-Colonel Bolton. - Can they be dismissed from the Service altogether under this Bill?
– I shall refer to that later.
Provision has been made whereby all Public Service offices held by permanent officers of the Defence Department are to cease to be offices under the Public Service Act, and are to become civil offices in the Defence Force, that is, offices which will be governed by the regulations for the civilian staff under the Defence Act. Public servants holding those offices, and also officers of other Departments who have been temporarily transferred tothe Department of Defence, will cease to be subject to the Public Service Act, and will become, and be deemed to be, persons employed in a civil capacity in connexion with the Defence Force. During the war we have had to beg, borrow, or steal officers from any other Departments whence we could secure them; there are quite a number of officers in the Public Service who have been appointed to positions in other Departments, and who have been loaned to the Defence Department for the period of the war. Those officers Will come under this Act, and will, for the time being, cease to be Public Service officers.
– They are not enlisted men, are they?
– In the Pay Corps they are, but not in the other branches. Their positions will be safeguarded by this Bill. They will not suffer by the fact that during the war they have been loanedto the Defence Department. The Public Service Commissioner has agreed to the Bill, and no officer will suffer by the fact that he has been brought under this measure. The whole of the Public Service officers, whether permanently attached to the Department of Defence, or loaned to the Department by other Departments of the Service, are to become subject to the regulations for the civilian staff made under the Defence Act.
There are certain rights of public servants laid down under Part IV. of the Public Service Act, which rights are required to be maintained. First, we require all public servants to insure their lives. That obligation must bc maintained, otherwise an officer might cease payment of his premiums, and then, when he has returned to the Public Service, he would be uninsured. We have to provide, therefore, that officials shall continue to pay their premiums. The giving of leave is governed by the number of years in which an officer has been a member of the Public Service, or, in other words, by the term he has served under the Public Service Act. And, although he has ceased to be a public servant, the period which he serves under this Act is to be counted as service under the Public Service Act. So that there, again, his rights are to be conserved.
– His seniority rights will notbe affected?
– His seniority will be respected.
Concerning loaned officers, it must be remembered that those will include not only persons who have been already loaned, but others who may henceforth be required. When such officers are loaned, they will automatically come under this Statute. There is a clause in the Bill to meet the cases of loaned officers who may not desire to come under its provisions. It is not proposed that they shall be forcibly taken away from the Public Service. A period of fourteen days is to be allowed after the commencement of the Act; or, in the case of future transfers, after the commencement of employment in the Department, within which officers may signify that they do not desire to be brought under the Act. It will be assumed that any officers who do not express their desire to remain under the Public Service Act shall have consented to be brought under this Act.
There is another right, or privilege, possessed by public servants which it will be necessary to conserve. It is not proposed that the operation of this measure shall prevent an officer of the Defence Department, or an officer of any other Department loaned to the Defence Department, from securing transfer or promotion to another Department during the continuance of this Act. For example, a man. may be an officer under the Public Service Board, or in the PostmasterGeneral’s Department. The Public Service Commissioner treats the whole of the Service as one institution, and an officer under the Department of the PostmasterGeneral has the right to apply for a position in any other Department where promotion may be offered. It is necessary, then, to safeguard loaned officers; so it is provided that they shall be eligible for transfer or promotion to any office in the Commonwealth Public Service just as if they had remained under the Public Service Act. Of course, it is provided that no such transfer or promotion shall be carried into effect unless the Minister, in writing, has consented to the officer concerned ceasing to be employed in a civil capacity in the Defence Department. Thatis essential in order that the Minister may not lose that control over his officers which this measure is designed to confer. In the strenuous times which the. Department is at -present experiencing, it may not be in the public interest to permit an officer to leave the Department. Public interest must be the first consideration; but consent, to the transfer or promotion being carried into effect will not be withheld where a suitable successor can be found to carry on the work performed by the officer in question in the Defence Department. If the Minister is unable to give his consent, the transfer or promotion will nevertheless stand. The officer will still continue to be employed in a civil capacity in the Defence Department as an officer loaned from the Department to which he has been transferred or promoted.
I come now to the question raised by Senator Bolton. Under the Public Service Act, if an officer is charged with an offence, or with being -inefficient, or incompetent, that charge must be lodged by the head of his Department. A Board of inquiry must then be appointed, the personnel and procedure of which are set out under the Act. The Board will comprise a representative of the branch of the Service to which the officer belongs, a representative of the Permanent Head, and a representative of the Public Service Commissioner. The Board will conduct its investigations! and upon its report the Com missioner will have to make his recommendation. The procedure under the civil regulations of the Defence Act are an exact copy of the Public Service regulations in that regard, but there is an essential difference between the control of a branch of the Service, such as the Defence Department in war time, and a branch like the Customs Department, or that of the Postmaster-General. Boards of inquiry have in some cases continued their investigations for as long as six and nine months before a finding has been presented. Necessarily., such a procedure could not, and should not, effectively be applied to a service of the nature of the Defence Department, which is actively engaged under war conditions.
It is proposed, therefore, that the regulations shall practically substitute for the Inquiry Board the Business Board of Administration, which will be in a position to make recommendations to the Minister as to the dismissal, or disrating, or transfer, of any officer under the Act. There are three classes of officers to be considered in this regard. First, there is the official who has been appointed under the Defence Act, and whose rights or privileges in that regard could at any time be altered by the Minister for Defence, by regulation. For convenience, and to keep in touch with other Departments, the Minister has adopted similar regulations to those existing in the Public Service, but there has been no obligation upon him to do so. Then there are military staff clerks and members of the Pay Corps, who may be dismissed at any time. These officers have a right to claim a Court of inquiry, but it remains with the Minister to say whether or not he will grant it. There is also the Public Service Officer who is appointed to the Defence Department, but who is governed by the Public Service Act, and. the Public Service officer who is loaned to that Department. In regard to military staff clerks, members of the Pay Corps, and Public Service officers appointed to the Defence Department, we propose to deal with them in regard to the questions of dismissal for inefficiency, disrating, promotion or transfer, through the Board of Administration making recommendations to the Minister. Where a loaned officer commits some offence which the Board thinks should be punished, it will have the .power to recommend that he be returned to the Public Service Commissioner. It will then be for the Commissioner to decide what action shall be taken in regard to that officer. The Commissioner may proceed against him under the Public Service Act by charging him with an offence, or may restore him to the position from which he was taken. Another feature of the Bill is that, whilst the war continues, and for twelve months thereafter, no permanent office is to be created in the Department of Defence under the Public Service Act. Any new office which may be created, will be created under this measure.
– So that officers appointed under this Bill will not have power to withdraw during the period of the war?
– Any new officers appointed will have the power to tender their resignations, which may or may not be accepted. If they join the Pay Corps as enlisted men, they will have the right to ask to be allowed to resign, and on the merits of their application the Minister will decide.
– What procedure will be followed in case of the dismissal of permanent officers on the military side of the Department?
– That is not touched by this Bill in any way. The measure deals entirely with the civilian staff/
– Is it intended to bring forward a Bill to confer similar privileges upon ordinary working people who are not in the Department?
– I do not know to what the honorable senator refers.
– Will new officers have any claim to enter the Public Service after this Bill has ceased to operate?
– If a new office has been created, yes; but not if an officer has been appointed. The honorable senator knows that under our Public Service Act the procedure followed is that before a person can be appointed to the Public Service theremust be an office to which he can be appointed. Under this Bill it willbe competent to declare a new office. Then an officer who isalready in the Service may be appointed to it, or applications may ‘be called from persons outside the Service.
– The new officers will have no claim to get into the Public Service in the same way as transferred. officers?
– Oh, yes. If a new appointment be made under thismeasure it will be made on the same lines as a new appointment to the Public Service, and the officer concerned will betreated in the same way as if he were a member of the Public Service.
– Will not that lead toovercrowding the Public Service after the termination of the war ?
– No. Becausethe great majority of our appointments will be of a temporary character, and the creation of new offices is not contemplated. The only new offices which will be created will be on account of some permanent extension of the activities of theDepartment.
-Will new appointees under this Bill be enlisted?
– In the Pay Corps, yes, but not necessarily in other sections of the Defence Service. In theOrdnance Corps, possibly, the men will beenlisted; but the conditions governingthat corps have not yet been laid down. All that has been agreed to by the Government is that there shall be an Ordnance Corps, and the Board has been asked to frame conditions under which it shall be established. One of the conditions which at present obtain in the Pay Corps is that a man enlists for the period of the war.
There is a difficulty in regard to officers who may be loaned to us from another section of the Service, or who may be in the Defence Department. Many loaned officers who were occupying, perhaps, subordinate positions in other branches of the Public Service, have, by reason of thenecessities of the times, been called upon to discharge more responsible duties, and, ‘ as a result, are in receipt of higher salaries. Where an increase of salary is given to a loaned officer under this Bill, it will be treated as if that officer had been given that increase in the Public Service. It is only equitable that heshould be remunerated for the services which he renders; but it is not in the public interest that he should be permanently raised to the higher class when it is known that the work will cease within a year or two after the termination of the war. In some cases this increase will be granted as an allowance. For instance, a postal officer loaned to the Defence Department may gain an increase in two ways. He may be entitled to an increment in the ordinary way, or he may be called upon to temporarily discharge more responsible duties in the1 Defence Department. In such cases the position will be met by an allowance being granted to the officer while he remains in the Defence Department. He will thus lose nothing, but will be paid for the more responsible work which he performs while associated with that Department. All officers of the Defence Department on retransfer to the Public Service, will again become subject to the Public Service Act. Their salary on return, transfer, or promotion, will not be less than that received by them at the time they were under the civilian regulations under the Defence Act.
No permanent office is to be created in the Defence Department under the provisions of- the Public Service Act. In lieu thereof, civil offices may be created, that is, offices under tlie civilian regulations. In making an appointment to such an office, the Governor-General will state the opinion that, but for the passing of this Act, the office to which the appointment is to be made, would have been created under the Public Service Act. It” is desirable that this point should be settled on the making of the appointment, in order that the appointee’s obligations in regard to life assurance may be determined. If it is an appointment which would, but for this Act, have been made under the Public Service Act, then- the appointee must insure in accordance with Part IV. of the Public Service Act. The reason for this is that as the appointee will eventually become an officer of the Public Service, he should, at once assume the obligation placed on all other public servants, of insuring his life. Clause 11 is intended to maintain uniformity between the Defence Department and the Public Service in the matter of increments, so that officers of the one shall gain no advantage over those of the other, and so that officers who become subject to this Act shall not gain or lose in the matter of status as compared with officers of other Departments of the Public Service. It is a safeguard also to assure that when officers return to the Public Service they will be on the same mark as, in all probability, they would have attained had they remained subject to the Public Service Act.
Clause 13 provides that service in the Public Service and service, in a civil capacity in the Defence Force, shall beregarded as continuous with each other, and the one included with the other for the purpose of determining any rights to which the officers are entitled, such as leave based on length of service.
Clause 14 deals with the consequences following upon the expiration of the Act. Paragraph a provides that all offices in the Defence Department which, by virtue of the Act, ceased to be offices under the Public Service Act, -shall again become offices under the Public Service Act. The next paragraph sets out that public servants, both those permanently attached to the Defence Department and those temporarily transferred from other Departments, shall again become subject to the Public Service Act, just as if this Act had never been passed. Another provision is that all civil offices created in the Department during the continuance of this Act, which, in the opinion of the Governor-General, as expressed on making the appointment to the office, would have been created under the Public Service Act if this Act had not been passed, shall be deemed to be offices under the Public Service Act in the Defence Department. The persons appointed thereto will become Public Service officers. When officers revert to the Public Service Act, they will go back .at the salary they are receiving at the time under the civilian regulations of the Defence Forces. In order that the salary an officer will thus receive on re-transfer to the Public Service Act may be as nearly as practicable the same as he would have received had he remained under that Act, provision is made in the Bill that officers in the Defence Department shall be treated in the matter of increments as nearly as practicable on equal terms and conditions with officers of similar status in the Public Service. It is also provided in clause 10 that any extra remuneration granted to defence officers for extra responsibilities imposed on them during war time shallbe payable solely in the form of an allowance while carrying out the higher duties.
– Can the Minister tell us why the Bill recommended by the
Defence Commission has been so lengthened ?
– For the simple reason that the Royal Commission did not profess to be a Commission of lawyers. They recommended only the lines upon which we should proceed. Their recommendations were considered by the Government, adopted, and then referred to the Crown Law officers, with instructions to draft a Bill to give effect to them - nothing more and nothing less. Moreover this Bill, as Senator Pratten has it before him to-day, has been referred to the Business Board for their consideration, and they have approved of it. Upon that Board is Mr. McBeath, who was Chairman of the Royal Commission, and he has approved of it without qualification. So that what we are putting forward in this Bill is merely intended to give effect in legal form to the recommendations of the Royal Commission. I hope that the measure will have a speedy passage, and I askhonorable senators, no matter what may be their views on the Public Service Act generally, to abstain from entering into a general discussion either upon the faults or the merits of that Act. As honorable senators know, the Public Service Act, as a whole, is under the consideration of the Government. The Acting Public Service Commissioner is only holding an acting appointment-
– How long has be been holding it?
– About twelve months.
– Nearly three years.
– It may be. The whole Act needs to be reviewed in the light of the changes which have occurred since it was passed. I ask honorable senators to regard that Act- as the status quo, reserving to themselves the right to press their views for an amendment of it, when it comes up for amendment, as it must shortly do. I ask them to give lis the additional powers that are contained in this Bill so far as the Defence Department is concerned, in order that we may get a more satisfactory service in the very important branches with which the measure deals. I refer particularly to the Pay Branch, which is doing a tremendous amount of work. Very few honorable senators have the slightest idea of the amount of work that it is doing. Re cently I invited the members of this Parliament to visit the Pay Branch in order that they might see for themselves the work which is being done there, and I deeply regret that so few of them saw fit to accept that invitation.
– The time was so unsuitable.
– No time is suitable to some persons. I ask honorable senators to accept my assurance that we. have been labouring there under tremendous difficulties with a tremendous expansion of work. What we are now asking for is undoubtedly necessary in the interests of efficiency in order that we may get unity of control, and prevent divergent classes from acting in divergent ways in connexion with our administration.
Debate (on motion by Senator McDougall) adjourned.
In Committee (Consideration resumed from 30th May, vide page 5293) :
Postponed clause 15. (Repeal of section 19 of the principal Act; special deduction) .
.- The Minister (Senator Millen) promised to supply additional information showing how the clause would affect the existing Act, and, in particular, if and to what extent sub-clause 1 would increase the taxation to be paid by taxpayers coming under section 19 of the Act. He was also to tell us if taxpayers coming under the other subclauses would be called on to pay taxation ; and, if so, how much ? Will the Minister now give us any additional information he has obtained from the departmental authorities ?
– I can only repeat the assurance that the clause does not impose additional taxation unless it may be an infinitesimal . fraction in certain cases. Originally the exemption was allowed in a set proportion in the case of joint incomes, some being deducted from the income derived from personal exertion and some from the income derived from property. That involved! a multiplicity of calculations, because there are many mixed incomes in Australia. It has therefore been thought, desirable to simplify matters by taking the exemption in the case of joint incomes entirely from property if the income derived from property is big enough to permit of that being done, and, if not, so much of the exemption is taken from it as represents the amount of that inincome, and the balance is taken from the income from personal exertion. In order to give effect to that arrangement an alteration is made in the point at which the exemption vanishes. Originally that vanishing point was £748 in the case of income from personal exertion, and £506 from income from property. They are both merged as one income now, and the vanishing point is fixed at £627, which is the mean between the two amounts I have just mentioned. The purpose is not to obtain any greater revenue, but is merely to simplify the calculations consequent on the distribution of the exemption between those two classes of income.
Clause agreed to.
Title agreed to.
Bill reported with amendments.
Standing and Sessional Orders suspended.
Motion (by Senator Millen) proposed -
That the report be now adopted.
Amendment (by Senator Pearce) proposed -
That the Bill be recommitted for the reconsideration of clause 7, paragraphc of clause 14, and clauses 32 and 46.
– Will the Minister also recommit clauses 2 and 14 ?
– My colleague (Senator Pearce) has included paragraph e of clause 14 in the motion for recommittal, which will give the honorable senator the opportunity he desires’. It is not necessary to recommit the whole clause.
– I think it is; because the subject to be discussed will take in several phases of that clause.
– I am unable to meet the honorable senator there. The point he raised referred to allowances for depreciation. That is covered by paragraph e of clause 14. We are moving for the recommittal of that paragraph, although the honorable senator had the opportunity of discussing the question when the clause was before the Com mittee. I recognise that at that time there was a mild head of steam on, and that probably the honorable senator inadvertently overlooked the matter, but I do not think he ought to ask for the recommittal of the whole clause, nor can I acknowledge any obligation to assist him in securing the recommittal of clause 2. The matter the honorable senator wants to raise on that clause was mentioned in Committee, and he was informed that he could submit his proposal as a new clause. He did not avail himself of that opportunity.
.- Mr. President-
– Order.! The honorable senator has already spoken.
– Have I not the right to move an amendment?
– The honorable senator would have had the right, but he has already spoken. If, however, he inadvertently lost his right by giving way to the Minister, I will hear him.
– I desire to move -
That clauses 2 and 14 be recommitted.
I do so for this reason : When I was speaking on clause 2-
– It will be necessary for the honorable senator to move what he desires in the form of an amendment. The best course for him to take is to move that the words “ paragraph e of “ be left out of the motion proposed by the Minister for Defence, and then to move “ That the words ‘ clause 2 ‘ be inserted.”
– Then I move -
That the words “ paragraph e of “ be left out.
– I point out that the honorable senator has had every reasonable opportunity of discussing any portion of the Bill, and therefore I think it is stretching it a little bit too far for him now to seek to open out a wide field of discussion by moving for the recommittal of the whole of the clause referred to, especially as the one point which I understood from the honorable senator’s representations he desires to have discussed is included in the motion. In the interests of the orderly and expeditious transaction of business I think that even the generous instincts of honorable senators should not carry them too far, and I hope, therefore, they will join with me in dissenting from Senator Pratten’s amendment.
– I have no desire, and I do not think Senator Pratten has any desire either, to unduly prolong debateor delay the passage of the Bill ; but, through ignorance of procedure, we were debarred, when this clause wasunder discussion previously, from submitting amendments which we were anxious to have included.
– Will the honorable senator say what portion of clause 14 he desires to discuss again?
– Paragraph e.
– That paragraph has been included, but Senator Pratten desires to recommitthe whole clause, which contains a dozen or more paragraphs.
Question - That the words proposed to be left out be left out (SenatorPratten’s amendment) - put. The Senate divided.
Majority . . . . 5
Question so resolved in the negative.
Original question resolved in the affirmative.
In Committee (Recommittal).
Clause 7 (Exemption of personal exertion income of persons on active service).
– This clause exempts from taxation the income of persons who have enlisted in the Australian Imperial Force. When it was last under consideration, some dis cussion took place as to whether the exemption would date from the time of enlistment or embarkation, and the question was further involved by the possible case of an Australian enlisting in some other unit outside of Australia. I have drafted an amendment to meet the case; but , I think the better course would be first to strike out the clause and insert a new provision.
– I move -
That the following new clause be inserted: -
Section 13 of the principal Act is repealed, and the following section inserted in its stead: - “ 13. This Act shall not apply to the income derived from personal exertion by any person who is or has been on active service outside Australia during the present war, with the Naval or Military Forces of the Commonwealth or any part of the King’s Dominions, or of an Ally of Great Britain, from the date of his enlistment in or appointment to those Forces until the date of his discharge therefrom, or the termination of his appointment.”
Proposed new clause agreed to.
Postponed clause 14 -
Section 18 of the principal Act is amended -
by inserting in paragraph (e) of subsection ( 1 ) thereof, after the words “ for the purpose of producing income,” the words “ such wear and tear not being of a kind that may be made good by repairs.”……
Paragraph proposed to be amended -
Such sum as the Commissioner thinks just and reasonable as representing the diminished value per centum by wear and tear, during the year in which the income was derived, of any machinery, implements, utensils, rolling-stock, and articles used by the taxpayer for the purpose of producing income.
– I wish to submit an amendment which will have the effect of inserting in paragraph e of sub-section 1 of section 18 of the existing Act the word “ buildings “ before the word “ machinery.” The paragraph would then read, “ Such sum as the Commissioner thinks just and reasonable as representing the diminished value per centum by wear and tear, during the year in which the income was derived, of any buildings, machinery,” and so on.
– Order ! I remind the honorable senator that paragraph e of clause 14 of the Bill is now before the Committee, and it is necessary that he should submit some amendment of that paragraph, which I can put to the Committee. The existing Act is not before the Committee.
– Perhaps Senator Crawford will permit me to offer a suggestion. I think I see the honorable senator’s difficulty.
– Through the Minister confining the recommittal of clause 14 to this one paragraph.
– It would not have made any difference if the honorable senator had been free to roam over the whole of this Bill, and over every Act on the statute-book, or likely to be placed there in future. Senator Crawford will have an opportunity of testing the opinion of the. Committee on the matter he desires to raise if he proposes an amendment to add certain words to the paragraph before the Committee. I am not saying that this amendment is ideal or symmetrical, but it will give the honorable senator the opportunity for a decision upon the point he wishes to raise. He might move that there be added to the paragraph the words, “ This paragraph shall also apply to buildings.” If that were carried it would throw upon those in charge of the Bill the responsibility of taking other action to put it into an effective form.
– In accordance with the Minister’s suggestion, I am prepared to move that there be added to the paragraph the words, “ This paragraph shall also apply to buildings.”
– I think it is possible that Senator Pratten wishes to deal with something occurring earlier in the paragraph. I desire to help the honorablesenator.
– To support me?
– To support the honorable senator to his own destruction.
– I thank the Minister most sincerely, as a loyal supporter, for giving us even the chance to re-consider one paragraph of this very long clause. I think there was an honorable understanding in connexion with several phases of the passage of the Bill.
– Order! The honorable senator is not in order in discussing the whole Bill.
– I am discussing the recommittal of the Bill, for the pur- pose-
– Order! The Bill is in Committee for the purpose of the reconsideration of paragraph e of clause 14. If the honorable senator has an amendment to submit to the paragraph, I shall be pleased to hear him.
– I move-
That the following words be added to paragraph e: - “Provided that if a machine, in respect of which depreciation has been allowed, is scrapped as obsolete, a deduction may be made from the profit of the year in which it was scrapped equal to the writtendown value of the machine, i.e., the cost, less, the depreciation, allowed by the Commis sioner.”
– I understand the purpose of the amendment. I assume that, as Senator Pratten did not speak to it in submitting it, he does not propose to do so.
– The Minister liasanticipated my rising.
– There was no reason why the honorable senator should have resumed his seat. He might have made his speech in submitting his amendment.
– I intend to say a good deal about it.
– I formed the conclusion that, as the honorable senator did not proceed to address himself to the amendment, he did not intend to do so. If he proposes to advocate the amendment, I shall resume my seat to give him an opportunity of doing so.
– It will be remembered that, on the second reading of the Bill, I pointed out how undesirable it was for the Commissioner to take up the rigid, narrow, and often harsh, attitude he adopts with regard to allowances for depreciation. I mentioned that it is felt throughout the community that the one thing necessary for our financial salvation in the future is increased production. I say that this is an age of machinery, and the more perfect we can make our machinery the better it will be for Australia. The attitude which the Commissioner of Taxation takes up in allowing, as a rule, only 5 per cent, for the depreciation of plant and machinery in the various factories and other industrial enterprises in Australia is manifestly unfair. It is well known to anyone who is familiar with the subject that machinery is scrapped very much earlier now than it used to be a generation ago. In America an intricate automatic machine of to-day may be scrapped for a better one tomorrow. That means progress. The reason for the scrapping is that the new machine gives a better return. Now what is the attitude on the matter of depreciation which the Commissioner of Taxation takes up ? Take the case of a tin shop, in which there are intricate machines dealing with tin plates for the manufacture of tins. The Commissioner says that there may be an allowance of 5 per cent, for depreciation on machinery of that kind. It is not an allowance of 5 per cent, every year, but of 5 per cent, on the diminishing value of the machinery calculated on his basis. The result is that it takes thirty years practically to write off the item, at the rate of 5 per cent, on the diminishing amount. Yet this intricate tin-making machinery will not, on the average, have a life of more than seven, or, at the outside, ten years. The business man, of course, must allow 10 per cent, every year on the original cost of machinery such as this. Take the case of a confectionery manufactory, a jam, or preserving, or canning factory, and also the machinery in the engineering shops in Sydney, and I ask any man who knows anything about’ what is going on to say whether the life of that machinery averages more than ten years.
– Some machines I worked on forty years ago are still in use.
– Take a linotype machine in a printing works. Will anybody say it will last for thirty years?
– A “Wharfdale” will.
– I am sorry the Minister has not a more progressive mind than to think such a machine will not be obsolete before another thirty years.
And further, this matter has relation to the rapid development of Australia, and that is a factor which should be considered by the Committee. If we place any check upon, or discourage the scrapping of old machinery for new, we shall be putting a brake upon the wheel of production. So far as I have ascertained, the whole of the secondary industries of Australia, generally speaking, consider they are imposed upon by the Taxation Commissioner in regard to the amount’ which he allows for depreciation. The remark has been quoted, in the course of debate/ “ Look at the profits made; look at the amount we allow you/’ I have given some thought to that phase of the question, and I cannot see how book entries can mean an addition of any further capital to a business. It has been stated that the 5 per cent, allowed as depreciation on machinery is earning profits. Maybe it is earning 20 per cent, in profits, but I cannot see how it is earning any at all; and if the Minister will make that clear I shall at least have received a lesson in business ethics.
– It is not a question of ethics.
– Shall I say business knowledge?
– So far as I can see, the only additional capital in the business, as a result of any allowance in depreciation on plant and machinery, is the difference between what the taxpayer ought to pay to the Commissioner upon his assessment, and what he does pay. For instance, if a manufacturer has £10,000 worth of machinery, which, on the average, he must replace in ten years, the only sound, businesslike and reasonable thing is for him to deduct £1,000 each year from the original £10,000 until the whole of the amount has been written off. He does not get that £1,000 in cash. Itis a book entry.
The Commissioner says he will allow only 5 per cent., and will deduct only £500 per annum, and that that 5 per cent, shall be only on the diminishing value of the machinery. The result is that in about eight years the manufacturer, with his nearly obsolete machinery, has it in his books at a book value of £2,000, while the Commissioner has it in his books practically at a value of £7,000.. If he goes on for another two years the manufacturer has to buy more plant and machinery, and he has piled up a book reserve fund for doing so. The
Commissioner would practically assess him then on £15,000 worth of machinery. But I cannot see what capital the Commissioner puts into the business by his diminished allowance; and the only thing that will be saved by the manufacturer, if he gets all he is entitled to, is some few pounds’ reduction in the rate of incometax on the difference between fair depreciation and unfair depreciation.
This is a bigger question than some honorable senators, perhaps, realize. It means either encouraging or discouraging a man from buying up-to-date machinery, and helping to swell the country’s industry. I am not asking more than that when a machine becomes obsolete, if the Commissioner has not allowed a reasonable reduction, then, when the machinery is scrapped, the difference between what the Commissioner has allowed and the realization by the owner upon it should be written off - the amount thus written off to be applied to the purchase, let us say, of new machinery. The methods of the Commissioner are inflicting hardship upon the primary and secondary industries of the community. There should be more generosity observed.
– The honorable senator has raised a point not covered by his amendment, which is one that deals specifically with an allowance for scrapped machinery. The major portion of his remarks had reference to allowance for depreciation.
SenatorPratten. - Does that not bear upon it?
– I am not saying that it does not, but I am trying to distinguish the two points for the purpose of shaping my reply. That is my only purpose in making the observation. The honorable senator stated a good deal about encouragement. He put in a plea for an additional allowance, on the ground that it would encourage industry. I could make that a plea for the abolition of all taxation.
SenatorFoll. - It would be a good thing, would it not?
– For the remitted taxpayer, yes; but we must raise revenue, and in proportion as we offered a special encouragement to one industry by remission of taxation we must not forget that we would have toimpose an additional burden on other industries, so as to make up for that remission.
SenatorPratten. - What would it amount to?
– If it were to amount to a great concession, it would mean a great remission by the Treasurer, and a great additional burden upon other sources. If the Treasurer were asked to give up but little, then the measure of encouragement to industry would be but little. I am not going to pretend that I can. expand Senator Pratten’s knowledge of business procedure; but I can justify my statement that it is perfectly fair, in considering the question of depreciation, to assume that the amount written off for depreciation every year is not permitted by any business man to remain idle. It is put out in some investment, earning interest. Let us take the simplest form of sinking fund. What happens when, each year, a certain amount is set on one side to meet the capital outlay at the end of a given period? It is put out at interest. An individual, or a firm, puts out such a sum as will represent - with the interest which it earns at the end of the period - the capital amount required. Senator Pratten states that it is only a book entry. It is a mighty substantial one. In an ordinary business, with a profit, say, of £1,000 per annum, on the assumption that one had to make no provision for depreciation, there would be £1,000 to distribute among shareholders or to go into the pocket of the proprietor. But, having to allow for depreciation, only £900 is distributed. Profit amounting to £1,000 was made. What becomes of the other £100? It is not locked up in thecash-box. It is either put into the business, or is placed in some other investment. It is earning interest all the while; and that must be taken into consideration. Nobody knows better than Senator Pratten that all reserves are put into the capital of a company, and are earning the same rate of profit’ as is secured by every other section of the capital controlled.
With regard to Senator Pratten’s amendment, it is either a good or a bad proposition. If it is good or bad for one form of asset, it must begood or bad for all forms. Senator Pratten limits it to machinery. It is an entirely one-sided amendment. The honorable senator speaks of machinery being scrapped, and of the amount unprovided for by depreciation being allowed for the year in which the depreciation occurs. Will he go further and say that where it can be shown by the Commissioner that the allowance for depreciation outlasts the life of the machinery, that official shall take the difference?
– The honorable senator is not making provision for that.
– Will the Minister accept the. amendment with that addendum ?
– I am dealing with the amendment as Senator Pratten has introduced it, and it is a kind of “heads I win, tails you lose affair. Speaking generally, the proprietor of a machine is permitted to write off a greater sum than is necessary to cover the. life of the machinery employed by him.
– By the Commissioner ?
– You are illinformed.
– No. I am not over-impressed by the statements of persons owning a particular class of machinery, nor by those who are claimants in this respect. They are generally looking through the big end of the telescope.
– The amount written off for depreciation in the balance-sheet far exceeds the amount conceded by the Commissioner.
– I admit that, but it has always been in excess of the amount necessary to be written off. Every sound business man adopts that method. If 5 per cent. is sufficient, he wipes off 7 per cent. or 10 per cent., and, the more profitable a company, the more prone it is to write off a larger sum in order to hide the profits which are being made. We cannot shut out eyes to that.
– Do not get on to the “ rich man “ touch now.
– I am dealing with the smart man.
– Discuss it on its merits.
– The honorable senator will not deny that it is a recognised practice. One must not take the amount stated in a balance-sheet as any evidence that that is the rate at which machinery is depreciating.
– Why not?
– Because, as I have said, every business firm, for precautionary reasons in the first instance, and, probably, so as not to disclose the whole of its profits, will set down depreciation as being more considerable than the facts warrant. The Commissioner has no fixed rate of depreciation.
– He has a schedule.
– It is not a fixed schedule, and any one who can show, not the mere assertion of the amount set down in the balance-sheet, but that theamount allowed is insufficient, may have that amount raised. But the mere claim for such allowance is no proof.
– You do not assume that the Commissioner is an expert in thematter ?
– No, I do not think he pretends to be.
– Can you give filenames of the persons advising tie Commissioner, then?
– I do not think that is at all necessary, even if I were in a position to do so. Anybody who feel* aggrieved, because he thinks that the rate allowed for depreciation by the Commissioner is insufficient may go before that officer and substantiate his contention. Upon this matter the Department has. consulted all the experts with whom it can get into touch. It has consulted practical men, engineers, and scientists.
– And the Minister will not give me the name of a single one of them.
– And for two reasons. In the first place, I do not know who they are; and, secondly, I doubt verv much whether I am under any obligation to disclose the names of the experts whom the Department consults.
– There are consulting engineers who do that sort of thing.
– And it is quite competent for the honorable senator’ friends, if they feel themselves aggrieved in this matter, to buttress their statements by the evidence of impartial, practical, and scientific men.
– That has been done over and over again.
– The honorable senator says so, but I differ from him. What has been done is to repeat the statement that the allowance made for the depreciation by the Commissioner has not been sufficient. There have been appeals to balance-sheets and general statements to that effect.
– Does not the honorable senator know that public bodies have protested again and again about this matter ?
– Yes. I have also known public bodies to protest against things which Senator Pratten has advocated, but that did not prove that the honorable senator was wrong. Unless it be possible to arrive at some formula by which we can determine with scientific and mathematical precision exactly the rate at which every piece of machinery will wear out, how can we adopt any other method than that we are adopting to-day ? Howcan we do other than leave men free - as they are to-day - to put before the Taxation Commissioner their evidence, to go before him and show that they are not getting a fair deal? In the circumstances I do hope that the Committee will not accept the amendment, which would operate unfairly to the Treasury and the taxpayers generally.
– I think the Minister was quite right in reminding the Committee that very often money written off for depreciation is re-invested, and is, to a certain extent, reproductive. But I would point out to him that if this capital is earning profit for its owner, it is, at the same time, liable to taxation. Not only does it increase the revenue of its owner, but it also increases the revenue of the Commonwealth. If the amendment be accepted I believe that it will do away with a good deal of the irritation that undoubtedly exists to-day.
– And injustice.
– It will do away with a great deal of the irritation and injustice which is done under existing legislation. All that Senator Pratten proposes is that when, from any cause whatever, machinery has to be scrapped, its owner shall be allowed to write off in his books the balance of the capital cost remaining on that machinery. The honorable senator was quite right in saying that machinery often has to be scrapped for other reasons than wear and tear. Some of us saw a very apt illustration of that in the Commonwealth Woollen Mills at Geelong, which we visited on Monday last. There we were shown several spinning machines, and we all marvelled at their perfection. But after we had seen seven or eight machines of that particular type, we were shown one which does quite the same quantity of work and which occupies only half the space.
– The others were not scrapped.
– But if that concern were being conducted by private enterprise, and if, in normal times, a competitor came along and equipped mills with the latest machinery, I venture to say that the pioneer firm in the industry would have to throw out its old plant and spend, perhaps, many thousands of pounds in putting itself upon an equality with its rival. We desire to encourage enterprise, and the use of uptodate methods, and the Committee will be doing only what is reasonable and just - and what will eventually prove to be in the interests of the Commonwealth - if it adopts the amendment.
– I am rather pleased to discover that Senator Pratten, Senator Foll, and Senator Crawford are so much concerned about this matter. May I urge upon them, during the short recess which we are now approaching, the wisdom of securing a copy of Henry George’s Progress and Poverty.
– Order ! The honorable senator will not be in orderin pursuing that line of argument.
– I have listened with very great interest to this debate, and I confess that at first I was inclined to think that a bigger allowance ought to have been made on account of wear and tear. But the Minister (Senator Millen) has convinced me that, under the existing system, a fair allowance is made. In regard to the scrapping of machinery, I submit that what we want to do in principle is to tax a man upon his income.
– I rise to a point of order. Is Senator Fairbairn in order in laying down what he conceives to be the true principle of taxation, seeing that I was ruled out of order because I wished to direct attention to the ideal method of raising revenue?
– If Senator Fairbairn goes too far he will be out of order.
– I was remarking, when I was interrupted, that the correct principle to follow is to tax a man upon his income. But if, unfortunately, a man has to scrap one of his machines which has become valueless, he will not be taxed on his income if Senator Pratten’s amendment be not adopted. I think it is only reasonable, where a man has to scrap a machine, that he shall be allowed to deduct from his income the value of that machine. Otherwise we shall be taxing him on what is not income. If, for example, he purchased a machine for £1,000, after the lapse of two years, a little more than 10 per cent. would have been written off as depreciation. In other words, that machine would be valued at £850. Then, if he were suddenly called upon to scrap that machine, he would make a loss of that amount. Surely it is a fair thing, then, to allow him to write it off his income.
– He will have to spend the amount on fresh machinery.
– He will need to replace it, otherwise he may have to go out of business altogether. Now, if he be not entitled to write off the value of the machine upon scrapping it, I submit that he will be the victim of an injustice. The Minister has said that business men usually allow for depreciation a larger rate than experience has shown to be necessary. But it is within the power of the Commissioner to cut down that rate. Where scrapping takes place the individual concerned undoubtedly loses money.
– That is to say, he loses an asset?
– Will the honorable senator apply the same principle to all assets ? If the Commonwealth is to yield the loss on an asset it ought to yield the loss on all assets, and to take all increments that may accrue on all assets.
– If a man scraps a machine, unquestionably he makes a loss which he should be allowed to include in his income tax schedule as a loss for the year.
Sitting suspended from 1 to 2.30 p.m.
– I understand that Senator Crawford has an amendment to in clude buildings. Will it be necessary for me to withdraw my amendment tem-. “porarily to give him an opportunity to move his, or can my amendment go to a vote on the understanding that the Minister will accept the principle of Senator Crawford’s amendment for inclusion in its proper place in the Bill?
– Senator Crawford’s amendment can be moved after the honorable senator’s amendment has been dealt with.
.- No honorable senator who is a big Australian and desires to see Australia progress can possibly vote against Senator Pratten’s amendment. I am supporting it purely in the interests of progress. We continually hear cries from every part of Australia that we should support home industries and encourage Australian manufactures so that they may meet competitors from other parts of the world on a fair basis. The amendment will materially assist Australian firms now struggling under adverse conditions in the endeavour to compete successfully with other markets. The Government should give every encouragement possible to manufacturers to scrap their machinery and install machinery which is uptodate. The point made by the Minister (Senator Millen) that some revenue would be lost was fictitious, because the amount of revenue lost on account of machinery being scrapped will be more than compensated for by the extra revenue received by the Government through the purchase of new machinery, and from the additional earning power of the firms who make improvements. When the war is over there will be a cry throughout the world for economic production.. Owing to the amount of scientific research which has taken place since war was declared, and the continual improvements made in every branch of machinery, a great deal of the machinery that was considered quite up-to-date in 1914 is inadequate for future requirements. In America, where machinery has reached a higher state of perfection than in any other part of the world, the rate of wages of the artisan is considerably higher than elsewhere. That is due to the high rate of production and the fact that the factories are so uptodate. In the Ford motor industry higher wages are paid than anywhere else, and
I understand that the lowest paid man employed by that concern receives£1 per day. Probably in America they have a Government that encourages manufacturers to be up-to-date. If our Government truly desire to see our home industries flourish, they should accept the amendment. Another class of machinery that depreciates rapidly is that used in farming, owing to its constant exposure to the weather. On my way to Geelong the other day I noticed a large amount of farming machinery lying idle in the paddocks, although apparently notmore than a few years old.
– It should be under cover.
– No; because it is practically done with. It quickly depreciates, and is soon scrapped. The depreciation at present allowed by the Commissioner does not cover the loss. The simple issue is whether the Government will encourage Australian manufacturers to progress by giving them a fair chance to bring their machinery up to date and compete with other markets, or whether, through stubbornness, they prefer to leave things as they are.
– I have been very silent on the Bill up to now, but Senator Foil’s eloquent address brings me to my feet to protest that I am not a small Australian because I am going to vote against the amendment. We arc living in a time when we have to be rather severe in our taxation, and the taxpayer for some years to come will have to pay taxes which would probably not be imposed in normal times. This Parliament, like other Parliaments, lays down the principle on which taxation shall be based. Having created a system of income tax, I, with other members of the Legislature, have employed professional men to carry out the policy of this Parliament. The Commissioner of Taxation has been instructed by Parliament to give effect to the income tax principle, and we look to him to do it. Wo one has been more severe in his criticism of that officer than Senator Pratten, who compared the work done in the New South Wales Income Tax Department with that of the Commonwealth.
– Order! I must ask the honorable senator not to wander too far from the question of the depreciation of machinery now before the Committee.
– I am dealing with the amendment, which proposes a further relaxation of taxation, and allows a further escape to certain taxpayers, although Senator Pratten has already complained about the numbers that do escape. Having instructed the Commissioner to collect the tax under the principle laid down by Parliament, it is my duty to give him the power he thinks necessary to carry out our instructions.
– The question of the general duties of the Commissioner of Taxation is not before the Chair.
– The Commissioner of Taxation has presented this clause to the Committee.
– Order! The Bill has been presented to the Senate by the Minister for Repatriation.
– The Bill, as presented to the Committee by the Minister, contains clause 14, which was drafted on the instruction and with the advice of the Commissioner.
– On the experience of the Commissioner.
– At any rate, the Commissionerands it necessary to have that clause in order to carry out our instructions. It is not the duty of honorable senators at this stage to dictate to the professional men we employ as to what is necessary to give effect to our instructions.
-We are dealing with a principle under this clause, not with the machinery to give effect to principles.
– The amendment will give further taxpayers an ‘opportunity to avoid paying what they certainly should to the revenue in the present circumstances of the nation.
– Certainly not. The purpose of theamendment is to avoid an injustice.
– Under the clause, 5 per cent, is allowed for depreciation, and under the present system that is all we should ask. The argument of Senator Foll and others, thatthe clause as it stands will discourage the introduction of modern machinery, is more imaginary than real.
– The clause allows “ such sum as the Commissioner thinks just and reasonable.”
– There may be circumstances, such as the depreciation of out-of-date machinery, where the Commissioner may allow more; but I understand that, as a rule, 5 per cent, is the basis on which he proposes to act.
– There is machinery working in Australia to-day which has been up for the last forty years.
– Quite so. Many people will certainly derive considerable advantage from the allowance of 5 per cent, upon their plant. Others, perhaps, may suffer some disadvantage. Considering the exigencies of the circumstances, and in view of the fact that people who, under normal times, might well claim exemption, will have to pay a direct tax towards the upkeep of the nation, I am not going to assist any member of the Committee to extend exemptions in cases such as this. Consequently, I will vote against the proposed alteration of the clause, and adhere to the suggestion that the Commissioner should be held responsible for carrying out the instructions of this Parliament.
– My honorable friend seems to have missed the whole point. My amendment was deliberately designed to make it mandatory on the Commissioner to allow the difference in cost of machinery in relation to depreciation and the value of machinery that is obsolete or scrapped. It is exclusively confined to machinery that gets out of date and can no longer be used. It only indirectly affects the question of depreciation, and, in my opinion, is manifestly an act of simple justice that ought to be done to any firm that desires to progress. We shall be placing a premium on inefficiency if we allow the Bill to pass as it stands j but if we incorporate the amendment I have submitted, we shall be placing a premium on efficiency, and providing every one with an incentive to use the most up-to-date machinery obtainable. I was much interested in the few remarks made by Senator Foll, and I emphasize that, in America, where, probably, manufacturers have reached a higher point of efficiency than in any other part of the world, machinery is not regarded as efficient if it is more than a few years old, and that, in fact,, in some cases machinery three and four years old is regarded as having outlived its usefulness. I urge members of the Committee to clarify their opinions on this matter. My amendment will only affect obsolete and scrapped machinery, and I ask honorable senators to. do the fair thing. I am not surprised that Senator Earle should vote against it; but I do not think he has given any good reasons why it should not be accepted. As a matter of fair play, the principle I have laid down should be incorporated in the Bill, because I am confident it will do a good deal to stimulate the future development of, and to increase production, in, this country.
– I only want to say, in reply to the homily delivered by Senator Earle, that I do not know why he should endeavour to point out what is my duty as a member of this Chamber. The professional members of the Commonwealth Public Service are, no doubt, capable officers, but it is not my intention to swallow piecemeal every Bill which may be prepared by them, and submitted by the Minister. I also want to say that my reason for supporting Senator Pratten’s amendment is not that I desire to see the revenue reduced, but rather, by encouraging the use of up-to-date machinery, to see it increased. We may differ as to the method by which taxation may be raised, but if Senator Pratten, Senator Crawford, and I, or any other honorable senators, express their views on a particular matter, I do not know that Senator Earle should be under any necessity to preach us a Sunday school sermon on the subject.
.- The whole question should be looked at purely from a business point of view. While, on the face of it, Senator Pratten’s amendment appears reasonable and just, and I suppose it appeals to the majority of honorable senators, we ought to bear in mind, as has been said by Senator Earle, that at the present time the Government require all the revenue they can possibly get, and that the future will be so serious from a financial stand-point that we should do nothing to deplete therevenue in any way.
– Or do any injustice.
– Yes, or do any injustice in gathering in the revenue. The question is : How much does the Treasury now receive as taxation on obsolete and scrapped ‘ machinery, as against the
Amount which it may be expected to derive by the introduction of new machinery? If machinery is inefficient, and if new plant would double the production, the introduction of modern machinery would, of course, be desirable. I should like to know if the Minister (Senator Millen) can give the Committee any idea as to the extent by which the revenue might suffer if the amendment were adopted, as compared with the probable return to the Treasury through increased production as a result of the installation of new machinery.
– There would also fee increased Customs revenue on the value of new machinery.
– But we really want to produce the machinery in Australia. At present I am undecided whether to vote for the amendment or for the retention of the clause as it stands.
– You want more argument, then?
– No; I want more information. I want to know whether we would lose or gain by the adoption of the amendment. If the retention of obsolete machinery is really interfering with production, Parliament, by legislation, should endeavour to encourage the installation of nevy machinery, thus leading to greater production. We must remember, however, that the amendment will really open the door, and that other concessions may be asked for. We gave way the other day in regard to mining plants. Personally, I was in favour of exempting expenditure for developmental purposes; but I realize how hard it is to differentiate in regard to mining plants. Now we are asked to authorize a somewhat similar concession.
– Not quite. This refers only to obsolete maohinery.
– It is very much on the same lines as the concession granted to the mining industry, and I should like to know if the Minister can say if we are likely to lose or gain by adopting the amendment.
– It is impossible to say that.
– I am not prepared to accept the dictum laid down by Senator Earle that Parliament should swallow any line of procedure recommended by the Department in the collection of taxation. It appears to me that, on the contrary, Parliament should indicate the lines on which its administrative officers should proceed; and I take it that that is the principle now before the Committee. It seems to me that the advocates of the amendment have provided very good reasons for its rejection. They have emphasized the f act that the clause, as it stands, would have the effect of preventing the installation of up-to-date machinery, and the consequent retention of obsolete plant; and, further, that the exemption for depreciation value, on the 5 per cent. basis, would not be fair. The slight difference between the 5 per cent. which the Commissioner is prepared to allow and the higheT exemption suggested by the amendment is infinitesimal from the manufacturer’s point of view, because the additional return from the installation of up-to-date machinery would cover the difference many times over if a manufacturer followed modern methods of commercialism.
– But we want to knock out of the Bill the provision discouraging the installation of modern machinery.
– That is my line of argument. I say that the exemption allowed by the Commissioner would not prevent the installation of modern machinery. The difference as represented by the amendment would be so slight that it would not be a factor in comparison with the added returns, and the greater revenue to the manufacturer himself, by the adoption of modern machinery. I am one of those who, from the first, opposed exemptions. I opposed even an exemption of the gold-mining industry; and I agree with the view advanced by Senator Reid that it would be difficult to draw the line, once we open the door to exemptions. I, therefore, oppose the amendment, because I do not think the clause will Tetard the development of industry on up-to-date lines. It is, I think, fair that the Commissioner should fix depreciation, as in the past, on the 5 per cent. basis.
– Senator Reid asked for some information which I regret to say it would he impossible to supply even if a little time were allowed for its preparation; but I am in a position to inform the honorable senator that for the financial year 1916-17 the Commissioner of. Taxation allowed a sum of £4,000,000 for depreciation.
– On what total value ?
– I could not tell the honorable senator that; but it is obvious that if the further concession involved in the amendment were made, the amount allowed for depreciation would be substantially in excess of £4,000,000.
– What is the good of that figure without the figure of the total value ?
– I guarantee that those who received the benefit of the £4,000,000 in deductions from their assessable incomes would not ask the question.
– I object to the use of the term “benefit.”
– I do not mind whether the honorable senator objects to it or not. He can call it “ disability “ if he likes; but there can be no doubt that it represented a benefit to those to whom the concession was made.
– Judging by the remarks which Senator Ferricks has made, he would not allow any deduction for depreciation.
– I think 5 per cent, is a fair thing.
– It ‘has never been contended that an allowance for depreciation is not quite fair. Even if the allowances made in 1916-17 for depreciation did amount to £4,000,000, that only goes to show the extent to which this matter concerns those who are carrying on the industries of the country. What’ we are trying to do is to prevent any unfair differentiation. I venture to say that if one of our coastal vessels were lost, the difference between the value of the ship and the amount received in insurance would be allowed to the owners.
– That is not so; nor if they sold the ship at a profit would income be charged on the excess. Loss or gain on sale of assets is not taken into account in considering income.
– I instanced the total loss of a ship, and did not. refer to what occurs when a vessel or any other property is disposed of by sale. The need for a more substantial allowance for depreciation is rightly urged by those who are not allowed to write off the value of machinery which has had to be scrapped. The practice of the Department touched me closely only recently. Those controlling a sugar mill in which I am interested had to throw out three boilers ten years before it was expected that they would have to be replaced. We had to spend a sum of £4,000 in replacing them, and it seemed to me most unfair that we were unable to write off the amount of capital represented by these boilers, and be allowed for it as a deduction in the income return. That kind of thing is happening in connexion with businesses generally every day in the week.
– That should bring the honorable senator round to the adoption of a true system of taxation. I like to see him squirming.
– Senator Pratten, by the amendment he has moved, proposes to lay the foundation for an alteration in our income tax legislation, which, if not accepted to-day, will have to be accepted before very long.
– I am delighted to see my honorable friends opposite squeaking and squirming. I have repeatedly urged them to take advantage of the fact that they have a majority to impose taxation upon those best able to bear it. I condemned this Bill from start to finish, but I could get no support from Senators Pratten and Crawford and those who are now supporting them. Honorable senators seem to forget that machinery is very scarce in Australia to-day, and it is most difficult to secure it. They overlook the fact also that machinery in Australia at the- present time, so far from having depreciated, has appreciated in value to a material extent.
– How could it, if it was scrapped?
– It is still increasing in value. A good deal of machinery that was recently scrapped, and a number of old vessels that were put out of commission, have been again put into commission. I repeat that I am delighted to hear honorable senators opposite squeaking. I hope that, during the short recess we are about to have they will purchase, for1s. 3d. each, copies of Henry George’s Progress and Poverty, in order that they may learn the true principles of taxation.
– I deprecate the attempt to put down any amount for depreciation. I had a good illustration of the point at issue only a short time ago supplied by an American railway magnate. I asked him the simple question, ““What is the difference between American and Australian engines?” His reply was,. “ Oh, your Australian engines should never be put upon a railway line. You should put them in a glass case. You build them to last fifty years. In America we build them to last for seven years, and then we put them on the scrap heap.” Sofar as installing new machinery is concerned, we have not had very much of it in Australia, and there is now very little chance of getting any new machinery.
SenatorFoll. - How many locomotives are there in Australia that have been running for fifty years?
– There are quite a number that have been running for fifty years as against the American gingerbread engines that are thrown on the scrap heap in seven years. I could show Senator Foll half-a-dozen steamers on the Australian coast that have their original engines in them to-day.
SenatorBakhap. - I could point to a, Tasmanian wooden ship that has survived four sets of engines.
– I think that Senator Earle struck the right keynote when he said that it is our business to lay down the principles of taxation, and we should let the’ Department deal with the details necessary for their application. I stand by that interpretation of our duty.
Question - That the words proposed to be added be added (SenatorPratten’s amendment) - put. The Committee divided.
Majority . . . . 13
Question so resolved in the negative.
.- I move-
That the following words be added to paragraph (e) : “and this paragraph shall also apply to buildings.”
Under the Act as it stands at present no depreciation is allowed upon buildings, although every one must recognise that buildings represent a considerable portion of the capital invested in almost every business. The proportion varies a great deal according to the character of the business carried on. If my amendment is agreed to, as I sincerely hope it will, it will be for the Commissioner . to say what rate of depreciation should be allowed upon buildings. I presume that therate would vary according to the class of building. There are some industries in which buildings represent a considerable proportion of the capital invested. This is particularly the case in connexion with rural industries. In some of the States, buildings for the accommodation of rural employees, dairies, and other buildings connected with the dairying industry must be provided in accordance with a standard fixed by the State Legislatures. I contend that it is most unfair that while depreciation is allowed upon machinery, implements, utensils, rollingstock, and articles used by the taxpayer, no depreciation is permitted with respect to buildings. They are necessary for the production of income. It does not matter what amount of repair is effected, the time comes when buildings must be renewed. In some parts of the Commonwealth where there are serious cyclonic disturbances, against which there is no form of insurance, buildings are sometimes destroyed, and must be replaced at great expense.
– I desire merely to add to the remarks of Senator Crawford that there are many buildings constructed for a particular purpose and that depreciation is not allowed upon them, although at the end of a number of years their value may have considerably depreciated. It is fair that something should be allowed upon buildings used in the production of income.
.- Queensland requires a provision such as this more than any other State. We are subject to weather extremes, such as cyclones and floods. I trust the Committee may see its way clear, in the interest of the small farmers of Queensland and other States, to accept the amendment.
– Buildings and plant might well be looked upon as tools of trade, in the same sense as the tools in a carpenter’s bag, or in the bag of a genial land-taxing stone-mason. Buildings housing plant used in many of our important industries ‘ are in all respects tools of trade; they are machinery used for the purposes of production. I fail to see that the principle of depreciation should not apply to buildings. It is logical and just that they should be included with those items on which depreciation is allowed.
– Prior to the outbreak of war the cost of galvanized iron was about £14 a ton. Despite elaborate machinery set up by States and Commonwealth for price fixing, that commodity is now about £90 a ton, and is scarcely procurable. Nevertheless, we are asked to grant concessions on the alleged depreciation of buildings.
– War prices are only temporary.
– Galvanized iron will last almost indefinitely.
SenatorBakhap. - What about buildings of material such as weatherboard and palings ?
– Who would think of putting up structures for manufacturing purposes such as those?
– Who would build walls and partitions of galvanized iron?
– Many erections are so built. In view of the appreciation in the cost of building material, there is little, if any, depreciation in buildings to-day. Do honorable senators expect the Committee to exempt their palatial manufacturing buildings from taxation? I think a little of this sort of thing will do honorable senators opposite good. The cost of machinery has gone up enormously; so has that of building material. In fact, it is almost impossible to build to-day. We may be sure that for a number of years, irrespective of whether the war terminates shortly or not, prices will go still higher. I hope the Government will oppose the amendment.
Question - That the words proposed to be added to paragraph e be so added - put. The Committee divided.
Majority . . . . 16
Question so resolved in the negative.
Clause agreed to.
Clause 32 (Collection of tax from employer in case of employees’ default).
– Honorable senators will recollect that in dealing with this clause considerable discussion occurred upon the authority sought to empower the Commissioner to make an agent of any person who held money due by a defaulting taxpayer. After discussion, the Committee struck out the first portion of the clause, which was then section 50a, and agreed to concentrate on the second portion, namely, flection 50b - making that applicable to all defaulting taxpayers who came within its compass. Some little difficulty arose, in Committee, in arriving at a satisfactory form of amendment. A draft has since been prepared, and I therefore move -
That proposed new section 50b be left out, and the following inserted in lieu thereof: - “ 60a. ( 1 ) Where the Commissioner is of opinion that it is difficult to ascertain the whereabouts of a taxpayer or to collect the tax from him, the Commissioner may by notice in writing (a copy of which shall be posted to the last known place of address of the taxpayer) declare any person, local authority, corporation, board, commission or body making payments or owing money to the taxpayer to be his agent, and may require the agent -
to pay the amount to the Commissioner forthwith, and for any default in so doing the agent shall be liable, in addition to the tax, to a penalty not exceeding Five pounds.
That amendment covers all the points which were virtually agreed to by the Committee yesterday. It sets out the idea of honorable senators with greater clarity, whilst bringing it into conformity with the verbiage of the Act generally.
– Is there a sufficient connexion in this clause to make it quite clear that an employer or association shall not be legally bound to pay over to the ‘Commissioner more money than is owing by the defaulting taxpayer?
– Yes. The employer’s liability extends only to the amount of money belonging to the employee that is in his possession.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 46 -
Section sixty-five of the principal Act is amended by adding at the end thereof the words “ and for prescribing penalties not less than One pound nor more than Twenty pounds for any breach of the Regulations”.
– I move -
That the words “ less than One pound nor “ be left out.
The amendment will leave the penalty standing as a maximum one, thus making the Bill uniform.
Amendment agreed to.
Clause, as amended, agreed to.
Bill reported with further amendments ; reports adopted.
– I move -
That this Bill be now read a third time.
In doing so, I would like to give to Senator Pratten and others an assurance in respect to the administration of the Act in regard to one or two matters in which they sought to effect amendments in Committee. First, as to the definition of “ sources within Australia,” the practice now being followed by the Department will continue to be followed in the absence of good and substantial reasons for a departure from it. But if any representations can be made which will show that the rate at present allowed for depreciation is wrong, those representations will be examined with a view to seeingthat a decision is arrived at which shall be fair alike to the Treasury and to the taxpayer.
Question resolved in the affirmative.
Bill read a third time.
Motion (by Senator Millen) proposed -
That the Senate do now adjourn.
.- I wish to refer to a matter in respect of which I have already asked a question. But I am not quite sure whether I shall be in order in doing so.
– I think so.
– The question was not replied to.
– It has been represented to me that a fair number of men. in Tasmania definitely enlisted for special service as wireless signallers. Subsequently they were informed that the wireless school was to be closed, and that - whether they wished it or not - they would be transferred to general reinforcements. I am given to understand that these men do not desire to be discharged from the Forces, but that they do wish to follow the course for which they enlisted - that of wireless signallers.
– Are they still in the Commonwealth?
– I understand that they are now in the Claremont Camp. This matter was brought before the Tasmanian Labour Conference a little while ago, and on 10th May last the following telegram was despatched to the Director-General of Recruiting : -
The Tasmanian Labour Conference, in session to-day, passed unanimously, on the motion by Mr. Lyons, leader of the party, seconded by Mr. Dwyer Gray, a member of the State Recruiting Committee, a resolution strongly protesting against any proposition to send out of the country, contrary to their consent, as ordinary reinforcements, certain Tasmanians now in Claremont Camp, who enlisted for special signal service. Conference holds that any such occurrence would be a breach of faith, a victimization to Tasmanians, a gross injustice, and detrimental to recruiting. (Signed) James Bolton,
To that conference there was a deputation from the State Recruiting Committee, including its president and secretary, and the opportunity was availed of to put the case of these men before them, and when they were given this information they expressed their very strong sympathy with the men concerned. Indeed, right throughout the southern end of the Island, particularly in Hobart, the people are very much incensed at the action of the military authorities in deceiving these men in the way they have been deceived. I have here a statement, which reads -
The text of the original memorandum, as published in August, 1917, was as follows : - “ Telegraph Operators Wanted. In view of the urgent need for operators., Alderman Meagher, of Hobart, has offered to train men for the work. The military authorities have sanctioned the formation of a class under the control of Lieutenant Medhnrst, O.C., Signal Service. It is proposed to give twenty lessons, two nights per week.”
That was thememorandum under which these men were enlisted.
– That is more than I can say just now. Alderman Meagher is an ex-mayor of Hobart, and a prominent citizen.
– He has had a son killed at the war, too.
– Yes. If I chose to read further I could show that he affirms that he cannot further assist recruiting while the present position continues. He feels that he has been deceived, in that these men are about to be sent abroad in a service for which they did not enlist. This is regarded as trapping men into the Forces in order to send them away as general reinforcements. I understand that the Director-General of Recruiting has forwarded a sympathetic reply to the representations that have been made to him. although I do not know the exact terms . of that reply. I am inclined to think thatboth that officer and the State Recruiting Committee desire that these men shall bc attached to the branch of the service for which they specially enlisted. If the tactics which have been adopted on this occasion are persisted in they will have a very detrimental effect upon recruiting, especially in the southern part of Tasmania. Indeed, I believe that they will tend to prejudice recruiting throughout Australia. If men, after having enlisted for a special branch of the service, may be told that they must be transferred to general reinforcements, it will indicate to the public that the authorities are merely laying traps to catch them. I think that the men to whose case I am now directing attention are entitled to know what is going to be done with them.
– As a member of the Tasmanian State Recruiting Committee, representations have been made to me in regard to this matter by very reputable men. Whether the whole thing occurred under a misapprehension or was due to a misunderstanding of the rule relating to enlistment I do not know. But undoubtedly there is considerable acerbity of feeling in respect of the matter in Tasmania. In justice to the Minister, however, I must say that whenever I have approached him. concerning men who wished to enlist for special service - as I had occasion to approach him only a few days ago - he has been particularly careful to ask me to impress on the minds of would-be recruits that they must enlist in the Australian Imperial Force unconditionally. But somehow a misunderstanding appears to have arisen under which men have enlisted for a special service, and apparently against their wishes have been drafted into the ordinary ranks of the Australian Imperial Force. I regard this sort of thing as one of the evils of the voluntary system. Now that the people have declared against the principle of conscription, in which I believe, and voluntary enlistment remains the order of the day, if a man has enlisted under a misunderstanding it is wrong to conscript him into a branch of the service in which he never intended to enlist. The misrepresentation or misunderstanding has doubtless taken place without the. knowledge of the Minister, because I have noted that he was always very careful to impress on me that,, while men might be drafted into services for which they turned out to be specially fitted, they must unconditionally enlist, in the first place, as members of the Australian Imperial Force. I have no doubt that in this special case there was a misunderstanding, which the Minister will do his best to clear up.
SenatorMcDOUGALL (New South Wales) [3.47]. - The issue raised bySenator Guy ie not new. The trouble is that too much power is given to Recruiting Committees and organizers of the Forces. The Minister has for some time been going to consolidate those Forces, and it is nearly time he did so. I was president of the League of Wheelmen in’ Sydney, and the secretary told me he had permission from the recruiting office to raise a corps of cyclists. He did so iu his own time, travelled throughout New South Wales, got nothing for his services, and enlisted himself; but not oneof those men went away in the Cyclists’ Corps. Some were well up to 50 years of age, and joined with the full knowledge that they might not be fit to go into the. front firing line, but they were willing to take up the work in the Cyclists’ Corps. They enlisted in the Australian Imperial Force, and have all gone away, I have had letters from some of them, and they do not grumble so much now as they did before they went away. They seem better satisfied, and probably have got into some service that has alle- viate their feelings in some way or another. The cause of the trouble is that too much power is given to the recruiting officers to send men out to organize corps. They tell men, “You can go away together, and stop together, and be pals.” When the men go into the camp they find, that they are not kept together, nor do they go away with the arm of serviceto which it was promised they wouldbe attached. Something ought to be done to stop that sort of thing.
– I am afraid these troubles occur very largely through overzealousness on the part of recruiting officers, who are naturally “ anxous to get results and recruits. The - indirect evidence is that they frequently “ make promises they have no right to make. If a man says, “ I am willing to join if I can go into a certain unit,” they say, “I will see that that is fixed up.” It has long been laid down that enlistment shall be for general service, and that selection will then he made of those qualified for the different arms. Take the case Senator Guy has mentioned. There is no such thing as a Signal Unit. Signallers are part of an infantry unit. We do not enlist men as signallers, but as infantrymen, and a certain number of them are trained as signalmen. In the
Baine way it might almost be suggested that we should enlist men as bombers and grenadiers, when the fact is that after enlistment a certain number of men are selected to go through a bombing school. The infantry training is not split up into these various sections. Some time ago it was necessary to have a number of schools established throughout the Commonwealth, including Tasmania, to train men as wireless telegraphists.
– Does the Minister know anything of the memorandum that was’ printed ?
– Absolutely nothing. If it had been issued by the Defence Department the Commandant would have authorized it, and the fact that it was not signed by him shows that some unauthorized person put it in.
– There are signalling units in the engineers.
– There are,but in the case Senator Guy speaks of, the signallers are part of the infantry unit.
– That is not so in the Engineering Corps.
– No. The schools were hold throughout the Commonwealth, so that a certain proportion of infantrymen should be trained as signallers. Alderman Meagher, in Tasmania, very patriotically gave his services honorarily, and did very useful and valuable work, the Department say, in the men he turned out. Wo received information that no more reinforcements of signallers are required, because there is a surplus. Are we, then, to say that, because these infantrymen have been trained as signallers, they must be kept here for months, until signallers are required, when we know that the infantry are short and that battalions havehad to be broken up because ofthe shortage? We cannot do it.
– Unfortunately, they, feel that faith has been broken with them in some way.
– Not by the Department, or by any statement or public announcement made by anybody on behalf of the Department. Faith may have been broken in regard to promises made to them byunauthorized persons. That is an evil that evolves out of the voluntary system, and from the natural desire of recruiting officers to get the best results.
– Are not the recruiting officers agents of the Department 1 .
– Indirectly they are, but they are under the control of the Recruiting Committee, and not directly under the control of the Commonwealth.
– The Minister is not clear on the point that there are signalling units who are divisional troops and not part of the infantry formation.
– There are signalling units in the Engineering Corps, but the schools I refer to have been held to give instruction in signalling to members of infantry units. As we are advised that there is a surplus of signallers we have discontinued the schools. There were a certain number qualified at the last school, and the problem is what to do with them. It would be simply hypocrisy to send them overseas as signallers, knowing that as soon as they got to the other side they would be absorbed as infantrymen, so we told them honestly that, as we could not absorb them as signallers, they would have to go away as infantrymen. I hope Senator Guy will convey to them the fact that at every school held note is taken of the fact that a man has qualified, and that with the papers that go overseas with each body of reinforcements a notice is sent that so-and-so has qualified as signalman. That information goes to the other side with them. They have yet to go through four or five months’ training in England before being sent into thefiring line, and if by that time signallers are required, those men will be absorbed; -but if they are not absorbed in that way, they will take their place as infantry reinforcements, which is really what they are. The full details of the matter will be furnished on Wednesday in reply to Senator Guy’s question, hut I am speaking now only from memory. I regret as much as the honorable senator does the dissatisfaction caused by unauthorized promises made by certain people. We have had several instances of the kind, and I regret it very much.
Question resolved inthe affirmative.
Senate adjourned at 3.55 p.m.
Cite as: Australia, Senate, Debates, 31 May 1918, viewed 22 October 2017, <http://historichansard.net/senate/1918/19180531_senate_7_85/>.