Senate
9 December 1921

8th Parliament · 1st Session



The President (Senator the Hon. T. Givens) took the chair at 2.30 p.m., and read prayers.

page 14186

PAPERS

The following papers were pre sented : -

Australian Soldiers’ Repatriation Act. - Report of the RepatriationCommission for the year ended 30th June, 1921.

Papua. - Ordinance No. 15 of 1921. Appropriation,19211922.

Public Service Act. - Promotions - Department of Trade and Customs - E. A. J. Benjafield, T. D. Carroll.

Wireless Communication - Agreement between the Commonwealth of Australia and Amalgamated Wireless (Australasia) Limited.

page 14186

PUBLIC WORKS COMMITTEE

G.P.O.Sydney

Senator NEWLAND presented a report from the Standing Committee on Public Works, together with minutes of evidence, relating to the proposed’ remodelling of, and additions to, the General Post Office, Sydney.

page 14186

QUESTION

AVIATION

Preparation of Landinggrounds

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

asked the Minister representing the Minister for Defence, upon notice -

Will the Government take immediate steps to provide thoroughly prepared landing grounds for civil and military aviators where considered necessary by the Air Board and/or contractors for mail services?

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– Certain air routes’ necessary for defence purposes have already been surveyed, and landing grounds selected where considered necessary, having regard to the joint needs of defence and civil aviation; but, with the exception of the Perth-Derby route, funds have not been made available for the preparation of the necessary landing grounds on these strategic routes. It is the policy of the Government to establish landing grounds along all approved commercial airroutes, so that an aeroplane flying at a reasonable height over the route could at all times effect a safe landing in the event of engine failure. This policy has been given effect to as rapidly as possible within the limits of the funds available for this purpose. Routes, other than that between Geraldton-Derby, over which it is intended to inaugurate regular aerial services in the near future, and on which the provision of the necessary landing grounds is well in hand, are as follow: - Sydney-Adelaide, 780 miles; Sydney, Brisbane, 550 miles;CharlevilleCloncurry, 575 miles. On the completion by the Government of the ground organization of an approved air route, all necessary landing grounds would have been established, but any request from a contractor for an aerial service for further landing grounds to be provided over the route would receive careful consideration.

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TRADING WITH THE ENEMY BILL

Bill returned from the House of Representatives without amendment.

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PATENTS BILL

Bill returned from the House of Representatives without amendment.

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PUBLIC SERVICE BILL

Bill read a third time.

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CUSTOMS TARIFF (INDUSTRIES PRESERVATION) BILL

Second Reading

Debate resumed from 8th December (vide page 14098), on motion by Senator E. D. Millen -

That this Bill be now read a second time.

Senator KEATING:
Tasmania

. -This Bill, which we received only just before we rose this morning, comes to us in a very formidable guise. It is a terrifying Bill, if I might say so, not merely because of what it may contain, but also because of its form. This is another instance of what I have frequently complained of in the Senate concerning the introduction of measures introduced of late years, and especially during the closing hours . of the session, when it is impossible that they can receive proper consideration. The Bill consists of seventeen clauses, several of which are lengthy, and I make bold to say that the average layman and business man will be best considering his own interests if he does not read this Bill and attempt to do business under it without having the advantage of some one able to comprehend it at his elbow.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– Then the Bill has one good feature.

Senator KEATING:

– The Bill is a combination of two principles - the principle of legislation against what is popularly known as “ dumping “ - ordinary dumping or the sending of goods into a country at prices lower than the cost of production, plus appropriate: charges. It is also an attempt to legislate against the importation into this country of goods which are manufactured in countries whose currency has temporarily depreciated. If I remember rightly, when such a measure was projected, the idea was that these two principles .should be dealt with separately and on their merits. With regard to the importation of goods from countries whose currency is temporarily depreciated, I understand that certain resolutions dealing with the subject were introduced in another place and discussed, but the criticism they evoked was so hostile that .the Minister for Trade and Customs (Mr. Greene) saw fit to postpone their consideration.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– Did not the discussion take place on the Bill itself? Other business was taken up and the attempt was not made immediately to pass the measure.

Senator KEATING:

– I understood that resolutions were submitted on which a Bill was to be afterwards framed.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– The honorable senator is right; but I may be allowed to add that the Bill is the same as the resolutions.

Senator KEATING:

– Preliminary resolutions were introduced in another place, and debated, and it was generally understood that if they were received “ with approbation a Bill to give effect to them would be introduced, and should take its course through both. Souses of the Parliament. I am now assured that the provisions in this Bill relating to dumping exchange duty are in terms similar to those used in the resolutions referred to. At any rate, the reception accorded to the resolutions in another place was such as to warrant the Minister for Trade and Customs in deciding not- to proceed with the measure immediately.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– ‘The resolutions were not introduced merely to test the opinion of honorable members in another place, but because in order to comply with procedure of that House it was necessary that resolutions should precede the introduction of such a Bill.

Senator KEATING:

– -The debate on the resolutions was such as to indicate that legislative action of this kind was not likely to meet with approval. We have arrived at the closing hours of the session, when it is easy for the Govern. ment to rush Bills through. Honorable senators are anxious to get away as soon as possible; they are making arrangements for their immediate departure, and they are, in the circumstances, unable to give proper consideration to such important measures.

Senator DE LARGIE:
WESTERN AUSTRALIA · ALP; NAT from 1917

– These high duties would not have been allowed to go through but for the promise of this Bill.

Senator KEATING:

– I do not think that is so, because, if anything, this Bill will have the effect of increasing the high duties imposed in our Tariff. I listened with a great deal of attention to what the Minister had to say in moving the second reading of this measure. He, very properly, delivered to the Senate a carefully prepared exposition of its principles. I say very properly, because, having been a member of the Senate during the period Senator E. D. Millen has been here, I remember hearing the honorable the Minister giving voice to principles in relation to fiscalism and political economy generally that would make me wonder almost at finding him supporting, not merely protective duties, but a measure of this kind, which, if it is to be effective, can only still further increase these high protective duties. I can only come to the conclusion that he and I, having been at the opposite poles as far as fiscal faith is concerned, have, by dint of voicing our views on various occasions, made something of an impression upon each other. I feel that the Minister has come along the way towards a policy of Protection, and very high Protection indeed, and though I will not admit that my faith in the principle of Protection has weakened, nevertheless I am disposed to criticise action taken by those persons who, whileprimarily benefiting under our Protectionist policy, are not altogether satisfied with the very high protective duties granted, but desire unwarrantably to increase them. The Minister spoke of the legislation introduced in other countries upon this matter. He referred to theNew Zealand Act, which I have not seen. He also referred to enactments passed by the British Parliament. In Great Britain, I think, legislation on this subject was introduced in two separate enactments. One provided, in certain cases, for the imposition of an extra duty of 331/3 per cent. on duties already fixed, and a separate piece of legislation purported to give effect to the principle embodied in what is known as the dumping exchange duty portion of this particular Bill. We have the fact that legislation was introduced in Great Britain. I propose to say something with regard to it, and show how it is viewed in certain quarters in the Mother Country. I also propose to follow the excellent example set by the Minister, and compress my remarks by quoting a short statement taken from an article from one of the British periodicals which I am in the habit of reading. I could quote from other periodicals comments and criticism upon this legislation asit is viewed in Great Britain, but, realizing that there is very little time available to the Senate before the close of the session, I content myself with one extract only. This I take from The Nation and The Athenceum of 9th April, 1921. It is from one article of a series that appeared even in that periodical, to say nothing of similar articles published in other British publications. Portion of it says -

We are to keep out goods sold to us below the true cost of production.

I agree with doing that, but what is said will apply to goods which are imported, not under the cost of production, but to compete against ourproducts, notwithstanding the high duties imposed; that is to say, it may be applied to goods that are not dumped. The extract continues -

Why? Does not every thrifty housewife look out for opportunities to buy surplus stocks at reduced prices? Are not spring and autumn “sales” organized on this basis?

I may add, in commenting upon that statement, that the habit of searching for bargains is not confined to the thrifty housewife solely. Men, too, take advantage of sales of this kind. I have no doubt that some honorable senators, when they see that sales are on and that bargains are offering, will buy goods even if they buy them below the normal cost of production.

Does any sane person suppose that there is loss either for the seller or the buyer in this process?

The writer, so far as this is concerned, has consideration only for the immediate seller and the immediate buyer. He does not take into consideration what this country’s policy does that is in the interests of those engaged in the production of certain articles. I dismiss that portion of the article without further comment, and come to a later portion of the article which deals with this matter of dumping exchange duties. We are going to give to the Tariff Board power to advise the Min- ister with regard to the effect of the exchange! value currency of the country of origin on the goods coming into the Commonwealth, and I have no doubt, judging from the attitude taken up by the Minister in another place, and from declarations made from time to time, that this question is going to be worked for all it is worth in the interests of secondary producers in the Commonwealth. We have a notable instance in what was taking place until the High Court, by its decision, declared that the way in which’ the value for duty of goods coming from Continental countries was calculated under the present la.w was illegal and invalid. That, in itself, shows the disposition of the Minister and the Department of Trade and Customs towards this question of exchange value. This is what is said in the article -

But the worst entanglements are contained in the provisions for a discriminative Tariff against countries with a bad exchange. We are to be confined in our foreign purchases to countries to which we must pay dear, because their exchange is better than ours.

That would be the effect of this proposal. We should be confined to the importation of goods from countries where we have to pay dearly because their’ exchange is better than ours, and prevented from importing from countries whose exchange is not so good as ours.

We may buy freely from America, Sweden, Holland, and Switzerland, but not from our European war Allies. We are to discriminate against France, Italy, and Belgium, because, as a result of their war efforts, they are left in a bad financial condition, and to give preferential treatment to the neutral countries who kept out of the war, and to America, who entered late and sustained least damage.

The article referring to the English Act, of course, continues -

Even within our Empire we are to favour Canada and India as against Australia.

There is a method in this madness, but the method only makes it madder. For the policy is directed to discourage us , from buying from those nations which owe us money and seek to pay in the only possible way by sending us their goods, and to encourage us to buy from nations that are our creditors, thus enlarging our indebtedness.

That applies to Australia as it does to Great Britain. We passed a measure last night in regard to our war indebtedness to Great Britain, and that indebtedness indirectly brings us into the position of being debtors with Great Britain to the United States of America, and creditorswith Great Britain of France, Italy, and other European countries whose exchange for the time being is depreciated. The effect of this policy will be to discourage us from dealing with our debtors and to encourage us to deal with our creditors, whereby our indebtedness will be increased. The article goes on -

Now the supreme folly of this procedure is that it makes for a general worsening of the bad and fluctuating exchange. For it stops the only really practical method by which countries with depreciated exchange can improve that exchange, namely, by selling abroad as much as possible to countries with better exchange. If we really wanted to help the financially broken countries of Europe, including our Allies, on to their legs again, we should receive on the easiest terms all the goods they were able to sell us. For the favorable balance of trade they would thus effect would react at once in an improvement of their exchange. The policy our Government proposes to adopt will aggravate the trouble for the continental countries, and will prevent any further recovery of our own dollar exchange. But the other defect is even more fatal to the policy. A Tariff applied equally to all foreign countries might at least be effective in achieving its object of keeping out the goods our consumers wished to buy, and of substituting English products for foreign ones. But this Tariff will not do this. It will make us buy Dutch, Swedish, Swiss, and American goods instead of German, French. Belgian, and Italian. For these former countries will only send us not only their usual quota of export goods, but a greatly enlarged amount, recouping themselves for their own national consumption by goods imported from those countries whose produce we exclude by our taxation. Sweden . will send us, not only the paper she has been previously, sending, but the paper which Norway (taxed for bad exchange) will cease to send us, or, what comes to the same thing, will consume Norwegian paper herself, and send us all her own supply. No scrutiny into origins can deal effectively with such evident advantages of substitution, though it can create an expensive and irritating official machinery for trying to, do so.

I regret that the Bill comes to us so late in the session, and under such circumstances. It involves a very serious principle, and I am afraid that we shall not be able to give it the attention that its importance warrants. I sincerely hope that the Minister will see his way clear, at any rate, not to proceed under the authority which may be derived from the passage of this Bill, with those portions which deal with the question of dumping and the variations of exchange. As far as general dumping is concerned, if it can be proved - and there is no reason why it should not be - that goods are sold in the countries of ‘their origin for export here at less than their manufactured cost, plus appropriate transport charges, let that dumping be stopped; but, as far as utilizing the depreciation of exchange is concerned, I am not disposed to rely on the Customs Department administering the Act other than in the spirit in which it administered the old Customs Act until it was prevented from doing so by the decision of the High Court. For that reason I am opposed to the provision called _ ‘ ‘ dumping exchange duties.” I hope that at a later date Parliament will ‘be able to give adequate consideration to the matter of exchange, and debate it from every aspect.

Question resolved in the affirmative.

Bill read a second time.

In Committee:

Clauses 1 to 7 agreed to.

Clause 8-

  1. If the Minister is satisfied, after inquiry and report by the Tariff Board, that the exchange value of the currency of the country of origin or export of any goods has depreciated, and that by reason of such depreciation goods have been or are being sold to an importer in Australia, at prices which will be detrimental to an Australian industry, the Minister may publish a notice in the Gazette specifying the country as to the exchange value of the currency of which he is so satisfied, and- the goods originated in or exported from that country to which in his opinion the provisions of this section should apply.
  2. Upon the publication of the notice, there shall be charged, collected, and paid to the use of the King, for the purposes of the Commonwealth, on all goods specified in the notice, produced or manufactured in or exported from the country specified therein, a special duty, at a rate to be ascertained in accordance with the schedule.
Senator KEATING:
Tasmania

– I take, exception to this clause, and to clauses consequent upon or related to it. I hope honorable senators will see the inadvisableness of passing at this juncture, and under these circumstances, provisions of such a sweeping character as are contained in this clause. The Government might very well be satisfied with having legislative authority against dumping, as provided in other parts of the measure.

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

– This must make exchange far worse.

Senator KEATING:

– Yes. It cannot improve the position.

Senator Elliott:

– How are we to protect manufacturers against unfair competition ?

Senator KEATING:

– By the other provisions of the Bill, and by calculating the corresponding value in English money according to the decisions given by the High Court.

Senator Vardon:

– Do you think other provision could be made to counterbalance the disadvantages of the exchange?

Senator KEATING:

– Yes, if there were real dumping. Clause 8 is not aimed at real or actual dumping, but at what may be called constructive dumping, and that ‘is determined by the construction of the relative rates of exchange. The High Court has, by its decision, directed the way in which the cost of goods imported from countries with varying exchanges is to be calculated. Let us adhere to that. Our, varied antidumping provisions in the past have been based on a recognition of that provision in the original Customs Act for calculating the cost of goods imported into the country. The calculation is based upon the cost of manufacture in the country of origin, plus 10 per cent. The cost of manufacture will be calculated according to the ordinary methods of determining the value of foreign currency in exchange from day to day and week to week.

Senator E D MILLEN:
Minister for Repatriation · NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

. - I would like to venture an observation in opposition to the views expressed by Senator Keating. This is not a clause under which the Minister acts blindly. It states, ‘ ‘ If the Minister is satisfied, after inquiry and report by the Tariff Board …” It will be noticed that he cannot act without inquiry and report. The clause is still further “subject to restriction, and will be operated according to the circumstances of individual cases. If the Minister is satisfied ‘ ‘ that goods produced or manufactured outside Australia have been and are being sold to an importer in Australia at an export price which is less than a reasonable price, wad that detriment may thereby result to an Australian industry, “ then action follows. I want to know what possible objection there can be to this clause by those who recognise that temporary or permanent, injury may be inflicted upon an Australian industry by dumping. Dumping may be either intentional and systematic, with a view to crushing an industry in order to obliterate a rival, or it may be the outcome of a firm or company, finding itself overstocked with goods at a given time, being prepared to realize on a surplus stock for what it is worth. Everybody I have heard in public has, with or without qualification, agreed that it is a fair thing to protect our industries’ against the operation known as “ dumping.” This clause does that, and does it with safeguards. The Minister cannot act of his own volition. He must obtain a report from the Tariff Board, and must further hold it up until he is satisfied that the goods are being sold in Australia at less than their cost of production, and, further, that so selling them will be detrimental to Australian industries.

Senator Crawford:

– That means that the provisions of the clause do not become effective until dumping has actually been established.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– It means more than that. The clause does not become effective until the Minister lias received a report from the Board, and is satisfied not only that dumping is taking place, but also that injury to Australian industries would follow. Dumping could take place without injury to an Australian industry. If motor-car chassis were dumped here no Australian industry would be injured ; but, on the other hand, if motorcar bodies were dumped, injury would be caused to an Australian industry. The mere selling of goods at a low cost in Australia is not sufficient to make this clause operative. With the safeguards which are provided, I submit that in the interests of our industries the Committee will be acting wisely if it adopts the clause.

Senator SENIOR:
South Australia

– It is not often that I disagree with the conclusions reached by Senator Keating, but in this case his advice would, in effect, be like trying to shut the frost out of a house while leaving one door open. Part of the reason why goods depreciated in price can be landed in Australia is owing to the rates of exchange. Consider, for example, a country where the currency is depreciated for purposes of foreign ex change, but passes at a nominally higher value locally for the manufacture of goods. The goods may be produced at one-fourth or one-fifth of what they can be produced for in Australia, after allowing for rates of exchange. For a given sum of Australian money a comparatively large amount of labour can be purchased in Germany and put into goods, which, if sent here, would compete with our own industries. There is a necessity for some such provision as that contained in the clause, although I am not saying at the moment whether it is or is not too restrictive.

Senator FOSTER:
TASMANIA

– What happens when the .value of the mark reaches vanishing point, as at present?

Senator SENIOR:

– Then the price paid for labour in that country will be approximately similar to our own. It will not be affected by the difference in exchange. In the debate on the Tariff we have again and again sounded thu note, “ Made by black labour.” The purpose of our Tariff has been to shut out goods so made.

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

– In Germany labour can be purchased for ls. per day of twelve hours.

Senator SENIOR:

– It is not a question of hours. The labour costs of foreign manufactured articles are very much less than the labour costs of articles manufactured here, and if we- delete this clause ive shall defeat the real purpose of the Bill and allow the free admission of such goods.

Senator LYNCH (Western ‘ Australia) ‘8.12]. - This clause is the kernel of the Bill, as it authorizes the Minister for Trade and Customs to establish a standard for his calculations. If he is satisfied as to the effect which the depreciation of the currency has upon the value of the goods he can, on the advice of the Tariff Board, take action. Perhaps it is better to acknowledge at the outset that the Senate, and even this Parliament, . although it has a certain amount of wisdom, has not sufficient to master the intricacies of currency and exchange. Honorable senators will remember that at a meeting of experts in the Old Country, convened by the British Government, a via media was sought in connexion with this, difficult problem, but it was found that even those possessing the most intimate knowledge of the subject in all its ramifications were unable to make any recommendations. Broadly speaking, I understand that the Bill is to provide increased protection to those engaged in manufacturing industries in Australia, and we have now reached the stage when protection is equal to prohibition. The intention is to allow a margin on the par rate of exchange of 4 per cent., but immediately the exchange rate differs from 3 per cent, the provisions of this measure become operative. In a certain sense this country, the currency of which has appreciated in certain other countries, has a great advantage in purchasing. If we send 20s. to Germany we can purchase more than 20s. worth of goods, and the object in view is to equalize the difference between the rate of commercial currency and the par value of exchange. It is very difficult to say whether we are on the right or the wrong track. If the German mark depreciates still further, what will be the effect? The logical result will be that we will get goods in from Germany for nothing, which is absurd. In fact, I have been told by a French wool-buyer that the value of the Austrian kronen has so depreciated that a Swiss brewer actually secured sackloads and pasted them on his beer» bottles. In view of that fact, we might ask what possible remedies we could apply to safeguard the interests of this country against importations from other countries with such a depreciated currency. Is there any necessity?

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

– The necessity exists. Consider the position of the Newcastle iron and steel works. Imported iron and steel come in at a lower price than we can produce it.

Senator LYNCH:
WESTERN AUSTRALIA

– It is always the experience that countries with au appreciated currency can buy in those countries where its currency is such with advantage. But it is harder for us to go to America and purchase, as the converse is the case. Countries are buying and selling all the time. We sell to America whenever we get the opportunity, but if we buy from America, where our currency has depreciated, it is to our disadvantage. .European countries, where the currency has depreciated, can purchase in Britain and America, but where their currency has appreciated they are handicapped.

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

– That is when they are buying the raw commodities, but not when they have the raw products in their own country.

Senator LYNCH:

– Germany, for instance, has iron and coal. The countries we are afraid of have to go to other countries where their currency is a handicap to them. I consider the provision is too severe, and favour reducing the rates by one-half. I am assuming that the rates set out in the schedule are in some cases almost prohibitive, and I would like to be informed by the Minister (Senator E. D. Millen) what is the increase in value. Par value of exchange rises from 100 to 105, and the increase is equal to about 50 per cent., which, added to our present rate of duty, is sufficient to prohibit the import of foreign goods altogether. It means an exceedingly heavy impost on many articles we import from other countries, including those which were our former Allies, and which are in the same position, with the exception of Germany, which is in the worst position of all, with the solitary exception of Austria, whose currency to-day is used to paste on beer bottles, as I was told. I. am given to understand that this measure is introduced for the protection of one particular Australian firm, and I hold that until we can estimate accurately the loss which that firm would suffer from dumping we should not penalize other industries and the consumers generally of Australia for its special benefit. If the firm could, by its books and certified balance-sheets, show that it suffered loss from dumping, the Government might come to its rescue with a special proposal, and without penalizing the rest of’ the ©immunity. This is not the first occasion on which an attempt has been made to bludgeon this Parliament into imposing rates of duty that the circumstances do not warrant. We were told when the first Commonwealth Tariff was under consideration that there were fleets of steamers coming across the seas filled with harvesters for the purpose of wiping out the local industry. Did they came? They are coming to-day, and a good job, too, for they are keeping the people in the business here on their mettle. They require to be kept up to the mark, notwithstanding the fact that they are receiving more protection than is given to the man who has to buy the harvester. We are now informed that unless we take the action proposed by this Bill one important Australian industrial enterprise will be wiped cut. I should deplore that, but I am afraid that this is another harvester bogy, or something very close to it. We cannot overlook the interests of other industries and of the consumers generally. It seems to me that the rates proposed will be equivalent to absolutely prohibitive duties. Under this measure, the Minister for Trade and Customs will be able to put his pen through waybills of goods exported from the Continent, and decide that they shall not be admitted to Australia. If the particular firm concerned in this measure is in a bad way, the Government can authorize reputable accountants to go into its affairs, and, if it is shown to be necessary, then introduce a measure to pay this firm a bounty equal to the properly ascertained difference between the exchange rate of other countries and the par value of money in this country and in those with which we trade. If I can see my way to diminish the proposed rates, I shall do so.

Senator E D MILLEN:
Minister for Repatriation · NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– I do not think it, is suggested by any one who supports this Bill that it is going to be a cure for the economic disturbance that exists throughout the world. It is put forward as a measure thought to be necessary for the protection of our own industries.

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

– I suppose it is really an emergency Bill.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– That is the very point I propose to make. He would be a very bold man who would dogmatize regarding the exchange difficulty and its causes and possible cure. I waa very much struck when I was in Europe, and was privileged to meet some members of the Financial and Economic Conference of Brussels. In the course of discussion this problem presented itself: Switzerland, a country which had not been engaged in the’ war, which had noi army of men withdrawn from industrial undertakings, which never had its factories disturbed or its business dislocated, which was free to carry on a profitable trade all round it, which had incurred no war debt, and which had an appreciated currency, yet revealed all the phenomena of unemployment and dislocation of trade evident in the countries in which all the worst con ditions of war prevailed. This shows that it is incorrect to say that these consequences are directly attributable to war, and that it is very dangerous indeed for any one to dogmatize and claim to have discovered a remedy for these difficulties.

Senator Lynch:

– This is groping in the dark.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– It is doing something more than that. If we feel that we are in danger of an attack we are justified in adopting measures to provide immediate relief, although they may not be sufficient to provide a cure for all the ills of the world. There is imminent danger threatening some of our important industries, and if we wait until wider knowledge and experience enable us to solve all these problems, those industries may in the meantime be destroyed. This measure, it is hoped, will have the effect of protecting these industries until, perhaps, a wiser world supplies us with a more effective remedy.

Clause agreed to.

Clauses 9 and 10 agreed to.

Clause 11 -

If the Minister is satisfied, after inquiryand report by the Tariff Board, that the duty imposed by either of the last two preceding sections is likely to be evaded by the consignment of goods to Australia for sale, he may direct that there shall be payable on any goods specified byhim, by notice published in the Gazette, which have been consigned to Australia for sale, a duty in an amount which will in his opinion assure that the goods will not be sold in Australia at less than a reasonable selling price, as defined in section 6, and duty in that amount shall thereupon be charged, collected, and paid to the King for the purposes of the Commonwealth on such goods.

Senator KEATING:
Tasmania

– I ask the Minister (Senator E. D. Millen) whether this clause has been carefully drawn, in view of the fact that its operation is limited to the two proceeding clauses. It is intended to prevent the evasion of clauses 9 and 10 by sending goods to some agent in Australia?

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– An agent, or possibly, a branch house.

Senator KEATING:

– I am concerned as to whether this clause should not apply also to clause 5.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– Clause 6 makes the necessary provision applicable to clause 5.

Senator KEATING:

– I see that that is so.

Clause agreed to.

Clause 12-

The various duties imposed by this Act shall be separately charged, notwithstanding that more duties than one may apply to any particular goods:

Provided that the duty payable on any particular goods under sections 4 to 7, inclusive, of this Act shall not either severally or collectively exceed 15 per centum of the value for duty of the goods as ascertained in accordance with Division 2 of Part VIII. of the Customs Act 1901-1920.

Senator SENIOR:
South Australia

– This clause appears to me to be more dangerous than the other clauses of the Bill, because it makes provision for the collection of the duties collectively. Under this clause, duties imposed in respect of dumping as a result of depreciated currency, those imposed to prevent ordinary dumping, and also duties imposed because of subsidies to vessels in which the goods are imported, may be collectively imposed on the same goods.

Senator Foster:

– Does the honorable senator not think that is quite right? Goods which should be liable to the exchange duty may be sent here in subsiddized vessels.

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

– This safeguards the manufacturers here.

Senator SENIOR:

– There is not the shadow of a doubt that it does. It means that the duties imposed ma.y be absolutely prohibitive.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– I point out to the honorable senator that the whole of the duties put together cannot exceed 15 per cent.

Senator SENIOR:

– That means 15 per cent., plus the ordinary Customs duties.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– Which include charges ordinarily taken into account in assessing Customs duties?

Senator CRAWFORD:
Queensland

– It seems to me that the limitation of 15 per cent. on the value of goods applies only to the additional duty imposed under certain clauses of the Bill. The clause makes provision -

That the duty payable on any particular goods under sections 4 to 17, inclusive, of this Act, shall not either severally or collectively exceed 15 per cent of the value for duty of the goods.

There is a still further imposition under clause 11, which might permit the imposition of a duty equal to an ad valorem duty of 75 per cent. Goods may have to pay, first of all, ordinary Customs duties, then 15 per cent. additional under clauses 4 to 7, and then another 75 per cent. ad valorem under clause 11.

Senator E D MILLEN:
Minister for Repatriation · NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– I think that inadvertently I misled the Committee. I thought that clause 12 made the maximum which we could collect in all circumstances 15 per cent., but it does not. Higher duties in respect of the exchange duty will still be levied.

Clause agreed to.

Clauses 13 to 17 agreed to.

Schedule.

Senator KEATING:
Tasmania

– I direct the attention of the Clerk to a small matter which, at first, Ithought was a typographical error; but I am afraid it is not, as it has appeared in the different prints of the Bill. In schedule A, the lire, Italian currency, is printed in the plural, whereas, to conform with the franc, French and Belgian currencies, it should appear in the singular, lira. This schedule will be read extensively, and widely circulated in foreign countries, and it is possible that unless the correction be made, the people of those countries will be under the impression that we do not know what we are talking about.

Senator FOSTER:
Tasmania

.- I should like some information concerning schedule B, which deals with the mark, German currency. The schedule provides for certain special duties when the mark depreciates to 240 to the British £1. Is it proposed to go beyond that point of depreciation ? I understand that to-day the mark is in the neighbourhood of 800 or 900 to the £1.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– The schedule stops at 240 in the £1.

Senator LYNCH:
Western Australia

. -In setting out the exchange rate, special duties chargeable under this schedule, the datum point is8½ per cent., which will be special ad valorem duty if, in the case of France, Belgium, or Italy, the bank rate of exchange, as compared with the par rate, is not less than 30 per cent., but is less than 35 per cent. What special reason is there for fixing on8½ per cent., and increasing it as the rate depreciates by fractions? Why not start with 5 per cent., and work upwards, thus preserving some symmetry of outline? In the higher range of depreciation the special duties leviable will be as much as 75 per cent., which practically means prohibition.

Senator Keating:

– What formula has been adopted for determining the percentages of the special duty ?

Senator LYNCH:

– That I cannot say. I prefer the starting point to be 5 per cent. I would like to give those countries whose currency has not gone to pieces altogether a chance.

Senator E D MILLEN:
Minister for Repatriation · NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– Though I cannot pretend to be convincing on a subject like this, I think I can show Senator Lynch that the schedule is not outrageously wrong in leaving a little “ sea room “ when the mark or franc approaches the normal rate of exchange. There is always a liability to slight fluctuations in exchange, and it was thought that when the depreciation is so slight as to be less than 5 per cent., the effect of a margin of five points upon Australian industries would be so slight as not to need bothering about. As the depreciation becomes greater, the percentage increases in the special duty will be of material assistance in safeguarding our industries.

Senator FOSTER:
Tasmania

.- It is generally understood that when the currency of a country depreciates beyond a certain point, goods in that country are more readily purchasable. In view of the extraordinary depreciation of the German mark recently, the fear has been expressed that there will be great danger in allowing German goods to enter Australia without some adequate safeguard. A few days ago Mr. Donald Mackinnon was reported to have stated that he was staying at. good hotels in Germany for 7s. per day English money, as compared with pre-war charges of £2 and £3 per day. One would naturally think from this that goods must be very cheap in Germany; but I want to point out that if the purchasing power of the mark in Germany for internal purposes were the same as it was before the war, it would have cost Mr. Mackinnon ever so much less. With the exchange rate at 205 marks to the £1, the mark would be one- tenth the par rate of exchange. If that condition affected only the export trade, it would mean that we would be able to get ten times the amount of goods in Germany, and a 75 per cent. special duty would not be of much value from the point of view of Protection. Suppose goods which cost £1 at the par rate were imported under a 15 per cent. duty, that would be 3s. But suppose the German internal currency had not depreciated; that it had depreciated only so far as the exchange rate was concerned, goods which otherwise’ would have cost £1 could be purchased for 2s., and the special duty of 75 per cent. would make the landed cost only 2s. 9d. When we consider the depreciated value of currency, we have to think of its effect upon the domestic condition of the country concerned. It is because I think that the Department has gone into the matter thoroughly that I propose to agree to the schedule.

Schedule agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 14195

WAR PRECAUTIONS ACT REPEAL. BILL

Bill received from the House of Representatives. .

Standing and Sessional Orders suspended, and Bill (on motion by Senator E. D. Millen) read a first time.

page 14195

INCOME TAX ASSESSMENT BILL (No. 1)

Bill received from the House of Representatives.

Standing and Sessional Orders suspended, and Bill (on motion by Senator E. D. Millen) read a first time.

page 14195

INCOME TAX BILL (No. 2)

Bill received from the House of Representatives.

Standing and Sessional Orders suspended, and Bill (on motion by Senator E. D. Millen) read a first time.

Senator E D MILLEN:
Minister for Repatriation · NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– I move -

That this Bill be now read a second time. .

Apart from the Act, which sets out the conditions ofthe income tax, there is a separate measure which determines the rate of that tax, and that rate is fixed for the financial year. It is, therefore, necessary to renew the Act, either as it stands, or in a varied form, each year, otherwise there would be no authority to collect the income tax. The Bill now brought down proposes to continue the rates which at present exist, the only difference being the omission of a provision requiring a single person without dependants to pay £1, if his income reaches £100, and, in the case of a married person, if it reaches £150. Otherwise the Bill provides for a continuation of the rates which are operative to-day.

Senator LYNCH:
Western Australia

– Does the Bill have the effect of exempting from future taxation those taxpayers who have been contributing £1 ? If so, a course is being taken which cannot be very well justified. On whatever scale their incomes may be, all are entitled to support the Departments that minister to the public welfare.

Senator E D MILLEN:
Minister for Eepatriation · NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– I am not prepared, offhand, to answer that point, but I shall obtain the information.

Senator Elliott:

– With that exception, is the Bill exactly the same as was brought down last year?.

Senator E D MILLEN:
NEW SOUTH WALES · FT; ANTI-SOC from 1910; LP from 1913; NAT from 1917

– There is no alteration in the present rates. The only alteration is the removal of the tax of £1 on single people without dependants, and married people with incomes of £100 and £150 respectively.

Question resolved in the affirmative.

Bill read a second time.

In Committee:

Clause 1 (Short Title).

Sitting suspended from4 to4.30 p.m.

Progress reported.

page 14196

CUSTOMS TARIFF (NEW ZEALAND PREFERENCE ) BILL

Bill received from House of Representatives.

Standing andSessional Orders suspended, and Bill (on motionby Senator Russell) read a first time.

Senator RUSSELL:
ViceBresident of the Executive Council · Victoria · NAT

That this Bill be now read a second time.

I direct the attention of honorable senators to the fact that Parliament recently passed a Tariff which included three divisions.

Senator Drake-Brockman:

– And many iniquities.

Senator RUSSELL:

– The second or intermediate column of the Tariff enables us to enter into reciprocal arrangements with other Dominions. Correspondence on the subject has taken place between New Zealand and Australia, and the Government is hopeful that satisfactory trading arrangements between the two Dominions will be the outcome. The imports of New Zealand produce into Australia during the past five years were- in 1915-16, £2,701,000; 1916-17, £1,900,000 ; 1917-18, £1,616,000 ; 1918-19, £2,136,000; 1919-20, £1,930,000. These figures do not include goods received by New Zealand for re-export to Australia. The exports of Australian produce to New Zealand in the same years were- 1915-16, £2,750,000; 1916- 17, £2,017,000; 1917-18, £2,904,000; 1918-19, £3,156,000; 1919-20, £5,777,000. These figures disclose a wonderful increase, amounting to about 100 per cent., since 1915-16 in the value of Australian exports to New Zealand. Australia has very big trading interests in New Zealand, as New Zealand has also in Australia. I think it is the desire of every member of the Senate that Australia should enter into reciprocal trading arrangements with New Zealand.

Question resolved in the affirmative.

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

page 14196

CUSTOMS TARIFF BILL

The PRESIDENT (Senator the Hon T Givens:
QUEENSLAND

– I have to announce the receipt of the following message from the House of Representatives: -

The House ofRepresentatives transmits to the Senate a copy of a message from His Excellency the Governor-General recommending amendments in the Bill intituled “ A B.ill far an Act relating to duties of Customs.” together with a copy of the said Bill as presented by the Speaker to His Excellency the Governor-General for assent, and acquaints the Senate that the House of Representatives has agreed to the several amendments recommended by His Excellency the GovernorGeneral in this Bill, with which it desires the concurrence of the Senate.

I remind honorable senators that the Bill is returned to the Senate by His Excellency the Governor-General, in accordance with the power vested in him by the Constitution. The provision in the Constitution is for the purpose, if a mistake is discovered in a Bill after it has passed a third reading, of enabling His Excellency the Governor-General to send it back to Parliament, so that the necessary amendments may be made.

Standing and Sessional Orders suspended.

Ordered -

That the message be taken into consideration in Committee forthwith.

In Committee:

Forster,

Governor-General. Message No. 80.

In accordance with section 58 of the Constitution of the Commonwealth of Australia, the Governor-General returns to the House of Representatives a proposed law intituled “ An Act relating to Duties of Customs “ which has been presented to him for the King’s Assent, and transmits the following amendments which he recommends to be made in the said proposed law.

Government House,

Melbourne, Sth December, 1921.

Amendments recommended -

Page 4, clause 12, leave out sub-clause (3).

Page 4, clause 13, leave out sub-clause (2).

Page 5, after clause 14, insert the following new clause: - “ 15. This Act shall riot affect the provisions of theCustoms Tariff (South African Preference) 1906 (No. 17 of 1906), the Tariff proposals proposed in the House of Representatives on the following dates, namely: - 3rd December, 1914. - (Relating to the Tariff on goods imported from, and the produce or manufacture of, the Union of South Africa) ; and 25th September, 1918. - (Relating to the Tariff on goods imported from, and the produce or manufacture of. the Union of South Africa), and the duties imposed by that Act, and those proposals shall continue to be collected in accordance with that Act and those proposals:

Provided that no higher duty shall be payable under that Act or those proposals on any goods than the duty under the General Tariff in this Act:

Provided further that no duty shall be payable under that Act or those proposals on any goods which under the General Tariff in this Act are free of or exempt from duty.”

The Schedule, Tariff Items Nos. 136 (f), 137 (b), 147, 152 (a), 168 (b) (1), 194 (d), 197 (b), 278 (a) (1), 278 (b) (1), 279, 324 (a), 388, and 430, leave out “ 1st January, 1922 “ wherever occurring, insert “ 31st March, 1922 “.

TheSchedule Tariff Item No. 278 (a) (2), leave out “ 1st October, 1922 “, insert “ 31st March, 1922”.

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

– I move -

That the amendments recommended by His Excellency the Governor-General, and agreed to by the House of Representatives, be agreed to by theSenate.

The amendments represent the basis of an agreement between South Africa and Australia. Theyare suggestions to South Africa, and South Africa, in its turn, is making suggestions to us, with a view to formulating a preferential Tariff between the two Dominions.

Senator Elliott:

– Is it proposed to admit South African explosives under a preferential rate?

Senator RUSSELL:

– Thatis not the intention. The representatives of the South African Government will meet in conference with the Commonwealth authorities should the necessity arise.

Motion agreed to.

Resolution reported; report adopted.

page 14197

IRON AND STEEL BOUNTY BILL

Bill received from House of Representatives.

Standing and Sessional Orders suspended, and Bill (on motion by Senator Russell) read a first time.

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

– Some time ago arrangements were made whereby a bounty was paid on black sheets and galvanized iron sheets, but the amount of the bounty was to be determined by the ruling freight. According to the Act of 1918, the freight was to be ascertained by the British Board of Trade, but as that body has now declined to act on our behalf, the Act has been amended so that the ruling freight shall be ascertained by the Minister, through the Manager of the Commonwealth Line of Steamers in London, Mr. Larkin.

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA · NAT

-Bbockman. -Is it proposed to continue the payment of bounties, seeing that we have already imposed very high duties)

Senator RUSSELL:

– Bounties are paid on black sheets and galvanized iron sheets, and as the duties do notcome into operation until 31st January, 1922, the payment of bounties is to be continued until that date.

Senator Keating:

– If the British Trade Board cannot ascertain the ruling freight, how can the Minister obtain the information from the Manager of the Commonwealth Line of Steamers in London ?

Senator RUSSELL:

– The British Board of Trade has declined to do it, and we have been compelled to adopt other means. I move -

That this Bill be now read a second time.

Question resolved in the affirmative.

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

page 14198

SUSPENSION OF SITTING

The PRESIDENT (Senator the. Hon.

Sitting suspended from4.55 to 6 p.m.

page 14198

WIRELESS COMMUNICATION

Agreement with Amalgamated Wireless (Australasia) Limited.

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

(By leave.) - I move -

That the Senate approves of the execution by the Prime Minister of the agreement proposed to be made between the Commonwealth and Amalgamated Wireless (Australasia) Limited, a draft of which has been laid upon the table of the Senate, subject to investigation and approval by a Committee consisting of six members of the House of Representatives (two nominated by the Prime Minister, two by the Leader of the Opposition, and two by the Leader of the Country party) and three members of the Senate.

It is suggested that the three members to represent the Senate on the Committee should be Senators John D. Millen, Wilson, and Drake-Brockman. As copies of the agreement have been in the hands of honorable senators for some time, and they have had it explained’, I do not propose to read it. I am sure that honorable senators are seized of the importance of the proposal.

The PRESIDENT (Senator the Hon T Givens:

– In putting the motion to the Senate, I point out that no machinery for the appointment of members of the

Senate to the Committee is embodied in it. By the motion as it stands, no member of the Senate is appointed to the Committee, whilst a certain methodis laid down in the motion for the selection, as members of the Committee, of members of another place.

Senator LYNCH:
Western Australia

– I have no wish to hang up this proposal. We are asked to agree to the motion, and the names of three honorable senators are suggested for appointment to the proposed Committee. It would appear that it is the intention that the Government should select representatives of this Chamber on the Committee. I do not think that that is right, and, further, I suggest that it would be wise to review the proposed selection of honorable senators. With all’ due respect to Senator Wilson, I think the Committee would be better balanced if Senator Gardiner were selected instead of Senator Wilson to represent the Senate. Two members of the Country party are to be included in the representation of another place, and as Senator Wilson is a member of that party, I think that if he were selected, there would be an undue proportion of the members of the Country party on the Committee.

Senator Elliott:

– This is not a party matter.

Senator LYNCH:

– That is so, but I still think that a better balance will be secured by the selection of Senator Gardiner instead of Senator Wilson.

Senator Russell:

Senator Gardiner is not here.

Senator LYNCH:

– He could be consulted.

Senator Bakhap:

-Senator Wilson is the representative of the Country party in the Senate.

Senator LYNCH:

– The Committee is to consist of nine members - six from another place, and three from the Senate. If Senator Wilson is selected, the Country party will have, in proportion to its numbers and status in this Parliament, more representation than the recognised Opposition.

Senator KEATING:
Tasmania

– I welcome this motion for the reasons I stated when speaking on the general Estimates. I then asked the Minister in charge of the Estimates to urge upon his colleagues the desirableness of having this question of long-distance wireless determined by this- Parliament before we disperse this year. I am thankful that the Government, even at the eleventh hour of the session, have realized the importance of taking some definite step in this matter. The agreement has been in the hands of honorable senators for some time, but I have not had the opportunity to look through it very carefully, because we have been overwhelmed with documents lately, which have fallen upon us “ as thick as leaves in Vallombrosa.” It has been impossible for us to familiarize ourselves with the “contents even of those that are of great interest to us, and of importance to the community. I noticed that the motion provides for the approval of the execution of the agreement by the Prime .Minister, subject to investigation and approval by a Committee consisting of six members of another place and three members of the Senate. I should like to know whether we are to understand that the proposed Committee is to have the right of investigating the agreement as to its details, and approving of it, or is to be confined to investigating the policy of entering into such an agreement.

Senator Russell:

– The Committee will deal with details and policy.

Senator Bakhap:

– The Committee will doubtless examine the capacity of the company and all relevant matters.

Senator KEATING:

– Whilst believ-ing that the Commonwealth should enter into an agreement of this character, and with the company referred to in the motion, the Committee might consider some provision of the draft agreement undesirable. I wish to learn whether the functions of the Committee extend merely to investigating and reporting as to the advisability of the Commonwealth entering into an agreement of this character, throwing responsibility upon the Government for the details of any agreement entered into.

Senator Russell:

– There will be no restriction on the action of the Committee.

Senator KEATING:

– Then we are to understand that the Committee will have the power to determine whether or not it is politic for the Government to enter into such, an agreement, and, if it decides that it is, it will also have the power to investigate and approve the draft agreement as it stands, or with modifications. I have referred to this phase of the subject because I have had some experience in dealing with agreements that have to be signed on behalf of the Commonwealth. It is very often found that the other party to an agreement, after ib is drawn up and in a tentative form, asks that the Commonwealth should sign it provisionally subject to the approval of Parliament. When Parliament is asked to approve1, it is told that however much it would like to alter details, and although the Government indorse the adverse criticism of it, it is too late to modify the terms of the agreement be? cause the other party to it has committed itself to its exact terms, and could not vary them without reference to people abroad. That is why I desired to know if this Committe would have a fairly free hand in the consideration of details of the agreement.

As to the representation of the Senate on the Committee, the President has pointed out that there is no method embodied in the motion, nor in the machinery of our Standing Orders, for the selection of honorable senators to represent the Senate on the Committee, but there is no reason why the names of the honorable senators who have been suggested should not be included in the motion. The Minister (Senator Russell) might consent to some honorable senator moving an amendment to his motion to incorporate those names.

I ‘ conclude by again congratulating the Government on realizing even at this eleventh hour the urgency of the establishment of long-distance wireless between. Australia and the rest of the world. I said the other evening that there was no community in the world to whom long-distance wireless is more essential, or for whom it will be proportionately of greater benefit, if successfully established, than it will be for this community of the Commonwealth of Australia. I sincerely hope that the result of the investigations of the Committee will be such as to lead to a satisfactory agreement that the Prime Minister will sign it, and that as a consequence there will be an early installation of as good a system of long distance wireless telegraphy for Australia as exists in any other part of the earth.

Senator Russell:

– I should like to include in the motion the names of the honorable senators who have been suggested for appointment to the Committee.

The PRESIDENT (Senator the Hon T Givens:

– The Minister may obtain leave to amend his motion in that way.

Senator Russell:

– I askleave to amend the motion by adding the words “ such members to be Senators DrakeBrockman, J. D. Millen, and Wilson.”

Motion, by leave, amended accordingly.

Senator ELLIOTT:
Victoria

.- I should like to know, Mr. President, if I shall be in order if I proceed to discuss one or two clauses to which I think attention should be directed.

The PRESIDENT (Senator the Hon T Givens:

– In view of the fact that the agreement is to be referred to a Committee for investigation and report, it is, I think, undesirable that the Senate should, prior to the appointment of the Committee, seek to indicate what should be done.However, I shall not rule the honorable senator out of order.

Senator Keating:

– It is possible that the honorable senator’s observations may be informative to the Committee.

Senator ELLIOTT:

– I should like to emphasize that certain clauses of the agreement should ; be scrutinized very carefullyby the Committee. One clause provides that, so long as the Commonwealth Government or its nominees hold a majority in number and value of the shares in the company, it will be entitled to nominate three-sevenths in number of the directorate, while the remaining shareholders will nominate four-sevenths. Under the companies law the Commonwealth should have an absolutely controlling interest in’ the affairs of the com- pany. It would appear that under these provisions outsiders could really overrule the Commonwealth Government, notwithstanding that the Commonwealth held the greater number of the shares, thus avoiding the provisions of the Companies Act. Paragraph vi. of clause 3 to some extent safeguards the Commonwealth. But for this provision it might be possible for the company, after it had got going, to sell the whole of its undertaking to a new company for a song, and defraud the Common wealth. In view of the revelations made yesterday by Senator E. D. Millen as to how the confidence of this Parliament had been betrayed by its representatives appointed to the War Service Homes Commission - theCommissioner disregarding the Minister’s instructions, and committing the Government to huge purchases - even a provision of this sort in the agreement should, I think, be closely watched. After the warning we have received we cannot, as a party, afford to leave ourselves open to anything of that kind occurring again.

Senator Bakhap:

– The proposed agreement, so far as it relates to the directorate of the company, is exactly the same as the arrangement determined upon in connexion with the AngloPersian Oil ‘Company some little time ago.

Question, as amended, resolved in the affirmative.

Sitting suspended from 6.22 to 8 p.m.

page 14200

CONCILIATION AND ARBITRATION BILL

Message received from the House of Representatives that it had agreed to the Senate’s amendment in this Bill.

page 14200

WAR PRECAUTIONS ACT REPEAL BILL

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

– I move -

That this Bill be now read a second time.

The object of the War Precautions Act Repeal Act 1920 was to repeal the great bulk of the War Precautions Regulations, but the regulations relating to trading with our late enemies, the formation of foreign companies in Australia, and several other matters, were retained. It is desired to keep these regulations in force until the 31st December, 1922. The object of the present Bill is to exercise effective control over foreign companies in Australia. The Government do not wish to be hard on certain people, but we desire to be careful about others. The coal position is very unsatisfactory at present, and it will be advisable to keep effective control of that trade for the next twelve months, although we hope to be able to relinquish control as soon as conditions improve. This Bill will give effective control over foreign companies and corporations that wish to register in Australia.

Senator ELLIOTT:
Victoria

.- I should like the Minister (Senator Russell) to explain why it is necessary at present to maintain control of the coal trade in particular ? We are at -peace with all the world, and surely the law of supply and demand should operate in this as well as other industries. It appears to me that the only effect such control would have would be to keep up the price of the article.

Senator Russell:

– It is not a question of price; it is a matter of insuring a coal supply.

Senator ELLIOTT:

– If the supply is insufficient, there must be something wrong with the economic conditions. The longer Government control is continued, the longer it will be before the ordinary law of supply and demand can operate.

Senator DE LARGIE:
Western Australia

– Regulation of the coal trade will not have the effect of increasing the price of the article, because the more the market is restricted, the less probability there is of a high price:

The PRESIDENT (Senator the Hon T Givens:

– This Bill deals only with corporations. There is no reference in it to coal. A similar measure referring to coal has already been dealt with.

Senator de Largie:

– The object of the Government in wishing to retain control of the trade is to insuro a coal supply for Australia.

Senator KEATING:
Tasmania

. -It is a pity that honorable senators have not been supplied with the copies of the Bill. I should gather from what the Minister (Senator Russell) has said, that there is a provision in it which deals with some regulations relating to coal. I understood the President to say that the measure deals only with corporations.

Senator Russell:

– I was intending to submit an amendment to make the Bill apply to coal as well.

Senator KEATING:

– Clause 2 of the Bill, of which I now have a copy, states -

Section seven of the War Precautions Act Repeal Act 1920 is amended by inserting at the end of sub-section (2.) thereof the following proviso: - “Provided that those Regulations, so far as they relate to foreign corporations and to trading or financial corporations formed within the limits of the Commonwealth, shall continue in force until the thirty-first day of December, One thousand nine hundred and twenty-two.”

The clause simply extends the Act of 1920 in relation to regulations affecting corporations to the end of next year. A reference to coal was made in anticipation, apparently, of an amendment that the Minister intended to move in Committee.

Senator Russell:

– I shall submit the amendment later.

Senator KEATING:

– I doubt whether it will be in order to introduce new matter of that kind. It might necessitate a new Bill. This measure deals specifically with corporations.

The PRESIDENT:

– I have not seen the amendment yet, but it has been ruled frequently that an amending Bill can deal only with that portion of the original Act that it is brought in to amend.

Question resolved in the affirmative.

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

page 14201

HIGH COURT PROCEDURE BILL

Bill received from the House of Representatives.

Standing and (Sessional Orders suspended, and Bill (on motion by Senator Russell) read a first time.

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

.- I move-

That this Bill be now read a second time.

The aims of this Bill are to make permanent the provisions of the amending Act of 1915. It will make the method of summoning juriesin cases before the High Court uniform with that employed in the States, and will provide for the payment of interest on judgment debts. The High Court Procedure Act 1915 was consequential on the Judiciary Act 1915, and provided that the trial by the High Court of indictable offences against the laws ofthe Commonwealth should be by a Justice with a jury. It also made similar provision for the summoning of the jury as was already in force as regards the summoning of the jury in a civil action. In the event, therefore, of the Judiciary Act 1915 being made perma nent, it will also be necessary to continue in force the High Court Procedure Act 1915. As regardsthe summoning of jurors, it is provided, at present, that the panel of jurors shall be made out by officers of the Commonwealth. The practice in the States is for a precept or order to be issued to the Sheriff by the Court or an officer thereof, requiring the Sheriff to empanel a jury. Under the Bill the Registrar or Deputy Registrar will issue the precept to an officer of the Commonwealth, and that officer will summon the jury. At the present time, judgment debts in the High Court do not carry interest. The Bill proposes to provide for payment of interest at the rate of 7 per cent. per annum on judgment debts from the time of trial or inquiry, or, if there is no trial or inquiry, from the date of entering up judgment. The rates charged in the States vary from 4 per cent. to 10 per cent.

Senator KEATING:
Tasmania

– This is another Bill which has been “shoved” into our hands the moment that we are asked to pass it. Fortunately, it does not go beyond providing necessary machinery. Some hitch occurred under the present legislation in connexion with a case in South Australia. I think it was a case in which it was necessary for a jury to be summoned under one of our more recent amending Judiciary Acts, and a difficulty arose as to the issue of the praecipe. It seemed that we had provided for trial by jury, but had not provided the necessary machinery for summoning the jury. A doubt was raised as to whether the procedure appropriate to summoning a jury for a Supreme Court of a State was applicable, and, if so, how far, for summoning a jury under the Federal Judiciary Act. It was thought for the time that our legislation would prove abortive. If this Bill is intended to overcome that difficulty, and to provide the necessary machinery, so that the precept for the jury can be made in the State by the appropriate Commonwealth or State officers, and the summoning of the jury can be carried tout by the Federal officers, it is legislation that is required.

Question resolved in the affirmative.

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

page 14202

REPATRIATION LOAN BILL

Bill received from the House of Representatives.

Standing and Sessional Orders suspended, and Bill (on motion by Senator Russell) read a first time.

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

.- I move-

That this Bill be now read a second time.

The Government has plenty of money available to meet repatriation needs up fca the 30fch June next, but it is necessary in these days to give power to the Treasurer to seize any favorable opportunity that may occur to place a loan on the market. From time to time we get advices that there is an opportunityto place a. loan. The money will bewanted in the latter half of 1922 for the purchase of land for War Service Homes. It will not be spent in this financial year, and probably will not be raised before the 30th June next.

Question resolved in the affirmative.

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

page 14202

RETURNED SOLDIERS’ WOOLLEN COMPANY LOAN BILL

Bill received from the House of Representatives.

Standing and Sessional Orders suspended, and Bill (on motion by Senator Russell) read a first time.

Senator RUSSELL:
VicePresident of . the Executive Council · Victoria · NAT

.- I move-

That this Bill be now read a second time.

Honorable senators will remember the great fight that took place as to whether the Repatriation Department should support soldiers who have established Australian co-operative companies. The purpose of the Bill is to permit the Department to advance to the Returned Soldiers’ Woollen Company of Geelong sums of money not exceeding £50,000. I believe all the machinery necessary is available to help them to establish this great industry in that city. After a long fight on this question, the soldiers won in this case by getting the preference. The Government is prepared tostand at the back of them, and I think Parliament unanimously desires it to do so. I am sure that the citizens of Australia- are quite prepared to offer their wealth as a security to help the soldiers on their feet in this undertaking.

Senator Foster:

– I understand that this matter was held up at one time because persons who were not soldiers - soldiers’ relatives, for instance - were interested in the co-operative concern.

Senator RUSSELL:

– I am not here to discuss that in detail. I do riot think itis very important.

Senator Foster:

– I think it is very important, and if that is the Minister’s attitude I will keep the debate going as long as I can.

Senator RUSSELL:

– I believe there were three men in this company regarding whom it was doubtful whether they should participate in the benefits. I understand that they have not been removed from the shareholders’ list. They volunteered for active service, but were retained in Australia by the military authorities. The Government does not feel justified in attacking men of that sort.

Question resolved in the affirmative.

Bill read a second time.

In Committee:

Clause 1 (,Short title).

Senator FOSTER:
Tasmania

– I do not know whether the title set out in this’ clause is the correct one or not. It may be a misnomer. It may be misleading concerning the exact nature of this limited company. I am sorry that the Minister (Senator Russell) should have said that he was not here to give such details as honorable senators might seek on the second reading. There have been numbers of concerns of a cooperative character established by returned soldiers in the various States; but they have found it impossible to secure any measure of assistance from the Government either under the Repatriation Act or any other Statute. Honorable senators naturally want to know why one business venture in Victoria can actually secure a loan of £50,000, entailing the passage of a special Act, while other soldiers’ co-operative companies cannoteven persuade the Government to cash their gratuity ‘bonds. Returned soldiers in Tasmania started a co-operative business at Hobart. Among the- capital subscribed is £7,000 worth of war ^ gratuity bonds. The company may borrow from the Commonwealth Bank up to about 40 per cent, of the face value of the bonds; but that is the inadequate extent of the assistance which the Government will offer. Soldiers all over Australia have every right to ask what influence is at work in Victoria which can secure such favours for a local scheme, which is not purely a soldier’s concern. Here is a proposition for the Government to make an advance of £50,000. The necessary Bill is being pushed through amidst the congestion and rush of the last hours of the session, while other schemes, in which soldiers solely are interested, are ignored. I do not oppose the Bill; but I demand an explanation on behalf of soldier organizations which would ‘be glad to receive help not to the extent of £50,000, but in the humble direction of having £5,000 worth of bonds cashed.

Senator ELLIOTT:
Victoria

.- This company has not .been in any better position than those to which Senator Foster has referred. It was floated with a capital of £100,000, and was strictly limited to returned soldiers or their dependents. The usual method of obtaining shares was to exchange gratuity bonds for them. A few thousand pounds was subscribed in cash by shareholders who preferred to retain their bonds or had cashed them in other directions. Shares to the value of more than £70,000 have been taken up. With the capital thus made available, a piece of land was purchased on the Barwon. A factory building was commenced, and the manager was sent to England to purchase machinery. Difficulties arose in respect of securing Government assistance. First, the benefits which may be conferred by the Act are strictly limited tq soldiers alone. As there are soldiers’ dependants among the shareholders, a serious difficulty arose. Then there was another disability. The Act is applicable only to concerns in which none but former soldiers are employed, and all the shareholders must be employees. It is impossible to start a woollen factory with any prospect of success unless the amount of capital available is at least £100,000. I hold five shares of £20 each - the maximum number which may be held by any one shareholder. Thus, in order to employ ali the shareholders, some 5,000 men would have to be employed which., of course, would be absurd, and impossible at the outset of such a concern, and outsiders like myself would have to be got rid of, which again would be impossible if the necessary capital was to be obtained. The next trouble which developed was that, among all the returned soldiers in the land, none .could be found who possessed the necessary qualifications to undertake the management. It is essential that such a person shall he a highly technical and skilled man. Indeed, to have gained sufficient experience, it is almost certain that such a person must be beyond the age limit of a soldier.

Senator de Largie:

– You could have appointed a nominal manager.

Senator ELLIOTT:

– Even then, we would have been no nearer to securing assistance under the Act; we would be employing one person at least who was not a returned man. The whole business has been held up for a long time. When the proposition was first brought under this attention of the Prime Minister (Mr. Hughes) - prior to the passage of the Repatriation Act - the right honorable gentleman heartily approved. Returned men and their dependants subscribed their gratuity bonds on the understanding that the company would come’ within the purview of legislation then about to be introduced. Ultimately, however, when the Act was passed in its present form, the company was cut out from all possibility of benefiting. Widows and children of deceased soldiers had been allowed to take up shares by subscribing their bonds as capital. Thus there were shareholders in the company not returned soldiers, and a manager a non-soldier, as I have already pointed out, beside returned men. The facts prevented the Minister from making an advance. It became necessary to request the Government to pass a special Act. That is the measure before the Committee.

With respect to the question of security, the Government will have first call upon the whole of the capital subscribed. They can take their security by way of mortgage on the land, factory, and machinery. Seeing that the capital subscribed, as well as the capital which the Government are advancing, will be invested, there should be a margin of 50 per cent, security for the Government in respect of their advance. Further, the Government will have the power to watch the trading account and see how the business develops. If it is perceived that the concern is being badly managed, it can be closed down and the liability got rid of. The new building is adjacent to the Commonwealth Woollen Mills at Geelong, and, if the soldiers’ efforts should prove a failure, the Government will be able to take over the concern and run it as part of the Government mills, under their own management. Altogether, the Government are amply safeguarded, and honorable senators need have no hesitation in giving the project their support.

Senator KEATING:
Tasmania

– I indorse and emphasize the remarks of Senator Foster. The Returned Soldiers’ Association at Hobart has opened co-operative stores, and, for some time those in control have been endeavouring unsuccessfully to persuade the Government to cash the bonds which they hold as part of their subscribed capital. I do not cavil at the proposition before the Committee, provided that the circumstances of the case warrant the advance. But I hope that the procedure in connexion with the Geelong venture may be taken as an earnest of better things to come for soldier concerns such as that in Hobart.

Senator DRAKE-BROCKMAN:
Western Australia

– I shall not oppose the Bill, but it affords merely another indication of the special treatment meted out by the Government to Victorian interests.

Senator Keating:

– Being nearer to the throne.

Senator DRAKE-BROCKMAN:

– Precisely ! The further an interest is from Melbourne - even a soldier proposition - the more difficult it is to secure consideration for that concern. Is the Minister (Senator Russell) prepared to assure me that the concession about to be granted to these Victorian soldiers and their dependants may also eventually be granted to soldiers in other States? With such an assurance, I would not object to anything that might be done for any soldiers, anywhere. But I shall not be a party to granting special and exclusive preference to a Victorian concern.

Senator Keating:

– The honorable senator is not unwilling to give preference to Victorian, returned men, but he will not support a monopoly in that direction?

Senator DRAKE-BROCKMAN:

– I am reluctantly willing to accord such preference, but I shall emphatically oppose anything in the nature of a monopoly for this State.

Senator FOSTER:
Tasmania

.- Following upon the explanation of Senator Elliott, one is more than ever led to doubt the sincerity of replies furnished by the Government to questions asked by honorable senators. With respect to the Hobart company, its directors have given their assistance honorarily. They are doing their best to give the soldiers the benefit of their experience with a view to make available the necessaries of life at the cheapest possible rates. In Victoria, because the returned men have here the finest and most authoritative advocate of all, the friends of the various soldier movements - although some soldiers do not recognise that fact - special preference is easily secured.

Senator Russell:

– Why should the honorable member be dissatisfied? Have not the Government just passed a Bill to grant £10,000,000 for repatriation purposes ?

Senator FOSTER:

– How much of it Will be devoted to Victoria? What will be the proportion absorbed, for example, among Tasmanian returned men?

Senator Vardon:

– South Australia’s experience has been similar to that of Tasmania.

Senator FOSTER:

Senator Elliott, in defending the action of the Government, appears to think that there is ample security for the money which appears to be forthcoming without much difficulty; but those engaged in cooperative concerns in Tasmania have to carry on with their own money; and when a request is made to the Government for an advance on their bonds, they are referred to the Commonwealth Bank, where they are charged 8 per cent., and advanced only 40 per cent. on their face value. If the Government are sincere in their endeavour to assist returned men there should not be this discrimination.

Senator PLAIN:
Victoria

– I can quite understand the attitude adopted by Senator Foster;but he should remember that the circumstances are not identical. iSenator Elliott put the position very clearly, and explained that the shareholders in that undertaking found sufficient of their own capital to provide the land, some of the buildings and a portion of the machinery. When the industry was first established, the men were under the impression that they would be able to secure an advance under the Repatriation Act. They appealed to the Minister for* Repatriation (Senator E. D. Millen), and explained the position; but after making inquiries he discovered that there were certain shareholders who were not returned soldiers. The Minister then informed the representatives of the men that the Government could not advance the company a single penny, because the Repatriation Act provides that money may be advanced to co-operative concerns in which the whole of the shares are held by returned soldiers or their dependants. The industry at Geelong was therefore placed in a most precarious position, because between £30,000 and £40,000 had already been expended in land, buildings, and machinery. An appeal was then made to the Prime Minister (Mr. Hughes), who realized that the Government could not allow the money that had been invested to be sacrificed, particularly as much of it had been earned on the battlefields.

Senator Foster:

– Then why not give similar assistance to co-operative stores? The Government would close their doors.

Senator PLAIN:

Senator Foster should inform the returned soldiers in Tasmania that they should invest their capital in something of a stable character, because the Government cannot be expected to render financial assistance to co-operative concerns which employ only three or four men, and which have no security to offer.

Senator Foster:

– Forty-three men are employed at the place in Hobart.

Senator PLAIN:

– That may be so; but at Geelong 200 to 300 men and their dependants would benefit.

Senator Foster:

– Is the Geelong mill a better asset than a city property at Hobart?

Senator PLAIN:

– A comparison cannot be instituted between a manufacturing industry employing several hundred with a storekeeping business.

Senator Keating:

– As a security a woollen mill would be practically valueless if the business ceased.

Senator FOSTER:
TASMANIA · NAT

– I think that Senator Plain is endeavouring to stress a point that employment will be found for a large number of men, but the employment of men cannot be regarded as an asset.

Senator PLAIN:

– In this instance the Government are establishing a precedent, but that is their responsibility. It is to be hoped that others will not misunderstand the provisions of the Repatriation Act, and that assistance will be given where possible.

Senator LYNCH:
Western Australia

– I do not object to assistance being rendered; but I am strongly opposed to the principle of Governments indiscriminately bestowing patronage upon one section of returned soldiers and overlooking the needs of others.

Senator Russell:

– That is not done.

Senator LYNCH:

– I shall show that it is before I have finished. I have, in common with other honorable senators, endeavoured to obtain, not £50,000, but a few hundred pounds for returned soldiers engaged in a co-operative undertaking in Western Australia. The case to which I refer is a new industry engaged in the manufacture of tool handles, and, after a good deal of pressure, we were successful in. getting a few hundred pounds. There are a number of woollen mills in this State, and, in this instance, there is a Government mill in the same locality. There are other industries that could be established, and there should be a diversifying of industries as much as possible, especially when Government money is coming to the rescue. The industry in Western Australia is holding its own, and has been assisted to the extent of only a few hundred pounds, which was forthcoming after a good deal of pressure, beseeching, and imploring on its behalf.

Senator Elliott:

– Was it a loan or a grant?

Senator LYNCH:

– The plant is at Bunbury, and as very careful inquiries w,ere made into the assets of the concern, we are safe in assuming that it was a loan. When one peruses the records it will be found that Victoria has fared very well when compared with other States, and in this connexion, I may refer to the Auditor-General’s report of last year, on page 41 of which will be. found the amounts advanced by the Commonwealth to the States.

The CHAIRMAN (Senator Bakhap:
TASMANIA

– The honorable senator will be beyond the scope of the measure if he indulges in a discussion of the general application of loans to all kinds of industries. The Bill deals with loaning money for a specific purpose, and, although I do not wish to unduly restrict discussion, I can permit only a passing allusion to the matter which the honorable senator was about to discuss.

Senator LYNCH:

– In view of the discrimination manifested, I should be permitted to state that New South Wales received £12,200,000, Victoria £10,300,000, Queensland £2,300,000, South Australia £3,000,000, Western Australia £4,600,000, and Tasmania £2,700,000. The point on which I desire to centre attention is this: That while ‘the Government of the Commonwealth undertook only to advance Victoria £10,300,000 a sum of £10,700,000 was actually obtained by that State.

Senator Bolton:

– Which goes to show the extent to which soldiers are being settled on the land in Victoria.

Senator LYNCH:

– I believe that the Government should have a fixed policy in regard to the making of advances to co-operative companies of returned soldiers. It should not be possible for a party of returned soldiers merely because they happen to reside close to the administrative centre, and to be under the eye of the responsible Minister, to secure a preference. We have found it hard te obtain even a modicum of justice for returned soldiers further afield. If I came from Victoria, I should have nothing of which to complain, but this granting of assistance in an indiscriminate way is on a wholly wrong basis. The Minister should have an Advisory Board to inform him as to the merits of applications for advances of this kind on the part of returned soldiers in all the States, and to advise him as to the order in which they should’ be dealt with.

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

– I am totally opposed to the suggestion just made by Senator Lynch that an Advisory- Board should be appointed to assist the Minister in these matters. I am about tired of such Boards. Ministers should be prepared to take the responsibility for their own actions. We should probably have been better off today if we had had more confidence in ourselves and less confidence in other people. I regret the tone of the debate, which has certainly not been calculated to give dignity to the proceedings of the Committee. If the Australian soldiers in fighting overseas had had regard only to the States from which they came instead of fighting as a united body, they might not have been so successful. As it was, they fought as soldiers of the Commonwealth without regard to State boundaries,

Senator DRAKE-BROCKMAN:

– That is why we object to such distinctions now being observed.

Senator RUSSELL:

– This Bill represents a new departure. For a long time I, in common with many others, believed that we had power under the Repatriation. Act to assist -co-operative companies of returned soldiers. We ultimately discovered that we had no such power under that Act, and after a big fight on the floor of the House it was decided that a sum of £250,000 should be appropriated to enable the Government to assist such cooperative efforts, In reply to Senator Foster, I would say that I fully appreciate the difficulties that have arisen in regard to some co-operative societies. I know of some which are presumed to consist solely of returned soldiers, but which, in fact, do not. In their own interests the soldiers in such enterprises should clean them up, and see that only returned men are shareholders. Many people trade on the names of returned soldiers and do good business, although they do not wholly employ returned men. The company with which this Bill deals, however, is confined, to returned soldiers. The Government would not make advances of this kind to an ordinary public company. It is true, as has been said, that we are making a start with this scheme in Victoria. The returned soldiers in this State have a very progressive organization, and it has been urging the Government for some time to take action in this direction. A stranger might gather from the observations of some honorable senators that the re turned soldiers of other States are fools - that; although in this case we are advancing £50,000 to a co-operative company of returned men in Victoria, soldiers in Tasmania, New South Wales, and elsewhere would not think it possible to obtain the same assistance. The position is that returned men in all the States can demand this help. How could we refuse applications for assistance of this kind on the part of bodies of returned soldiers in any State? As long as the money lasts we must assist the men to set up these industrial enterprises. Senator Plain, in the course of a long explanation, has suggested that soldiers, when carrying on business, sometimes get into difficulties. That, however, is .not a very good argument for making advances to them. A good deal of sneering has been indulged in, I regret to say, in regard to the different States, and special mention has been made of the fact thaw Victoria has received by way of advances for soldier settlement over £10,000,000. I wish she had received £15,000,000, since it would mean that still more returned men had been placed on the land. As it is, in proportion to her population, Victoria has settled 50 per cent, more soldiers on the land than has any other State. During the last two years we have not been able to make advances for soldier settlement as freely as before, because of. the difficulties of the money market; but Victoria has put up a wonderful performance in soldier settlement, and I am glad to say that the men, particularly those engaged in wheat forming, are doing very well.

The advances for which this Bill provides are not being made to this company merely because it is carrying on operations in Victoria. The only consideration is that the enterprise is carried on by returned soldiers, and if groups of soldiers from New South Wales, Tasmania, or any other1 State can put up a proposition I shall be glad to help them, and I am sure the Government will do so.

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA · NAT

-brockman. - That is all we want.

Senator RUSSELL:

– If the officers at the head of the organizations of returned soldiers in other States had the same amount of “go” as have the principal officers of the Victorian organization, they would keep the Government busy. I believe that Australia has done as well aa any other country so far as the treatment of her returned men is concerned. I remind honorable senators that the returned soldiers in this co-operative com:pany axe risking their own money, as they have to provide 50 per cent, of the capital. I shall bring under the notice of the Cabinet the view unanimously expressed by honorable senators that something should be done on these lines for the returned soldiers in all the States. We, want to help genuine co-operative companies consisting of returned soldiers, and not individuals who try to make use of the returned soldiers for their own profit. There are smart men who do not hesitate to do so.

Senator Foster:

– The honorable senator will not find me “ boosting” any attempt of that kind.

Senator RUSSELL:

– 1 am sure that the1 honorable senator- would not do so. I wish these returned men good luck, and. 1 hope that many other organizations of the kind will be established. Private enterprise seems to be altogether too slow in entering new fields of industry, but our soldiers should be able to furnish the necessary “ ginger.”

Senator FOSTER (Tasmania) [9.8 J. - I desire to thank the Minister (Senator Russell) for the promise he has made. It is well from the point of view of the Administration, as well as the soldiers themselves, that it should be widely known that the Government are prepared to consider favorably applications by groups of returned soldiers in all the States for advances to assist them in genuine cooperative enterprises. The information just given by the Minister will do the Government good and the soldiers good. I only regret that so much time has been spent in obtaining it from him.

Clause agreed to.

Clause 2 (Definition).

Senator KEATING:
Tasmania

– In this clause, we have a reference to the “Geelong R. S. and S. Woollen and Worsted Co-operative Manufacturing Company Limited.” We have the same reference in the title to the Bill, whereas clause 1 provides that the Act may be cited as the “Returned Soldiers Woollen Company Loan Act 1921.”

Senator Russell:

– I believe that the registered name of the company is the “Geelong R. S. and S. Woollen and Worsted Co-operative Manufacturing Company Limited.’1

Senator KEATING:

– I am glad to have that explanation, because the use of these abbreviations suggested to me the possibility of having references in future Defence Bills to “ D.A.Q.M.G.,” and in Postal Bills to the “ P.M.G.,” and so forth. It would seem, however, that we have not to dread anything of the kind.

Clause agreed to.

Clauses 3 to 5 agreed to.

Clause 6 (Treasurer may make requirements as to management).

Senator KEATING:
Tasmania

– Sub-clause ‘2 provides that -

Upon the failure of the company to comply with any directions required to be observed in pursuance of this section, the Treasurer may enter into possession of all the assets of the company, and work, manage, or dispose of those assets as he thinks fit.

I desire to know whether it is intended that this sub-clause shall give the Treasurer power, of his own motion, as soon as he considers that the conditions have not been complied with, to enter into possession of the assets of the company, and to manage or dispose of them as he thinks fit. Is it ^ to rest entirely in his own discretion? Under the preceding clause, the Treasurer is authorized to obtain from the company such security as he thinks necessary. Suppose he takes security in the form of a mortgage in which there is a condition such as that referred to in this clause, and he considers, at a certain stage, that the condition is not being complied with, will he be entitled, under sub-clause 2, to be judge in his own case, enter into possession, and dispose of the assets of the company -as he thinks fit; or will it be necessary for him, as in an ordinary case of foreclosure under a mortgage, to take the ordinary proceedings in Court. I should like to know what is intended by the clause. Is the Treasurer, under this clause, to be judge in his own case?

Senator Elliott:

– Yes.; he is.

Senator RUSSELL:
Vice- President of the Executive Council · Victoria · NAT

Senator Keating has exercised a vivid imagination in drawing a picture of the Government advancing money to help returned soldiers, and then going round and acting as bailiffs. Any Treasurer who would do such a. thing would not remain long a member of the Government. I might have been disposed to consider a gentle suggestion for a modification of the clause; but I object to the honorable senator getting up and making these charges.

Senator Keating:

– I have not made any charge. I merely asked the Minister what was intended by this clause?

Senator RUSSELL:

– The intention is merely to protect our security.

Senator Keating:

– Is it intended to give the Treasurer power to enter into possession without resort to any Court?

Senator Elliott:

– Yes; and quite right, too.

Senator RUSSELL:

– We must have security for the money advanced to the company, but the Government will, in this matter, be much more likely to help the company should it get into trouble. It is wonderful how soon the shareholders of a company become panic-stricken if it is not doing well; and if such a thing were to arise in connexion with this company, I have no doubt that the Government would help it in every way,and would certainly administer the Act sympathetically. If Senator Keating considers the clause objectionable, he might make a suggestion for ito amendment. The Government have never entertained the idea that the Treasurer would do anything unfair to the company to whom it is proposed to advance this money.

Senator KEATING:
Tasmania

– I might put the matter briefly in the form of a question: Is jt intended by sub-clause 2, of clause 6, to give the Treasurer power, to be exercised in the last resort, or in all circumstances where he considers that the conditions referred to in sub-clause 1 are not complied with? In normal circumstances, will he act as an ordinary mortgagee, and will he only as a last resort exercise the authority conferred upon him by this clause?

Senator Russell:

– I cannot say that he would ever use such a power as the honorable member suggests.

Senator ELLIOTT:
Victoria

.- The clause is all right as it stands. It is necessary that the Government should have ample security. This clause will not give the Treasurer any greater power than is frequently given in connexion with a trading company that issues debentures. In the case of such a company, there is always provision made for the appointment of a receiver, if at any time the debenture-holders become suspicious of the financial position of the company, to enter into possession and wind up the company.

Senator Russell:

– We might say, “ Where, in the opinion of the Treasurer, the company has failed to comply with any directions”, and so on.

Senator Plain:

– That would be only saying what is in the clause, in other words.

Senator Russell:

– Very well, I will let it go as it stands.

Clause agreed to.

Preamble and title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 14209

AUSTRALIAN SOLDIERS REPATRIATION BILL (No. 3)

Bill received from the House of Representatives.

Standing and Sessional Orders suspended, and Bill (on motion by Senator Russell) read a first time.

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

.-I move-

That this Bill be now read a second time.

This Bill is intended to extend the field of operations of the Soldiers’ Pensions Act. In a great many cases it has been a matter of doubt whether men who suffered from certain complaints and diseases prior to enlistment had their sufferings accentuated as a result of their war service, and in consequence they have been denied pensions. This Bill is introduced to give effect to a desire to review the attitude hitherto adopted towards these cases. A very careful medical examination will, of course, be made, but wherever it is shown that war service has impaired the health of the returned soldier he will be included in the pension list. I hope that the Bill will result in providing relief for many hard cases that exist in Australia to-day.

Question resolveld in the affirmative.

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

page 14209

INCOME TAX BILL (No. 2)

In Committee. (Consideration resumed from page 14196) :

Clauses 1 to 8 agreed to.

Clause 9 (Levying of income tax).

Clause agreed to.

Schedules and title agreed to.

Bill reported without request; report adopted.

Bill read a third time.

page 14210

INCOME TAX ASSESSMENT BILL (No. 1)

Second Reading

Senator RUSSELL (Victoria - Vice-

President of the Executive Council) [9.35]. - I move-

That this Bill be now read a second time.

Several alterations of the existing Act are proposed in this measure, but they are mostly matters of detail, which experience in its working has shownto be necessary for the better administration of the Act. I understand that there is fairly strong opposition to clause 6, and when we are in Committee I shall consent to certain amendments which may tend to make that provision more satisfactory.

Senator KEATING:
Tasmania

– This is a very important measure. The Bill we have just disposed of is the annually recurring Bill for fixing the rate of the income tax, whereas this Bill seeks to amend a very complicated, intricate, and involved measure, namely, the Income Tax Assessment Act. It is a Statute which very few people in the Commonwealth can read understandingly, but yet, in the closing hours of this session, we are asked to amend it in several important respects. How important they are I am not in a position to say, but if one reads the Bill, even without comparing it with the original Act, which it is really necessary to do in order to enable one to properly understand it, the very farreaching nature of the amendments will be seen. I am certain that if we pass the measure as it stands the result on existing legislation will be surprising to each and every one of us, and that for some time to come every honorable senator will be bombarded with inquiries from all quarters as to why Parliament, in the closing hours of this session, legislated in this or that direction in relation to this particular Bill. I do not pretend to be able to understand the significance of all these amendments. We have the same difficulty to-night thatwe always experience when dealing hurriedly with legis lation in the last few days of the session; we have not the benefit of a memorandum, indicating in ordinary type, black type, and erased type, the nature and purpose of the proposed amendments. I venture to say that we have not dealt with any measure for a considerable time past which has more justified the adoption of that procedure than this does. I do not think that what the Minister (Senator Russell) has had to say in moving the second reading has given us any insight into the effect or purpose of. the Bill.

The Income Tax Department stands in a very peculiar position; it comes into direct relationship with a great number of residents of the Commonwealth. Constituents of honorable members in every State are deeply affected by the association they occasionally or regularly have, perhaps more often than once a year, with this Department. By our legislationwe have conferred on the Commissioner of Taxation and his officers certain authority over the taxpayer. If the latter makes a mistake or omission, it is always at his peril. The Income Tax Office can make errors, and does make errors, but not at its peril, and never at its cost. Last night Senator Wilson referred to another Bill as a “double-headed penny.” The designation might very appropriately be applied in respect to the errors that occur in transactions between the taxpayer and the Income Tax Offi6e. I cannot say what additional powers are given to the Department under this Bill, but a very cursory glance at some of the provisions it contains assures me that some very revolutionary alterations are proposed. For instance, clause 2 alters the definition of the Avord “Income,” and proposes to include what has never been included before, namely, “ the amount for which trading assets have been sold, whether they are sold with the business as a going concern, or in any other manner Avhatsoever.” I presume that hitherto, if a man sold out and received £5,000 for the assets of his business, it has been treated as capital.

Senator Wilson:

– It cannot be anything else.

Senator KEATING:

– If we pass this amendment, it will be treated as income, and the man will be assessed as if he had earned the £5,000 in addition to his ordinary income.

Senator Lynch:

– -If a man is £5,000 in debt when he sells out, what happens ?

Senator KEATING:

– The Department will not recoup him. A man who has an income of £800, and has £10,000 invested in assets, pays income tax each year on £800, according to the rate of the curve of the tax, but if he sells his assets for £10,000, his income for the year is to be regarded as £800, plus £10,000, and he will not get the full £10,000 because the Income Tax Department will regard it as a very heavy income, and by the application of the curve of the tax, which makes the rate exceedingly high on large incomes, scoop a few thousand pounds out of it.

Senator Wilson:

– It is, as a matter of fact, an increase in the tax without admitting it.

Senator KEATING:

– It is really a levy on capital. Income, according to clause 2, will not, in future, include “ any rebate received by a member of a co-operative company based on his purchases from that company, where the company is one which usually sells goods only to its own members.” That is probably a very desirable provision. If the Department has been regarding as portion of a man’s income the rebates which he has received from a co-operative concern of which he is a member, and which only sells to its own members, it is only fair, if the Government seriously wish, to encourage cooperation, not to include such rebates in a man’s income.

The same clause proposes to insert the following new definition : - “ ‘ Trading assets ‘ does not include live stock which are ordinarily used as working animals, or for breeding purposes, but does include all other live stock.” I am not in a position to say what effect this provision is likely to have; but honorable members who are more experienced in grazing matters will probably know better than I do its relation to the provisions of the original Act.

These amendments are only portion of one page of a Bill running into ten pages, and if they are a sample of what the measure contains, all I can say is that it is not fair to the Senate, to any honorable senator, or to the public, that this Chamber should be asked to take it into consideration when there are not even sufficient copies of the Bill available to circulate among honorable senators. I protest against our being asked to enact legislation blindfold in this way. Within the last day or so, we have been asked to do so with regard to other measures. I sat here for the whole of last night endeavouring to familiarize myself with ‘ the several measures that were being brought forward in quick succession. Certainly they were short, and many of them were machinery Bills, and to some extent I was able to keep in touch with their contents. But ‘ I frankly confess that I am unable, in the time at my disposal, to understand what this Bill is aiming at, and I would, not be doing right by those who sent me here if I did not protest against this method of legislation.

Senator Wilson:

– If legal and trained minds find it difficult to grasp the meaning of this Bill, the honorable senator will realize the difficulties of the layman.

Senator KEATING:

– I do. Last night I was able to keep pace with the measures that . were coming forward, thanks to some extent to Senator Wilson, who occupied the attention of the Senate in his criticism of the several measures, and the breathing space thus afforded me, gave me an opportunity to delve into the several Bills, and in a superficial way familiarize myself with their contents. But if my honorable friend stood up now and spoke for an hour, thus giving me an opportunity to study this measure, I do not think it would help me very much. I hope the Minister will not persevere with it. It is true that a Royal Commission has been making inquiries into taxation matters generally. I do not know that it has finalized its labours, but I have not the slightest doubt that when it does the report submitted to Parliament will have some relevancy to our income tax assessment legislation. If legislation on the lines of this Bill is necessary, has this necessity become apparent only within the last few days or the last week or two? Parliament has been sitting for quite a considerable time. On several occasions the Senate was adjourned because there was no business for it. If there was a necessity for this legislation, that necessity must have been apparent to the Commissioner and the Treasury officials long since. The Senate should insist upon its rights. Before being asked to enact far-reaching legislation of this character it should demand a proper and adequate opportunity for understanding what it is doing. The fact that the Taxation Commission has not furnished its final report is an added reason why the Minister should not proceed with the Bill. The Government ought to realize that it is not fair to this Chamber or to the public to expect legislation of this kind to be enacted in this way. If we do proceed with the Bill we shall be legislating blindly.

Senator Foster:

– Do you not think the Treasury will get more revenue under this measure than under the existing “assessment Act?

Senator KEATING:

– I could not say. I do npt know whether the purpose of this Bill is to ease the taxpayers’ burden or to fill the Treasury coffers. Very little of it is understood by the community generally and by members of this Parliament. I prophesy that honorable members will have plenty to do in the near future, when the assessments come out, in answering inquiries from their constituents as to why the provisions of this Bill were allowed to be inserted in the Act.

Senator Wilson:

– Does it not affect some important cases that are before the Courts.

Senator KEATING:

– I could not say. The primary producers, I know, were promised relief some time ago, and surely legislation along these lines should have been forthcoming at an earlier period of the session.

Senator Crawford:

– This relief for the primary producers will not come into effect until 30th June, 1923.

Senator KEATING:

– We should have been asked to legislate in that direction long ago, and to make such enactments effective before the date mentioned by the honorable senator. I appeal to the Minister not to proceed with the Bill. If he persists I ask honorable senators respectfully and firmly to decline to proceed with it.

Senator DRAKE-BROCKMAN:
Western Australia.

– I must confess that I find myself in m.uch the same mental condition as Senaror Keating does. Senator Wilson observed, by way of interjection just now, that both Senator Keating and I, being members of the legal profession, perhaps had qualifications for the interpretation of Statutes a little more highly developed than in the case of the majority of honorable sena tors. Despite the possession of that qualification, I confess that ‘ I do not understand this Bill. I have not had enough time to discover what is in it, and, added to my difficulties, I had no sleep last night - I believe other honorable senators’ are inthe same position - and therefore my mental condition is not so; alert as it might be. We have been in session for nearly twelve months. There has been a demand from time to time, in Parliament and out of it. for certain amendments of the Income Tax Assessment Act, and yet at the very last hour in the life of this session we are asked to deal with, and try to understand, this very complex Bill embodying the amendments referred to.

Senator Foster:

– And there are only about six copies of the Bill available to us.

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA · NAT

– BROCKMAN . - Added to the difficulties I have referred to is the one mentioned by Senator Foster. I hope the Minister (Senator Russell) will not proceed with the measure. We have had no explanation of its provisions from the Ministerial table. For this I am not blaming the Minister, because I realize that he is filling an emergency position, so far as this Bill is concerned at all events, and, therefore, I do not blame him for not giving us an explanation of a Bill which I am. certain he does not, and could not, understand.

Senator Keating:

– It is a case of the blind leading the blind.

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA · NAT

-BROCKMAN . - Yes. but, fortunately, the blind that is being led is not altogether dumb.

Senator Lynch:

– Do you confess that you do not understand it either?

Senator DRAKE-BROCKMAN:

– I do not understand it, but I understand that it is going to affect very materially the method of assessment of taxation on incomes right throughout Australia. Senator Keating has drawn attention to the objectionable features of clause 2. The Taxation Commission, which has been inquiring into the incidence of taxation, has issued an interim report advising the Government that some measure of relief should be given to those taxpayers engaged in primary industries and to those who have to pay double taxation. If honorable senators will look at the Bill, they will find that out of twelve clauses there are only two giving effect, as I understand the position, to the recom- mendations of the Commission. The other ten Clauses refer to a variety of matters, and evidently have been put in at the instigation of the Taxation Commissioner. We know nothing about them. I am not going to stand for this system of legislation. I demand an opportunity of understanding a Bill of this nature, and certainly I want to know the effect of the other ten clauses. I am certainly not going to accept them. I shall vote against the measure.

Senator Foster:

– Let us vote against the Bill on the second reading, and knock it out.

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA · NAT

-BROOKMAN - The Minister should not ask us to persevere with it at this stage. Will he say if the assessments to be made under the Bill are going to be retrospective?

Senator Wilson:

– That is very important.

Senator DRAKE-BROCKMAN:

– Are they going to apply to income-tax returns already in for 1920-21?

Senator RUSSELL:
NAT

– Yes.

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA · NAT

-BROOKMAN. - Then, I say that is another reason why we should not accept the Bill. It is absolutely scandalous.

Senator Keating:

– It is outrageous.

Senator DRAKE-BROCKMAN:

– We are entitled to know just what the proposal means. We are now told that it is to be re’trospective, but we have had no opportunity of understanding it.

Senator Vardon:

– And the taxpayers will never understand it.

Senator RUSSELL:

– It is the outcome of the recommendations of the Royal Commission.

Senator DRAKE-BROCKMAN:

– If the two clauses to which I have referred, giving relief to taxpayers engaged in primary industries were going to be made retrospective, the measure might be all right; but I cannot find, as a matter of fact, that they are to be made retrospective.

Senator Plain:

– Why not pass those two clauses and knock the others out?

Senator DRAKE-BROCKMAN:

-No, because I do not understand them, either. I do not admit that there is any great urgency for dealing with the Bill at all. If there were, it should have been brought down earlier in the session. We should not be asked to deal with a very difficult subject unless we have plenty of time and a clear brain to work with. I must confess that, having been up all night, I have not the clearest brain at the present time.

Senator Wilson:

– You are not alone in that.

Senator DRAKE-BROCKMAN:

– I realize that, and therefore I say it is most unfair that, in the circumstances, we should be asked to deal with an /intricate subject in this manner. I invite honorable senators to give their attention to clause 6.

Senator RUSSELL:

– Paragraphs a, b, and c are to be deleted.

Senator DRAKE-BROCKMAN:

– I am glad to hear the Minister say that, because the clause is most objectionable. Let me give honorable senators a concrete illustration of what I mean. The case was, I believe, mentioned by Mr. Bowden in another place. There was an old lady who had £2,000 worth of shares in a comany returning 10 per cent. The company reconstructed and issued to this lady 4,000 shares bearing 5 per cent, interest, instead pf the 2,000 shares returning 10 per cent. Her income was unaltered. She was getting 5 per cent, on 4,000 shares instead of 10 per cent, on 2,000 shares, so her income was £200 per annum. When the reconstruction took place, she was taxed on income for that year of £2,200 ! That is in this Bill. There are, before the Courts at the present time, a large number of cases contesting the construction put on this phase of taxation by the Commissioner.

Senator Lynch:

– The same thing happened under the old Act.

Senator DRAKE-BROCKMAN:

– It has happened before. If this Bill is passed, and it is retrospective, it will bind all those cases now before the Court. Are we to tolerate that? At any rate, that is one clause out of which I am able to get some meaning.

Senator Keating:

– ‘The litigants will have to pay costs.

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA · NAT

– BROCKMAN. - Yes; it is a case of “heads I win, tails you lose.” This Bill was rushed through another place, but fortunately we are able in some degree to analyze it and discover its iniquity. I think, further, that if the Government did not understand the meaning of the measure before, they have now discovered it. This Bill is the outcome of the Taxation Commission, who, in a double-headed penny “ sort of way, got the Government to accept their recommendation; and if we had time we might be able todiscover further iniquities. I am not suggesting for a moment that my interpretation is complete, or is to be accepted as final, for it is the result of a very cursory examination, owing to insufficient time. Clause 2, to which Senator Keating drew attention, alters the very meaning of the word “income.” It provides that the amount for which trading assets have been sold, whether with the business asa going concern or in any other way, shall be deemed to be income. If a man buys a couple of thousand sheep out of capital, and after keeping them for twelve months as an asset of his property then sells them, the money he receives is “ income.”

Senator Keating:

– He is not allowed to deduct what he paid for them in making up his income tax return for the year in which he bought them, but when he sells themthe money he receives is treated as income.

Senator DRAKE-BROCKMAN:

– Precisely, and that makes the position worse. Then, to my mind, this clause has another meaning, though, of course, it is possible I may be wrong.

Senator Russell:

– It is not “possible” butcertainthat the honorable senator is wrong, because we do not tax the breeding section of a man’s stock, but only those concerned in his trading operations.

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA · NAT

-BROCKMAN. - That is so. Under the sub-clause there is not included live stock which, in the opinion of the Commissioner, is used as working animals or for breeding purposes, but there is included all other live stock. If a man has ewes which he is using for breeding purposes, they are not included; but if he has ewes or wethers for fattening, and he sells them, the money he receives is treated as income. In order that I may not be misunderstood, I confess once more that I do not profess to completely understand the Bill. I think I can say without egotism, however, that if I cannot understand it, I doubt very much whether there are more than one or two here who are better qualified in that regard than I am.

Senator Wilson:

– I think we must follow our legal advisers !

Senator DRAKE-BROCKMAN:

– The honorable senator will be well advised if he does. At any rate, I advise the Minister to withdraw the Bill ; if he is not prepared to accept the advice, I ask the Senate to throw it out.

Senator LYNCH:
Western Australia

– I am rather loath as a layman to “ butt in “ when honorable senators, who are accustomed to define the correct meaning of a Bill, are dealing with a measure of this description. At the same time, I do not like to vote against this Bill if it is brought forward as an emergency measure for the protection of the revenue.

Senator Russell:

– It gives away revenue.

Senator LYNCH:

– It all depends on the amount of revenue. If the Bill is necessary to tighten up the existing Statute for other purposes, I hesitate to take a hand in throwing it out. But if the revenue is only slightly affected, or it merely means a variation of the terms of assessment, or a general overhaul of the Act as it stands, we might very well postpone it until Parliament re-assembles. If the revenue is going to lose seriously by reason of this measure, I should like to take a hand in rejecting it.

Senator Russell:

– It will mean a loss of revenue.

Senator LYNCH:

– Then I think that should determine the action of the Senate. I am awaiting a declaration from the Government, though I know that Senator Russell is placed in a disadvantageous position, owing to the illness of his colleague (Senator E. D. Millen), and we cannot expect him to” master all the details of an intricate measure of this description. At the same time, he is in a position to get straightforward and correct advice as to what the true effect of this measure will be with or without clause 6. If the Minister is in a position to say that the Bill is required to protect the revenue from those who have escaped taxation in the past, I, for one, will vote for it, even with the excision of clause 6.

Senator ELLIOTT:
Victoria

.- The main argument urged in favour of the Bill is the relief it will afford to pastoralists. Unfortunately, however, that particular provision of the Bill does not come into operation for a couple of years, so that the urgency, from the point of view of the pastoralists, does not seem to be very great. ‘There were members of another place who would have made that clause operative straight away, and I cannot see why it has been postponed. I have nothing to add to the able arguments of Senator Keating and Senator Drake-Brockman, who have pointed out the difficulties and dangers of going on with the Bill. I remind the Senate, however, that yesterday Senator E. D. Millen emphatically laid it down that he is not responsible for what has happened under the Repatriation Act, holding that Parliament, who passed that Act, must take full responsibility for all the- evils that arose. It would seem that when a Bill has been introduced and explained, or not explained, and whether we have had an opportunity of studying it for ourselves, then, judging from what, happened yesterday, if anything goes wrong, the Ministry may wash their hands of all responsibility, and place it on us. That is not a fair proposition when legislation is rushed through like this. I have much regret in turning down a measure designed to relieve the pastoralists, who may have a bad time in the near future ; but the opinion which I have formed of the Bill from the remarks of Senator Keating and Senator Drake-Brockman compel me to vote against it.

Senator RUSSELL:
VicePresident of the Executive Council · Victoria · NAT

– I have listened with a great deal of interest to the remarks of honorable senators, from which one would conclude that they were the only persons who had had no sleep last night. I have a good deal of sympathy for them, and realize that their sufferings in that regard may account for one or two of the rambling statements we have heard. Honorable senators say they have not found time to read the Bill, and that is to be. regretted ; but I also suffer from a great disadvantage at the present time in dealing with the measure. However, I have the best of advice, and I can say that some of the statements made here to-night distinctly prove that some honorable senators are truly suffering from lack of sleep. Senator Drake-Brockman begged of me to accept his advice, and then went on to say that the Bill altered the definition of “income.” In that, however, the honorable senator is quite wrong, for the [Bill makes no alteration in the definition. It has also been said that this Bill will result in an increase of taxation; but I’ can show that, over a number of years, loss will result in most cases from the adoption of the recommendations of the Royal Commission. This will be seen from the following table: -

If the Government were greedy for revenue, it would not have adopted the averaging system, which will be in full operation within a couple of years. The Bill decreases taxation ; it does not increase it. There appears to be an organized attempt to misrepresent the aims and objects of the measure.

Senator Keating:

– How can the Bill have been misrepresented by speakers who said that they could not understand it? I have not heard any honorable senator say that the Bill increases taxation.

Senator RUSSELL:

– The honorable aenator himself spoke of unlimited possibilities in that direction. “Senator Keating. - I said that I did not understand the meaning of some of the provisions of the Bill. I did not say that it increased taxation.

Senator RUSSELL:

– It is not possible to make an exact estimate of its effect on the revenue. It will not affect this year’s revenue. In succeeding years the revenue may benefit, as some persons may be required to pay at a rate higher than that applicable to their actual income for the preceding year; but, on the other hand, reductions of rate will reduce revenue. I am informed that the net effect will be probably a reduction in the revenue from the taxation of primary producers. An additional staff will be needed for the administration of the averaging system. In the first year, the increase of staff may not be large; but the staff will grow until the fifth year, when the scheme comes into full operation, when it is thought that the additional expenditure will amount to about £15,000. The Royal Commission reported that, on the evidence submitted to it, the amount involved in the rebates to eliminate double taxation would be about £45,000, and the additional work likely to be thrown onthe Department in dealing with rebates is estimated to cost about £1,000. The loss of tax is estimated, under present conditions, at £11,000. Yet we are told that this is a Bill to increase taxation. I hope that the Senate will not be misled by. rash statements of . that kind, made by men who admitted that they had not read the Bill.

SenatorFoster. - If the Minister can tell us anything about the definition of trading assets in clause 2 which will satisfy us, it will have a great deal to do with the vote upon the measure.

Senator RUSSELL:

– Clause 2 does not alter the past practice. To-day men who are producing wealth in Papua are taxed; but we are putting an end to that.

Senator Drake-Brockman:

– The Bill may not alter the past practice of the Department, but there is a decision of one Court iu Australia, at all events, against that practice.

Senator RUSSELL:

-Yes; but we are yielding to it. No mau who produces income in Papua will be taxed.

Senator Drake-Brockman:

– I am not talking about Papua.

Senator RUSSELL:

– In regard to the insertion of the definition of taxpayer, there is no alteration of the practice. “ Trading assets “ is a term that does not include live stock which, in the opinion of the Commissioner, the Assistant Commissioner, or a Deputy Commissioner, is ordinarily used as working animals or for breeding purposes; but does include all other live stock.

Senator Foster:

– If a man sold a couple of wethers that he had bought to fatten, what he got for them would bc income under thedefinition.

Senator RUSSELL:

– The breeding stock is capital, which ought not to be taxed; but the money earned on stock ought to be taxed as income.

Senator Lynch:

– But not the stock itself.

Senator RUSSELL:

– Do not men make big incomes by dealing in stock, and should not those incomes be taxed? Have we not to pay income tax on our salaries?

Senator Crawford:

– But surely when a man sells something he is allowed to deduct the cost of it?

Senator RUSSELL:

– The Commonwealth and State income tax -takes the first six weeks of my pay, and why should not men who have more money than I be made to pay? Is not what they get from wool income? If such profits are not to be taxed, how far would you go before abolishing all taxation on income?

Senator Foster:

– That is not the point. A man may be selling stock to buy other stock in their place.

Senator RUSSELL:

– IfI sell my shirt what I get for it is income. If I make a profit on the sale of my house, that is income. The excess over and above what the house has cost me is profit.

Rash statements have been, made by speakers who admitted that they had not read the Bill. Are the opinions of those critics to be accepted instead of those of reliable officers 1 Is the Bill to be de- .feated when the Government wants revenue?

Senator DRAKE-BROCKMAN:

– You have said that the- effect of the Bill will be to reduce the revenue.

Senator RUSSELL:

– To-night an appeal has been made for more expenditure.

Senator Keating:

– Why do you object to demands for increased expenditure when you are moving the second reading of a Bill which you say is to reduce revenue?

Senator RUSSELL:

– I have put before the Senate the statements of the Taxation Commission, which travelled round Australia collecting evidence on the subject of its inquiry, and I have given honorable senators the opinion of the officers who are successfully administering our Taxation Department. There are many things which may seem strange until the reasons for them are known. That has been my experience. I have at times wandered why certain regulations were framed, until a departmental head has enlightened me as to the need for them in the conduct of the affairs of the Department.

Question - That the Bill be now read a second time - put. The Committee divided.

AYES: 6

NOES: 11

Majority . . . . 5

AYES

NOES

Question so resolved in the negative.

page 14217

SPECIAL ADJOURNMENT

Motion (by Senator Russell) agreed to-

That the Senate, at its rising, adjourn until 11 a.m. to-morrow.

Senate adjourned at 10.32 p.m.

Cite as: Australia, Senate, Debates, 9 December 1921, viewed 22 October 2017, <http://historichansard.net/senate/1921/19211209_senate_8_98/>.