8th Parliament · 2nd Session
The President (Senator the Hoa T. Givens) took the chair at 3 p.m., and read prayers.
page 3630
Retirement of Du. Jensen
– I ask the Minister for Home and Territories whether he has any objection to laying on the table of the Library the papers dealing with the retirement of Dr. Jensen from the Commonwealth Public Service in the Northern Territory.
– I have no objection. I will see that the papers are laid on the table of the Library.
page 3630
Reduction of Taxation
– I ask the Leader of the Government in the Senate whether, in view of the serious condition of the mining industry, the Government will, during the interregnum between this Parliament and the next, take into consideration the desirableness of relieving the mining industry from taxation burdens to as great an extent as possible, in the hope of resuscitating the industry for the benefit of the Commonwealth?
– It is rather difficult to answer questions affecting the immediate present, hut it is almost impossible to answer questions that hinge on events following an election. I shall bring the honorable senator’s suggestion under the notice of the Prime Minister.
page 3630
The following papers were presented : -
High Court Procedure Act - Rules of Court - Rated 22nd September, 1922 (Postponement of sittings in Melbourne). Dated 22nd September, 1922 (Sittings during year 1923).
Public Service Act - Appointments - Department of Trade and Customs - A. E. Battle, A. E. E. Sheehan.
Spirits Act - Regulations amended - Statutory Rules 1922, No. 132.
New “Guinea - Ordinance No. 29 of 1922- Native Labour (No. 2).
page 3630
Senator NEWLAND brought up a report from the Public Works Committee, together with minutes of evidence relating to the proposed establishment of an automatic telephone exchange at City South, Sydney.
page 3631
Report of Royal Commission. Senator GARLING asked the Minister representing the Prime Minister, upon notice -
Whether a promise was given by the Prime Minister that, as soon as the various State Governments had considered the report and recommendations of the Royal .Commission on “ pillaging,” and had appointed delegates to attend a Federal Conference to deal with such report and recommendations, such Federal Conference would be called?
Is he aware whether the States’ delegates have been appointed, and whether they await an intimation as to the date of such Conference?
If such Conference has not yet been arranged for, will steps be at once taken to call such Conference?
– The answers are -
page 3631
Tariff Reciprocity. Senator KEATING asked the Minister representing the Minister for Trade and Customs, upon notice -
Whether, as stated in the Melbourne press of 9th inst., cable messages have recently passed between the New Zealand Minister for Customs and the Australian Minister for Trade and Customs relative to a “few outstanding matters of reciprocal trade,” including desired concessions on New Zealand oats “ imported into the Commonwealth?
What other imports than oats are included in the said outstanding matters?
Is it -intended that this Parliament, during the remaining days of this session, shall be asked by the Minister to deal with the said outstanding matters?
What were the dates and the duration of the period covered by the personal negotiations of the two respective Customs Ministers in connexion with the preparation of the present reciprocity (with New Zealand) Tariff schedule?
The date when same was first submitted to this Parliament?
The date when same was finally approved by this Parliament!1
The reasons why the said outstanding matters were not then dealt with, and should now receive hurried consideration?
– The Minister for Trade and Customs supplies the following answers : -
page 3631
Tariff Reciprocity. Senator KEATING asked the Minister representing the Minister for Trade and Customs, upon notice -
Have the Oommonwealth Government and the Government of Canada recently been in communication with a view to a Tariff reciprocity treatj’ ?
Is the Canadian Minister of Customs expected in Australia to further and complete negotiations in the matter?
If so, when is he expected to arrive in Australia ?
– The Minister for Trade and Customs supplies the following answers : -
page 3631
Motion (by Senator E. D. Millen) agreed to -
That standing order No. 68 be suspended for the remainder of the present session, for the purpose of enabling new business to be commenced after half-past 10 o’clock at night.
page 3632
Bill received from the House of Representatives.
Star ding and Sessional Orders suspended, and Bill (on motion by Senator E. D. Millen) read a first time.
page 3632
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 3632
In Committee (Consideration resumed from 11th October, vide page 3554) :
Clause 23-
In calculating the taxable income of a taxpayer the total assessable income derived by the taxpayer from all sources in Australia shall be taken as a basis, and from it there shall be deducted -
so much of the assessable income as is paid in calls on shares in a mining company or syndicate carrying on mining operations in Australia for gold, silver, base metals or ‘rare minerals ;
so much of the assessable income as is set aside or paid by an employer of labour as or to a fund to provide individual personal benefits, pensions or retiring allowances for employees :
the sum of Forty pounds in respect of each child who is under the age of sixteen years at the beginning of the financial year in which the income was received, wholly maintained by any taxpayer who is not ari absentee; (/) sums paid by way of “ commission for collecting the assessable income;
the interest paid by the taxpayer during the year in which the income was derived on a mortgage of lond to which section 16, paragraph (e), of this Act applies, if the taxpayer satisfies the Commissioner that the mortgage was entered into in good faith; and
– I wish to refer to paragraph i of this clause, providing that deductions from income*may be made of so much of the assessable income as is paid in calls on shares iu a mining company or syndicate carrying on mining operations in Australia for gold, silver, base metals, or rare minerals. Sometimes a taxpayer pays money towards the expense of prospecting for gold, silver, base metals, or minerals which, perhaps iu the highly technical sense, could nol be described as “ calls.” This is an. original contribution. . For instance, a prospector comes forward who has some “show” which he thinks will pay if properly developed, .and a number of individuals are asked to back him. Sometimes a provisional or preliminary company or corporation is formed with shares of £20, £50, or £100 each. Surely if a taxpayer invests £50 or £100 in the purchase of a share in that way for the purpose of establishing ultimately a company to properly develop some concern, he should be entitled to deduct from his income such a payment in the same way as under this paragraph it is provided that mining calls may be deducted. Shares paid for in this way are regarded as original shares, .and carry with them, on the formation of the company, a certain proportionate interest. There may be only twenty or thirty shares altogether, and, perhaps, some are reserved for the prospectors. I contend that money paid for these shares is a legitimate deduction from income just the same as ordinary calls are deductible. If a man buys so many shares in a company at, say, 5s. or IOsl, and contributes further by way of calls of 6d. or ls. per share, he is entitled to deduct the amount of such calls from his income when, making out his return. I should like to know from the Minister if the same practice is not allowable in regard to original, shares. It may be, but I am. not sure.
– You cannot define the original payment as a call, can you?
– That is what I am saying. I do not know whether they are treated as calls on shares.
– At first sight it may seem a little difficult to understand why an allowan^ should be made in respect of calls paid in connexion with a properly constituted company, while other contributions which are the same in essence are not deductible, but I ask the honorable senator to consider the impossibility of policing the latter proposition if it were adopted. Senator Keating. - There would be the taxpayer’s declaration.
– A taxpayer’s declaration as against a possiblei saving to himself in the matter of income taxation has not always proved sufficient. T take it the honorable senator has in mind those original subscriptions to syndicates engaged in what is known as “grubstaking “ a man; that is to say, a limited number of men get together and arrange to keep a prospector out in the field searching for gold or other precious metals. Very rarely are those ventures ever properly constituted as a mining company, and, therefore, it would be almost impossible for the Commissioner to say whether the returns presented m respect of them were bond fide statements of expenditure. But tihen I might also raise this point. Why should this concession be limited even as suggested? Why not go further? In almost any form of argument in which there is a line of demarcation it is possible to suggest the logic of going a little further. Therefore, I might ask why this concession at all, if it is to be used as a lever to gain further concessions along the same road? It is a concession, because if a man puts his money into a business, and pays calls on the share capital, he gets no deductions, whereas if he invests in a mining venture and pays calls, deductions are allowable. My prime reason for objecting to any further concession is that some reasonable protection must be afforded to the revenue in the interests of the great body of taxpayers, who are making their fair share of contribution to the Treasury.
– With all due deference to the Minister (Senator E. D. Millen) I do not think ihe properly appreciates my argument. “From time to time individuals are called upon in the metropolitan and urban communities of the Commonwealth to put money into mining ventures. Some who do this through the medium of stock exchanges are not in the least interested in mining. They simply buy shares that are quoted at a certain price, because they think there is a possibility, for some reason or other which th’ey do not properly understand themselves, that the value of those shares will shortly rise. Very often they buy shares just as other people put money on a certain horse. Although they may not be able to distinguish the fetlock from the mane of a horse they simply back their fancy, or what they are told should be their fancy in the hope of getting some reward. Likewise certain people buy mining shares in established companies purely for the purpose of a gamble. But the issue I am raising is of a totally different kind. It is the initiation of mining enterprises without which successful, and even unsuccessful, mining development could not be carried on. i I have no doubt, Mr. Chairman, that you have had a great deal more experience in this business than I have, although I have had sufficient. I know that, if I were permitted to deduct from my assessment for income money which I have paid from time to time in sums of £10, £20, and £50 to promote mining ventures, it would be a consideration ; and I believe that very many others in the community are in a similar position. If calls paid to metal mining companies are deductible from income, this other legitimate expenditure for the promotion of mining development should also be deductible. I hope the Minister will see that the clause is so interpreted by the Department. With regard to the policing of the system, I do not think there need be any trouble at all. It may be policed just as many other deductions are checked at the present time. If’ a man claims a deduction in respect of a mortgage, or any other payment, he is required to give the name of the person to whom he has paid the money, and so, with regard to these payments, the taxpayer should be called upon to indicate to whom the money has been paid. In this way, the deductions could be checked quite easily. Moreover, it is well known that ‘any attempt to form a mining syndicate has a good deal of publicity, because many more people than join are asked to do so. I have known of persons contributing to these mining syndicates being established almost for life. In one case, a company was formed, and after two calls of 2d. each, it went on the dividend paying list, and remained there for about five and a half years. That, of course, was one of the fortunate instances. In that case, in which twelve or fifteen men each put in £20 or £25, some of them were hard pressed to find the money, because they were livinsr on a field that was threatened to be abandoned, but ultimately they reaped their reward. I submit that “ calls “ should be so interpreted by the Department as to include payments of the nature to which I have referred.
.- My reading of the clause leads me to believe that ordinary calls paid to a syndicate are deductible, just the same as calls paid to a company.
– They are.
– If the honorable senator’s contention is correct, it appears that every person who invests money in mining shares at the inception of a mining company should be allowed to deduct it in his income tax return. When the company or syndicate finds it necessary to make a call, the shareholder paying the call is entitled to deduct it from his income tax returns at the end of the year; but, apparently, he is not allowed to deduct any amount paid originally for the shares, calls upon which may eventually be made. It appears that calls paid in connexion with an ordinary trading company are not deductible.
– This provision is inserted to encourage the development of raining.
– I find, from a perusal of the original Act, that it con- tains a provision allowing a deduction of 5 per cent, in the amount of calls paid to any company dealing in Australia other than a mining company. That provision is being eliminated by this Bill, and I think we are entitled to some explanation from the Minister as to the reason. Is there any other of the same kind provision in the Bill?
– There is no other provision in the Bill. The only alteration is that to which the honorable senator refers.
– I was sorry that a more favorable reply was not forthcoming from the Minister (Senator E. D. Millen), because this provision in the measure requires to be very carefully considered. If there is a phase of mining less attractive than any other it is that which has to do with the sending out of men into the unknown and undiscovered parts of the country searching for some of its hidden mineral wealth. Too much consideration and encouragement cannot be given to men who undertake this business. Why draw this distinction in the matter of allowable deductions between organized mining up to the time whei it becomes the property of a company and the time when it is in a nebulous condition of development? The people who come late om the scene should be considered, but those suffering hardship in the field should not be singled out for neglect. The reason why there has not been a greater outcry in the past is that those who are providing the backing money are largely men whoseincomes fall below the exemption level. There are a number, however, above the exemption line, and they get no consideration whatever. It is an indefensible discrimination between two classes of mining, and the effect must be that there will be fewer prospectors going out. These prospectors have a right to ask why the Federal law is not operating in the same way towards them as towards milling companies.
– A syndicate is allowed deductions for calls.
– The Minister states that he cannot widen the provision any further, and I contend that that attitude is absolutely wrong. A mine must be tested first, and that is the most arduous phase of the work. The people engaged in the least attractive and the most risky part of mining ventures should not be penalized in this way.
– That is why they require the most heartening.
– Yes. I hope senator Keating will put this question to the test. I should like to see an amendment framed to cover the class of mining to which I have referred. The reason that mines are not discovered is that there are not sufficient prospectors. Miners go to other countries because they are not encouraged in Australia.
has stated that it would be hard to police such a provision, but it would be as easy to police that as the various other deductions allowed under the measure.
– There is no difficulty about a properly constituted syndicate.
– They are not companies in the legal sense, when a few men club together to put a certain amount of money into a scheme for the development of mineral resources in some part of the Commonwealth. When the money is exhausted more is asked for, hut such payments are not deductible under the clause. I would suggest to Senator Keating that after the word “syndicate ‘* it might be as well to add, “ or other payments made for the purpose of carrying on mining operations in Australia.”
– I sympathize with, Senator Lynch. He has made a plea on behalf of the hard-working miner with whom money is going out all the time and nothing coming in, but the deduction under this clause is only a deduction from assessable income, and its non-application would not hurt that struggling miner, or the man who is paying out for mining and getting nothing in return, because he is not earning a taxable income. It should be remembered, also, that the men engaged in prospecting a mine naturally employ labour, and what ever money they pay for that labour or for the employees’ keep can be deducted. Therefore, the struggling miner will not be affected one way or the other by this provision. But the whole thing is anomalous. 0ne might just aa well give a concession to those persons who are paying annual or periodical instalments on the purchase of farms. It would be infinitely better to encourage land development in that direction - though I am not now urging it - than to endeavour by this very small means to encourage mining. “Very little benefit indeed could arise from the proposal.
.- I have been trying to come to a conclusion as to what originated the provision for the deduction of mining calls. Such deductions are certainly justifiable, because many companies throughout Australia would have gone out of existence had not it been for the encouragement thus afforded to shareholders. They have been induced to subscribe more capital to en able operations to be carried on in the hope that the lead that had been lost might be eventually picked up again. Senator Garling said that he would approve of the elimination of the provision because he could not see any differentiation between money paid for mining calls and payments made by way of instalments of the purchase money for farming properties. There is no comparison between the two classes of investors, because the landholder, who is paying instalments,, knows that he will receive full value for his money, while the investor in mining realizes that at is problematical whether he will secure any return. We should give every encouragement possible to prospecting. Notwithstanding the immense mineral wealth, that has been obtained in Australia up to the present, I believe there is still more to be tapped.
– What about the “wild-cat” company?
– Some people always regai-d a mining company that has fa: led as a “wild-cat” concern, no matter how enterprising it has been. The rich, mines we have in Tasmania would never have been discovered had it not been for the pioneering work of prospecting syndicates. The men who did the prospecting in the north-western part of my State underwent hardships quite as great as those encountered by the early explorers. I think Senator Keating would need to draft a new clause to make the provison he desires, and I would certainly support it.
– The clause gives evidence of practically the same spirit as has sometimes been shown under State laws, where an award, or bounty has been offered for the discovery of such things as shale or liquid oil. If a valuable mine is discovered and development is actively carried on, it is not long before considerable income is available and it then becomes assessable. In swen an instance a deduction would be allowed for wages, and if that is allowed what of those who are subscribing the capital for prospecting, even if only in small amounts. In principle I do not see that there is any’ difference, and as prospectors are engaged in developing mineral resources, the capital subscribed to assist should be deductible.
– The whole paragraph is open to this criticism: It has been copied in the revision of income tax assessment legislation without very much reflection. In preparing this measure, which is largely a consolidating one, it would appear that very little consideration, had been given to the developments which have taken place since the first Income Tax Assessment Bill was introduced. I intended directing attention to the ‘necessity of making it applicable to mining operations in connexion with oil, but that comes later. References have been made to, and a distinction drawn between, the different classes of capital, and calls, which, after all are only capital in the form of deferred payments, and while the Commissioner of Taxation is here, I would like to direct attention to the provisions which* correspond with that now being considered. Let us assume that a company is being formed with 20,000 shares at 10s. each, of which 2s. 6d. is payable on application, 2s. 6d. on allotment, and the balance in calls not exceeding ls. payable not more frequently than once a month. If a person took up 100 shares on those terms he would pay 100 half-crowns on application, 100 half-crowns on allotment, and I would like to know if the payments made on allotment are deductible under this provision.
– No.
– He does not deduct the amounts paid on application or allotment; but on the remaining 5s. per share as paid am I to understand that he gets the benefit of this provision?
– Yes.
– That is only deferred investment of capital, and he is given time within which to pay 2s. 6d., on application, 2s. 6d. on allotment and the balance in amounts not exceeding ls. and not more frequently than once per month. Surely that is all a portion of the 10s. The whole position is anomalous because he is contributing to the same fund and for the same purpose. If we were to review the situation to-day, we would not have such a narrow provision.
– Probably it would not be there at all.
– Yes, and it would go further and provide for mining operations in Australia for gold, silver, base metals, rare minerals or oil, be cause the discovery of the last mentioned should certainly be encouraged. Although my amendment may not yet exactly meet what is desired, I suggest dividing the paragraph into two parts. To test the question I move -
That in paragraph i of sub-clause 1 after the word “ in,” first occurring, the figure “ i “ be inserted.
The paragraph amended in the way I desire would read -
In calculating the taxable income of a taxpayer the total assessable income derived by the taxpayer from all sources in Australia shall be taken as a basis, and from it there shall be deducted -
so much of the assessable income as is paid in:
calls on shares in a mining company or syndicate carrying on mining operations in Australia for gold, silver, base metals or rare minerals, and
original contributions or payments made to prospecting syndicates for the shares or payment for the calls for the carrying-on of prospecting operations.
It would then apply to the individuals who originally founded the enterprise, and would be a legitimate deduction.
– How would the honorable senator meet the case of a man who put in £50 as an original contribution, and then had to pay another £50 ? I do not think it would apply.
– Perhaps not. I favour some elastic provision for dealing with such cases under regulations, so that if a syndicate wished to get the benefit of it it could obtain a permit or certificate.
– That* would aid policing.
– It would, and ay suggestion would be the means of solving the whole difficulty. The Government and the Committee would be well advised if they encouraged what is a, languishing, but deserving, industry in Australia. Consideration should also be given to those who are searching for oil.
– A good deal has been said in the course of the discussion which reveals certain anomalies in the present law; I admit that. Whenever we depart from any given line of policy or principle we create anomalies, and the more we attempt to prevent them the more they are multiplied. The real anomaly in this provision, whether it isjustified or not, arises from the fact that certain investors who make payments in the way of calls are allowed to deduct them in their income-tax returns. Having created that anomaly, it is quite easy to say, when comparing these people with other sections of the community, that there is an anomaly. Senator Keating referred to an incident which is, perhaps, more glaring than any other. A man pays £1 for a £1 share and he does not get an exemption; but if he makes up that £1 by contributing so much on application and so much on allotment, the payments beyond the allotment stage can be deducted. Because it is termed a call it is an anomaly. If Senator Keating, in a speculative or sporting spirit, decides to invest his £1 in the form of calls in Boulders or Broken Hills, and I prefer to invest in farm lands as a member of a company engaged in just as desirable an enterprise, he claims that he should derive some benefit which is denied to me. That is an anomaly.
– The Minister would get the land, or an interest in it.
– I would get the mortgage.
– He would get something.
– If there is any one in this Chamber who knows what I would be likely to get itis Senator Lynch, who, on numerous occasions, has almost startled honorable senators by informing them of the little return which is received by the man on the land after much hard work.
– Senator Lynch has told us what he does not get.
– Yes, and my heart has bled when listening to the tales of woe he has disclosed in this Chamber. No comparison can be made between the man who backs a prospector and the one who does the work. One stays at home with, you may be perfectly certain, a solid consciousness that if the prospector strikes payable minerals he will have the “big end of the stick.” I affirm that, in all these prospecting parties, when a good result is obtained, the large proportion of it does not go to the man who found it. The appeal that has been made is a plea to give encouragement, not to the prospector who goes out to the man who is “eating the grub stake” - but to the speculator or investor who stands behind him. I am asked why the provision is in the Bill. As far as I am concerned, all I can say is that it is there, and the Government is not disposed to root out a principle to which the people have become accustomed. I have attempted to advance arguments against extending the principle. I ask theCommittee to leave the provision alone. Senator Senior has said that it would be as easy to police this proposal as to police anything else. It would not. Senator Senior has sufficient knowledge of this world and its weaknesses, and of the operation of human nature, to enable him to say whether the contributors to a syndicate of which there was no tangible evidence could be easily policed. They could affirm that they had made contributions to the syndicate, and who could disprove their statements? It is not easy to police a criminal in the vast country from which Senator Lynch comes, and it would be much less easy to police a number of citizens in a little village remote from anywhere.
– The Minister’s argument, if it proves anything, proves too much.
– It is not possible to prove too much regarding the possibilities of this scheme, because they would be limited only by the ingenuity of the people who would work them.
Question - That the figure proposed to be inserted be inserted - put. The Committee divided.
AYES: 11
NOES: 15
Majority . . 4
AYES
NOES
Question so resolved in the negative.
Amendment negatived.
– With regard to paragraph i, would the Minister (Senator E. D. Millen) be agreeable to alter the last words, “ base metals or rare minerals,” to “base metals, rare minerals or oil.”
– No; that would be spelling encouragement with a big “ E.”
– Paragraph j of sub-clause 1 provides for the deduction, in arriving at the assessable income, of pensions to employees. I would like the Minister to agree to insert the words “ or ex-employees.” While it is allowable to deduct payments made to a superannuation fund, it is not allowable to deduct a pension paid to an old employee. It seems to be a pity that employers should not be encouraged to pension off their old workmen.
Senator E. D. MILLEN (New South Wales - Minister for Repatriation) T4.101. - I am not sure that I have correctly interpreted the honorable senator’s remarks. I understand that he wishes the amounts paid by way of pension to be deductible from income. He must remember, however, that deductions have already been made in respect to payments into the fund from which the pensions are paid.
– The Minister is speaking of a case in which there is a fund, but what of cases in which no fund exists ? I may employ a gardener until he is fifty years of age, and then pension him off with £1 per week. In that case no deduction would be allowed.
Seuator E. D. MILLEN. - That is quite true. If the honorable gentleman regards the payment of a pension as an act of benevolence he is, after all, spending his income in the way that pleases him. The income tax is a tax on income earned, and it has very little to da with the way in which the income is spent. Senator Elliott might get his gratification by pensioning off an old gardener, and he considers that if he does so he should be relieved of payment of a. certain amount of income tax. I, on the other hand, might get my gratification by spending my income in some other way, but he would not be agreeable to allowing me the same deduction.
.- I cannot understand why a distinction should be made between money paid into a fund for the future benefit of a man employed during his period of vigour, and the payments made to an employee after he has become old and decrepit. Such payments might save the country a certain amount of expenditure in Old-age pensions. Surely the pensioning off of old employees is a matter for encouragement.
– The word ‘ encouragement ‘ ‘ has been flogged to death.
– In order to test the opinion of the Committee. I moveThat in paragraph j of sub-clause 1, after the word “ employees,” first occurring, the following words be inserted: - “or payments in pensions to ex-employees “.
– I am not in favour of the amendment. I believe that this provision was .inserted to encourage the establishment by employers of funds for the benefit of their employees, and not merely to encourage people to be generous, which would be the object of the amendment. I may inform Senator Elliott that if the ivord “fund” is permitted to remain in this provision he will get no further by the adoption of his amendment. I would ask him to withdraw it.
.- I do not see any force in the honorable senator’s argument. Surely if it is a worthy thing to encourage employers to establish funds of this kind, it is also worthy to encourage them to provide for retired employees in the same way as they would be provided for if, before retirement, they had had an opportunity to contribute to a fund of this kind.
– What the honorable senator proposes to deal with is not a pension, but a pure gift, which might be withheld at any time.
– Under this Bill, pure gifts are in many cases allowed as deductions from taxable income.
– Such deductions are being considerably reduced.
– I think that they ought to be increased rather than reduced. I would advocate the exemption from tax of amounts paid to a university or any scholastic institution. I regard the payments which under my amendment would be relieved from taxation as particularly worthy of our consideration.
An employer who hands money over to a faithful old employee has not that money to spend as income. My amendment might, to some extent, reduce the liability of the Commonwealth for old-age pensions, and something is to be said for it from that point of view. It is difficult while one is on his feet to frame an amendment to give effect to what he desires,, and I ask leave to amend my amendment so as to make it read “ or as pensions to ex-employees.”.
Amendment, by leave, amended accordingly.
Senator MacDONALD (Queensland) [4.191. - I support the amendment, although I am conscious that my support is more likely to result in its rejection than in its acceptance. ‘ It appeals to me, and I think it should appeal to every member of the Committee. An employer at a certain time of his life may decide to establish a pension fund for his employees, but there may be a certain number of very worthy ex-employees to whom ho would like to extend the benefits conferred by such a fund.
– Senator Elliott’s proposal is to pass from the fund, and where an employer provides a pension for an ex-employee he proposes that the amount should be deducted from the employer’s income.
– I support that. I do not think that the Committee should do anything to discourage generous actions of that kind. I do not contend that to include these payments in moneys which mav be deducted from taxable income would exercise a determining influence on any employer, but it might serve to promote a spirit of benevolence and good-will on the nart of employers towards worthy ex-employees. The loss of revenue involved would certainly not, amount to a great deal, and the passing of the amendment might, result in fewer applications for old-age or invalid pensions. I hope the amendment will be carried.
Question - that the words proposed to be inserted be inserted - put. The Committee divided.
Bolton, W. K. Elliott, H. E. Keating J. H. Lynch, P. J. MacDonald, J. Newland, J.
AYES: 0
NOES: 0
AYES
NOES
Benny, B. Buzacott, B. Cox, C. F. Duncan, W. L. Earle, J.
Garling. H. C. M. Millen, E. D. Millen, John D.
Plain, W. Senior, W. Vardon, E. C.
Telle:* Foll, H. S.
Pearce, G. F. Reid, M. Rowell, J. Russell, E. J. Wilson, R. V.
Teller: de Largie, H.
Ayes Noes
10 14
Majority
Question so resolved in the negative.
Amendment negatived.
.- I move-
That in paragraph k, sub-clause 1, the word “ Forty “ be left out, with a view to insert in lieu thereof the word “ Fifty”.
I understand that the deduction allowed for each child under sixteen years has been increased to £40, but I do not consider £40 sufficient. The former deduction of £30ieach child was quite insufficient, in view of the high cost of living and the very decided burdens that are cast upon parents. A deduction of £50 for each child would not mean that the taxpayer would be relieved of £50 which he would otherwise have to pay as income tax, but merely that his taxable income would be reduced by that amount. It would represent’ only a very small reduction in the actual tax paid. In the present state of population in Australia, we should encourage large families, and the greater the deduction from income allowed for children, the better will be the prospect of an improvement in. the natural increase of population. Honorable senators who have even small families will agree with me that the single man has decidedly the best of it in these days, when the cost of living is so high. It is often difficult to understand how people with families can get along on £300 a year, and” it is almost impossible to conceive how an average household of five pensons can make ends meet on the basic wage when they have to pay rent. The argument against my amendment which will probably be brought forward by the Minister (Senator E. D. Millen) will be that the proposed increase in the amount of deduction for children will necessarily involve remission of so much, taxation that the Government will have to ask themselves how the deficiency in the revenue can be made up. The amendment should receive the support of every honorable senator.
– I could put up just as good a case for increasing the exemption to £60 as Senator MacDonald has made out for raising it to £50.
– Not quite so good, but certainly a case.
– I decline to believe’ that raising the exemption will encourage large families. I am confident that no matter what allowance you make it will have no effect upon the size of families. To solve the problem we shall have to go into much deeper water than the question of taxation.
– Then why make any exemption at all?
– Would the honorable senator propose to strike it out?
– Oh, no!
– The exemption seems to be some recognition of the principle that the burden of taxation should fall upon the shoulders of those best able to bear it.
– Make the exemption adequate then.
– Will the honorable senator say what is an adequate exemption?
– At least £1 a week for each child.
– With the minimum wage at about £4 a week, how is it possible, consistently with financial stability, to allow an exemption of £1 a week for each child. The extra amount of exemption asked for would represent a loss to the revenue of £350,000. It is easy to talk like this on the eve of an election. I could do it myself if I wished. ‘But I say we are bound to ask ourselves what is a fair thing. The Government propose in this Bill to remit taxation to the amount of £2,500,000. It is quite clear, therefore, that we cannot go on remitting taxation to £his class and that class in the community without seriously affecting the finances of the uountry.
– You have not remitted anything yet, you know.
– This Bill provides, as I have said, for a remission in taxation to the extent of £2,500,000.
– Nothing further?
– Does the honorable senator suggest that there is something wrong? Unless he is prepared to put forward entirely new financial proposals for raising the revenue of the country in some other direction, he is not justified in suggesting that we should whittle away from the Bill this and that source of revenue upon which the Government are relying. This sort of talk, of course, may win a certain amount of popular applause for honorable senators wtho indulge in it just at present, because it will make them appear, in the eyes of the public, as philanthropists.
– Is not that what the Government are doing all through this measure1?
– In what way?
– In granting concessions to the people.
– If the honorable senator thinks that it is the duty of the Government to go on remitting further taxation why not suggest the repeal of the income tax altogether ? But since we have an income tax there is a responsibility resting on the shoulders oft all honorable senators to see that under it taxation upon the general community is levied with some degree of equity. Honorable senators may differ as to the details, but I submit that the taxation scheme outlined in this Bill follows well recognised taxation principles. If we are to go on reducing the amount of revenue by enlarging the number of beneficiaries in the way suggested, we may render the Bill in-operative altogether. I ask the Committee, therefore, seeing that the Bill already remits £2,500,000 in taxation, to say that that is a f aiT, substantial, and bona fide effort on the part of the Government to ease the hurden wherever it is possible to do so, and to leave this excellent Bill as it stands.
– I based my argument for the raising of this exemption mainly on the fact that, in view of the high cost of living, it is essential to relieve the breadwin- ner of families as much as possible; and, judging by the attitude of several honorable senators, I have a. certain measure of support. I do not think it can be said that I have rushed into the limelight in this matter, or that I am endeavouring to make political capital out of the Bill, because I have sat here for nearly two days, during the debate on this measure, and this is the first amendment which I have sought to have inserted in it. There is no doubt that the former exemption of £26 for each child was totally inadequate. If I may judge from what I have heard privately, I think the general .opinion in this ‘Chamber is that the Government proposal to Taise the exemption to £40 is not sufficient! when we consider how other people have been allowed to escape taxation.
– I was rather surprised that the Minister (Senator E. D. Millen) should have treated Senator MacDonald’s amendment in such a scathing manner, because, in my opinion, it is a deserving amendment, and I intend to support it. With me, however, it is not a personal matter, because I have only one child, a lad of ten, for whom I could claim exemption. I have in mind the general body of taxpayers. It seems to me that we ought to do as much as possible to encourage children. I point out to the Minister, in reply to his statement that we cannot remit taxation right and left, that the Government have already remitted taxation in other directions. They now claim that, unless we pass this Bill as it stands, they will not be able to balance their Budget; but I respectfully suggest that they have remitted taxation in the wrong direction. For instance, they have dropped the tax in respect of certain tickets of admission to picture shows, which do not affect the general community, whereas the matter which we are now discussing is vital. We want to encourage children. Our motto ought to be, “Babies before pictures.” We want to encourage children as much as passible, and I suggest that if Senator MacDonald adopts this as his slogan, he will probably secure re-election. The Ministry has deliberately selected picture shows as .an object for their solicitude; but, in a .matter like this, which is vital and concerns every member of the com munity, they appear to be indifferent. Senator MacDonald has moved an amendment to increase the exemption to £50. It is a worthy object, and I intend to support it.
– I also intend to support the amendment submitted by Senator MacDonald. As a father, I know what it costs to maintain a family of young children, to feed, clothe, and bring them up properly. This is not a question of encouraging large families at all.
– Senator MacDonald said it was.
– By raising the exemption we are not encouraging large families.
– But it will help.
– The heavy burden of taxation, Federal and State, laid upon all parents, is a direct discouragement to larger families. I know that the heads of some families are almost at their wits’ end because their children are so numerous. The taxation levied upon the average family is a direct discouragement to any further increase, and so steps have to be taken to guard against that possibility. I hope the amendment will be carried. Under the Customs Tariff there is a substantial increase in taxation upon the head of every family. For every article produced abroad, and imported here, he has to pay duty, and upon every article manufactured in Australia he ‘has to pay an additional price, due to protection. ‘He has to pay taxation all along the line.
– But the honorable senator helped to put duties on.
– I did my best, so far as a number of items were concerned, to keep .the duties down.
– The honorable senator proposed duties on certain items - for instance, kapok - for bedding which the children sleep on?
– I desired that the children should sleep upon beds that were healthy and comfortable. Apparently some people want to take the beds away from the children altogether. I wish to do all I can to help the family man, and therefore I hope the amendment will be carried.
.- T. intend to support the amendment moved by Senator MacDonald, and mainly for the reasons- advanced by Senator Duncan. T speak with some first-hand knowledge of this question. I know, perhaps more than most honorable senators whose families have grown up, how heavily the present burden of taxation, falls upon the family man, owing to the very heavy increase in the cost of living during the past few years. Let those honorable senators whose families have grown up make a comparison of the cost of living when they were raising their families with the prices that have to be paid to-day. Wages have not increased in the same ratio as the cost of living.
– We brought our children up on £400 a year; you are getting £1,000.
– I am not referring to high salaries so much as to men in receipt of the basic wage who are at a great disadvantage. Single men make practically no contribution to the revenue through the Customs as compared with married men with considerable families, such as Senator Plain, who is the father of ten sturdy Australians. In addition to the increase suggested by Senator MacDonald, there should also be a wife’s allowance of £40. On every hand we hear the cry that Australia’s treat need to-day is more population. The Minister (Senator E. D. Millen) said that he did not believe the proposed increase in the exemption would make any difference to the size of families. I maintain that, if there is one thing more than another responsible for the decrease in the birth rate, it is the high cost of bringing up families. Under present conditions the man on a small wage cannot hope to rear a large number of children decently.
– How do you reconcile that statement with the fact that the better-off people are the smaller their families ?
– That statement is continually being made; but that has always been the case. Unfortunately, the people who can best afford large families do not always have them. It is not unreasonable to ask that the exemption for children be raised another £10. Such a concession would make a great deal of difference to the struggling man desirous of giving his children a proper education, and making good citizens of them. It would have been quite possible for honorable senators to advocate, for electioneering purposes, that the exemption be raised to £100, but the request made is the very modest one for an increase of £10. I believe that on second consideration the Minister will agree to the amendment.
– There might have been some ground for the argument used in favour of the amendment if we had been asked to accept the old allowance of £26, but seeing that the Government have increased the amount to £40, and have told us that, having regard to the revenue outlook, they cannot do more, a different aspect is given to the matter. The Government have treated the taxpayers very liberally. It would be a great mistake to encourage the people to think that the Government ought to have gone further. It is sheer nonsense to put forward the claim that an increase of another £10 in the deduction for children would add one additional baby to the family. The additional saving to the breadwinner would be about 12s. 6d. per annum, and would anybody suggest that that would aid in increasing the isize of families? What is largely responsible foT the low birth rate is the inherent selfishness of human nature. The Government have, without pressure, endeavoured to meet the claims of the general community, and I think that in this particular matter they have gone even further than was expected of them.
– I favour the exemption being made £50. I do not .think that it would have any effect on the population whether the amount were £40 or £50, but I wish to relieve the taxation at present bearing heavily upon certain classes. Most of the taxation comes through the Customs Department. Some years ago, when in Tasmania, I heard Mr. Fitzgerald, who was at that time at the head of the Free Trade organizations in that State, say that the statisticians had computed that three families of the artisan type, in full employment, paid more through the Customs than the richest man in Tasmania. The bigger a man’s family the greater the amount he contributes to the general revenue. I am prepared to remit from that class as much taxation as we possibly can. A great many of the commodities in common use go into the homes of rich and poor alike, and there are no exemptions so far as Customs revenue is concerned. It is a fact that families are larger in working-class districts than in localities where the welltodo and idle rich live.
– This Bill benefits the poorer sections, because we are raising the exemption.
– I do not think it has been raised sufficiently.
– It has been increased 100 per cent.
– That may sound large, but it all depends on what the amount was to begin with.
– It covers all the artisans on the latest living wage.
– A married man would have to receive £240 before he would pay income tax.
– It is recognised that, after all, the greatest asset to the nation is the large family. Napoleon said that the mother with the most sons was a country’s greatest asset. Ministers have reminded us that the Government have reduced taxation by raising the general exemption. I would point out that, according to the Government, tremendous economies, are to be effected when the Public Service Board is appointed, and on account of the saving to be made there the Government will not require anything like so much taxation as they have collected in the past. They ought not to tax the people to a greater extent than necessary. My reason for supporting the allowance of £50 for children is because the honorable senator has not moved to make the amount £60.
Question - That the word proposed to be left out be left out - put. The Committee divided.
AYES: 12
NOES: 13
Majority
Bakhap, T. 3. II. Benny. 1). Bolton. W. “Duncan, W. Keating, J. H. Lynch, P. J. “MacDonald, J. V. &yes.
Newland. J. Reid, M. Thomas. J. Wilson,’ E. V.
AYES
NOES
Teller:
Foll, BC. S.
Cox, iC. F.
Drake-Brockinan, E. A. Earle, J. Fairbairn, Gr. Garling, H. C. M. Glasgow, Sir Thomas Millen, E. D.
Pearce, G. F. Plain, W. Rowell, J. Senior, W. Vardon, E. C.
Teller: de Largie, H.
Question, so resolved in the negative.
Amendment negatived.
.- 1 move -
That in paragraph (k) of sub-clause 1, after the word “’ of “, second occurring, the words “a wife (if totally dependent) and” be inserted.
This is a reasonable request, and if adopted will be a concession to married men. In Queensland, I believe that gradual deductions are made until they disappear on incomes of £803 per annua. . This principle was also recognised some time ago, when a bachelor tax was sought to be imposed; but owing to the strong opposition, the proposal was not proceeded with.
– If a wife has an independent income, and her husband is dependent upon her, she should also receive a similar concession.
– Such a suggestion is unworthy of the Minister, and I do not think that any valid reason can be advanced for opposing the amendment, which is submitted in an endeavour to assist a man who has a wife totally dependent upon him.
– I ask the Committee to reject the amendment, not only for the reasons given when discussing the amendment which has just been disposed of, but because the proposal is utterly absurd and illogical. When I interjected to the effect that if this concession were granted a woman of independent means who has a husband dependent upon her would be entitled to the same concession, the honorable senator, to my great surprise, said that such a suggestion was unworthy of me. I should like to know why a logical argument should be unworthy of any man.
– It is not logical.
– If a wife with independent means has a husband dependent upon her, she would certainly be entitled to such a deduction - that is, of course, if we are to bc logical.
– How many cases would there be?
– It does not matter if there is only one. We are here to give justice to all. It is not justice Senator MacDonald wants, but votes. When I submitted a logical proposition, Senator Foll said it was unworthy of me, and if it is unworthy because it is logical, I cannot understand the position. Amendments of this character could be multiplied to an alarming extant, and it is ifcime honorable senators realized that we are dealing with financial proposals of momentous importance to the Commonwealth.
– How many concessions have been made up to the present?
– The Bill comes to this Chamber in the form which the Government consider best, and after having reduced taxation to what they consider the lowest possible extent. Other amendments equally worthy in the opinion of some honorable senators could be submitted, and, we could go on till the worth of the measure was whittled away.
– The allowance for children was amended in another place.
– It was defeated.
– There was a compromise.
– The original allowance was £30, .but it has been increased to £40, and to use Senator Foil’s words, that is a fair compromise.
– Are we not justified in asking for something ?
– If a man is entitled to exemption because he is maintaining his wife, should not similar consideration be given to a man who is maintaining hia widowed mother or. his aged father? We could go on indefinitely.
– A similar provision is embodied in Queensland legislation.
– I can quite understand Senator MacDonald holding, up Queensland as a model, but I cannot understand Senator Foll doing so.
– There is a somewhat similar provision in the Victorian legislation.
– There is no justification for this continual bidding for, concessions, and it is well for the Com mittee to understand that the Government are not going to be in it. I again appeal to honorable senators to do what is a fair thing, and to consider not only one section of the community but every taxpayer.
– The attitude of the Minister (Senator E. D. Millen) will’ probably cause a little resentment, as he suggests that we are merely endeavouring to drag concessions from the Government. I do not think we have amended this Bill at all.
– That is not the honorable senator’s fault.
– I have not spoken on the measure until this afternoon.
– The Bill comes to us as a fair concession.
– Are we not allowed to make suggestions?
– We are here to swallow, not to suggest.
– That appears to be what is expected of us, but I do not intend to be placed! in such a position. I have been here for three days, and this is about the first occasion on which I have spoken. I moved an amendment which I considered necessary in the interests of those who are maintaining families, and I have another which I intend to submit. The words which Senator Foll moved to insert are embodied in a Queensland Act, and there are also other dependants for whom allowance is made. Certainly a single man supporting a widowed mother or infirm brother or sister should also be entitled to claim an exemption. Senator Foil’s amendment does not go so far as the Queensland Act, but it at least proposes to make provision for a wife. I think it should be included in the Bill. Without repeating the arguments which I have used previously, I can at least say that they apply even moire strongly in the present case. A husband has to provide, not only for children, but also for a wife. The point put forward by the Minister (Senator E. D. Millen) that a wife who has an income should also be exempt if the husband is dependent upon her, is quite true. I should say, however, that there would only be one case in twenty of that kind.
– Surely the need is greater where the wife supports the husband than where the husband supports the wife.
– The usual position is that the husband is the incomeearner, and he provides fori his wife and children. The cases where a wife provides for a husband who will not or cannot work, are certainly not more than one in twenty, and .they have very little bearing on Senator Foil’s practical . suggestion for the inclusion of wives in the provision relating to the £40 exemption. In Queensland, and some other parts of the world, the wife is included under -this head.
– I have been very quiet on this clause, and I shall be very brief regarding the amendment. The last proposal made to amend the elause was supported by the argument that if it were carried it would affect the size of families. That was disputed, but I do not think it can be confidently or truthfully disputed that the effect of present taxation is to discourage marriage. An amendment of the kind indicated by Senator Foll would tend to promote and encourage marriage. With regard to the deduction allowed in respect of each child, I believe that provision was first introduced into income tax legislation in the State of Tasmania, at the instance of Dr. McColl, who waa afterwards Sir John McColl, and later Agent-General for Tasmania. I well remember the storm of ridicule that surrounded the proposal, and I remember the oomments that were made, not only in the Taamanian newspapers, but in the press of the mainland, in Sydney and elsewhere. The innovation came, it stayed, and it spread, notwithstanding that there was just as much ridicule heaped upon it as is now being heaped upon the suggestion made by Senator, Foll. We may say what we like, but the present income tax legislation of the Commonwealth and States, and more particularly of the Commonwealth, differentiates strongly and most disastrously against the married man. I have not been in the Taxation Department myself, but, possibly because of that fact, I have seen things which! officers of the Department seem never to have contemplated. I have ..known cases where married men have scraped and borrowed, to pay their income tax, while unmarried men who were not subiect to income tax could have paid the tax im posed upon the married men and never noticed it. I shall support the amendment because it is calculated to achieve the object which the Minister said we should set out to achieve, and will eive us equity, fairness, and justice all round.
– Senator Foil’s amendment has been regarded jocularly, but the more we look upon it in the light of what has been said about the necessity for increasing the population of this country, the more merits it seems to contain. In addition to what Senator- Keating has said about the effects of taxation, there is not the slightest doubt that taxation, as levied at present, does bea* very heavily upon the man with a large family. He pays infinitely more through the Customs than other people. In addition to the married and unmarried sections of the community, there is a third section known as the married bachelor. He might as well be a bachelor for all the effect that is produced by his entering the married state. Of the bachelor, as such, we have too many in this country, particularly in view of the fact that the countrv is crying out for more population. Every time a public man has stood up to speak within the last thirty years or so, he has emphasized the necessity for more population. We waited for Lord Northcliffe to come here and tell us the same thing. He said, “What you want most is more population.” Then we really awoke to the fact, although for twenty-five or thirty years every public man of note in the country had been saying the same thing. How are we going to get more population? I hope not in a promiscuous way, but only according to the one means which Senator Foll ‘proposes to encourage, namely, by marriage. I believe Senator Foil’s amendment, if adopted, would encourage marriage somewhat, but to what extent it would be hard to say. We ought not to discourage marriage, as we do at present, by our taxation laws. The amendment is framed on right lines. Senator Foll could have met the objection from the Ministerial bench by saying that “each child’s mother”, instead of each wife, should receive so much. That would have brought in eyerybody, and would have cut out the sophisticated argument by the Minister regarding a mother who i3 not dependent upon her husband. It would have applied to all mothers, rich and poor, and to those potential mothers who are single women to-day. Bv encouraging marriage it would increase “ the producing and consuming population, and might convert bachelors, if only through its moral effect, to married men with numerous families.
We are told that we are saving £1,000,000 as a result of the Washington Conference. How much are we spending out of that sum for the benefit of a married man with a numerous family? I venture to say that one could lift it on a teaspoon. We are raising the exemption for the married man, but we are doing the same for the bachelor. We are making no differentiation between the two. In a country where we want a virile native population, we should encourage marriage in every way we can, although it is probable that, if we did everything we could, we would not be able to encourage it to the extent thai, we would wish. The Minister says the proposal is impossible. Anything is impossible to the man who does not want to do it. Senator Pearce says that it is an equitable proposal, and that the Bill is a thing for us to look at and admire, but we must not rmprove it or make any suggestions about it. If that is so, the sooner we go out of existence the better. He suggests that we should have no independent, collective opinion. I would not like to appear on a public platform and say that the allotted function of the Senate is to swallow everything the Government brings down. I would be ashamed to say that. When a proposal is put before this Chamber, which is co-equal with the other House, with certain limitations, we have a right to amend it. We are told that we must not “ cross an i or dot a t.” Wherein, then, comes our responsibility to the electors who sent us here? Wherein is our dignity? We are told that we must take what comes from the Ministerial bench as if it were incapable of improvement, although it may be put forward in an experimental way, to be moulded according to our collective wisdom. It is true that Senator Foil’s proposal is new, and it is because it is new that the conservative mind rejects it, and the hair on the head of the conservative stands on end. Senator Keating has said that when a proposal to make an allowance for children was launched in Tasmania, everybody with conservative instincts stood aghast.
I was a member of a Ministry in Western Australia when the idea was introduced in that State. I do not know who claims the distinction of first giving this particular concession to the married state in this country, but the net result to-day is that everybody is falling over everybody else to follow the example. I would shut down hard and remorselessly upon the human shape who enters the married state and has no children, although he could. I know it is not the married man’s fault always; but in too many cases in this country it is his fault, positively and avowedly. We should give him, no respect and no shelter. I have no sympathy for the cowardly, swinishly selfish brute who walks abroad in this country and, while entering the married state, refuses to become a parent.
– The amendment would allow a £40 a year deduction to that man.
– I would give the allowance only in respect of each child’s mother. Before the wife was eligible she would need to have a child.
– That is not Senator Foil’s proposition.
– But it is mine. It is about time we carved a fresh track, stepped out of the stereotyped groove, and recognised that we can originate things in the Senate as well as can others elsewhere. Those men who are sheltering themselves behind the cloak of citizenship, while other men are raising large families to protect them in times of peril, are not acting the manly and patriotic part in this country. I shall support the honorable senator in regard to the change he wishes to make.
– I do not propose to permit Senator Lynch, by making use of a casual interjection of mine, to convey the impression that I hold opinions which I do not hold, and have never advocated, and “ get away with it.” Because I suggested by interjection that honorable senators cannot consider the amendment without having regard at the same time to the Bill as a whole, and the financial position generally of the Commonwealth, the honorable senator would convey the impression that I have contended that the Senate may not dot an “ i “ or cross a ” t “ of any Bill which the Government bring forward. I have never said anything of the kind. But I do say that there is a responsibility resting upon the Senate to have regard to the financial position in which the Commonwealth finds itself at this juncture, and honorable senators must remember that although the proposals contained in the Bill are the proposals of the Government, if the measure is passed by the Senate they will be the proposals of the Senate.
– We have a right to amend the Bill.
– Of course, the Senate has that right ; but it has also the responsibility of paying due regard to the financial position of the Commonwealth. It has been clearly explained to this Pajv liament that it has been possible to submit the provisions of this Bill only by dipping into our reserves. If we had not availed ourselves of the £6,000,000 of reserves it would not have been possible for the Government to have proposed these alterations in the Income Tax Assessment Act. Assuming that our revenue and expenditure remain as at present, the effect of the alterations of the existing Act proposed by this Bill will be to eat up our reserves in two years. If honorable senators insist upon adding to the concessions to taxpayers which the Government have proposed, and so further reduce the revenue, we must, unless we can reduce our expenditure at once, reimpose taxation within two years. The Senate is a responsible guardian of the public purse sent here by the electors, and it is not free to give away taxation here, there, and everywhere without having some regard to the consequences in the near future. If the Senate passes this Bill it will be the Senate that will be giving away £2,500,000 of revenue, which, but for the proposals of this measure, would be collected as income tax. That is a very substantial concession to the taxpayers of the Commonwealth. The argument in support of an exemption for a wife can be used with quite as much force as for an exemption for children. The argument can be used in many cases with iust as much force for a similar exemption where a man is keeping a widowed mother, a widowed father, or a crippled sister or brother. There is a class of married people to whom Senator Lynch has referred in scathing terms, and who are not deserving of the exemption of Id. from their taxable income. I refer to the class of men and women who deliberately interfere with nature to prevent the bringing of children into the world. Under Senaton Foil’s amendment such people would secure the benefit of the exemption he proposes. They are parties to the deadly work to which Senator Lynch has referred, and does that honorable senator agree that they should be ‘ given the proposed exemption from taxation? Of course, he does not; yet he proposes to vote for an amendment which would bring that about. The man who is maintaining an aged mother or. father is far more worthy of consideration under this Bill than is the husband who is maintaining a wife who refuses to accept the responsibilities of marriage. If we agree to the amendment we must make further concessions, and the total reduction in the revenue from this form of taxation will go beyond £2,500,000, and may reach £3,000,000. That could only mean new taxation by the new Parliament. Whilst honorable senators have a perfect right to state their arguments in favour of amendments of this kind, they must not shut their eyes to the facts. If they dp, they will be lowering the Senate in the public opinion of the country. The public will judge us not merely by the concessions we make, but bv the strength we show in refusing concessions if we think that to grant them would land this country in an unfavorable, unfinancial position.
– We have been invited to believe that, unless we pass these taxation proposals as brought down by the Government, it will be impossible for the Government to balance revenue and expenditure. The Minister for Home and Territories (Senator Pearce) has told us that, if the Budget is not accepted in its entirety, our reserves will be used up. I wish to remind honorable senators that, while this Bill was under consideration in another place, tha Government accepted a proposal to increase the deduction allowed for children from £30 to £40. Are we to understand that that is going to throw the finances of the country out of gear?
– Yes, to the extent of the loss of revenue it will involve.
– We have been told that the result of an amendment submitted by a member of- this Committee will be to throw the finances out of gear.
– The effect of the amendment just now defeated would, if adopted, have been to extend the gap between income and expenditure.
– The passing of my amendment would not involve any very considerable loss of revenue. If it would throw the finances of the Commonwealth out of gear, what will be the effect of the amendment which the Government accepted in another place as a compromise when they .knew that the numbers were against them ? I agree with Senator E. D. Millen that a widow with children, invalid sister, &c, or an aged mother, may be quite as dependent as a wife. We. know that .there are many men in this country who, because they have had to keep a widowed mother, have been unable to get married, and have received absolutely no consideration in the way of relief from taxation. The single man who has no responsibilities at all is called Upon to pay no more taxation than is the single man who has an aged mother or an invalid sister dependent upon him. For this reason I ask the leave of the Committee to amend my amendment by adding after the word “wife” the words “or other female relative.” That should meet the wish of Senator E. D. Millen.
– Is it the pleasure of the Committee that ‘Senator Foll should have leave to amend his amendment!
– I will withdraw my request, for the time being.
– No one would welcome more than I would a scheme by which we might wipe the income tax off the statute-book altogether. Personally I have as much sympathy with taxpayers who find it difficult to pay taxation because of small incomes, and in many cases large families, as any other honorable senators have. But I .think that Senator Pearce is quite right when he says that we should regard this matter from a broader standpoint than the relief which may be given to certain taxpayers. We have incurred very heavy obligations in Australia which have to be met. If people outside are asked whether they are prepared to meet those obligations, the majority will agree that they must be met. They were incurred as the result of circumstances over which we had no control. The Treasurer, (Mr. Bruce), has been able to prepare the Budget by drawing upon a certain portion of the reserves, and in that way has recommended a, decrease in the direct taxation of the people of Australia. The decrease proposed is very substantial, and the proposals made will give relief to the great majority of Australian taxpayers. The Bill makes provision for an increase’ up to £40 in the deduction allowed for each child. In the case of the average family in Australia the father in receipt of an income of £320 per annum will be allowed in respect of three children to deduct £120 from his taxable income. That will bring his income down to £200 per annum, and on that he will be called upon to pay no income tax. If our finances were in such a position that we could afford still further reductions of revenue I should be inclined to support Senator Foil’s amendment. But my first duty is to the community as a whole, and it must be patent to every one that if we encroach on our reserves further than is proposed under this Bill, some means must be devised to reduce our expenditure. We cannot give effect to a scheme for the reduction of national expenditure as quickly as to a scheme for the reduction of taxation. No reduction in expenditure can be brought about except after a great deal of inquiry, reorganization, and re-classification of the various Public Departments. It may take years to accomplish substantial reductions in expenditure. What is to be done in the meantime? The only method which can be adopted is to introduce fresh taxation to meet the loss of revenue involved in the remissions of taxation we are asked to consent to to-day. I know how popular it is to advocate the remission of taxation, but any one appointed to the position of a representative of the people should consider how far we can go in this direction having due regard to our financial obligations. For the reasons I have given I shall have to oppose the amendment.
Senator REID (Queensland) [5.441.- I am as anxious as any one else to reduoe taxation, but I think that the Government have gone almost to the limit in this regard in view of our obligations. I should like the Minister in charge of the measure (Senator E. D. Millen), to let us know what loss of revenue would be involved in carrying the amendment. The Government have carefully investi- gated the financial position of the Commonwealth, and the House of Representatives has proposed the reduction of taxation, in one instance, by increasing the deduction from taxable income allowed for children.
– Which is the more justifiable, the deduction which Senator Foll proposes or the reduction of the entertainments tax?
– The .reduction in the entertainments tax was made in the interests of the poorer people of the community, and will effect the revenue to the extent of only about £100,000.
– Parliament has approved of that.
– That was part of the Ministerial policy..
– But the people do not get the benefit of the exemption.
– I think they do. I know that in some cases the picture show proprietors at once dropped their charges for admission by one penny. Personally, I should like to vote with my colleague (Senator Foll) if I could do so without interfering with the finances of the Government. If, for sentimental reasons, we agreed to the amendment, it is possible that the Government would be faced with serious financial difficulties, and the next Parliament might be required to impose fresh taxation. I know many single men who are supporting, or helping to support, widowed mothers and younger members of their family, and, of course, I should like to help them; but the vital question is, How much loss in revenue will be involved ?
– How far would you be prepared to go ?
– I would be prepared to remit the whole of the taxation if it were possible, but ‘I point out that the Government came down with a definite statement that they could not afford to remit any more taxation. Where would the money come from.?
– There i3 still a large portion of the surplus from which the Government have drawn for these other concessions.
– The Treasurer (Mr. Bruce) has indicated that concessions already made have only been possible by drawing on the accumulated surplus. If taxation and Customs revenue do not in or ease - and the seasonal outlook in Queensland and New South Wales is by no means favorable - it is possible that any further interference with the financial proposals of the Government may create a critical position, and the surplus be wiped out altogether.
– Senator Reid has directed attention to a very important point, and I only regret that I am not in a position to give the figures in the manner asked for, and in which, no doubt, honorable senators desire them. Whilst he has been speaking I have been able, with the assistance of an official of the Department, to gain some idea as to where the adoption of this amendment Would lead us. It has been ascertained that, as a result of the increase m the child allowance exemption from £30 to £40, an increase of £10, there will be a reduction in taxable incomes of £3,500,000, and as, for the purposes of this calculation, each child represents £10, it follows that there will be 350,000 children for whom an additional deduction will be made. It is only a rough and ready estimate, but it is not unreasonable to assume that there is one mother for every two children under the age in respect of which the exemption will be claimed. That this is not very far out was demonstrated by the inquiry made some time ago in New South Wales, in connexion, I think, with the Piddington Commission inquiry as to the amount necessary to maintain a wife and three children. It was found then that the average family was not three children, but rather less than two. However, I am basing my estimate on a family of two. On this basis there would be 175,000 wives in respect of whom it is proposed to grant an exemption of £40. I am advised that this would mean a reduction in the area of taxable incomes of £7,000,000, which, I submit, is a very substantial figure. What that « amount of taxable income would yield it is impossible to say, because one parent, owing to the fact that he may be more richly endowed with this world’s goods, would pay on a much higher rate than another. Therefore, it is not possible to say just how much taxation would be derived from that £7,000,000 of taxable ‘income, but taking a broad average, I think it may be stated that nearly £750,000 would be lost to the revenue. We have already, by the increase in the child allowance, given up £350,000 in revenue, in addition to the £2,500,000 remissions under the original Government proposals. If this amendment were carried the total loss in revenue would be about £3,500,000 instead of £2,500,000. It is clear that if we srive up that amount of revenue under this Bill, we shall have to make it up in some other way. I admit that these figures as to the probable loss in revenue following the adoption of this amendment are the result of a roughandready calculation, but they are sufficiently approximate to the actual sum to justify the Committee in coming to a decision on the amendment;
– As Senators Wilson and Lynch are evidently in favour of my amendment provided it applies only to those wives who are also mothers, I desire, with the permission of the Senate, and in order to meet the wishes of the Minister (Senator E. D. Millen) to amend it so as to make it apply only to a wife who is also a mother. In its amended form it will read -
After “of” (second occurring) to add the words, “ a w-ifo who is a mother ( if totally dependent on the taxpayer), and”
In this form I think I can claim the support of Senator Lynch, who made some pointed remarks about wives who are not mothers, and men who marry, and could have children, but refuse to recognise their obligations.
Amendment, by leave, amended accordingly.
– Senator Foll assumes that I intend to support his amendment; but Senator. Pearce a few moments ago drew attention to the obligations of this Committee with regard to the financial side of the question. That I admit. In my opinion it is impracticable, at this stage, to chop about the financial proposals of the Government. The Ministry are responsible for carrying on the business of the country, and I am not prepared to do anything to place them in a difficult financial position over this matter. I am in favour of reducing taxation where possible, and I think it would have been better to ha-ve given relief in connexion with the present proposal than with the entertainments tax.
– I am rather disappointed that Senator Foll receded from his first amendment. This very necessary provision is embodied in the Queensland Act. My object is to help the married man with a number of dependants, as against the bachelor and spinster, who escape a great deal of the Customs taxation. I do not think the amendment would involve such a loss of revenue as has been suggested by the Minister (Senator E. D. Millen). In any case, there fs about £3,500,000 still left of the surplus that the Government have extracted from the people by means of Customs duties.
– Do you not favour those duties?
– I do believe in reasonable Customs duties. The amendment gives about the only chance that the Committee is likely to have to make any impression upon this measure, and I hope that such a reasonable proposal will be adopted.
– I am concerned as to what the effect of the amendment would be on the finances of the Commonwealth. I. do not wish to support Senator Foll if it means defeating the financial proposals of the Government, but I am making a demonstration on the question because I believe it is one of the’ most vital at present confronting the people.
Amendment negatived.
– Paragraph m of sub-clause 1 has a reference to paragraph e of .clause 16, but the two paragraphs appear to have no relation to one another.
– That is a typographical error. The letter “e” should read “f.”
– The necessary alteration will, I presume, be made.
Amendment (by Senator E. D. Millen) agreed to -
That in paragraph (m) of sub-clause (1) the letter “ e “ be left out, with a view to insert in lieu thereof the letter “ /.”
.- I move: -
That after paragraph (») sub-clause (1) the following new paragraph be inserted: - “ (o) Any taxpayer (whose income does not exceed Eight hundred pounds per annum) shall be allowed by the Commissioner of Taxation as a deduction from his income any sum or sums of money paid to any legallyqualified medical practitioner, public or private hospital, nurse, or chemist, in respect of the illness of or any operation upon the taxpayer or his wife or any member of his family under the age of twenty-one years, and in addition in the event of the death of the wife of the taxpayer, or of the death of any member of his family under the age of twenty-one years, any sum of money not exceeding Thirty pounds paid to any undertaker for funeral and burial expenses.”
I know from personal experience what a great drag it is upon a married man to have sickness in his family, or to have to send a member of his family to a hospital for medical treatment. Probably every honorable senator has had such an experience, or knows of cases where the head of the f amily has had to bear a heavy burden it; this respect. A man may be called upon at any time to pay as much as £50 in the way of medical or hospital expenses, and he may be left without means of meeting the ordinary taxation imposed upon him. I think it will be agreed that, in the case both of, illness and death, a deduction should be allowed.
. It is not given to everybody who assumes the rule of prophet to be so successful in his forecasts as I have been to-day. Only a few moments ago I said that if. one amendment was submitted to extend the very liberal provisions of the Bill, it would immediately be followed by others of a similar nature. Senator MacDonald has proved that I was correct. I could make out a much better case by urging that a deduction be allowed in respect of food and clothing, which is more essential, perhaps, than medical services. This and other concessions of a similar character would, no doubt, appeal to some honorable senators, and also to many outside.
– I understand that a similar provision is embodied in the Victorian Act.
– I am not commending Victorian Acts for general acceptation. I ask the Committee to reject the amendment.
Amendment negatived.
Clause, as amended, agreed to.
Clauses 24 and 25 agreed to.
Clause 26 (Deduction of losses from profits).
Senator GARLING (New South Wales) [6.171. - In the memorandum showing the differences between the Income Tax Assessment Act 1915-21 and the Bill under consideration there is a footnote relating to this clause which reads -
The section in its original form operated against persons in receipt of income which could not be classed as income from a business or income from property, e.g., pensions, but * who, in endeavouring to carry on similar busi nesses to supplement their ordinary income, suffered loss.
The section as now drafted will obviate all difficulties in future in the case of all taxpayers.
That suggests that while this clause is literally intended to operate only in those cases where losses are incurred in carrying on businesses, the footnote I have quoted leads one to suppose that it is intended to apply to all taxpayers. Will the Minister (Senator E. D. Millen) say whether it deals in any sense with losses incurred in connexion with mining or other like investments. In my opinion it does not.
– No, but it applies to a person conducting an operative business. .
– Then a person could not set off his. losses on property against profits derived from a business, but he could set off losses in business against his profits on property investments. There is thus a distinction in principle in favour of which there can be little argument; but as the Minister has said, if we commence extending these cases we can provide anomalies in many directions. ‘
Clause agreed to.
Clauses 27 to 43 agreed to.
Clause 44 (Powers of Board).
– This clause defines the class of cases to go before the Board, and provides that a Board of Appeal shall have power to hear such cases as are prescribed or are referred to it by the Commissioner. Does that refer to cases pending or to those which have arisen, say, within the last three or four years ?
– No intimation of a taxpayer’s desire to go before the Board has reached the Commissioner.
– I know of an instance, but I could not say whether it has reached the Commissioner.
– Unless they reach the Commissioner, they cannot be regarded as having been officially received.
– The case I have in mind is before the Department.
– I am concerned with those cases in which a dispute has arisen between the Commissioner and the taxpayer, and which have been pending for some years without finality having been reached.
– Appeal cases?
– Yes3 from a decision of the Commissioner.
– I am informed that no appeals to the Board are pending, although there are a number of cases in which negotiations have been proceeding between the Commissioner and the taxpayer, but which have not been presented to the Board.
– Some time ago I mentioned an instance in connexion with the war-time profits tax.
– That is not dealt with under this measure.
– No, but the same Board is acting in connexion with appeals.
– The honorable senator will not be in order in discussing war-time profits tax unless he can connect his remarks with the clause.
– There is no Board under the War-time Profits Act.
– When I spoke to the Deputy-Commissioner I was assured that the matter was going before the Board, and I assumed it was the Board referred to in this Bill.
– I understand that this clause is not exclusive. It is a new provision, and reads -
A Board of Appeal shall have power to hear such cases as are prescribed, or are referred to it by the Commissioner under this Act.
Sub-clause 5 of clause 21 reads -
A taxpayer who is dissatisfied with the decision of the Commissioner under this section may require the Commissioner to refer his case to a Board of Appeal, and the Commissioner shall refer the case accordingly.
That enables a taxpayer to approach the Board of Appeal, and if he exercises hi3 option the Commissioner is required to refer the appeal to the Board. This simply provides that the Board shall have power to hear such cases as are referred to the Commissioner under this measure, or, in addition, such cases as are prescribed. It really gives the Board jurisdiction.
Clause agreed to.
Clauses 45 to 49 agreed to.
Clause 50 - (1.)’ A taxpayer who is dissatisfied with the assessment made by the Commissioner under this Act may, within thirty days after service by post of the notice of assessment, lodge with the Commissioner an objection in writing against the assessment stating fully and in detail the grounds on which ‘lie relies. < (5.) Objections which are treated as appeals to a Board of Appeal shall, if the taxpayer’s written request is accompanied by a deposit of such amount as is prescribed for the particular class of case, be forwarded to the Board of Appeal by the Commissioner not later than thirty days after receipt by him of the written request.
Senator NEWLAND (South Australia) T6.281. - The amendment I propose moving will not affect the revenue in any way. The clause provides that when a taxpayer is dissatisfied with his assessment he may, within thirty days after service by post, lodge an appeal. The time allowed is totally inadequate for a person conducting an extensive business, because it might be necessary for him to make a searching investigation and to compile a new assessment. Those who are living far from a regular postal service are entitled to greater consideration. When in the Northern Territory, some time ago, I was informed that settlers occasionally received their assessment notices and an intimation that a fine had been imposed for non-payment of the tax by the same mail, owing to the fact that in some instances three months elapsed between the arrivals of mails.
Sitting suspended from 6.S0 to 8 p.m.
– Before the dinner adjournment I was dealing with the short period allowed to taxpayers in which they may appeal if they are dissatisfied with their assessments,, and I was pointing out the difficulties that large business men experience in preparing fresh assessments in accordance with the requirements of the Act. I also complained of the period allowed to taxpayers who live in the outlying portions of Australia. That last objection applies particularly to Western Australia, the north-western portion of this continent, the Northern Territory, and Queensland. I said I had met taxpayers who had received their taxation assessment and notice of fine by the same mail. I am free to admit that those were exceptional cases, where, on account of wet weather, the mails did not run more than once every three or four months. Whilst the taxpayer is tied down under the Act to thirty days, the Commissioner is not limited to any time in dealing with appeals. The Commissioner may take as long as he pleases to deal with appeals. The period of thirty days ought to be extended to sixty days. This alteration would not interfere with the work of the Department, and would not entail any extra expense. I am not quite sure whether, if the period were altered in this sub-clause, it would also have to be altered in sub-clauses 4 and 5. If the Minister will indicate in his reply that it is necessary to have those periods uniform, I will later on move amendments accordingly. I move -
That in sub-clause 1 the word “ thirty “ be left out, with a view to insert in lieu thereof “ sixty.”
– I have to admit that on the first presentation of the case made by Senator Newland, it does appear not to be unreasonable that the longer period for which he pleads should be allowed, but this matter is not new so far as the Department is concerned. Representations have been made before, and some time ago they were presented to the Treasurer in quite a formal manner by representatives of the business world. The proposals were discussed and fully inquired into, and it was found that many of the objections to the present system were fanciful rather than otherwise. When they were looked into, the necessity for the extensions of time asked for was not so apparent as appeared at the first glance. If honorable senators will consider for a moment what is required to be done in thirty days, they will realize that there is no need for the amendment. The taxpayer’s books are all in order, and from them he, personally, or through somebody else, has drawn up his return. He has all the material properly noted. When the return goes to the Commissioner the Commissioner says he is dissatisfied with some item of it, and he sends to the taxpayer an assessment which varies from that which the taxpayer would have received had his return been accepted in its entirety. When it reaches the taxpayer, he can tell at once wherein there is a difference between himself and the Commissioner. He is asked immediately to notify the Commissioner if he objects to the assessment, and to state why he objects. This would not involve a remaking up of his books or accounts, because he has them all before him. All he has to do is to write back and say, “ I object to your assessment because- .”
The reason why he objects would be displayed by his knowledge of his own books, which would be in front of him. It would not take him very long to send in that notice, and any business man ought to be able to do it in less than thirty days.
Many taxpayers take up a somewhat curious and illogical attitude. They claim the very longest measure of time themselves in their dealings with the Department, but complain continually that the Department, which has to handle thousands of cases where the individual taxpayer has only one, is sometimes dilatory in its dealings with them. In view of these facts, I cannot see the reasonableness of Senator Newland’s request. Unless some definite evidence can be produced to show that the period of thirty days is insufficient to enable a business man, with his accounts in order and his books before him, to discover whether he objects to the Commissioner’s assessment, and if he objects, why, I cannot accept the amendment. I suggest to Senator Newland that ho should not proceed with his amendment.
With regard to the second point, as to whether the period of thirty days mentioned elsewhere in the clause must be altered if the amendment is carried, I do not think that the two are connected. A period of thirty days is allowed for the taxpayer to notify the Commissioner that he is dissatisfied. If the Commissioner replies to him, and says, “ I have overruled your objection,” then there is a further period of thirty days allowed in which the taxpayer can send in his notification of appeal. Either period may be sufficient or insufficient, but they do not necessarily bear any relation to one another.
– There is the other case of the man who cannot possibly receive his mail and get his reply back to the Department in thirty days.
– I am told that in cases of that kind the Department makes full provision, and allows the time necessary for the transmission of communications. Accidents may happen, but what I have stated is the practice of the Department. Here and there it is always possible to find cases where something has miscarried. Full allowances are made for extremely outlying places.
– Members of the Public Works Committee discovered a case in the Northern Territory in which a man received his assessment and a notice of fine bv the same mail. “ Senator E. D. MILLEN- I hope the honorable senator does not suggest that that is a common rule. Obviously it is in extraordinary exception.
– On account of distance.
– Yes, and on account of something more. In all such complaints it is advisable to look into .the circumstances of the case. It may have been that the taxpayer was away from his home for a time. One of the letters may have been forwarded to an address and then followed the taxpayer elsewhere. Taxpayers in stating a complaint, and by way of voicing a joke or a gibe at the Department, often refrain from giving the full facts. It is quite inconceivable to me that in the ordinary course of events an assessment and a notice of fine would reach the taxpayer at the sameotime.
– There may be something in what the Minister (Senator E. D. Millen) says regarding business men, although they state that they find it difficult to meet the demands of the Department in the specified time. The argument, however, does not apply to the man who lives in the centre of Australia, and who is under such disability that he cannot meet the demands of the Department within the time allowed. Whether a notice of assessment to a man in the centre of Australia goes through So nth Australia or via Port Darwin, in either case it takes a considerable time to get to its destination. The mail may be delayed on account of weather conditions. It is carried on camels, and there are many reasons why it may not reach its destination at the specified time. Although we met with one case of a man who had received two notices by the same mail, we also met many other men who complained very bitterly about the short time allowed to them in which to make appeals to the Commissioner. At that time there was a good deal of extra taxation, including the war-time profits tax, on men who owned a considerable number of stock. It often happened that those men were away from their homesteads mustering stock or doing other work on their stations for three or four weeks at a time. The amendment that I suggest would meet the complaints of those men. The Department may be generous enough, but men in the back country who are notified by the Department of a fine look upon it as a serious and grave matter. They say, “ The Commissioner of Taxation and his officials are treating us as if we were one of the backyards of Melbourne.”
– In the centre of Australia they receive the same notice as the man who is living next door to the Department. The thirty days allowed commences from the time the notice is delivered.
– How does the Commissioner know when the notice is delivered? The period must commence from the date when the notice leaves the Commissioner’s office.
– The Commissioner calculates how long it will take for a notice to reach the taxpayer, and the taxpayer is allowed thirty days from that time.
– That is not the way it works out in the centre of Australia. The men complain that they have received the two letters by the same mail, and it seems to me that there is so little involved in making the concession for which I am asking, that there ought to be no hesitation in granting it. It would involve no difficulty and no further expense. It is merely a matter of convenience for those taxpayers who are situated a Ions’ distanoe from the head office. I desire to press the amendment, and hope the Committee will accept it.
– I understand that the recipient of a notice is allowed a full thirty days, irrespective of when the notice is delivered. If the letter- takes six weeks to reach its destination, the taxpayer is allowed thirty days on the end of that time. Senator Newland did not sufficiently stress the point that it is impossible in many of these places for the taxpayers to get the apoeal back into the Commissioner’s office within thirty days.
– So long as the appeal is in the course of post within thirty days, that is sufficient.
– ¥e are under this Bill reducing taxation very considerably, and on that account I have not pressed for any further concessions, but I urge the Minister (Senator E. D. Millen) to accept the request made by Senator Newland. It comes from a very large number of reputable business men, and I am certain that they have really good reasons for asking that the time within which notice of appeal against assessments may be made should be extended from thirty to sixty days. They ti id ask that the time to be allowed should be three months, but we think that sixty days would be a fair compromise.
– I should like to ask the Minister (Senator E. D. Millen) with regard to the explanation he last gave, to say in what particular clause of the Bill it is provided that if an objection is in course of post within thirty days from the receipt of the notice of assessment, that is sufficient compliance with the law. This clause provides that a taxpayer who is dissatisfied with the assessment made by the Commissioner may, within thirty days after service by post of the notice of assessment “ lodge with the . Commissioner an objection in writing.” I know that the ‘Commissioner has taken a very strict view of his powers under our taxation Acts, and has been unable to grant extensions of provisions which he has regarded as rigid. I see nothing in the Bill to enable the Commissioner to say that an objection was lodged with him within the time allowed if he received it forty days after the taxpayer received his notice of assessment merely by reason of the fact that it was in course of ipost to him.
– What does “lodged with the Commissioner “ mean?
– It means literally that the notice of objection has reached the Commissioner’s office. To say that an objection is lodged with the Commissioner the moment it leaves the objector’s hands, and is posted by him, is to stretch the meaning of the .provision. The Minister has said that the taxpayer who asks for this extension asks for a lot of time from the Department, while he objects to what he calls delays on the part of the Department. The taxpayer is called upon to put up with delays in the administration of the Department, and very often with inordinate delays. It has to be remembered that the Department is in a very different position from the taxpayer.
– I should say that the taxpayer is in a very different position from the Department.
– I am content to put it in that way. The Minister said that the taxpayer is concerned with only one assessment and one objection; but what is the Commissioner concerned with? Every hour of his working time be is concerned with assessments and objections, and, what is more, he has an enormous staff of officers, who should be capable, who have nothing else to do in life, so far as duty is concerned, than to concern themselves’ with the administration of our taxation Acts. They should be expert, and competent to give decisions rapidly. Not so the taxpayer. He is confronted with something outside the ordinary scope of his duties, and he is up against a Department supplied with skilled and expert men who have nothing else in life to do in the way of duty than to check returns and make assessments. My word, the taxpayer is in a different position from the Commissioner! My view has all along been that if ever I had the power to do it, I would put the taxpayer and the Department more on terms of equality than they are at present. All our legislation arms the Department with every possible safeguard, and equips it with every means of dealing with the taxpayer.
– Why? The honorable senator knows perfectly well.
– I do; but being armed with every safeguard and equipped with every means to administer the Act, the Department should be able to do the work more deftly and expeditiously than the taxpayer could be expected to do it. My sympathy in these matters as the result of what I have observed is with the taxpayer every time. For delay on the part of the taxpayer, he is fined. Is there any fine imposed on the Department for delay ? If I were in a position of authority, I would impose fines on the Department. We supply it with all that it asks for- in the way of well-salaried, trained, and experienced officers, and yet these officers can make as many blunders as they like, and the taxpayer has to grin and bear it. He may have to wait an inordinate length of time for the refund of money of which he may be badly in need.
– Does the honorable senator think that if the Department made many blunders the heads would stand it?
– The Department does make blunders. Senator Newland has referred to a ease in which the notice of assessment arrived at its destination at the same time as the notice of fine for delay in payment of the assessment. I had an experience of that myself, though the circumstances may not have been normal. A demand for taxation was addressed to me at Parliament House, and so far as I remember now it was the first time that any such demand was sent to this address. The demand for the payment of tax was always previously sent to my address in Tasmania, which was given on my return. I believe there was a change in the procedure of the Department of which 1 had no notioe. I was away for some time electioneering, and officers of the House were sending on to me only mail matter that did not include such things as circulars, and through some inadvertence the demand frqm the Taxation Office was not sent to me. The Department changed its practice without notification to the taxpayer, and for the first time sent such demands on members of this Parliament to Federal Parliament House. If my notice had been sent to the address in Tasmania stated on my return, it would have reached ma wherever I happened to be in that State. As a matter of fact, I received the assessment simultaneously with a demand for payment plus fine.
I can quite understand that sixty days might be regarded as a very long time to ask the Department to wait for notice of objections to assessment, especially in populous areas; but a margin of thirty days is too short to allow for objections. If the taxpayer had simply to notify the Department that he obiected to his assessment thirty days would be sufficient; but he has not merely to do that. He has to notify the Com missioner of his objection in writing against the assessment, stating fully and in detail the grounds on which he relies, and if honorable senators will look at sub-clause 6 of this clause they will find that the taxpayer is limited on the hearing of his appeal to the grounds stated in his objection.
– He needs to be very careful in stating; his objections.
– He does. As a consequence, business men who have complicated books must get in accountants or other skilled persons to go through their assessments in conjunction with their accounts. These accountants are not so very numerous that they can be picked up at a moment’s notice. They may be engaged in attending to the interests of a number of different taxpayers. It may be a difficult matter for a business man or firm to secure the services of the necessary skilled accountant to go through the books and the assessments in time to enable the taxpayer to lodge his objection together with a full and detailed statement of the grounds upon which it is made.
– Take the case of a town agency dealing with a distant pastoral property.
– Sometimes the taxpayer in the country has to refer to a bank at some distance, to some financial institution, or to his solicitors, in order to obtain the information necessary to enable him to set out fully and in detail the grounds of his objection.
– In the case mentioned by Senator Foll, the taxpayer’s accounts would be kept in the agent’s office.
– A taxpayer might have to refer to another State for particulars of a certain portion of his return.
– Delay may mean a saving of interest to the taxpayer.
– The Department may earn a good deal of interest by holding up refunds. Thirty days is sufficient to enable a taxpayer, under sub-clause 4, to request the Commissioner to treat his objection as an appeal, but it is not a. sufficient time to allow him, should he decide to object to an assessment, to set out in detail the grounds for his appeal when he realizes that his appeal will be limited to those grounds. If Senator Newland would propose that the time to be allowed should be forty-two days, I would be prepared to support him. Some extension of the period beyond thirty days is absolutely necessary.
– There is a great deal in what Senator Newland has said, and more so because of the wording of the sub-clause. If a man had thirty days after he had actually received a notice of assessment, within which to make out and post his grounds of objection, in 99 cases out of 100 the time would be ample. But the Bill does not allow that. It requires that the notice of objection shall be lodged with the Commissioner within thirty days. The effect can easily be obtained by the simple addition of a couple of words. I suggest to Senator Newland, therefore, that it would be better not to press his objection, but to permit of the alteration of the sub-clause by inserting after “assessment,” the words “or despatched by post to or.” That will permit of any man who is in the city making his lodgment personally if he likes, and at the same time will permit any taxpayer in a distant part of the country to post his notice of objection within the period stated.
– Senator Keating desired to know the section of the Act under which it is the practice of the Department that, if objection to assessment is posted within thirty days, it is regarded as a compliance with the law. There are two points involved, one of fact and another of law. As to the matter of fact, I can state that the practice of the Department is as set out under its regulations, and the consequence is that if within thirty days of the receipt of the assessment a taxpayer posts his objection i-u the terms indicated, although that notice may not reach the Commissioner till long after the expiration of thirty days from the service of the assessment, it is accepted as valid notice of the taxpayer’s objection.
– In some cases there may be no mail for six weeks.
– It does not matter, provided the notice is posted within the time specified.
– In some places there may be no post-office, the mail being picked up by other people for lodgment at a post-office.
– Senator Foll knows very well that there need be no difficulty about cases of that nature. In such circumstances the taxpayer would probably be his own postman. It is impossible to establish sound laws based on fanciful and extravagant cases.
Senate Newland. - A considerable number of taxpayers in the remote parts of the Commonwealth are in similar circumstances, and we hope to see more of them in the near future.
– Before that hope is realized I venture to say that we shall have had two or three more “ joy rides “ through amending Income Tax Bills, and they may be provided for. It is, as I have stated, a fact that the Commissioner interprets the law in the way I have indicated. Whether that is right or wrong is another matter. It is being done, and no one has yet seen fit to challenge the interpretation of the law of the Department. As to the law, I cannot, for the moment, place my hand on the reference upon which the Department is relying for justification, but I know that in. one of the Courts it has been held .that the post-office may be regarded as the agent or tiervant of the addressee. Subclause 1 states that any taxpayer who is. dissatisfied with the assessment may, within the time specified, “ lodge” with the Commissioner his objection in writing, and it has been held that if some one else is carrying that letter to the Commissioner, thu taxpayer has fulfilled the requirements of the law. Senator Keating also mentioned what he regarded as instances of harsh treatment by officers of the Taxation Department. I can only say that that has not been my experience. I have never found officers of the Department going about like raving wolves, seeking whom they may devour and with the fell purpose of harassing people.
– I did not say that they were harsh in their methods, but I did say that they were indifferent, and took up the taxpayer’s time, often unduly.
– I have never found them to be anything ‘but. courteous and animated by a desire to expedite business, but in standing up for what they think to be their rights and in the discharge of a public duty, it is only to be expected that they should look after the interests of the taxpayer. Senator Keating made a suggestion which is worthy of consideration. I do not regard thirty days as too short, hut certainly sixty days is too long, and, in view of what I have said, I .think that if Senator Newland would accept .Senator Heating’s suggestion and make. the period six weeks instead of eight, there would he no serious objection by the Department.
Senator NEWLAND (South Australia)
I S.38] . - I accept the suggestion, and ask leave to withdraw my amendment with a view to amending it in the direction indicated.
Amendment, by leave, withdrawn. Amendment (by Senator Newland) agreed to -
That in sub-clause 1 the word “ thirty “, be left out, with a v.iew to insert in lieu thereof the words “ forty-two “.
Senator E. D. MILLEN (New South Wales - Minister for Repatriation) S.39] . - Senator Garling just now made a suggestion as to the posting of a notice of objection by the taxpayer. If he will adopt the wording which I suggest I think it will meet the view of the Department, and I shall be glad to accept it. I therefore move -
That in sub-clause 1 after the word “ assessment “ second occurring, the words “ post to or “ be inserted.
This will have the effect of making statutory what to-day is really the practice of the Department.
– That will be very helpful.
Amendment agreed to.
– Sub-clause 5 provides that objections which are treated as appeals to a Board of Appeal shall, if the taxpayer’s written request is accompanied by a deposit, be forwarded to -the Board of Appeal ‘by the Commissioner, not later than thirty days after receipt by him of the written request. I suggest that it is in the interest of the Department and of the State’ that our taxation machinery should work as smoothly as possible and with the. least friction. This sub-clause requires the taxpayer to lodge a deposit in support of what may be, from his-point of view, a perfectly valid objection, but if the Board of Appeal determines that the objection is frivolous or unreasonable, the taxpayer will suffer two penalties. Having lost his case before the Board of
Appeal he will be mulcted in costs^_and will also forfeit his deposit. He will be confronted with a double-banked penalty. If, instead of going to the Board of Appeal, he sends his objection to the Court in the first instance, he will have only one penalty in the event of the appeal going against him, namely, to pay the costs. I put it to the Committee that there. is no need to create friction in the working of a Department. It should be sufficient for the objector to have to pay the costs of his appeal.
– Is not the provision as to a deposit intended to cover costs if they are awarded against the objecting taxpayer ?
– The clause now under consideration and the clause following deal with objections and the powers of the .Court and Board on the hearing of appeals. It is provided in subclause 5 of clause 51’ that the Board shall, if it considers an appeal to be frivolous or unreasonable, order the forfeiture of the whole or r>art of the amount deposited by the taxpayer, so there are two penalties. Another subclause deals with costs. One is not alternative to the other. They may be ciunulative. The Department ought to be content with getting costs in the event of the Board determining an appeal to be unreasonable, although, in the view of the objecting taxpayer, it might be quite reasonable.
– I cannot accept Senator Garling’s suggestion. The provision with regard to deposit is inserted for an obvious reason, which it indicates, and which Senator Garling admits, namely, as a check against the lodging of unreasonable or frivolous appeals. Many taxpayers are tempted to lodge frivolous appeals, and thus cause delay. While the country is entitled to the money they may, by reason of the delay, effect a saving of interest. When a penalty is inflicted, who imposes it? Not the arbitrary Commissioner, who is* depicted as ready to pounce upon the unoffending taxpayer. The matter is determined by. a Board, and we are entitled to assume that the Board consists of fair and reasonable men, and it is not likely that an order will be issued for the forfeiture of a deposit unless tbe appeal is of a frivolous nature. Senator Garling talks about friction. I can assure him that the way to prevent any friction arising is to get every taxpayer to pay up at once. The honorable senator apparently would rob the Commissioner of all powers, and leave the taxpayers free from any restriction whatever. That would, no doubt, remove friction, but the Department would probably get no revenue. iSenator Keating. - The taxpayer has to pay up, even if he appeals.
– He pays his money first. iSenator ,E. <D. MILLEN. - IWe must give the Commissioner sufficient power, or there will be a number of taxpayers taking advantage of every loophole.
.- What would be the position of a taxpayer living at, say, ‘Camooweal? An assessment sent from the Commissioner’s office would not reach Camooweal until a week later. I believe that the usual practice of a Department is to allow the taxpayer thirty days, provided he posts his money within that period. Would such a taxpayer be in the same position as one who lodges an appeal?
– That is so.
Clause as amended, agreed to.
Clause 51 -
.- Will the Minister (Senator E. D. Millen) agree to a slight amendment to meet a case that arises by reason of certain concluding paragraphs to a number of clauses? Taike clause 23, which, among others, contains the following provision -
A taxpayer who is dissatisfied with the determination of the Commissioner under paragraph (e) of suib-section (1.) of this section may require the Commissioner to refer his case to a Board of Appeal, and the Commissioner ‘ shall refer the case accordingly.
Sub-clause 1 of clause 51 deals only with the hearing of “ the appeal “. It does not meet the case of what is really a reference and not an appeal at all. In the one case, as in clauses 23 and other like clauses, the matter is simply referred by the Commissioner at the request of the taxpayer. I want it made quite clear that it is the intention of- the Department that the word “ appeal “ shall cover a reference. I understand that the Commissioner himself has no objection to that.
Amendment (by Senator E. D. Millen) agreed to -
That in sub-clause (1), after the word “ the,” second occurring, the words “ reference or “ be inserted.
Amendment (by Senator E. D. Millen) proposed -
That in sub-clause (4), after the word “ the “, second occurring, the words “ reference or “ be inserted.
– ‘This amendment would mean that a taxpayer would be mulcted in costs in connexion with a reference, submitted by the Commissioner to the Board of Appeal. I do not think that that is the intention.
– It would be left to the discretion of the Board to say whether the taxpayer himself was responsible.
Amendment, agreed to. Clause further consequentially amended, and agreed to. Clause 52 -
Consequential amendments agreed to.
.- The Minister (Senator E. D. Millen) stated that an extension of the time allowed for appeal to sixty days would be too long, and the taxpayer might get some benefit in the direction of interest on the money withheld. [ am asking that the Commissioner shall not be permitted to withhold for an unreasonable time the money of a taxpayer which, if it were in his possession, would be earning interest. I do not suggest for a moment that the Commissioner or his officers wilfully withhold refunds longer than is necessary; but in some instances taxpayers have reason to complain of what appears to them to be an unnecessarily long delay. I movei -
That in sub-clause (2), after the word “refunded,” the words “ within thirty days “ be inserted.
If^ the amendment is adopted the Commissioner will have thirty days in which to refund to the taxpayer the amount concerning which a successful appeal has been made. Cases have been brought under my notice in which fairly substantial amounts have been refunded only after a considerable time has elapsed. The Commissioner has all the machinery and an efficient staff at his disposal, and should not have any difficulty in complying with such a. provision.
– I trust that Senator Newland will not persist with his suggested amendment, for the reason which I shall endeavour to briefly indicate. The honorable senator has admitted that he exonerates the Department for any wilful delay.
Senators Newland. - I would have to be able to prove my case before I made a charge.
– There is no reason to suppose that the. Department would unnecessarily delay repayments; but warrant authorities have to be obtained. If an appeal were taken to a higher Court, no refund could be made until a final decision had been given, although Senator Newland suggests that the Department must make a refund within thirty days.
– Eut this is after the appeal has been settled.
– There might be an appeal to a higher authority. Senator Senior. - ‘That is provided for in a previous sub-clause.
– If the decision of the Board is against the Department, the honorable senator suggests that the money should be refunded within the time he specifies.
– Clause 51 will have to be complied with before action can be taken under clause 52.
– The honorable senator proposes a definite and unqualified instruction if the decision is against the Department; but I trust he will not press his suggested amendment, as he himself has given strong testimony that it is the invariable practice of the Department to act as quickly as possible The honorable senator moved that a tax payer should have sixty days in which to lodge an appeal, and he now suggests that the Department should make refunds within thirty days, and in that respect he is not consistent.
Senator NEWLAND (South Australia) 9.6]. - That may be so, but the Minister Senator E. D. Millen) must remember that many of those whose interests I was endeavouring to protect are far removed from adequate postal facilities, whilst the Commissioner has an able staff of officers at his disposal, and is in touch with adequate postal facilities. I am asking that the Department shall make refunds of payments which have been wrongly collected within thirty days. It has been said by a number of taxpayers, many of whom have closely perused the provisions of this measure, that interest also should be added after a certain period has elapsed.
– So1 it should be.
– I am not advocating that at this juncture, because I think it is possible to go too far. I am principally conoerned with the fact that money is at times held for an unreasonable period. The clause provides that refunds shall be made after an appeal has been decided by the Department or by a Court, and I do not suggest that refunds should be made until the case has bsen settled by whatever authority it was heard.
. -I trust the Minister (Senator E. D. Millen) will accede to the request of Senator Newland. Had I spoken on the motion for the second reading, that was one of the matters, amongst numerous others which are to receive consideration before this Bill is disposed of, that I intended to mention, because I think the taxpayer is unfairly loaded in his relations with the Department. In the first instance, he has to pay the amount demanded of him,, although he has good grounds for appeal. He loses the benefit of any interest on the money, and, if he is successful, a refund should be made within a specified time. If he is slow in complying with ,the provisions which directly affect him, he is penalized, and he is also called upon to carry out a series, of transactions in connexion with which he cannot be expected to be an expert. He is also burdened with the obligation of complying with State income tax legislation, and it is easy for him to make a mistake. If he is in any way dilatory, woe betide him, for the penalties are here. He is heavily handicapped in the contest, particularly in the matter of appeals. On the other hand, the Department has the Commissioner, whose sole duty is to know everything in connexion with this measure and the regulations under it. He has a highly skilled and competent staff. “We have passed a generous Public Service Act and a Superannuation Act, which provide many benefits for public servants, and, in return, we expect efficiency, comjJete-ncy, skill, diligence, industry, and attention. But if they fail in any of these directions, who suffers? The taxpayer, every time. The least we can do is to place the taxpayer and the Department as nearly as possible on equal terms.
– Senator Keating has suggested that we should place the taxpayer and the Department on an equal footing, and Senator Newland urges that refunds should be made within thirty days, but he stops there. I am willing to do that, provided he agrees to a similar obligation on the part of the taxpayers in the matter of arrears, subject to therms being no other legal proceedings pending, in which case there should be no handing over of money by the Department* or calling up of arrears from the taxpayer. If the Committee will agree to postpone the clause on the understanding that it will not be further debated, and that we are in agreement that both the Department and the taxpayer should pay up within thirty days, unless legal proceedings are contemplated, I shall submit an amendment somewhat in this form as a new Bubclause 3 -
In both the cases mentioned in the last preceding sub-section the refund or further payment by the taxpayer shall be made within thirty days, unless an appeal is made to a higher Court, in which case the refund or further payment shall be made within thirty days after the delivery of that Court.
– The Department has always been very good, and I think very fair, .in granting extensions of time where requests for such extensions have been reasonable. I think the proposal made by the Minister (Senator E. D. Millen) would take away from the Commissioner the discretion which he has formerly had in the matter of granting time, and it would be a mistake to do that. The Commissioner has always, in my experience, exercised his discretion very wisely. We must consider what is fairest and most proper for the taxpayer, and in my view the fairest and most proper thing is to allow the Commissioner to have the same discretion in the future that he. has so wisely exercised in the past. Whatever wisdom there may be in the request put forward by Senator Newland and Senator Keating, I think it would be a mistake on our part to saddle the taxpayer with-
– The consequences of Senator Newland’s amendment.
– No, the consequence of the Minister’s suggestion.
Senator NEWLAND (South Australia) (“9.19]. - I do not propose for one moment to pit my legal knowledge against that of Senator. Drake-Brockman. i think the suggested new sub-clause would not take away from the Commissioner any ordinary discretion that he now has, and which he uses wisely, with ordinary taxpayers. It would not apply to ordinary taxpayers, but only taxpayers who have” appealed against an assessment, and whose money might be lying in the Department for a considerable time. Many months may be occupied .by an appeal if the taxpayer or the Department exhaust his or their full rights to appeal to the various Courts as provided for in the Bill. The Commissioner has the right, and has exercised it, to give the taxpayer extended time, or he may allow him to pay his tax in instalments. I do not think the suggested new sub-clause would interfere with that discretion at all. I am just as anxious that the taxpayer should pay up any amount that is due to the Department after he has exhausted his right to appeal as I am that the Commissioner should r.efund money owing to the taxpayer. With the consent of the Committee, I will withdraw my amendment with a view to accepting the amendment suggested by the Minister.
Amendment, by leave, withdrawn.
– Senator Drake-Brockman has raised a point which is full of interest. The new sub-clause was suggested because of a very pronounced demand from members of the Committee that, first of all, a definite time limit should be fixed -within which the Commissioner should make his refund, and, accompanying that demand, was an appeal that the two sides should be placed on an equality. The proposition I have offered to the Committee will achieve that.’ Neoessarily, in providing that equality, it does run the risk - at present I do not know how far that risk is substantial - pointed out by Senator Drake-Brpckman. Previously unlimited time could be given to the taxpayer, at the discretion of the Commissioner, in which to make his payments. Naturally, it was understood that the Commissioner would make his payments as promptly as he could, although a discretion was allowed him. Now it is said that we ought to tie him down hard and fast so that he must make his payments within a definite time. In order to meet the request for perfect equality, I have suggested the amendment. I have no objection to withdrawing the amendment or seeing it defeated.
Senator KEATING (Tasmania)
T9.251. - One would think from the comments of the Minister (Senator E. D. Millen) that this clause deals with the general taxpayer. It deals only with the appellant. Where a taxpayer objects to his assessment he may, within a certain time, give notice in writing to the Commissioner of his objection, stating fully and in detail the grounds of his objection. On the subsequent hearing of - his objection he is limited to those grounds of appeal. Clause 52 says - .The fact that an appeal is pending shall’ not in the meantime interfere with or affect the assessment appealed from; and income tax may be levied and recovered on the assessment as if no appeal were pending.
As a rule the amount due from the taxpayer is paid in full, and his appeal goes on. Then it is provided that if the assessment is altered on appeal the necessary adjustment shall be made, for which purpose amounts paid in excess shall be refunded, and amounts short paid shall be recoverable as arrears. The clause under discussion does not apply to every taxpayer, because every taxpayer is not an objector or an appellant. Only a certain percentage are objectors and appellants, and of that percentage there is again only a smaller percentage who find themselves in the posi tion of having paid short. It is in connexion with those who have made short payments that the Commissioner will be limited to compelling them to pay within thirty days. What fraction of the whole of the taxpayers would they be? Clause 55 states that -
The Commissioner may in such cases as he thinks fit - (a extend the time for payment as he considers the circumstances warrant, or
That clause covers the general taxpayer, but in the clause under discussion we are dealing specifically with a percentage of a percentage of the general body of taxpayers.
– I withdrew my amendment on the understanding that the Minister (Senator E. D: Millen) would submit his suggested amendment to the Committee.
-D. Millen. - I would suggest that Senator Newland should move the amendment.
– I would prefer the Minister to move” it. It is his amendment.
– I am’ satisfied with the clause as it stands.
– Then I moveThat the following new sub-clause be inserted after sub-clause 2 : - “In both the cases mentioned in the last preceding sub-section, the refund or further payment by the taxpayer shall -be made within thirty days,- unless an appeal is made to a higher Court, in which case the refund or further payment shall be made within thirty days after the delivery of that Court.”
Question put. The Committee divided.
AYES: 0
NOES: 0
AYES
NOES
page 3662
Majority
Duncan, W. L. Keating, J. H. Lynch, P. J. Newland, J. Payne, H. J. M. j Rowell, J. ! Senior, W. i Teller:
Foll, H. S.
Noes
Cox, C. F
Drake-Brockman, E. A Earle, J
Garling, H. C. M. Glasgow. Sir Thomas Millen, E. D
Pearce, G. F. Plain, W. Keid, M. Thomas, J
Teller: de Largie, H.
Question so resolved in the negative. Amendment negatived. Clause, as amended, agreed to. Clause 53 -
Amendment (by Senator E. D. Millen) agreed to -
That the words “ references or “ be inserted after the word “ to,” line 3.
– I wish to direct attention to what may be called a new feature which’ appears in this clause. It was introduced for the first time in the Income Tax Assessment Bill, which was put through in a hurry at the end of last session, otherwise I do not think it would have escaped notice. I should like the Minister (Senator E. D. Millen) to agree to the omission of the words “ and a Board shall not be bound in its consideration of any question by any rules of evidence.” That is a dangerous provision to include in a measure’ of this kind. The rules of> evidence are the result of hundreds of years of experience in the administration of justice and the determination of facts. .The Board of Appeal will have to carry out function’s very similar to those of a Court, and it is appropriate that it should be governed by the same rules of evidence as a Court of justice. Senator Pearce. - The Board will not be a Court.
– It is a body formed for the purpose of ascertaining facts, and there are proper rules which should govern all bodies whose function it is to ascertain facts. The rules of evidence are, as I have said, the result of centuries of experience, and have become as perfect as the ingenuity of man can make them. It so happens that at pre sent there is a lawyer on the Board of Appeal who is perfectly familiar with the rules of evidence, and most intelligent people have a general knowledge of those rules. I hope that the Minister will consent to leave out the words I have referred to.
– I cannot quite follow the hon- orable senator in his request. Subclause 1 reads: -
The Governor-General shall make rules for regulating the practice and procedure in relation to appeals dealt with by a Board of Appeal, and a Board shall not be bound in its consideration of any question by any rules of evidence, but in forming its decision shall be guided by good conscience and the facts of the case.
– Those are the ,rules of evidence which obtain in every Court.
– There is obviously intended, and is, a distinction between the two, and I venture the opinion that it is because of that distinction that the legal fraternity flourishes as it does. On the Board of Appeal there will be one lawyer and two laymen. The obvious intention is that in seeking to inquire into these matters the Board should not be too closely bound by rules of evidence, but may obtain information in a way which will appeal to laymen determined to be guided by good conscience in ascertaining the facts of the case.
– I do not think that the use of these words in the clause is an absolute novelty in. our legislation. Various bodies have been constituted from time to time by Parliament or by the Government, and in their commissions have been expressly exempted from this obligation of following too closely the strict rules of evidence, and empowered to inform themselves of the facts of a case by what is known as “ equity and good conscience.” The reason for that, I think, is that there may be an appeal to a legal tribunal.
– Yes, on questions of law.
– But not on questions of fact.
– That is so. It has been thought that if the Board is. confined in its investigations to rules of evidence in some instances what would not be strictly evidence might be received, and although that might not very seriously affect the finding of the Board, still there would lie an appeal from that Board to some other tribunal because of the wrongful admission or rejection of evidence that would not be admitted or rejected in a Court of law.
– On questions of mixed fact and law the Board in stating evidence might get things mixed up.
– If the Board improperly accepted or rejected evidence, although no substantial injustice might be done, the finding of .the Board might be upset by reason of that technical miscarriage of justice. In spite of what Senator E. D. Millen has said, the rules of evidence are the result of the accumulated experience of the various tribunals of the British Empire through centuries, and represent the best method of getting to the facts of a case. It would be possible for the Board of Appeal under this clause to accept hearsay evidence or documentary evidence as against a particular person, which would not be evidence or documentary evidence, as against that person in an ordinary Court of law.
– The Board might accept copies of letters.
– Yes, where originals would have to be produced in a Court of law. I know that this practice has been adopted in connexion with different bodies appointed in the past, and
I have never yet’ heard that as a result any injustice has been worked. If the Board is confined entirely to finding the facts, I think it will be able to deal with the matters referred to without contemplating that its findings will be liable to be upset because of some technical deviation from the rules of evidence.
, - If honorable senators will look at clause 16 of this Bill they will see that very grave questions in connexion with which it may be very difficult to distinguish between matters of fact and matters of law may come before the Board of Appeal. Clause 16 is the clause which defines what the assessable income of any person shall include. It is one of the most important clauses in the Bill, and it is one which we found it most difficult to handle. It presents extraordinary difficulties, not one of which could be settled as mere questions of fact. The Board, in arriving at its decision on such questions, will do so by consideration of a mixture of facts and law. Certainly the taxpayer would have an appeal on questions of law, but in many cases questions of law and of fact would be so inexplicably mixed up as not to be separable. I can see grave disadvantages to the taxpayer, and possibly to the Commissioner, in going to any higher Court with a matter, because of a departure which’ the Board might make from the well-worn path of -the rules of evidence, in taking evidence which would not be regarded as evidence, in the strict interpretation of the term, and would not be admitted in any Court of law.
– A taxpayer has the option of taking his appeal to some other tribunal.
– Not in connexion with his assessable income. Take also sub-clause 5 of clause 17 which provides that -
Any taxpayer who is dissatisfied with the decision of the Commissioner, Assistant Commissioner or Deputy Commissioner under” this section may require the Commissioner to refer his case to a Board of Appeal, and the Commissioner shall refer the case accordingly.
There is no right of appeal to a higher Court on questions of fact. What is a question of fact and what is a question of law is at times very confusing, and the .position is not going to be improved if the rules of evidence are not followed. There »is very much to be said for .Senator DrakeBrockma’n’s proposal, and I ask the Minister to accept it.
– As I understand my amendment is not formally before the Committee, I move -
That all the words after the word “ Appeal”., line 4, bo left out.
Amendment negatived.”
Clause, as amended, agreed to.
Clause 54 -
. - Oan the Minister say if it is intended to apply sub-clause 4 universally? I ask this question because many persons, unaware of this provision, may be called away suddenly to the United States of America or to Great Britain without having made provision for the payment of income .tax, but without any intention of evading payment. In many instances there would be some one representing them under power of attorney, but it is possible that at the last moment the passport officer, in the absence of a certificate signed by the Commissioner or other authority certifying that satisfactory arrangements had been made for the payment of the tax, may refuse to issue -a passport.
– Subclause 3 I think will meet the case stated by the honorable senator.
– What I want to know is whether this provision is intended to be applied to Australian citizens generally or only to those persons who are regarded as birds of passage, and who have rendered themselves subject to income taxation but are endeavouring to leave without meeting their obligations.
– The honorable senator in. his last remarks has indicated the purpose of the clause. I do not think any one need fear that an evil will arise under it. There is no ground for the belief that the Commissioner will be” unreasonable in his interpretation of the law, and that citizens of Australia going abroad will be subjected to one moment’s trouble. The provision is inserted to give ‘the Commissioner the very necessary authority to prevent individuals who are leaving Australia from evading their personal obligations to pay taxation.
– An arbitrary passport officer may refuse a passpoTt in certain circumstances.
– This matter will not rest with the passport officer only. Unless there is some very good reason why it should be withheld, the passport officer cannot refuse to issue a passport to a would-be traveller.
– I direct attention to the words “may leave Australia,” and to the general looseness of the verbiage in sub-clause 3. In civil process, where it is shown to the Court that a person is about to leave for the purpose of evading his creditors, or for some other reason, action may be taken to bring him up to the scratch; but under this sub-clause it is provided that if the Commissioner ha? reason to believe that a taxpayer “ may “ leave Australia, he may issue a demand for the payment of the tax. We should not clothe the Department with arbitrary power to inflict a serious penalty unless the Commissioner really has reason to believe that a taxpayer is “about” to leave Australia. The principle of the clause is really objectionable, and it is something new that has been engrafted on to our legislation. There is no difficulty at all about the ordinary civil process, so I fail to see why we should clothe the Department with greater power than is given to an ordinary creditor simply because it happens to be a Government Department.
– - What steps have to be taken under the civil process you mention?
– You can go im- . mediately into a. Court on affidavit and say that a certain person, a debtor, is about to leave Australia. Of course, you have to satisfy the Court that .he is about to leave, and then you. get the necessary authority to prevent him. It is being done every day. The Commissioner should not be in any better position than an ordinary creditor. Under this clause it “is possible that a taxpayer may be prevented from going about his business simply on the conjecture of some clerk in the Income Tax Department. In this Chamber, only a few weeks ago, we had two or three instances of people who had lodged complaints’ about unceremonious treatment on the part of a Department.
– And a perfectly satisfactory answer was given in those cases.
– The statements made were disproved. I had inquiries made into them.
– At any rate, there appeared to be a great deal of unceremoniousness about the business, and I do not think the Department should have the power to piao© anybody in a. false position. The onus should be on the Department to prove that a taxpayer is about to leave the Commonwealth and evade his obligations. Not many men are going to leave Australia for New Zealand or the Old Country without paying their income taxation.
– The honorable gentleman’s statement is not borne out-‘ by the experience of the Department. This clause has been , a godsend to the Department.
– Against persons who were attempting to evade their obligations ?
– They would have done so.
-Well , any delay in the payment of taxation occasioned by their departure would not be for any considerable length of time, because people very rarely travel any distance without appointing some one to act as attorney who may sue and be sued on their behalf, so that if there were any trouble action could be taken against them. The Commissioner should be required show that he had reason to believe that a person was “ about” to leave Australia, before the action contemplated in this clause could be taken.
– It may happen that between the time of the taxpayer’s return being received by the Department and the posting of his assessment by the Department, it would be necessary for the taxpayer to go to Java; China, India, or some other place outside Australia. In such circumstances the Commissioner could call upon him to pay his income taxation before the due date.
– The honorable senator need have no doubt on that point. There is no trouble with residents in Australia.
– But six months of the financial year may have elapsed, and. ordinarily, no return would be required till the end of the year. Would the. taxpayer in such circumstances be called upon before he left Australia to pay taxation for that portion of the year?
– Yes, undoubtedly.
– Well, I want that to be made quite clear, because if the taxpayer had remained in Australia he would not have been called upon to pay until the following year.
– He would be only taxed on the return lodged, which would be for the expired year.
– (Sub-clause 4 provides for’ securing the payment of income tax due by persons who are likely to leave Australia before the ordinary time for the making of returns becomes due, but there is a proviso which states -
Provided that this sub-section shall not apply to -
the representatives of an association or club established in any country for the control of any outdoor athletic sport or game in that country visiting Australia for the purpose of engaging in contests in Australia: c
I see here a loophole that may lead to some trouble. The proviso principally applies to visiting teams, such as cricketers. But I remember that last year there was a suggestion that a team of American baseballers might be brought out to play in Australia. This was seriously proposed in New South Wales; and I believe that before long an. American baseball team will be brought here. The baseball teams in the United States of America are not associations or clubs, but they are proprietary concerns, owned by one or two individuals, and sometimes by a company. I would like to see inserted in paragraph a of the proviso, after the word “ club,” the words, “not being a proprietary association or club.” We do not desire to give exemptions to a proprietary club that might be playing in Australia for profit. It should be required to pay income tax. iSenator Keating. - Just as a dramatic company would be expected to pay the tax on its profits.
– Yes. ‘
– The clause, as drafted, would avoid the difficulty which Senator Duncan fears. The exception applies not merely to the representatives of any club, but also to the representatives of an association or club established in any country for the control of any outdoor athletic sport. The clubs to which the honorable senator refers do not control the sport as the Marylebone Cricket Club does cricket at Home, or the Australian Jockey Club racing in New South “Wales.
– An association of proprietary clubs in the United States of America does control the game there. iSenator Pearce. - The individual clubs are the proprietary concerns in the United States of America.
– But there is an association of the proprietary clubs.
– In the opinion of the draftsman such clubs would be excluded. If the disability to which attention has been drawn ever arose, action would be immediately. taken to check it.
– I cannot support the suggested amendment. We cannot afford to have any bad advertisements for Australia. There are other countries besides the United States of America where these games are played. Will the Minister (‘Senator E. D. Millen) state how long sub-clause 5 has been in operation, and what occasion the Department has ever had to use it? It is a most extraordinary attempt to strike a blow at private enterprise. The sub-clause states -
Whenever the Commissioner ‘has reason’ to believe that any taxpayer establishing or carrying on business in Australia intends to carry on that business ‘for a short time only,, he may at any time and from time to. time require the taxpayer to give security by way of bond or deposit or otherwise, to the satisfaction of the Commissioner for the due return of, and payment of income tax on the income derived from the business.
I have had a good deal to do with the rendering of income tax returns, and I have never come across a case where a man starting business in Australia has been called upon to give a bond that he will pay his income tax before it is due. This is a very drastic provision.
– The suib-clause referred to has been found necessary in dealing with variety shows. !] ‘H? iSenator Garling. - It applies to any business.
– It gives the Commissioner considerable power, but. that flower is only used where the necessity for its application is apparent.
Clause agreed to.
Clause 55 agreed to.
Clause 56 -
If the income tax or additional income tax payable on an amended assessment is not paid before the expiration of the time specified in section fifty-fonr of this Act, or such further time as may be allowed by the Commissioner under section fifty-five of this Act, additional tax amounting to ten par centum of the tax unpaid shall be payable in addition by way of penalty.
– Under this clause a penalty may be imposed on any person liable to pay income tax if bc does not pay within the time stipulated. I desire to refer especially to the imposition of a 10 per’ cent, flat rate on any person who does not pay his tax on the due date. The Parliament that originally passed this penal clause sanctioned a provision that inflicts a very grave injustice and a harsh penalty on many individuals. A taxpayer may omit to pay on the due date for many reasons. He may have failed to apply for an extension of time. He may have paid the tax forty-eight hours after’ it was due, and if the tax amounted to £50, he would be mulcted in a penalty of £5. If the Department inflicted a penalty amounting to 10 per cent, per annum, it would be ample. A case was .brought under my notice some time ago where a taxpayer relied upon a person in his employ to forward the amount of the tax when it became payable. By some oversight, the employee neglected to do so, and the taxpayer was four days late. The amount was £40, and the penalty, £4, had to be paid. That seems a very harsh penalty for a very small omission. Ten per cent, per annum ^ a considerably higher rate of interest than the present bank rate. I move -
That after the words “per centum” the words “ per annum “ be inserted.
riO.15]. - I trust Senator Payne will not persist with his amendment, as it has beep proved by experience that it is necessary to impose a penalty by applying a spur to many taxpayers. It must also be remembered that the Treasury cannot carry on without adequate funds, and I trust consideration of the taxpayers’ interests will not cause him to entirely overlook the necessity of bringing in money which properly belongs to the country.
Senator KEATING (Tasmania) T10.16]. - I would have some justification for supporting Senator Payne if there was not this proviso to the clause -
Provided that the Commissioner may in any particular case, for reasons which in his discretion he thinks sufficient, remit the additional tax imposed by way of penalty or any part thereof.
I onlv trust that the Commissioner will in the exercise of that discretion take into consideration all the circumstances.
– I do not wish to harass the Minister (Senator E. D. Millen) by pressing my amendment. I feel that we ought to do all we can to enable the wheels of the Department to run as smoothly as possible, but at the same time we ought also to refrain from passing legislation which aggravates taxpayers. I had read the proviso, but in the case I referred to when a delay had been innocently occasioned the taxpayer had to pay a fine of approximately £4 10s. on a £40 assessment. I was assured that, although an explanation was given, the Department insisted on the full penalty being paid. I should have thought that such a feasible explanation as that quoted by me would have been accepted by the Deputy Commissioner, but such was not the case. I have always found the officers of the Department most courteous ; but instances have come under my notice where taxpayers have not received that consideration to which they are entitled. The Minister said that the Department must get the cash, but he must remember that if it collects a penalty of 10 per cent, per annum it is more than recouped any monetary inconvenience, because it is receiving a higher rate than the Government would have to pay for accommodation outside if required. I intend to press the matter to a division if I can obtain any support.
Amendment negatived.
Clause- agreed to.
Clauses 57 to 60 agreed to.
Clause 61 (When tax not paid during lifetime).
– This is a provision that I have always looked upon with a good deal of apprehension and alarm. Paragrapns a, b, and c give the Commissioner certain powers. The clause reads -
The following provision shall apply in any case where, whether intentionally or not, the taxpayer escapes full taxation in his lifetime by reason of not having duly made full complete and accurate returns. ….
No lapse of time shall prevent the operation of this section, and the Commissioner may take all such proceedings and exercise all such powers and remedies for the purpose of giving effect to this section and recovering the double tax as in the case of , ordinary assessments and taxation.
That applies where a taxpayer has failed to make a full, complete, and accurate return, whether intentionally or otherwise. There is no Statute of Limitations in this ease, and k is another instance in which the taxpayer is heavily loaded. Sis actions in dealing with the Department during his lifetime may have been perfectly honest and straightforward, but it may be found after death that through inadvertence he escaped full taxation because his returns were not complete and accurate. Ten or .fifteen years might elapsej and after he died his representatives might find that they had to pay up under paragraphs a, b, or c, or all of them. There should be some Statute of Limitations in such cases unless the Department can prove fraud or wilful intention on the part of the .taxpayer to escape taxation during his lifetime. I trust the Minister (‘Senator E. D. Millen) will agree to some amendment.
Clause agreed to.
Clause 62 (Provision for payment of tax by executors or administrators).
– As the Minister (Senator E. D. Millen) did not reply to my comments on tbe previous clause, I wish to direct his attention to this provision.
– I thought the honorable senator would take my silence as conclusive.
– The clause provides that if at the time of a person’s death, tax has not been assessed and paid on the whole of the income derived by that person up to the date of his death, the Commissioner shall have the same powers and remedies for the assessment and recovery of tax from the executors and administrators as he would have had against that person if he wore still alive. How are the executors or administrators to be absolutely bound by such a provision where there is no qualification? A taxpayer may not have left any books or records, or he may not have been in the habit of recording his transactions in a business-like way, so that it would be impossible after his death for his representatives to satisfy the Department as to his income during a particular year. There appears to be no means of the executors or administrators avoiding the liability.
– They could only secure the best returns with the material at their disposal.
Clause agreed to.
Clause 63 (Statute of Limitations).
– I must also determinedly protest against “this clause, because I am strongly opposed to the Income Tax Department being exempt from any Statute of Limitations. If ‘ it were ever within my power to deal with the Taxation Department I should make it my duty to see that that Department, equipped and armed as it is, shall observe the ordinary rules of business, and shall be subject to the same conditions as are taxpayers in the community. I shall oppose the clause, and if supported shall press the matter to a division.
Question - That the clause be agreed to - put. The Committee divided.
AYES: 0
NOES: 0
AYES
NOES
Aves . . . . 7
Noes . . . . . . 11 jonty
Cox, C. P. Earle, J. Givens. T
Glasgow, Sir Thomas
Ayes
Millen, E. T). Pearce. G. F
Teller: tlo Largie, H.
Noes
Drake-Brockman, E. A. Payne, H. J. M
Garling, H. C. M. Reid, M
Keating. J. H. Rowell, J
Lynch, P. J. Senior, W. Millen, John D. Teller:
Newland, J. Foll, H. S
Question so resolved in the negative. Clause negatived.
Clauses 64 and 65 agreed to. Clause 66-
Amendment (by Senator E. D. Millen) agreed to -
That in sub-clause ( 6 ) , after the word “ Act,” third occurring, the following words be inserted : - “ and any judgment debt and costs in respect of tax.”
– The whole of clause 66 appears to be new matter. The clause proposes, in effect, to give the Commissioner power to garnishee without the intervention of a tribunal.
– The same provision is in the existing law. The clause recasts the existing section of the Act. There is only one portion of the clause which is new in essence, and that is the first line of sub-section 5, where the words “ or the fine and costs “ have been inserted.
Clause, as amended, agreed to.
Clauses 67 to 75 agreed to.
Clause 76-
– I do not know that this clause will effectuate what is intended on its present wording. It would be impossible in most of these cases to produce the telegram purporting to be signed by the Commissioner or Deputy Commissioner.
– They could produce the telegram received.
– That would not purport to be signed by the Commi<ssioner. It might be necessary, under this provision, to produce the telegram actually signed by the Commissioner. Suppose the Commissioner sent a telegram from Melbourne to Rockhampton authorizing somebody to conduct a prosecution. The telegram received in Rockhampton would not purport to be signed by the
Commissioner ; it would purport to be a message based upon a telegram signed by the Commissioner in Melbourne. In many cases the signature on a telegram delivered would be typed. I think there are some words in the High Court Procedure Act or rules which would cover this matter. In strict law, and on the rules of evidence, the original document must be produced, and I do not want the taxation authorities to be ruled out because somebody raises an objection on the ground that a typed telegram does not purport to be signed by the Commissioner. I move -
That in sub-clause 2 the words “ be signed “ be left out, with a view to insert in lieii thereof the words “ have ibeen sent “.
Amendment agreed to.
Clause, as amended, agreed to.
Clauses 77 to 80 agreed to.
Clause 81 (No objection for informality).
– I am aware that a similar provision to that contained in this clause has been inserted in modern legislation in connexion with procedure before Justices in some of the States. None the less, I take strong exception to it, and, if I may be permitted, by way of illustration, to make some very brief remarks regarding other provisions in the Act, it will shorten my references to the rest of this Bill very considerably. I object to this clause, just as I do to clauses 82, 83, and 84, which follow it. I object to them on the general ground that they give too much latitude to the Department. They allow the Department to make any errors it likes - that is, in effect, the position. The clause allows no objection for informality. “We have a Department well officered by highly-skilled, technical, experienced, expert men, but they can make as many mistakes as they like and they go scot-free, but the taxpayer must pay the penalty of his mistakes every time. The ‘same objection can be applied to clause 82, which says -
A conviction, warrant of commitment, or other proceeding, matter, or thing done or transacted in relation to the execution or carrying out of any taxation Act shall not be held void, quashed, or set aside by reason of any defect therein or want of form, and no party shall bc entitled to be discharged out of custody on account of such defect.
Clause 84 is equally objectionable -
In every taxation prosecution the averment of the prosecutor or plaintitf contained in the information, declaration, or claim shall bc deemed to be proved in the absence of proof to the contrary; but so that when an intent to defraud the revenue is charged the averment shall not be deemed sufficient to prove the intent.
I think we are unduly loading the taxpayer with responsibilities which are not reciprocated by the Department. I object to these clauses on general principles. I know it is too late in the evening, and also too late in the session, to deal with these matters effectively, but I hope that at some time this Parliament will deal with them in a way which will be more equitable, as between the tax collecting Department and the taxpayer.
.- I think that Senator Keating will agree with, me that provisions similar to these are to be found in almost every Act dealing with criminal prosecutions. I do not know of any Justices Act which does not contain a provision similar to clause 81, providing that no objection shall be taken to an informality in an information or summons. It seems to- me that these clauses only give the powers which are given to all Courts. I speak with special, reference to legislation in New South Wales, and I have no doubtthat similar legislation is in force in all the States. Clause 81, for instance, seems to me<> to be almost a facsimile copy of words to be found in tihe Justices Act of New South Wales. They are included for the purpose of preventing either party being affected by mere technicalities. I do not think that any evil will follow from the inclusion of these clauses.
– Such provisions tend to carelessness in the Department.
– I admit that, but similar provisions have been in force under the New South Wales Justices Act for many years past.
– That is chiefly as between individuals.
– No; I am dealing with offences that come before a bench of magistrates. Under the Justices Act, should the Court, on going into the facts before it, find some mere error in an information, it may amend it in order that the matter shall come before it in a full technical sense. I” understand that the honorable senator is not pressing his objections to these clauses.
– No.
Clause agreed to.
Clauses 82 to 86 agreed to.
Clause 87 (Release of offenders).
– I do not object to the provision that offenders shall be released in certain circumstances, but there is some information which I would like to get from ‘the Minister (‘Senator E’. D. Millen). Offenders are imprisoned in State gaols. I have never been quite sure in my own mind what is the (position with regard to the detention of Commonwealth offenders in State gaols. I am well aware that under the covering clauses of the Constitution laws passed by the Parliament are binding on State Courts .and authorities, but a gaoler under this clause will be a State officer, whilst the duty cast upon him will be cast upon him by an Act of the Commonwealth Parliament. Supposing an offender under this clause is not released for one year, can the Minister tell me who will be responsible for his maintenance. Do we ask the ^State to maintain him, or does the Income Tax Commissioner pay for his keep?
– I do not know who pays for his keep, but I am perfectly certain that he will not starve.
Clause agreed to. Clause 88 -
No person shall be twice imprisoned upon the same conviction, but the suffering of imprisonment for non-payment of a penalty shall not release the penalty or affect the right of the Crown to collect the amount in any manner provided by this Act other than by imprisonment of the person convicted.
– This is another very severe provision, against the taxpayer. It provides for imprisonment for non-payment of penalty, not non-payment of “tax, and the offender cannot be imprisoned a second time. I should have thought that the clause would provide, an alternative of imprisonment if the penalty were not paid.
– That the offender might “ take it out.”
– My difficulty is that under this clause, if he cannot pay the penalty and “ takes it out,” when he is released he is still liable for the penalty. I think that is hardly fair. The penalty and imprisonment should be alternatiyeB. ~”
I understand that, at the present time, the practice adopted by the Department is that if a taxpayer does not pay his tax he is taken to Court by the Commissioner, who gets an order for payment, and if the tax is not paid the taxpayer is imprisoned, not for having failed to pay his tax, but for contempt of Court in failing to respond to the order issued against him. He still has to pay the tax, plus any fine. But I think there is something new in this clause, because where it would ( appear that there is an alternative of fine or imprisonment, should the offender go to prison, he still has to pay the penalty.
– I shall be content if the Committee negatives this clause.
Clause negatived.
Clauses S9 to 95 agreed to.
Clause 96 (Covenant by mortgagor to pay tax).
– I should like to know why the 13th of September, 1915, was fixed in this clause ?
– Because that was the date of the commencement of the Federal Income Tax Act.
– Before that date the taxpayer would not have been liable to income tax, and it occurred to me that this clause was comparing his position at the present time with what it would have been prior to the 13th September, 1915 It was for that reason I wished to know why that date appears in the clause.
Clause agreed to.
Clauses 97 to 99 agreed to.
Clause 100 -
Notwithstanding anything contained in anr Act repealed by this Act, a person who *x on active service or in any way attached to the Naval Forces of the Commonwealth during the wai: which commenced on the fourth day of August. ‘One thousand nine hundred and fourteen, shall not, by reason of such service, be entitled to exemption in respect of income derived by him from personal exertion after the thirtieth day of June, One thousand nine hundred and twenty.
.- I wish to ask whether this clause applied after the 30th June, 1920, if the person concerned still remained a member of the Naval Forces?
– The honorable senator wishes to know whether the Department can recover arrears since 1920.
– Y«e. .
– Under this clause there is no exemption in or out of the Navy after the 30th June, 1920. Senator KEATING (Tasmania) [11. 0]. - Does not the question asked by Senator Foll suggest that an officer in the Naval Service is liable to be proceeded against by the Depaxtment in respect of income tax since the 30th June, 1920 ?
– He became an ordinary taxpayer then.
– What is his present position 1 He got exemption from i the 4th August, 1914. Is that provision operative still?
– This puts a period to it!
-Why is the period fixed as since June, 1920 ?
– That was the end of the first financial year after the termination of the war.
– It will be pretty hard on these men if they are required to make up practically two years’ income taxation.
– .Does a member of the Permanent Naval Forces pay income tax ?
– Yes.
– I do not think this is going to be a hardship. The men on active service, either in a military or naval capacity, understood that they were to be exempt from income taxation during that period, and no doubt a good number of them have desired to continue in the same position, but the Department now calls upon them to make returns.
– But why make the provision retrospective’ to June, 1920 ?
– Is it really necessary to insert the clause at all ? Would it not be in the power of the Department, without this provision in the Bill, to call upon those men to pay up their arrears of taxation ? Judging by the marginal note - “ Naval Service,” the clause is intended to deal only with the Naval Forces; but does not the wording suggest the inclusion of Military, as well as Naval, Forces?
– The Military Forces were demobilized, and are dealt with separately.
– I think we ought to insert after “ service “ the words, “ with the Naval Forces,” in order to make the provision quite clear.
.- The Minister (Senator E. D. Millen) referred to the fact that the Military Forces were dealt with separately, and were demobilized. But what is the position of a man who was a member of the Permanent Forces prior to the war, and who served with the Australian Imperial Force? During the war, with others, he had’ the benefit of the exemption clause in the Act; but what is his position since returning to his original status?
– When he. ceased to be a member of the Australian Imperial Force, and resumed his permanent position in the Defence Forces, he became an ordinary taxpayer, just as it is now proposed to make members of the Naval Forces taxpayers.
Amendment (by Senator E. D. Millen) agreed to -
That after the word “ service “, line 3, the word “ with “ be inserted.
Clause, as amended, agreed to.
– I move -
That the following new clause be inserted : - “ 100a. Statutory Rules 1922, No. 150, shall have effect and shall be deemed to have had effect in relation to assessments for the financial year commencing on the first day of July, 102lj as if they had been made on the first day of July, 192.1..’”
Honorable senators will remember that until comparatively recent times, by regulation under the Act, the Department fixed certain prices for calves, the value for the natural increase being fixed at from £3 to £6. As a result of representations made by the stock-owners thos;1, valuations were reduced” by two-thirds. That was done by regulation, but a doubt has arisen as to whether the regulation could be made retrospective. The Department has acted on the assumption that it could, and gave the stock-owners the benefit of the provision some months ago; but in view of a doubt as to the validity of this action, it is proposed now to insert this new clause to give legislative sanction to what has already been done.
Senator KEATING (Tasmania) ril.10]. - The amendment has not been circulated, and I intend te oppose it. The validity of the statutory rules to which the clause refers is now in question sub judice. “ I happen to know, because I am acting for the party who is contesting their validity, and I believe I have to be in Court to-morrow at 10.30 o’clock on an interlocutory application in connexion with this matter, so I am’ certainly not going to take any part in legislation to declare valid, as from some date past, regulations the validity of which is being contested.
– Will this amendment affect the matter, you mention 1
– I cannot say. I heard the Minister say something about the price set upon stock, and that is the regulation the validity of which is being Questioned.
– The amendment seeks to relieve the taxpayer to the extent of two-thirds the original value of the stock.
– And that relief is being afforded at the stock-owners’ own request.
– The validity of the whole regulation is being challenged.
– I do not think the honorable senator will be contesting the effect of this amendment unless be is briefed for the Crown.
– I know that the regulation in question deals with the valuation of stock, including calves and matters of that sort, and I am not going to take any part in legislation to validate it.
– This new clause merely validates the regulation that reduced .the value of stock from a high standard to a reasonably low standard. It is already in force, but a doubt has arisen as to whether it could be done legally by regulation.
– For the want oi better information, and because of the hurried form in which it is introduced, I can only register my protest against the amendment.
Senator GARLING (New South Wales) T11.141. - The amended statutory rules which the proposed new clause seeks to validate provides .for an amendment of reeulation 46 of the Income Tax Regulations in this manner -
This is all to the benefit of taxpayers, who will be entitled to bring the calves into account at lower values. I cannot conceive of any action that we are proposing to take being contested by the taxpayers, or, that we shall be doing harm to any person.
.- The amendment was made by the Commissioner at a time when calves were assessed at about .three or four times the actual market value. Many stock-owners in Queensland were killing their calves because it was more profitable to do that than to assess them at a very high rate. The reduction in the assessment value was very much appreciated. .
Proposed new clause agreed to.
Clause 101 agreed to.
Postponed clause 13- (0.) Any year in which the taxpayer was not carrying on business and was not in receipt of a taxable income shall not be counted as an average year, but any year in which the deductions allowable in his assessment to a taxpayer engaged in business left no taxable income, shall be capable of being a first average yeaT, and, if an average year, shall be taken into account in ascertaining the rate and the excess of allowable deductions over assessable income shall be taken into account in calculating the average.
– When this clause’ was before the Committee yesterday, some criticism was directed towards sub-clause 6, and I hope that the suggestion I am now about to make will fairly meet that criticism. Honorable senators will find that the clause includes two classes of taxpayers - those who are not engaged in business, and those who are. It will be seen from the first two or three lines of the sub-clause that they deal with one subject, and are complete in themselves. The words are -
Any year in which the taxpayer was not carrying on business and was not in receipt of a taxable income shall not be counted as an average year.
That meets the case of the non-business man whose income is on the down grade, and it provides that his averaging period shall not commence until his income commences to rise again. The first year in which it. shows an improvement is to be regarded as’ the first year of his’ averaging period. I then propose to divide the balance of the sub-clause into two paragraphs, dealing with the man whose income is derived from business.
– Including income from property?
– Yes. The first paragraph would be as follows : -
Any year in which the taxpayer was carrying on business but had no taxable income shall be capable of being a first average year.
The second paragraph would ra.ad -
In the case of a taxpayer carrying on business any excess of allowable deductions over assessable income shall be taken into account in calculating the average.
This means that in a year where a loss is sustained the loss will be set off against the profit of a succeeding year. If this errs at all, it errs on the side of generosity. I move -
That in sub-clause 6 the word “an”, line 4, be left out, with a view to insert in lieu there the words “ a first “.
– I have been trying to discover the reason why such a complicated system as the averaging method has been introduced. I appreciate the present proposal of the Minister (Senator E. D. Millen) as compared with the original suggestion with regard to the averaging of incomes, but I feel that this is the only opportunity I shall have to express my opinion regarding that system. In the first place, I believe it will lead to a very large amount of additional work on the part of the’ Department - work that could have been obviated if a different; system had been adopted, so that, actual losses incurred in one year would be allowed for in the return for the following year. The Minister points out that his amendment’ will have that effect, ibut surely a simple amendment in regard tei ordinary returns would have been all flint was necessary. No taxpayer objects to paying tax on his actual income, and that could have been arrived at simply by providing for a deduction of the loss in any one year from the profit in another year. That would have got over the complicated system of averaging. The Minister made a point of the great saving that would be effected because of the large number of taxpayers who would come under the exemption provision. I think, however, that the saving effected by the ‘increased exemption would be entirely lost by the extra expenditure involved by the adoption of the averaging system. I do not approve of that system at all.
– Honorable senators have been led to believe that losses are not to be brought into account under the averaging system embodied in the Bill.
– I hope that no words of mine ha.ve led any honorable senator to believe that.
– I think I remember a speech in another place by the Treasurer (Mr. Bruce), in which he said that the choice lay between bringing forward losses or adopting the averaging system, and he said that the averaging system as recommended by a majority of the members of the Taxation Commission had been adopted by the Government. I now understand that a loss made in any particular year is to be set off against the income of the following year. I compliment the Government on having taken the fair course.
.- T want an assurance from the Governnent that this policy will not prove to be a penny wise and pound foolish one. I made some investigations the other day in connexion with the averaging system, and I was advised that under the higherrate of exemption something like 200,000 taxpayers, who at present have to send in returns, would not be required to do so, and that the departmental staff would be considerably reduced. Owing to the adoption of the averaging system, I am of opinion that the present staff will not only have to be retained,, but increased. That information was made available in the course of certain investigations that I, in common with some other honorable senators, was making in regard to office accommodation required by the Income Tax Department in one of the States. I realize that these amendments have been brought down for the sole purpose of lightening the burden of taxation, but I do not want to adopt a. system that will mean robbing Peter to pay Paul. If taxpayers were allowed to deduct losses, I do not see that the averaging system would be necessnry.
– No such assurance as Senator Foll has asked for can be given. It is hardly conceivable that any method proposed would command universal approval. The Government referred this matter to a Royal Commission.
– Was the averaging system originated in Australia?
– I cannot answer that for the moment. That question does not affect my judgment at all. Let the matter be decided on its merits. The Commission devoted considerable time to its investigations, took evidence on a variety of proposals submitted by advocates of different schemes, and came to the conclusion by a four to three majority that this was the bes.t. The Government considered the proposal, and haying coincided with the views of the majority of the Commissioners, embodied the scheme in the Bill which is now before the Committee.
– It was not a very big majority.
– I have seen important matters decided by equally small ones.
– Were they all expert in questions of taxation.
– Yes; as we are in this Chamber. The Government have studied the report, and have decided that the recommendations of the majority are such as can safely be recommended to Parliament. Senator Foll expects an assurance that the scheme is not going to impose additional work on the Department. That assurance I cannot give. It is also impossible for me to guarantee how the system is likely to work out, and all T can say is that it is presented with the authority of a Commission, which, constituted as it was, should be able to submit a proposal worthy of our acceptation.
Senator GARLING (New South Wales) ril.33].- The Minister (Senator E. D. Millen) has put the matter’ very modestly when he says that a great concession will be granted to the . taxpayers. It seems to me that such is the case, and I am quite sure that we can recommend this method of dealing with incomes. I am not quite sure that the State is not giving up a little more than it should; but at all events the taxpayers should not grumble. The point
I want the Minister to make clear is whether, when the first average year is fixed, the periods of five years will go on continuously, irrespective of incomes increasing or decreasing.
– Once in, always in.
– That is a point on which a great many will be glad to have a definite statement. I have heard a number of questions asked in that direction within the last two days.
– If it were not so, the honorable senator will readily admit that when a taxpayer’s income was increasing he would want to get out.
– Tes. We are starting them off fairly, and after that they must take their chance whether their incomes are on the up or on the down grade.
Amendment agreed to.
Amendments (by Senator E. D. Millen) agreed to -
That in sub-clause 6 all the words after”yean”’ second occurring be left out.
That the following new sub-clauses be inserted - “ (6a.) Any year in which the taxpayer was carrying on business but had no taxable income shall be capable of being a first average year. “ (6b.) In the case of a taxpayer who is carrying on business, the excess of allowable deductions over assessable income in any year which is an average year shall be taken into account in calculating the average.”
Clause, as amended, agreed to. Schedule and title agreed to. Bill reported with amendments. Motion (by Senator E. D. Millen) proposed -
That the report be adopted.
Amendment (by Senator Pearce) agreed to -
That the Bill be recommitted for the reconsideration of clause 16.
In Committee (Recommittal) : Clause 16-
The assessable income of any person shall include -
profits derived from any trade or business and converted into stock-in-trade or added to the capital of or in any way invested in the trade or business:
Provided that for the purpose of computing such profits the value of all live stock (not being live stock used as beasts of burden or as working beasts), and trading stock (not being live stock), not disposed of at the beginning and end of the period, in which the income was derived shall be taken into account:
For the purposes of this paragraph “ Value “ means -
in the case of live stock (not being live stock used as beasts of iburden or as working beasts) - - the values as prescribed: and (ii) in the case of trading stock (not ibeing live stock) - the actual cost price or market selling value of each article of trading stock, or the price at which each article of trading stock can be replaced, at the option of the taxpayer in respect of each article;
it shall be optional whether natural increase be taken into account at fixed value or when realized upon.
– I desire to test the feeling of the Committee in regard to sub-paragraph ii of paragraph a, which refers to the value of trading stock, the value, of course, being arrived at to enable a taxpayer to” furnish his return to the Department for income j tax purposes. When the clause was before us on a previous occasion, I pointed out that in its present form it provided that, no matter which alternative a trader used, in the event of any stock having depreciated in value, as it does in any ordinary mixed stock, he would of necessity have to pay on a higher income than he had actually earned during the year. My statement was contradicted by the Minister (Senator E. D. Millen), who conveyed the impression that, under this provision, a trader or manufacturer would be dealt, with much more liberally than under the existing law.
– What is the honorable senator’s alternative proposition ?
– To leave out the word ‘ “ and “ at the end of subparagraph i, and to eliminate sub-paragraph ii.
– What case would then be set up?
– I shall give a case which would apply to hundreds of trading concerns in Australiai I shall assume that T am entering business and have purchased a £10,000 stock. At the end of the first year, having decided to keep my stock at par, I take’ stock by the method always accepted by accountants, financial institutions, and others as correct. At the end of the year I find, taking article by article - the clause provides “ in respect of each article “ - that half of the stock has depreciated in value for many reasons, one being a falling off in the market value, and another that portion of the stock has become shop-soiled. We will assume that one-half of the stock has depreciated in value to the extent of £1,000, and various articles which cost £5,000 are put down at £4,000, which I consider their value after depreciation. I then take the balance, which is in a somewhat better condition, as at the actual cost price, rather than inflate the value in the balance-sheet because of some problematical increase in value, because if I’ did and required accommodation from a financial institution, it would demand that the stock sheets be produced. It would not -accept as accurate a stock sheet based on values that had appreciated, and, therefore, the actual cost price would be shown. ‘ That has been the practice, and it has been approved by the Commissioner. (What is proposed? The first option is that of taking the stock at cost, which would be, say, £10,000; the second is to adopt the market selling value of each article of trading stock. The market value of half the stock, we may assume, is £6,000, whereas it cost me £5,000. The depreciated half is worth £4,000, so that the total value would be £10,000. I have another alternative of taking the. stock at the replacement value. If the appreciation by £1,000 in half the stock has been brought about by a market fluctuation, and the depreciation of the other £5,000 worth because of a fall in replacement values,, then the figures would be: £4,000 for stock depreciated to £4,000, the aotual replacement value of which is £4,000, and the cost of which was £5.000. Of the other half of the stock the replacement value would be £6,000, although it cost £5,000, and thus there would be a total of £10,000, and the result, under the three alternatives, would lie the same. In the first plnce the depreciation is an absolute fact, and in the second place the appreciation is only problematical, because a month afterwards there might be a depreciation through a. fall in market values. If, under either- of the three alternatives, my income tax was assessed by the Commissioner, I would pay on ?1,000 more income than I had actually earned. T would be taxed on an addition to my capital. The Department, further, would not gain anything by this. If I had to pay on the appreciated value of the stock which is assumed by the Department to bring me in an additional income of the value of that appreciation^ that appreciated value would be carried forward to the next year, and consequently my income for the next year would be diminished. In the first year of the operation of this clause, the taxpayer would be compelled to pay tax on ?1,000 more income than he had actually earned. It would certainly come back to him: in the next year, but . why should that handicap be put upon him ? Another and more serious handicap would also be placed upon him. He would be compelled to prepare his balance-sheet in the ordinary way according to the legitimate method of stocktaking, and he would have to prepare another balancesheet to meet the conditions laid down in the clause. The first balance-sheet would be the only one that would be accepted by any creditor upon whom he was dependent for financial help to carry on his business. He would not be able to get any financial help from any one on the basis of a balance-sheet prepared under any of the alternatives mentioned in the clause. No man would lend or advance’ money on the problematical increase of profit a trader might get, but only on the actual result of the year’s operations. Neither of the alternatives meet the case, but’ the present Act meets it fairly and reasonably.
– The present Act does not define value. This clause does.
– And in defining value it puts on an assumed value. Are we proposing to tax people on their income or on the possible income that they may earn in the future?
– The very case that the honorable senator ‘ has mentioned is provided for in the clause.
– It is not. I would take stock that had been depreciated, article by article, at what I considered to be’ its real value. The half of the stock which had not depreciated in value, but had appreciated to, the extent of ?1,000- -
– -The honorablesenator would take in at cost.
– No, I would not, if I complied with the tenns of this clause.
– Then the honorable senator ought not to .be in business.
– The honorable sena.tor may take the appreciated price instead, of the cost price for the appreciated portion of his stock. In his illustration he ha? not exercised the right option, and that has made a ?1,000 difference.
– I cannot see that.
– I am afraid that is the trouble. -
– This . matter has been submitted to the consideration of people who have gone into it very carefully, and they assure me that my contention is correct.
– (Senator Bakhap ) - I must draw the honorable senator’s attention to the fact that, the time allowed him under the Standing Orders has expired.
– I am particularly interested in this clause. I have gone through it very carefully, and I accept the assurance of the Minister (Senator E. D. Millen) that a trader has three options. Ee may value his stock1 at cost price, market price, or the price at which the articles could be replaced. I cannot see that he should require anything more than that. I have tried to explain that to Senator Payne. The only way in which I think the clause could be improved would be to eliminate the market selling price. If the clause merely said that trading stock could be taken in at cost price or the price at which it could be replaced, I think that would meet the case.
– I should like to know whether, under this clause, a trader can take part of one and part of another option.
– Each article can be taken under any one of the threeheadings.
– That is not so from my reading of the clause. I can quite realize the position stated by Senator Payne. A trader in taking his stock will have regard for the cost price, but he- does not necessarily put that price down as the value of his stock. There might be some article ‘ which had gone out of fashion, or been depreciated by shop soilage, and then, as an honest trader., he would have to write down his stock.
– And if a trader’s stock had appreciated, he would naturally put it in at the cost price,- and not the selling value.
– A man starting to make out his stock-sheets has ohe of three options for each article. Suppose I am making out a stock^sheet for drapery. I find that the cost price of my Manchester goods has appreciated, and I put them down a.t their actual cost. Jn men’s general wear I find that everything has depreciated, and here I put down the market selling value. Can I put down one part of my stock at cost, another part at the market selling price, and another part at the replacement price?
– The honorable senator can even take articles- of the same character and return them under different heads.
– That is correct; but I am afraid that the clause does not carry that interpretation on its face.
– “ The actual cost price or market selling value of each article of trading stock.” It is as plain as it can be.
– If that is the interpretation of the Department I accept it without hesitation. I wished to be sure that the taxpayer in trade would not find that he was bound by one of the three methods of valuation.
,. - The. Minister (Senator E. D. Millen) suggested that the taxpayer had three options and three only - cost price, market value, or replacement price. Now the honorable senator says that the taxpayer has more than three options, and it does not apply to taking his whole stock down.
– The clause savs ‘ ‘ each article. ‘ ‘
– Then the illustration I gave with regard to each article’ applied. There might be a thousand articles and the taxpayer might apply one method to one class of merchandise, a second to another class, and a third to a different class. If that course be followed it will be found that- the figures I compiled will work out. correctly.
– They would , if the taxpayer were a stupid man and adopted the method of valuation which would hit him hardest; but that is the last thing the average taxpayer would do.
– Personally, I would prefer to eliminate this part of the clause, in order that we might go back to the practice we have been following in the past. This provision will not be of any advantage to the .Department. It will add to the difficulty of making out returns, and may lead to more income tax being extracted from the taxpayer than .he is properly liable for in the first year of its operation, though, I admit, he will be reimbursed in later years.
Sitting suspended from 12.5 to 1.15 a.m. (Friday) .
– I direct the attention of the Committee to paragraph c, which deals - with the valuation of live stock, and states that it shall be optional whether the natural ‘ increase shall be taken into account affixed value or when realized upon. The provision was introduced with the idea of helping live-stock owners, but I ask honorable senators to consider what it means. A stock-owner who took advantage of the option would not credit himself, in his annual returns, with anything on the natural increase until a few years later, when he would return them in a lump sum “which would, of course, be considerably greater than if he were taking them, into account at a fixed value annually. He would be penalized, because he is entitled to deduct working expenses in connexion with the natural increase, but, as he would not be returning income for the natural increase . annually, he could not make that deduction. It would * be difficult for him to analyze his working expenses in this way. If, for instance, he employed three or four men about his place, it would be exceedingly difficult for him to say what proportion of labour costs was to be charged to the care of the natural increase, which would _ o not be returned as income, and how much should be debited to the care of stock that did return income. To do this, he would be under the necessity of keeping elaborate books of accounts. If the Commissioner were to call upon, stock-owners to furnish returns in this way, I am. certain that stout protests would be received from all over the Commonwealth. As the Commissioner could not allow any deduction for working expenses in connexion with the natural increase, because there would be no income in respect of the natural increase returned for the year, it would mean that when bhe stock-owner ultimately realized after, say, three or four years, he would get no deduction at all for any amount he might have paid, by way of wages, before bringing the stock into account. For this reason, I intend to ask the Committee to agree to the deletion of the paragraph. If it is eliminated the stock-owner, in ‘ making his returns, will be able to select some point between the maximum, and minimum values to be fixed by the Commissioner, and,, having done that, he must, during the accounting period, adhere to his values in the furnishing of his returns. This provision will allow of a considerable measure of elasticity, and will enable the stock-owner himself to determine the figure at which the nataral increase shaill be returned as income.
– Will the Commissioner fix the value each year?
– No. With regard to the natural increase, the prices ranged1 up to £6 for calves, but later it was brought down by regulation, which we have just legalized by the insertion of a- new clause. The reason why a stockowner, once having selected his own valuation, must adhere to it is, I think, fairly obvious. If he fixed on £2 this year and £1 next year, he would, to that extent, be evading his obligations to the Department.
– At present calves are worth nothing. Suppose next year they rise in value to £1 ? What would be the position of the Commissioner then ?
– The stock must be worth something on the books. of the owner, who is permitted to select his own valuation. “I understand the figures are for calves, minimum 5s., maximum £1; and for sheep, minimum 2s. 6d., maximum 10s. These rates are so reasonable that, even allowing for depreciation in the state of the market, I think it hardly likely that any one will cavil at them. I am certain that the stock-owners themselves will regard this as an extremely liberal provision. I move -
That paragraph c be left out.
Amendment agreed to.
Clause, as further amended, agreed to.
Bill reported with a further amend- 1 ment.
Motion (by Senator E. D. Millen) proposed - That the reports be adopted.
Amendment (by Senator Pearce) agreed to -
That the Bill be recommitted for the reconsideration of clause 100.
In Committee: (Second Recommittal). Clause 100 (as amended)-
Notwithstanding anything contained in any
Act repealed by this Act, a person who was on active service- with or in any way attached to the Naval Forces of the Commonwealth during the war which commenced on the fourth day of August, One thousand nine hundred and fourteen shall not, by reason of such service, be entitled to exemption in respect of income derived by him from personal exertion after the thirtieth day of June, One thousand nine hundred and twenty.
.- Since this clause was dealt with I have been advised that it is likely to work a very grave injustice upon certain members of the Royal Navy who had been lpaned to the Royal Australian Navy by the Imperial Government. There was an understanding, I believe, that during their period of service in the Australian Naval Forces, they would be exempt from the Commonwealth income tax legislation. I have received a communication from an engineer-commander of the Royal Navy stating that, like many other Royal Naval officers, he came out to Australia whilst we were still officially at war. on the distinct understanding that he would not be liable to Federal income taxation. When, in due course, the time arrived for him to send in his Federal taxation returns, in obedience to the law, he did so, at the same time pointing out that, under the’ Income Tax Assessment Act 1915-2S, he was not liable. He paid the sum of £36 under protest, and a few days ago he saw the Deputy Commissioner of Taxation in- Sydney, who advised him that the Bill now before Parliament repealed, in clause 100, the exemption that had been extended to Royal Naval officers. He points out that if this clause, which is retrospective to 1920, becomes law, the Commonwealth Government will be breaking faith with a body of Royal Naval officers who accepted considerably lower incomes in the Australian Navy than they would have been getting in Great Britain, on the distinct . understanding that they were to be exempt from this tax. Fie further states that the late Admiral Dumaresq, Captain Cumberlege, Commander Ward Hunt, Commander Burroughs, and others, on leaving Australia protested against the tax, and their objection was upheld. Being in the same position, he fails to see why he should be called upon to pay £36 in Federal income tax. He further points out that Australian Naval officers, when loaned to the Royal Navy, are exempt from British income tax. The Commonwealth Government, I understand, have an arrangement with many of. the officers loaned by the Imperial authorities, that they are not to be held liable to pay income tax in Australia. This clause is retrospective to 1920, and I take it that the cases in regard to which Admiral Dumaresq and others protested, date back to 1918.
– The agreement, whatever it was, will be. equally observed in both cases.
Senatoir FOLL. - Is any amendment necessary in order that the agreement with the men loaned by the Imperial Government may be honored ?
– Whatever the agreement was, it will be fulfilled to the letter. No one would ask or expect otherwise. That we have proceeded to honour it is shown by the cases that Senator Foll has mentioned, in which some’ of the officers protested, and the validity of their claim was recognised. Senator Foll mentioned another case, and it is quite clear that the same procedure will be followed there. If it is found that the officer is exempt, by reason of his agreement, any money paid by him will be refunded. Royal Naval officers will have their interests safeguarded, clause or no clause. No Government would repudiate the terms of any agreement. Another point is that Australian Naval men are called upon to-day to become liable to taxation for 1920-21 and 1921-22. Although legally the Government may be entitled to make that demand, it seems a trifle harsh on men not receiving over-lordly incomes that they should be suddenly called*, upon to pay two years’ tax. The Bill proposes to make them pay tax for two years, but I intend to submit an amendment that will put these men in the same position as every other taxpayer in the community.
– Will that also apply to members of the Permanent Military Forces ?
– When they were demobilized, provision was made to meet their cases. I move -
That after the word “ twenty “ the word “ one “ be added.
Amendment agreed to.
Clause, as further amended, agreed to.
Bill reported with further amendment; reports adopted.
Bill read a third time.
page 3680
– I move -
That this Bill be now read a second time. It is a measure on which there should not be much debate. It authorizes the Treasurer to raise £4,000,000 for immigration. This amount is required to finance the immigration work, which it is anticipated will be carried out this financial year under agreements between the Commonwealth and the States. Honorable senators are aware, I presume, of the general basis of these agreements. Arrangements have already been entered into with Western Australia and Victoria. Proposals for an agreement with New South Wales are now being dis- “ cussed, and the Commonwealth is willing to enter into agreements with the* other States. Subject to satisfactory conditions being arranged, the Commonwealth is prepared to raise £2,000,000 per annum on behalf of each State, with a limit of £6,000,000 for each State.
The Western Australian agreement provides for about 75,000 immigrants- - men, women, and children - from the United Kingdom, and “for the establishment of about 6,000 farms in the southwestern division of Western Australia. The estimated total cost under the scheme is £6,000,000, and it is anticipated that five years will be required for carrying it out. The Commonwealth Government is to raise the necessary loans, but the State is to become responsible for the principal of and the interest on such loans. The British and Commonwealth Governments will each pay, for live years from the date of the raising of the loans, a sum equal to one-third of the interest payable on the loans by the State Government. If Western Australia does not provide for a total of 75,000 immigrants and for the establishment of 6,000 new farms, the contributions of the British and Commonwealth Governments will be reduced proportionately. The State Government is to furnish the British and Commonwealth Governments with periodical reports showing the progress made under the scheme and the expenditure incurred. The immigrants are to be met on arrival, and are to be placed in suitable employment in country districts. Those who prove most suitable whilst so employed will be selected to partially clear blocks of selected land to form farms. The men will work in groups of twenty or more, under supervision, and will clear a suitable area, erect a house and outbuildings, put up fencing, and arrange for a water supply. -The members working in these groups will receive advances in the form of wages at a rate not exceeding 10s. per day. The farms will be allotted to members of the group by ballot, but priority is to be given to married men with families. The cost of establishing his farm will be charged to each settler, but the total charge in any case is not to exceed £1,000, Avhich sum is to be repaid over a period of thirty years, together with interest, but during the first -five years interest only is to be paid. This agreement in regard to immigration in Western Australia was made between the Government of the United Kingdom, the Commonwealth, and Western Australia.
Under the agreement with Victoria the Commonwealth has undertaken to borrow up to £3,000,000 on behalf of Victoria; to arrange with the British Government for the loan of £300 to each immigrant; and to pay. to the State of Victoria for a period of five years from the date on which the money is borrowed one-third of the interest payable upon £2,000,000 of the sum raised by the Commonwealth on behalf of the State.
The State of Victoria has agreed to provide 2,000 farms, and to settle immigrants thereon; to become responsible for the interest and principal of the moneys borrowed on its behalf, by the Commonwealth; to collect the money o lent to settlers by the British Government; and to .furnish periodical reports in regard to the progress of settlement under the scheme. The scheme in Victoria provides for the immigrants being met on arrival, and fcr employment to be found for them in the. country, or land allotted to them if they have the necessary knowledge and experience. Provision is to be made for instruction and supervision of settlers, and advances are to be made for equipment and stock, and for improvements, the total advance in each case not to exceed £500. This £500 includes the £300 to be advanced by the British Government. The total debt of a settler for land and advances is not in the average to exceed £1,500. Thirty-six and a half years are to be allowed for tha repayment of the moneys spent on behalf of each settler. During this period the settler will pay £6 per centum per annum which will include both redemption and interest. The advances will be payable over varying periods up to twenty years, and interest on the advances is to be at the rate of 5 per cent. The British Government is not a party to the agreement entered into by the Commonwealth and the State of Victoria, but the British Government will co-operate with the Commonwealth and the State in regard to the scheme for Victoria by granting a loan of £300 to each person immigrating and settling on the land in Victoria.
Clause 2 of the Bill authorizes the Treasurer to borrow £4,000,000. No time has been arranged for the raising of the loan, but it is not contemplated that it will be necessary to raise any money immediately. Clause 3 directs that the money borrowed is to be used only for the expenses of borrowing and for making loans to the Sta.tes for’ the purposes of immigration and works in connexion therewith in accordance with agreements made or. to be made between the Commonwealth and the States. As market conditions may not be favorable for the raising of money exactly when it is required by the States, authority is sought in clause 4 to make advances to the States out of any moneys in the Commonwealth public account. Any advances in this manner will be repaid as soon a3 the loan is floated on the market. Clause 5 provides for the payment to the States of the Commonwealth’s share of interest during the period of five years from the date of the raising of any loanThat briefly sets out the purpose of the Bill, and I do not anticipate that there will be any objection to its main purpose.
– The Minister (Senator E. D. Millen), in moving the second reading of’ this Bill,, said that honorable senators would probably be acquainted with the terms of the agreement entered into with the various parties, but I do not know by what means we could secure the information. I have heard of and read a good many vague statements in regard to the proposal, but have been unable to get’*-a definite statement. I have seen very little of a reliable nature in print.
– Your State Premier has given you many opportunities of obtaining information.
– The Premier of Western Australia has made many vague statements concerning the proposals. Moreover, I do not think that1 we should bc guided by the statements made by the Leaders of State Governments.
– The Prime Minister (Mr.- Hughes) has also referred to it.
– That may be so, but it would be much better if particulars of the whole scheme were printed and circulated for the information of honorable senators; who are supposed to record an intelligent vote on the Bill now before the Senate. Surely it is a most reasonable request that the agreement should be in print so that we may know what it is. It is very difficult to know exactly where Western Australia stands in connexion with the matter, as a Western Australian State Minister has said thatby the agreement the Western Australian Government are not under obligation to find land for emigrants for the first twelve months they ars in the country. I do not know ‘exactly what position these people will be in if suitable employment cannot be found for them, and if the State Government is not under any obligation to find land.
– I informed the Senate, in moving the second reading, that representatives of the Western Australian Government would meet immigrants on arrival, place them in suitable employment in country districts, and at the end of twelve months those suitable would be offered an opportunity of acquiring blocks.
– Ae one possessing some knowledge of the land in Western Australia, I am afraid that we shall find the position somewhat embarrassing later on.
– Surely there is plenty of land there.
– Is it of the right sort?
– It is not a question of scarcity of land, but one of organization. There is also the statement of a Western Australian Minister that the Government are not under any obligation to find land during the first twelve months.
– He said they would not put them on the land for the first twelve months; they wish them to gain some experience.
– The Minister for Home and Territories does not understand the position.
– I have read a good deal concerning what ie proposed.
– If the organization is complete, and land is available, no objection can be offered, but I desire further information.
– I said that they would be engaged in clearing the land to- be selected later by immigrants.
– That is the village settlement scheme which has been propounded, and I agree that the southwest portion, of the State is the proper place for them to settle, as the land is suitable; but unless the Federal Government intervene, I am afraid the lack of organization will mar the success of the undertaking.
It has been said that a number of people who have been brought from the Old Country to Western A.ustralia in recent years have not remained in the West, hut have found their way to the’ other States, and if that is so I would like to know whether tihe State in which they were intended to settle is- responsible for the payment of the passage money. It would be very unfair, in such circumstances,. if the State were debited with any cost in the form of passage money if people finally settled elsewhere. The climate in the south-west of Western Australia is suitable, and the soil good, and under a proper scheme extensive settlement could be undertaken, but in the absence of adequate organization I cannot see ihow the proposal will meet with success.
– It is extremely unfortunate that a measure embodying such important proposals should be submitted to the Senate about thirty-six hours before Parliament is expected to prorogue.
– The honorable senator will rise to the occasion.
– This is the beginning of considerable expenditure on the part of the Commonwealth without any adequate security. There have been very discouraging reports concerning the possibilities of successful, settlement in Western Australia, where even the natural increase has been very small. According to statistics, the bulk of the increase of population in Victoria has been in the metropolitan area, and that in the rural population has also been ridiculously low, which proves that even the settlement of the native-born and immigrants who came to Australia on their own accord, or under the old State system, has not increased settlement to any marked extent. The measure which we are asked to pass comprises one sheet, enormous expenditure is involved, and very little information is available- Certain cabled statements on the Imperial Agreement on Immigration have appeared, and the proposal has been discussed in another place; but we should have more details before being asked to pass the Bill. My opinion is that New South Wales and Queensland offer the best land for development, and although there is a considerable area in Western Australia, I doubt whether the land available would compare in quality with that in New South Wales and Queensland. In Western Australia the natural increase of population has been very small.
– Would not the honorable senator allow Western Australian people t© judge what their State is capable of settling?
– We have to be guided by the natural increase.
– The honorable, senator knows very little about it, as the population of Western Australia .has increased considerably.
– Much more rapidly than that of Queensland. There were only 40,000 people there thirty years ago, and in 1920 there were 330,000.
– I am referring to the- increase during recent years, and the Minister for Home and Territories is probably thinking of the increase in population during the mining boom.
– The honorable gentleman’ makes comparisons about land of which he knows nothing.
– It is possible to get statistics to show the respective vsalues of agricultural and pastoral land in Queensland, Western Australia, and New South Wales, and in any case the volume of settlement is a guide to those who have not paid a long visit to Western Australia. I desire to protest against bringing forward a Bill of this character at this late hour, and at the lack of information regarding it.
– If Senator MacDonald has any regrets to squander, he should squander a few on his own State. The expenditure provided for in this Bill is only the first instalment of a large sum of money that is to be devoted tr increasing our population. It is not to be spent entirely in the temperate parts of the Commonwealth. We are all interested in seeing the tropical and sub-tropical parts of Australia settled. Queensland, with the opportunity right in front of her, spurned the offer made to her, and in that respect I do not think she acted in a continental or Commonwealth spirit. Queensland representatives, instead of criticising Western Australia, should pull the beam out of their own eye. The maxim has been laid down that “ population is the best form of defence” for a country, and we are just embarking upon the task of obtaining that first essential of national defence. If £5,000,000 was spent on perfecting the material defences of the country, and £5,000,000 in making a large addition to our population, it would be quite clear that the Central Government, in spite of what is said to the contrary, would have the best of the deal in a fiscal and a financial sense. This money is proposed to be loaned out to the several States, to be repaid by them with interest; except in respect of one-third of the interest for the first five years. Although Ave may be building “ castles iu the air” regarding the peaceful time that is ahead of us, the Government has saved money to that extent. It has saved money that would have been spent in putting the country in a state of defence, and it is spending money to increase the population. In regard to money spent, however, the Commonwealth does not “ foot the bill.” When we view it from the point of view of the States and the Commonwealth, and from the point of view of defence on the one hand and increase of population on the other, it is seen that the Commonwealth has the right end of the stick. I do not think the Commonwealth Government is paying the cost of raising the loan. The Imperial Government is doing as much as the Commonwealth Government. I think the Commonwealth Government should be much more liberal than it has been. It is quite true that it has been a kind of fairy godmother to the States in the raising of money, butthe States have to pay the money back to the last farthing. In the meantime the Commonwealth will obtain extra taxpayers, who will contribute increased revenue through the usual channels.. The Commonwealth cannot claim any creditfor liberality. If it had to embark on other forms of defence, it would have to pay the whole of the cost, but under this proposal the States are to bear the brunt of it.
.” - The object of this Bill is to put one of the coping stones on the structure for the building of which the Prime Minister (Mr. Hughes) has been endeavouring, for three solid years, to get the various States to come into line. To meet this stream of immigration for which the States have all been crying out, nioney must be made ready. It is not necessary to go into all the details of which State is going to get a certain sum, or how it is going to be spent. There seems to be a great deal of doubt in the minds ‘of honorable senators as to what this scheme really is and where it springs from, and a tfew observations which I have to make on the Empire Settlement Act passed by the British Par liament, which will take about two minutes in the reading, will enlighten honorable senators a good deal upon the proposals of the Imperial Government. They will . realize, when I give them some figures, to what extent the Imperial Government is prepared to assist the overseas Dominions in settling Britishers upon their shores. We can also look within ourselves to see what we can do towards that co-operative movement. The Imperial Settlement Act was passed for the purpose of affording joint assistance . to suitable persons in the United Kingdom who intend to settle in any part of the overseas Dominions, and the Imperial Government is to co-operate with other Governments or organizations in . carrying out joint schemes. .An “agreed scheme” may be either -
Contributions will be either by way of grant or by way of loan, or otherwise, and by the parties to the scheme toward the expenses of it. The Imperial contribution is in no case to exceed half I lie total expenses of the scheme. The Imperial liability is not to extend beyond fifteen years from the passing of the Act in ]922. The aggregate expenditure by the Imperial Government under any schemes under the Act is limited to £1.500,000 in 1922-23, and £3,000,000 in 1923-24, and each year thereafter, but i.s exclusive of moneys received by way of interest or repayment of advances. This latter provision is important, inasmuch as it increases the contributions, fund by the credits received from the sources mentioned. It appears that £43,500.000 is to be available for contributions, either by way of grant or loan, or otherwise, and this sum will be increased by the. repayments of loans or of interest. When the Bill was being passed, Lieutenant-Colonel Amery, in the House of Commons, made certain remarks which I will quote briefly. He said that assistance by way of paesage money to migrants would absorb £.1,000,000 a year of the Imperial grant on the- half-and-half basis, thus leaving £2.000,000 a year available for assistance to land settlement and development schemes. He also referred to the Western Australian schemes, under which a contribution was to be made towards interest on the cost of settlement for five years. Further, he stated that, whatever the cost, the amount ihe Imperial Government was prepared to advance to the settler would not be more than £300, although the cost of -fttlement might be double that amount. It may be stated, however, that it is clear the Imperial Government contemplates assisting migrants with grants towards passage money, and with advances towards initial training and eettlement on the land, and that the interest on the capital cost of development and settlement on the land may be shared with another Government. It may be gathered from abstracts from the House of Commons debates that no contributions will be made in respect of schemss which are based on the purchase of private estates. That is an aspect of the matter which we must keep before us. The idea of the scheme, so far as assistance by the British Government is concerned, is settlement on Crown lands. It is a very important feature of the policy of the Imperial Government that they seek no preference for overseas settlers to the exclusion or disadvantage of the residents of any of the overseas Dominions. I have thought it advisable at this juncture to offer these remarks, which are based on speeches made during the passage of the Bill through the House of Commons. Honorable senators will, perhaps, understand a little more clearly from having heard them the extent to which the Imperial Government is prepared to go to assist the Old Country and its surplus population whilst, at the same time, rendering effective assistance to the overseas Dominions. I do not think we need waste any time over the passage of this Bill. It is the first step towards giving effect to what the Prime Minister (Mr. Hughes) has been urging upon the State’s for three years.
– I regret that we have not had’ more information in connexion with this Bill. We are asked to pass a measure giving the Government power to raise £4,000,000 to be spent in accordance with agreements already made, or to be made, between the Commonwealth and the States. I should like to know whether this Parliament will be afforded an opportunity ‘to say whether or not it agrees with the arrangements proposed to be entered into with the State Governments. The Minister (Senator E. D. Millen) has said that this money is to be lent to the States, and that every penny of it is to be repaid. I remind honorable senators that a * similar statement was made in connexion with advances to States for soldier settlement.
– There has been no default there.
– Will the Minister say that the Government are going to receive from the States every penny advanced for soldier settlement?
– Undoubtedly.
– Then are the State Government’s to stand the loss in case of default ?
– Certainly; they take the responsibility of selecting the men and the lands on which they place them.
– I am glad to hear that statement from the Minister. There are certain areas in Australia that are unsuitable for settlement until provision has been made for roads and railways through them. I should, like to know whether any work which has to be done to prepare areas for settlement is to be carried out by the immigrants or whether men who are now unemployed in Australia will be engaged in carrying out that work.
– The money is to be used only in connexion with immigrants.
– Then people in Australia who are out of work at the present time are to be given no employment as a result of this immigration scheme?
– This money is for immigration.
– I realize that, but every honorable senator must be aware that if previous immigration schemes have not been as successful as they might have been, it has been due to the fact that immigrants have been brought into the country before we have been ready for them. The Government are, under this measure, undertaking a huge liability, and if the scheme is not a success it will reflect uipon them. ‘They are going to lend this money to the States, but they will have no voice in saying how it is to be spent, except that the expenditure is to be confined to immigration. What voice will the Commonwealth Government have in the selection of land for immigrants ?
– The New South Wale3 Government sent two representatives of the Commonwealth to inspect the Murray Kiver lands.
– That may have been in accordance with the agreement between the Commonwealth and the State of New South Wales, but the Government of the Commonwealth have no control over the lands of any of the -States. The Minister must be aware that soldier settlement in Queensland has been’ retarded because the selection of land for settlement has been entirely in the hands of the State Government. Unless they are given some definite powers in that regard under the agreements with the States, the Commonwealth Government will have no control over the State Governments so far as concerns the land to be opened for settlement, the crops to be planted by the settlers, and so on. All that they will do will be to lend this money to the States, and should the scheme not be as successful as could be wished, the whole of the odium will fall upon the shoulders of the Commonwealth Government. . They are finding money to lend to the State Governments at a ridiculously low rate of interest, according to an interjection by Senator Pearce, and they will be at considerable expense also for the >payment of passage-money. Yet they will have no control over the way in which the advances to the States are to be expended. I should like to have some more definite information as to the particulars of the agreement to be’ entered into with the State Governments. I should like to know whether the system of a flat rate for every settler is to be adopted, as under the soldier settlement scheme. In some of the States practically the whole of the land is taken up, whilst in Western Australia and -Queensland large areas can be obtained at very much less cost than must be paid for land in New South Wales and Victoria. If the Federal spirit is to prevail, and each State is to be treated alike so far as new settlers are concerned, ihe scheme may result in greater advantage to some of the States than to others. I do not wish to offer any very strong opposition to the Bill, because no one but a fool would take exception to an immigration scheme for this country under existing conditions.
– Some honorable senators are doing fairly well in that direction. The honorable senator is asking questions which 1 have answered in anticipation.
– The Minister has brought forward at this time of the night a Bill authorizing the Government to raise £4,000,000.
– To give effect to an agreement, the particulars of which I set out.
Senator -FOLL. - Surely the honorable senator will not say that we are not entitled to criticise this measure; if so, I have nothing further to say. We have had a fair experience in the last few years of some closer settlement schemes financed by the Commonwealth Government, and it has not been very encouraging. I am not blaming the Minister for Eepatriation (Senator E. L). Millen) or the Government for- the failure of those schemes, but it appears to me that the Government propose to follow similar lines- in this case.
– I have known measures involving a great deal more money than this Bill deals with to be passed in this Chamber without much explanation or criticism. Possibly the lack of information accounted to some extent for the absence of criticism. But for the last three years every public man in Australia who could claim to be broad in his views and public-spirited, has been trumpeting forth the urgent necessity of more population for the ‘Commonwealth. This Bill should highly commend itself to members of the Senate particularly, because they represent States. I do not propose to enter upon a criticism of the details of the measure. It is the broad principles that are of importance. Looking at a newspaper put into my hands, I found some very severe criticism of Mr. Hughes and the present Government, but I say that if Mr. Hughes and the Government go out after the next election, they will still have deserved to live in the history of Australia for all time, because, if for no other reason, they have inaugurated this immigration scheme, the first section of which is before us to-night. That is all I shall say on the subject. I think that the Bill should meet with the unanimous approval and support of this Chamber.
.- This is the ‘first time, in my opinion, that a real effort has been made by any Govei-nment to formulate and bring into operation an immigration scheme that will be of value to Australia. No immigration scheme of such magnitude has previously been proposed. Some of the States have assisted immigration by defraying part of the passage-money of immigrants. There is great need in Australia for a much larger population, not only to bear the burden of taxation, but. ultimately also for defence purposes. “1.. for one, welcome the programme which lias been outlined by the Minister (Senator E, D. Millen), and which is the outcome of several consultations between the Commonwealth and the State authorities. I hope the day is not far distant when every State which is capable of carrying a larger population than is at present maintained therein will come into the scheme. Some States, of course, have a greater capacity than others for the absorption of immigrants, but every State is capable of carrying a much larger population. Senator Foll referred to the partial failure of the scheme for soldier settlement, due largely .to the fact that, higher prices were paid for land than it was worth, and he suggests that, to insure the success of this scheme, the Commonwealth should exercise close supervision over the proposals for the settlement of the prospective immigrants in the various States. “We must recognise, however, that dual control is often very undesirable; and, as the Commonwealth will have first call upon the revenues of the State for the payment of interest, the security is quite sound. The Government will be in much the isame position as an ordinary money-lender, and in this case the margin will be ample, not only to insure interest payments, but also the repayment of capital advance.
– What will be the terms of the stock and the price?
– No one can say that.
– Everything will depend upon the condition of the money market. It is provided that the loan shall be raised as required. Personally, I welcome the measure as a step in the right direction. It is one of the mo3t useful schemes that Australia can engage in, and, backed up as it is by the Imperial Government, I hope it will be brought into operation as speedily as possible.
– I welcome this scheme, and although I am anxious for a little more information, I must not be regarded as opposing the Bill in any way. The proposal is to raise the necessary money for the scheme bv inscribed stock, the duration of which has not been mentioned. We do not yet know the probable rate of interest, or whether the money will be raised in Australia or elsewhere. The Senate, I think, is entitled to a little more information on these points.
– The terms, upon which every loan is raised must be left to the Treasurer for the time being to determine.
– I accept the Minister’s statement; but it seems to me that, to some extent, we are taking a leap in the dark. It was only by interjection that we were able to gather that Great Britain is associated in the scheme to the extent of providing one-third of the passage-money of prospective immigrants. Of course, I am acquainted with the fact that Great Britain desires to cooperate with the Commonwealth and the States in immigration, but I think the Senate is entitled to more specific information on these points. The reason why this has not been given is, I think, due to the fact that the Bill has been brought in at such a late hour.
– That is not the reason. I did not speak at greater length in moving the second reading of the Bill because I assumed that all these simple matters, which have been published time and again, were known to honorable senators.
– In the rush of business I must confess that I have not had time to make myself thoroughly acquainted with the facts connected with this proposal. I cannot be charged with neglect on that account. We want to know these things. I understand that two of the States are co-operating with the Commonwealth. We have to look at the scheme broadly, and to inquire to w’hat extent it may benefit the Commonwealth. An increase in population is necessary, but, so far, we know very little as to the provision being made to insure the success of the scheme. If it should not be entirely successful; that would be the worst possible advertisement Australia could have. I do not wish to raise any opposition to the measure, but I do think that a matter like this should have been placed clearly before honorable senators. If there is an agreement, it should have been in the hands of honorable senators, so that we could have seen the exact position of the Commonwealth in relation to the States.
– I must admit to a feeling of disappointment at the tone of many of the speeches made to-night. In view of the lengthy sitting, I would not have been speaking again now except that all sections are agreed that this question of immigration is of vital importance to the future of Australia. It has become a habit for every public man and ordinary citizen to refer to our empty spaces, to point to the danger to Australia arising out of the fact that we have such a scanty population, and to speak also of the obligation that rests upon us to thicken up our population. It is quite true that, in my second-reading speech to-night, I did not delay honorable senators by repeating what has- become a platitude. I assumed that honorable senators were acquainted with all these facts, and that .instead of talking about the position there would be a desire to do some work. I am disappointed, therefore, that there should have been a repetition of this cry, “We want more information,” due, I am tempted to believe, to a desire to indulge in captious criticism rather than to help the scheme. Senator Toll said he wanted to* know more about the terms of the agreement, and I say that I gave the headings and main features. I traversed the agreement, categorically, clause by clause, and stated the obligations imposed by it on the Commonwealth Government, and the things which the States undertook to do in return. It is true I could have elaborated on the details of the agreement; neverthless, I placed the whole of the facts of the agreement substantially before honorable senators.
– You cannot overlook the fact that, equally with you, I want to see the money well spent.
– That was not the honorable senator’s complaint. His complaint was that more information had not been given; and I repeat that I furnished all the necessary information under .the different headings.
Let me again refer to the outstanding features of the agreement. Under th’e scheme the Western Australian Government provides for about 75,000 immigrants - men, women, and children - from the United Kingdom, and for the establishment of about 6,000 fai-ms in the south-western division of the State. The estimated total cost, under the scheme, is £6,000,000, and it is anticipated that five years will be required for carrying it out. The Commonwealth Government is to raise the necessary loans, but the ‘States are to become responsible for the principal and interest. The British and the Commonwealth Governments will each pay for five years from the date of the raising of the loans a sum equal to one-third of the interest payable on the loans by the State Governments. If Western Australia does not provide for a total of 75,000 immigrants and for the establishment of 6,000 new farms, the contribution of the Commonwealth and British Governments will be reduced proportionally. In other words, they will pay pro rata. The State Governments are to furnish the Commonwealth and the British Governments with periodical reports showing the progress made under this scheme arid the expense incurred. The immigrants are to be met on arrival and placed in suitable employment in country districts. Those who prove most suitable whilst so employed will be selected to partially clear blocks of land to form farms. The men will work in groups of twenty or more under supervision, and each settler will clear an area on which to erect a house and outbuildings, put up fencing, and arrange for a water supply. The men working in these groups will receive advances in the form of wages at a rate not exceeding 10s. per day. The farms will be allotted to members of the group by ballot, but priority will be given .to married men with families. The cost of establishing the farm will be- charged to each settler, but the total charge in any case is not to exceed ?1,000, which sum must be repaid over a period of thirty years, together with interest; but during the first, five years, interest only is to be paid.
Under the agreement with Victoria, the Commonwealth Government undertake to borrow ?3,000,000 on behalf of the State, to arrange with the British Government for a loan of ?300 to each immigrant, and to pay to the State of Victoria, for a period of five years from the date on which the money is borrowed, one-third of the interest payable upon ?2,000,0*00 of the sum raised by the’ Commonwealth on behalf of the State. The State of Victoria has agreed to provide 2,000 farms, and to ‘settle the immigrants -thei’eon; to become responsible for the interest and principal alone of ‘the moneys borrowed on its behalf by the Commonwealth; to collect the money lent to settlers by- the British Government; and to. furnish periodical reports of the progress under this scheme. The agreement provides for the immigrants .being met on arrival, and for employment to be found for them in the country, or land allotted to them if they have the necessary knowledge or experience. Provision is to be made for the instruction and supervision of settlers, and advances are to be granted for equipment and- stock, and for improvements; the total in each case not to exceed ?500. Repayments will be made over a period of -thirty-six and a half years.
– In the event of an immigrant having a certain sum of money of his own, will he receive interest on it’? Senator E. D. MILLEN. - I cannot imagine that the Australian Government would decline to receive such a deposit. In certain States, my own included, provision has been-made for. setting aside certain blocks for immigrants who have money of their own.”
Senator Senior has asked for information as to the terms of the Bill. He seemed to’ think that the rate of interest should be inserted, but if we fixed an amount less than the market rate the Treasurer would not be entitled to proceed! to float the loan, and if, on the other hand, the rate was in excess of the market rate, it would penalize the Treasurer. It is clearly not desirable /to insert the terms in ‘the Bill. As to whether the loan should be floated here or in London, that matter has been left undecided, because it might be more opportune to float the loan in London, and, on the other hand, the circumstances might be favorable for floating it in Australia,. It is better to leave these matters to the authorities of the day. Parliament has invariably approved of that practice.
Senator Senior said that the worst advertisement Australia could get would be secured if the immigration scheme were launched and failed. I concede that, but one of the worst advertisements it could have would be the publication in the Old Country -of some of the speeches I have heard here to-night. I even heard an honorable senator expressing grave doubt as to whether his State had an organization capable of handling this project. Then Senator Lynch remarked that the Commonwealth Government were not doing anything at all.
– I did not throw any cold water on the scheme.
– No, but the honorable senator threw a few tacks on the track. He stated that Western Australia had the land available, but he had grave doubts as to whether the State Go- ernment had the necessary organization to deal with the scheme.
– My speech will net do any harm in England.
– Then we were toild that the Commonwealth Government is doing nothing. Let me say that this is the first Government that has lifted the immigration question from a local effort to a big national one. It is the first Government that has set to work to bring into existence a coordinated scheme between the Commonwealth and the States, and it ie the first Government that has offered to share with the States the cost of the undertaking. The proposal has all the elements .of a big growth, if watered by the enthusiastic support of the people of this country.
– What is your opinion about population being essential to defence ?
– There can be only one opinion on that matter.
Increased settlement is o paramount importance to the Commonwealth.
I take some exception to the attitude ofvSenator MacDonald, who inferentially affirmed that Queensland offered very great advantages, equal at least to any of the other States, for the reception of new settlers and land-seekers generally. But what should be the attitude of such a State? Should it turn around and find fault with the efforts of the less favoured States ? If the other States have drawbacks due to natural and other causes, is it not a greater shame that Queensland does not give a lead to the movement?
– It has.
– There was a flat refusal by Mr. Theodore to join in the scheme.
– That is a long story, and you have not gone back to the beginning.
– There has been no variation in the story since the honorable senator’s friends have been in control in the northern State. Long before the conference at which the scheme was discussed took place, I met the Agent-General for Queensland in London. ‘ I represented the Commonwealth Government at a Conference there, and it was part of my duty to get the various States to agree to this co-or.dinated scheme imder which were to be brought out only the number and class of immigrants required by the States. The first thing I came up against was the fact, that Queensland would only take immigrants who had an unreasonable amount of money behind them, and that was tantamount to saying that Queensland did not want them at all.
– What did Mr. Gullett say about that?
– I am not concerned at this juncture with what Mr. Gullett said. At the Conference in London with the Agents-JGeneral, Mr. Hunter and I were endeavouring to obtain a statement as to the number of men that the States would take, and the class of men required, and Queensland’s proposal was for a limited number of men with an amount of capital which would have prevented any considerable number of immigrants from being obtained.
– Capitalists are r eeded in Queensland.
– Yes; and by nobody more than by Mr. Theodore. I was privileged to be present at the Conference between the JPrime Minister (Mr. Hughes) and the Premiers of the States and other Ministers. The Prime Minister stated that, if the States wished, the Commonwealth would undertake to raise the necessary money, and would lend it to the States and pay part of the interest, but r.n undertaking’ was required from the States that they would spend the money on immigration, guarantee the immigrants employment for a certain period, and also guarantee an opportunity for them to take up farms afterwards. The Commonwealth stipulated that, as it had to raise the money and be responsible for a portion of the interest, and also give an assurance to the British Government that the scheme was sound, the States must submit their schemes for the Commonwealth’s approval. Queensland replied, “ No, we are a sovereign State.’’ Mr. Theodore refused. Queensland has issued unlimited promissory notes when it should have spent its money in redeeming its debts and in’ carrying out new projects for the employment of immigrants.
– The majority of Queenslanders do not agree with the views expressed by Senator MacDonald.
– It does not seem to me to matter much what opinion the Queensland people express. A little while ago ‘ they expressed an opinion by referendum. What effect did.it have? Mr. Theodore said, “ To the winds with your referendum! To the winds with the opinion of the people of this State ! “ There is some talk about the Prime Minifter (Mr. Hughes) being lordly; he. is a mere circumstance as compared with the brutal autocracy of Mr. Theodore.
Just .one other matter. Senator Foll referred to soldier settlement, as one or two other’ honorable senators did. Whatever may be the experience in one ‘State or another in regard to individual soldier settlements, I repudiate altogether the suggestion that soldier settlement in Australia has been a failure.
– That suggestion was never made by me:
– It was made with regard to War Service Homes. In certain groups of homes mistakes were made, but those mistakes are discussed as if they constituted the whole scheme. That scheme has been, and is going to be, a success. In Victoria and South Australia the great bulk of the returned men are making a success of their settlements. We hear grumblings from the ordinary civilian, and even from members of Parliament.
– If you had been Minister for Lands, would you have selected some of the land that State Ministers have selected?
– The suggestion that the Commonwealth should select the land is the most ghastly one I have heard. The States have experienced officers, and yet the advocates of decentralization -asked the Commonwealth Government to send out officers to inspect blocks throughout a continent. It cannot be done. But if we did attempt to do it, people would rise up and say, “ What a monstrous duplication of effort .’ You are trespassing on the functions of ‘the State.” Whatever we do, we shall be told that we are doing wrong. Whilst just now there is a measure of criticism about land settlement, and there are those who affirm that the Commonwealth Government ought to have done the work, rather than use the State agencies, when we turn to War Service Homes we are told what fools we were not to leave that work to the State agencies. There will be no attempt on the part of this Government to interfere in any way between the State Governments and the settlers that they place upon the land. . Whilst we cannot all agree with some of the selections made, or in regard to the form of settlement, we must admit that the State officials should be able to do better than a central authority. They will make mistakes, and they would not be human if they did not. But in spite of errors, we must all encourage the scheme so that Australia will progress with leaps and bounds, and our industrial and economic position be such that we shall never be afraid of dangers that we think at times surround us.
Question resolved in the affirmative Bill read a second time.
In Committee:
Clauses 1 and 2 agreed to.
Clause 3 (Application of moneys).
– In the expending of money, it would be wise to make some inquiries and ascertain if, apart from the States, some organizations which are in existence and have rendered considerable assistance, not only in training disabled soldiers, but in other directions, could not be assisted financially. We have already established a precedent by granting money under other Acts to assist organizations in the direction I have indicated. The Ugly Men’s Association in Western Australia has carried out a good deal of work in the training of disabled soldiers, and has assisted them not- only during the war, but since in securing positions. Since the immigration scheme has been introduced, they have now tackled the problem of assisting newcomers, and 1 have good reason for believing that the association is well organized and is rendering a very valuable service to the community. Its funds are voluntarily subscribed, and it would be advantageous if financial assistance were given to enable the good work to be continued. If the organization which I have mentioned had only recently been established we should, of course, hesitate.
– These moneys have to go to the States.
– The States could do that.
– I know it is a matter for the States, but some encouragement should be given to organizations. Every Western Australian is familiar with the working of the association I have mentioned, and such valuable service as this organization is voluntarily rendering in their interests should be encouraged.
Clause agreed to.
Clause 4 (Authority to make advances to States).
– I understand that the Com^monwealth Bank has approximately £4,000,000 partly in reserve and partly in a redemption fund which might be made available without incurring flotation expenses in connexion with loans.
– There is no time- stated in which the Treasurer may borrow. If money is available, it oan be used until required for ‘ its proper purpose, and then a loan can be raised for the repayment. ‘ ‘
– The moneys I refer to are not those in the Commonwealth Public Account, but moneys representing accumulated bank profits.
– But there would be balances in various accounts.
Clause agreed to.
Clauses 5 and 6, and title agreed to’ Bill reported without amendment re port adopted.
Bill read a third time.
page 3692
, - I move - .
That this Bill be now read a second time.
Tha objects of this amending Bill are: - (1) To allow a deduction from the value of an estate of a deceased person of Federal and State land and income taxes which may become due on land owned, or income earned by, the deceased up to the date of his death, which may subsequently become due within twelve months after payment of the estate duty ; and (2) to authorize remission of penalties in cases of late payment of duty where reasonable cause exists. The provision in the Bill to secure the first object mentioned is in the form of an amendment of an existing definition of “ debt9 “. It is thought, however, that the provision does not attain the desired object as effectively as was intended. Itis proposed in Committee to submit an amendment by which the new definition of “ debts due and owing “ will be replaced by specific amendments of sections 17 and 18 of the principal Act, which deal with the deductions of debts. The Bill makes no other amendments to the principal Act. It will fill a long-felt want in respect of each of- its. objects.
Question resolved in the affirmative.
Bill read a second time.
In- Committee:
Clause 1 agreed to.
Clause 2 (Definitions).
– I ask the Committee to delete this clause, as I intend to moye for the insertion of a new clause with a better definition.
Clause negatived.
Amendments (by Senator Pearce) agreed to.
That the following new clauses be insetted: - ‘ 2. Section 17 of the principal Act 13 amended by inserting after the word death ‘ (first occurring) the words ‘ and Federal and State Land and Income Taxes which become due and jjayable after his death and within one year after the payment of dutv on anv assessment under this Act.’.” “ 2a. Section 18 of the principal Act is amended by inserting at the end thereof the words ‘‘and Federal and State Land and Income Taxes due and payable at the time of his death or which become due and payable after his death and within one year -after the payment of duty on any assessment under this Act.’.”
Clause 3 (Remission of penalty duty).
– This remission is similar to that provided in the Income Tax Assessment ,Act. and it brings the law into line.
Clause agreed to. Title agreed to.
Bill reported with amendments; report adopted.
Bill read a third time.
page 3692
Bill received from the House of Representatives.
Standing and Sessional Orders sus-. pended, and Bill (on motion by Senator Earle) read a first time.
Second Beading.
– I move - (That this Bill be now read a second time.
I am sure that after the long debates we have had on the question of immigration and income tax assessment, a Bill of the nature of that which I am about to explain will tend to sweeten the tempers of honorable senators. I anticipate that, it will have a very speedy passage through the Senate. The important part of the Bill is the schedule. It seeks to amend items 2S, 29, 30, and 31 of schedule 3 of the Customs Tariff Act. I hardly think it is necessary for . me to make .any lengthy speech upon the necessity for establishing and sustaining the sugar industry in Australia. All the questions affecting the desirability of the establishment of the sugar industry have been so extensively discussed in another branch of .the Legislature that it would be quite superfluous for mc to add anything to what has already been said. We are all familiar, first, with the desirability of Australia being self-contained in the matter of the production of one of the essential commodities which enters into so many different phases of our industrial life; and, secondly, with the desirability of encouraging the production of a commodity so suitable for the sub-tropical regions of Australia, thereby settling population in that par.t of the continent. The development brought about by .the sugar industry must necessarily be very important, not only to our commercial life, but also from a different point of view. All those phases have been very fully discussed in the debates which have taken place in another branch” of the Legislature, and honorable senators are quite familiar with them. We have, so far, met with very material success in the effort to establish this industry.
I will not trouble honorable senators with very many figures, but I think it would be well for thom to know the growth that has been made by the industry during the ten years from 1912 to 1922. The area cultivated for the purpose of growing sugar in 1912 was 117,000 acres, while in 1922 it ‘had reached 203,000 acres, representing an increase of 86,000 acres. I do not say that this growth has been continuous; the industry has had its ups and downs, but, today, we find that there ha”B been that actual increase in the area under cultivation for the purpose of growing sugar. The area upon which cane was actually e;rown in the two years under review was, in 1912, 78,142 acres, and in 1922. 135,000 acres, an increase of 56,85S acres. The quantity of raw sugar produced in those comparative years was, in 1912, 113,060 tons, and in 1922 285,000 tons. The number of men employed in the industry is equally important from the point of view of the interests of Australia, and we find that, in 1912, there were 18,000 men employed, while in 1922 there were 24,000, or an increase of. 6,000. The figures given to me regarding the investment of capital in the in- dustry are, I am afraid, not quite complete. The capital invested in farms, mills and refineries is put down at £10,000,000 for 1912, while it was £14,000,000 in 1922, or an increase of £4,000,000 for ten year3. While those figures relating to capital are only approximate, they will give honorable senators a very good idea of the progress which has been made in this particular industry during a period of ten years.
The alteration which is sought to be made in the Tariff schedule by this Bill is to increase the duty on “ sugar, the produce of cane,” from £6 per ton, or, as set forth in the schedule, 6s. per cwt., to £9 6s. 8d. per ton, or Id. per lb. In item No. 29, the same increase is provided for; in item No. 30, “ sugar, not elsewhere included,” the duty will be £14 per ton; while the duty on golden syrup and sugar syrup, not elsewhere included, will be increased from £3 to £4 15s. 9d. per ton. It is probable that those honorable senators who are* particularly interested in the State in which this industry is principally carried on will express themselves as dissatisfied with the increase of duty provided under the Bill. I want. to warn honorable senators that thero are many industries in Australia which depend upon a reasonable price for sugar and ample supplies of it. The Tariff Board’s report shows that for five years before the war the imports of sugar into Australia amounted to 340,322 tons, representing a value of £3,988,577, or £11 14s. 4d. per ton. This works out at about l£d. per lb. The exact proportion of raw sugar to refined sugar is not obtainable, but I am assured that the proportion of raw sugar was practically 9 per cent. Bearing that in mind, and seeing that the manufacturers of different commodities in which sugar plays a very important part have to compete with the outside_ world’, the duty proposed should be accepted as reasonable. It must be borne in mind that we have . to compete with . the outside world sooner or later, and so, in the sugar industry, as in everything else, we must apply ourselves to more efficient-
End more energetic methods of production. From the workers’ point of vi w, we must realize that we have to apply ourselves more energetically to the production, of those things that we seek to protect, or otherwise it is no use endeavouring to protect them. -No man is more convinced of the efficacy of Protection than I am, but I realize that we must apply ourselves to the production of the goods which we protect at as low a cost as possible.
– Does the Minister suggest that that is not being done in regard to sugar at the present time?
– I do, and I - shall show why I suggest it. There is’ in Australia a rather deep-rooted idea that, by the application and energetic use of the most modern appliances, workers are depriving their fellow workers of the opportunity of employment. No greater fallacy than that was ever uttered or believed in. I noticed the other day that the persons controlling a certain industry had to discharge a large number of men simply because they would not use. the most modern tools for carrying it on.
– That has been the case with a few from the time tools began to be used.
– Such a theory might very well impress the workers in the early part of the 18th century, when weavers were thrown out of employment and subjected to starvation by the introduction of machines, one of which could do as ‘much work as had been done by ten men. I can quite understand weavers in those days looking upon such a machine as their mortal enemy, but surely we have grown out’ of that mistake? We must realize now that the more up-to-date machines we have for the saving of labour and the production of wealth, the better for the worker, as well as for everybody else. If we do not use the up-to-date machine, the people of some ether country will. They will have the employment and .prosperity, whilst we lag behind in the primitive, condition of producers of primary material upon which others work and prosper.
Senator Crawford anticipated that I was leading up to a statement concerning the sugar industry. I wish to substantiate a belief that the most up-to-date appliances are mot used in this industry, by quoting from the report of the Tariff Board, delivered at the end of last month, extracts taken from the report of a -Royal Commission that in quired into the sugar question in 1920.. With regard to the production of sugarcane in Queensland, the Royal ‘Commission reported -
It was generally admitted by expert official witnesses, and by farmers, that by better niethods of cultivation, and ‘by the use of suitable manures the average yield anight be largely increased. Whilst a comparison with other countries of the average yield of cane and sugar per acre might be misleading owing to different methods of cultivation, variations of climate, and length of time necessary for the ripening of the cane, the evidence generally points to the fact that our average production, though slightly improving, is not. satisfactory. This applies generally throughout the whole industry.
A further extract states, in regard to themilling of sugar-cane in Queensland -
The Commission, in obtaining evidence on> which to Compare Commonwealth equipment and practice with other countries, found that but. few of the sugar experts examined have had1 an opportunity of seeing sugar manufactured’ outside Australia. A highly expert witness, of wide experience within and without the Commonwealth, said, “ Generally speaking, I am of the firm opinion that, most Queensland mills are quite inefficient in the ordinary sense of the word. By that I mean that they neither extract - that is, in the milling process - aior recover in the subsequent -processes theeconomic maximum of sugar in the cane, and’ ito other sugar-producing country in the world’ can less afford to stray from the path of true Efficiency.
If those statements are correct, and I have no reason to doubt them-
– I have, and I know something about the subject.
– I have quoted theevidence giy,en before a Royal Commission by men who certainly should know something of the subject.
No one, not even excepting SenatorCrawford, is more anxious than I am tosee the sugar industry succeed. I look upon it as a national industry; but I recognise that no effort on our part can protect an industry that is using inefficient appliances. The most up-to-date and most effective methods devised by science must be applied. We cannot protect an industry that is carried on by wasteful and primitive methods.
– There is nothing primitive about the methods used in Queensland, I can assure the honorable senator.
– Ttc Minister should have a look at some of the Queensland mills.
– It is of no use to say that. I have to be guided by the evidence of men who understand the business. The honorable senator might take me through crushing mills and refining plants in Queensland, and I would only be mystified.
– Is the expert evidence quoted of any use?
– The whole of the recommendations of the Commission referred to were ignored during the Tariff debate.
– They are not ignored by the Tariff Board.
– Not now.
– I have looked through the report of the Tariff Board, and it has seemed to me that they have taken a practical view of the matter.
– The honorable senator did not quote such extracts when advocating duties for the protection of Tasmanian industries.
– Surely the honorable senator will not accuse me of partiality in the interests of my own State?
– The Minister was the high priest of Protection when we were considering the Tariff, but he is now trying to run down duties, because, he is dealing with a Queensland industry.
– It is very unfair of the honorable senator to say that. I have consistently advocated effective Protection.
– And now the honorable senator is telling Queenslanders how to run their industry.
– I shall not combat such statements, because they are distinctly unfair. I have never done anything in my advocacy of Protection which could by any stretch of the imagination be described as selfish or self-interested.
– Can the Minister give us the name of the expert whose evidence ho quoted?
– I have quoted from the Tariff Board’s report. Senator Reid should address his question to the chairman of the Tariff Board who was the ex pert who gave this evidence before the Royal Commission on sugar.
– The expert might have been a crank, like the chairman himself.
– Honorable senators will not improve their case by such statements. I do not think that the members of the Tariff Board would be likely to include in their report the evidence of some crank. I want to impress upon honorable senators representing Queensland that they must recognise the rights of the other States of Australia.
– They did recognise them when dealing with the Tariff.
– The Minister does not recognise the rights of Queensland.
– I have no wish to set St’aite against State. If the duty ou sugar now proposed proves to be insufficient, even at the sacrifice of my own State, I shall be Willing to advocate later on a “higher tariff on sugar.
I desire now to quote a paragraph which appeared in the Industrial Australian and Mining Standard of 12th October, 1922. This newspaper, is, I believe, a reputable journal, and it published a paragraph relating to the operations of a successful sugar company.
– Is the Minister endeavouring to have the Bill rejected?
– No; I wish it to be carried. I want to meet arguments advanced in support of the contention that the duties proposed on sugar are not high enough. The following is the paragraph to which I refer: -
The Australian Sugar Company Limited, which is a subsidiary company of Howard Smith Limited, closed a successful year on the 30th June lust, the net earnings amounting to £54,466. Dividends at 10 per cent., two bonuses of ls. per share, making a total of 20 per cent, for the year, will absorb £27,987, leaving £26,479 to- be added to the reserve after all necessary provision has been made. During the year, 85,744 tons of cane were treated. The continued dry and cold weather had retarded the growth of the current” crop. It is expected that not more than 70,000 ton’s will be crushed this year.
That is a very satisfactory report. .
– Some portion tff that profit may have been made out of land transactions? i
– Well, the profits arc there. The object of the Bill is ,to increase the duties on sugar by a very substantial amount, and it is to take the place of the Agreement, which will end in June next. Senator Crawford. - That is not what the Prime Minister said in another place.
– It is true that this Bill provides for increased duties to operate from 12th October, and that no arrangement has been made to discontinue the Agreement, which will be current until 30th June next. It may be argued that the levying of these increased duties might very well have been left over for the new Parliament as the present Agreement has about eight months to run, but the Government have been advised that now is the time when the planters begin to make their arrangemeats for the planting season, so it is advisable that they should have some assurance of continued protection beyond the date of the expiration of the Agreement. If tha matter is not settled before the end of tha year very many planters will not put their land under cultivation for cane, and there will be a falling off in the production of sugar.
– As well as very general unemployment.
– Representations having been made, the Government have introduced this Bill in order to give the sugar-growers that stability which is so necessary for the development of the industry.
– If foreign sugar drops in price before the end of Juno next, I suppose they will not want another increase ‘in the duty?
– I do not think that they will be able to demonstrate in that time that the Tariff is too low, or that they are using the most effective methods for the cultivation and handling of thu cane. Therefore, the1 honorable senator may rest assured that there is not likely to be any demand for a further increase in the duties within the time mentioned. All fair-minded men who desire the development of the sugar industry in tha Commonwealth will support this measure. No ‘ doubt the senators representing Queensland would like to see an increase in the items, but I am sure they will recognise that the fruit-growers and con sumers in the other States of the Commonwealth have a claim to consideration and fair treatment. This tBill is, I think, a reasonable compromise, and, generally speaking, it will be acceptable to the people.
: - In view of the hour, I shall be as brief as possible, but honorable senators I am sure will understand that, because of my relations with the industry, I could not allow n measure like this to pass without making a few remarks. I have, on previous occasions, dealt somewhat comprehensively with the sugar industry, and therefore I do not propose this morning to go over the same ground. However, T would like to 3ay that it i3 very necessary that increased protection be afforded tho industry, and I point out that this prolection covers tho growing of the cane, the milling, and manufacture into raw sugar, and also the conversion of the raw product into refined sugar. I need not dwell upon the importance of the industry to Queensland and to the Commonwealth. It i3 admitted to be vital to the maintenance of a White Australia, and I am sorry to discover that the people of Australia, as represented in this Parliament, are not prepared to pay more for the consummation of a White Australia ideal than Id. per lb. protection on locally-grown sugar.
Those engaged in the industry in Queensland require some greater assurance of stability than they have had up to the present with regard to the future, because operations have been in progress for some time in connexion with the crop to be harvested, not only next year, but in 1924 as well. This is a matter that affects a very large number of primary producers, in which category I include not only the growers themselves, but their employees. Men on wages on farms in the various States in Australia are just as much primary producers as are the owners or lessees of farms. If something in the nature of increased protection had not been afforded the sugar-growers, there would have been stagnation in the industry in Queensland and New South Wales, and very general unemployment in my State. I quite agree with the Minister (Senator Earle) that in giving protection to any industry reasonable efficiency in its operations should be expected”, and I contend that, having regard to the circumstances, this efficiency is- attained in connexion with the sugar industry in* Queensland. There are two methods of’ sugar cultivation - one known as the intensive, and the other as the extensive system. In some circumstances intensive cultivation gives more profitable results; in others extensive cultivation is more profitable. Hawaii, where there is an abundant supply of cheap labour, furnishes a very good example of the intensive system, but there the conditions are altogether different from those obtaining in Queensland. The production of cane can be carried on in Hawaii under ideal conditions, because the temperature varies so little that the cane can be harvested right throughout the year, and there is abundant water for irrigation purposes. It is possible, therefore, to harvest the cane when there is a maximum crop with a maximum of sugar content. It is also necessary to remember, in any comparison of yields with other countries, that the crop in Hawaii, instead of being a one-year crop, is a two-year crop.
I have some figures, taken from a publication issued by the Commerce Department of the United States of “America, allowing that, with the exception of the Hawaiian, the production of sugar in Queensland is approximately, and on the average, quite as good as in most other cane-sugar producing countries. For instance, in Porto Rico the average yield of cane per acre is 20.45 tons, and there it requires nine tons of cane to make one ton of sugar. In Cuba the production per acre is 21 tone, and it takes 8.68 tons to make a ton of sugar. Twenty years ago the production of sugar in Cuba was only about 1,000,000 tons per annum, and for the last three years it has averaged nearly ‘ 4,000,000 tons. It follows, therefore, that the greater part of the Cuban cane is produced on comparatively new land, and in these circumstances one would naturally expect a higher yield of cane than is obtainable from land that has been under cultivation for a longer period. In Louisiana the yield is 18 tons per acre, and it requires 14 tons to make a ton of sugar, whilst in Australia, for the ten years, 1910-1920, the yield per acre was 18 tons, and it took just over 8£ tons, to make a ton of sugar. It is a matter of common knowledge to those acquainted with agricultural operations, that in Australia the seasons are more variable than in most of the other agricultural countries of the world. This applies as much to the sugar industry as it does to wheat production and other forms of agriculture. I regret that I have no figures relating to the work of the sugar mills, but I know, as a matter of fact, that the work done in our mills is quite as good as that done in other countries, with the sole exception qf- Hawaii, where the mills are owned by companies that have practically unlimited wealth at their command.
I intend to make some reference to statements in the report of the Tariff Board which, to me, is a most surprising document. When the proposed duty of lid. per lb. was referred to the Board, I thought it would make an exhaustive inquiry before reporting to Parliament; but, so far as one can gather from thi? document, the only investigation the Board has made has been to read the report of the two Rsyal Commissions, one of which inquired into the industry in 1911-12, and the other in 1919. The only quotations made from those two reports are portions that tell against the industry.
– Specially picked out.
– But the Board has recommended an increased duty.
– Nothing like the increased duty necessary; but half a loaf is better than no bread, and we must accept it.
– You might get the whole loaf yet.
– You might get the Agreement continued.
– We have asked for that, but have not got it. Under the heading “Economic Position of Industry “ the report states -
The Tariff Board is forced to the conclusion that the sugar industry is on somewhat of an anomalous basis. In Queensland, where nearly all the sugar is produced, the State Government - through its instrumentalities - fixes the wages and conditions of the industry, whilst the Federal Government is called upon to protect a position it has had no hand in creating. Speaking generally, this does not appear to’ ‘be a proper economic position, for in the future it might happen that the granting of a certain protection if made necessary through special conditions: imposed by any State might not be long, sufficient, if the State, authorities con? cerned decided to impose additional conditions. Such divided control does not appear to be satisfactory, and it seems reasonable to suggest’ that should, any State desire unusual conditions, in- one of its staple industries it should, specially contribute towards such conditions, and not penalize the whole of the Commonwealth to maintain any special conditions desired.
As a means of protecting the sugar’ industry, the’ Board strongly indorses’ the- granting’ of a protective duty in preference to> the extension of an Agreement. The latter is’ neither satisfactory to the producer, the manufacturer, nor the consumer.
When the effect’ of the- control of the Agreement was to hold down the price of sugar to the manufacturers and the consumers, ‘ it, was perfectly satisfactory to them. When, however; conditions altered so that the Agreement had the effect of increasing, the price of sugar to an. extent which will make it possible to carry on the industry ins a satisfactory way we are told that the control is neither satisfactory to the producer, the manufacturer nor the consumer. Under the heading, “ Arguments advanced by applicants in favour of duty,” the- Board goes on to say-
The Board, now desires to deal with the arguments advanced in favour of increasing the duty from £6 to £14 per ton.
The applicants state, “ We have to remind you that- there is an import duty of 3d. per lb. on jams and jellies, and all jams are half, sugar, so that, the jam. manufacturing industry, is protected to the extent of 100 per cent, more than, what we are asking for sugar. Preserved1 and. condensed, milk- also is protected to the extent of 2&d. per lb. (General), and the sugar content thereof is something over 40 per cent.
It’ will be seen that this product is protected to the extent of 60 per cent, more than, what- we are asking for sugar.”
The Board does not consider the sugar producers are taking up a fair attitude in these arguments. In seeking to forward their own1 claim it is only reasonable to remember that other great primary, interests of immense value to the Commonwealth should not be prejudiced. In the manufacture of jam there are three industries to be considered, viz. : - Sugar, fruitgrowing,, and jam-making. To give half, of the protection to sugar would not, in the opinion of the Board, be a wise division of the protection. The fruit-growing industry in Australia is. of great economic value, and for the disposal of its fruit is largely dependent on. the sugar industry. The fruit-grower appears to be entitled to the sama proportion of the 3d’, as the sugar producer, whilst’ the jam manufacturer, who- has to provide equipment, lays out his money- in fruit, manufacture, case, and distribute, seems fairly entitled to the remaining Id.
Nothing could be more misleading than this statement of the position by the Tariff Board. The case, as stated by the sugar-producersj does not suggest- that the duty should be divided in the proportion of fifty-fifty. In a pound of jam there is1 said to be half-a-pound of sugar. The protection of jam- is- 3d. per lb. under the Tariff., that would be 3d. on a 1-lb. tin of janv. The protection on tho half-pound of sugar in- tha’fc pound- of jam at’ l^d. per lb. would only amount to $d. That would be Jd. protection for the sugar and 2£d. for the jam. I3 that asking for the sugar industry half tho protection, that the jam industry enjoys? It i& only asking for one-fourth.
The sugar content in preserved milk, sweetened,, is 40 per cent. At l$d. per lb. that would, amount to very little over Jd. protection on the sugar in a pound of milk, leaving 2d’, for the milk itself, yet the Board says- that it does not consider, that the sugar-producers are taking- up a fair attitude in. this, argument. Then the Board divides the manufacture 0? jam into two separate industries.. It says that the fruit-grower appears, to be eni- titled to the same proportion of the 3d. as the sugar-producer, whilst the jam manufacturer seems fairly entitled to the remaining Id. The jam manufacturer has to get Id., so does the fruit-grower, but the cane-grower and the miller and refiner are only to divide Id. between them. Has not the Board looked at the question in the same way as the members of the two Boyal Commissions did - through southern eyes? Further on the report states -
Similarly, the suggestion that sugar should receive l$d. out of the 2Jd. per lb. provided against imported condensed and preserved milk cannot be approved. The ever-increasing industry of dairying is of much more value to the Commonwealth than the sugar industry.
But is that a fair statement of the case? The extent to which the dairying industry as a whole is affected by the price of sugar is comparatively small. We all know that the principal product of the dairying industry is butter, and next to that cheese. The export market for condensed milk, now that tie war is over, and that there .are no large Army orders obtainable, is practically negligible. The report states -
The Royal Commission in 1920 reported that the average total area devoted to cane during the five years 1914-15 to 1918-19 was 174,535 acres, and, in the present state of our population -
The form of primary production which has always been regarded as the most profitable, and the best .suited to our circumstances, is that which promotes closer settlement, and the value of the sugar industry should not be measured by the area of land under ‘sugar-cane, but by the value of the product of that land and the number of people which the 200,000 acres under cane in Queensland supports.
– -Directly and indirectly, how many are supported?
– Over 100,000.
– What is the wages bill?
– Six million pounds, or twice as much as the pastoral industry, although that industry occupies scores of millions of acres.
– And what capital is invested?
– Directly invested in mills and farms, on a pre-war basis, there must be from £12,000,000 to £15 ‘000,000 ; but if based on the present value, the amount would be, I should say, practically double that. I- wish again -to remind honorable senators that the money invested in our sugar towns is just as directly invested in the sugar industry <as the capital represented by the sugar farms and mills.
– What is the population of Queensland?
– About 750,000 ; a little less than the population of Melbourne, although the area of Queensland is nearly eight times that of the State of Victoria. The report continues - any material increase in the production of sugar will yield a surplus which it will be practically impossible to export at a profit.
Evidently the idea in the mind of the members of ithe Tariff Board is that the population is not going to increase, and if such is the case, the Commonwealth is becoming stagnant. We passed a measure this morning to promote immigration, and quite apart from the special efforts made by the Commonwealth in cooperation with the States and Imperial authorities to induce people to settle in the Commonwealth, we have had, for a number of years, an average increase in population of at least 100,000 a year for the whole Oommonwealth. That means an increased consumption of sugar of 5,000 tons annually, and to supply thai quantity would require an increased milling capacity, or the erection of a new mill, capable of producing 15,000 tons of sugar every three years. Notwithstanding that, we have this surprising suggestion that there is a- risk of ‘Overproduction if reasonable protection is granted to the industry.
– Has the output per head of the persons employed been increased or otherwise ?
– I do not think it has decreased. We have, of course, had our troubles in connexion with the industry, and the unsettled state of the labour market throughout the world has naturally been reflected in Queensland. Although some sugaT-workers are somewhat extreme in their ideas, they are, in the main, a fine body of men. I have had very little cause to complain in regard to the class of men whom I have employed on my own holding.
– There -are far more strikes there than in the wheat industry, which employs about ten to one.
– Wherever large bodies of men are employed, there is bound to be more industrial trouble. I am sorry that I feel it incumbent upon me to deal at some length with this report, which is’ a most extraordinary production. J have a thorough practical knowledge of the industry, and I shall look with extreme doubt upon any reports which the Tariff Board may iu future submit regarding other industries. This practically means, the report states, that the present production of sugar cannot bc increased without the producers incurring a loss. If wc produce an additional 10,000 or 15,000 tons in the course of tho next few years it will cause a loss to the producers, we are told. How absurd, in view of the fact that this Tariff cannot be felt until the 192-4 season’s crop has been gathered, when the consumption of sugar will be 10,000 or 15,000 tons greater than at present. The report goes on to state - Every other country is adjusting its conditions now that the war effects are passing, and practically every other industry in Australia is also adjusting its conditions, which were framed in years when our economic conditions were un- - stable and inflated beyond all previous records. Is Australia to be the only country to indefinitely continue war terms and conditions in the sugar industry ? Is no heed ‘to be paid to the righteous cry” from the hundreds of thoueonds of industrialists for reduced costs of living? Or is sugar to be the only item to remain in the enviable position of maintaining its abnormal protection -whilst other industries have to yield to the demand for reduction in costs and price t
What reductions have been made in the price of other commodities? I have not enjoyed reduced prices, but have had to purchase at rates far above what may bc regarded as normal. Reference is made to abnormal protection, but I would like to quote some figures to show the protection enjoyed by some other industries in the south. Dried prunes are protected to the extent of £42 a ton; preserved ginger, the raw material for which is imported free of duty, is protected to the extent of £37 6s. Sd. per ton; preserved fruit in liquid enjoys a protection of £37 6s. 8d. ; and, notwithstanding this, we are informed by the Tariff Board that the duty the sugar industry asked for is abnormal. In what respects? Abnormally low I should say. Hops, chiefly pro duced in the State which the Minister (Senator Earle) represents, enjoys a protection of £112 per ton. Is £14 per ton for sugar abnormal in the sense intended by the Tariff Board when compared with £112 per ton on hops? Egg yolk, dry, is protected to the extent of £168 per ton.
– Did not we iucrouse the duties on a number of articles that might be dumped here?
– But sugar was not included. Egg, being yolk and albumen, has a protection of £168 per ton, and egg albumen, dried, a protection of 3s. per lb., which amounts to £336 per ton. Notwithstanding this, we are told that the protection of £14 a ton on sugar would be abnormal. Could anything be more ridiculous in view of the protection enjoyed by industries in the southern States? The report continues -
There is probably no other commodity that enters so largely into the household cost of the consumer. Sugar is freely used in nearly everything in Australia, with the result that we are classed amongst the two greatest sugarconsuming countries of the world.
I should like to ask householders if their sugar bill is anything like their meat or bread or butter bill. As a matter of fact, sugar is one of the smallest items. The report further states -
The next argument used by the applicants in favour of the increase in duty to £14 per ton is by reference to the report of the Royal Commission which inquired into the sugar industry in 1912; and reported in very strong terms on the great importance of the industry te Australia from the industrial, social, and political points of view. With this the Board entirely agrees, but it must point out that when that inquiry was made the industry was being maintained by white labour against outside competition, and yet the Commission, with one exception, recommended a duty of £6 10s. per ton. The exception was Commissioner Crawford, now president of the Australian Sugar Producers Association, who recommended £7 per ton.
The portion to which I wish to direct honorable senators’ attention is that wherein reference is made to the industry being maintained by white labour against outside competition. So it was when these reports were made and the wages in Australia were 8s. per day. Wages arc now a little higher in the north than in the south of Queensland; but, taking the centre ‘as the mean, they are 16s. 8d. per day. That means that our wages since then have more than doubled, and so hava most of our other costs. The wages in other countries have not increased in anything like the same proportion. Take, for instance, Java, which is our nearest and most direct competitor. Wages there were 6d. a day before the war, and they now average something leas than 9d. per day.
– That is an increase of 25 per cent._
– That may be so; but the increase in Queeusland is over 100 per cent.
– What percentage of the cost of sugar do wages represent?
– About 80 per cent. The Tariff Board, later in its report, emphasizes what it said in the paragraph which “I have just quoted -
In a further statement presented by the applicants, particulars are given which have some bearing upon the cost of production, but sufficient definite information is not available to enable such cost to be obtained. As previously referred to, the Royal Commission of 1912 had conditions of production by white labour to consider as at present, and they were evidently not impressed that the duty should be materially increased.
If the Board had made any investigation outside these reports, it would not, surely, have made such a statement? What did the Board do ? A few days after the application was forwarded to it by the Minister, although it was informed that further evidence would be tendered if it was required, the Board left for Western Australia. It will be found that the report is dated “Perth, 30th September.” I Avould like to know what very urgent matter took them to Perth, in view of the fact that a report was required upon this most important subject. When the Board was appointed, it was understood that its members would travel throughout the4” Commonwealth, to make investigations; but their investigations in connexion with this matter were not made where the sugar industry is carried on, but in Melbourne, or during the journey from Melbourne to Perth. I had great hopes of the Tariff Board when the legislation constituting it was passed, but my hopes have certainly not been realized. If this is an example of the way the Board makes its investigations, Australia would be better without it, and could obtain the necessary information in some other way. When the measure was before Parliament, I advocated the appointment of three salaried officials, who would devote the whole of their time to the business of the Board. Instead of that, we have one member of the Board who can only be regarded as the representative of the southern manufacturers, and another who is the representative of the importers. How can we expect anything like a judicial pronouncement upon matters referred to a Board so constituted?
– Especially if it relates to a primary industry.
– And especially, it seems’ to me, if it is a Queensland industry.
I do not wish to unduly delay the Senate. I have spoken longer than I intended. I feel sure that the amendments made in another place to the Government’s proposals are chiefly due to the report of the Tariff Board, and I say, without hesitation, that if honorable members had a personal knowledge of the industry, they would come to the conclusion which I come to, that the report is not worth the paper it is written on.
– Will the honorable senator deal with the second-last para* graph on page 5?
– The paragraph referred to reads -
In support of the proposed duty, the Board notes that the price of overseas sugar, which is higher than it was twelve months ago, is now quoted in Java at £17 3s. per. ton. With the addition of the duty recommended, and the freight and other charges, this should leave ample room for profit, even should a further decrease take place in the price of- overseas sugar.
If the Board had made the investigationsit should have made, i t would have known-, that it costs less to bring sugar from Java!’ to Adelaide or Melbourne, than it costs to> bring it from the sugar ports of Queensland. I believe that statement ako applies to Sydney; but certainly, taking the average, it costs less to bring sugar from Java to the Australian refineries than it does to bring it from the sugar ports oft Queensland. The freight and other charges on sugar from Java, as compared with freight and other charges on- Queensland sugar, are against tafe Australian industry instead of being in favour of it. All I can say about the pri^e is that, according to the latest advices I have seen, it is less than £17 3s. The latest quotation I have seen was £16 10s. It would seem that the market is falling instead, of rising.
– At what price would Queensland sugar have to be sold now to show a profit?
– I do not think it is possible to sell it at a price below what we are getting at the present time, namely, £30 6s. 8d.
– And what could. Java sugar be landed for ?
– The sugar with which Australian sugar has to compete is not the raw, but ‘the white, sugar, which usually is 30s. or £2 a ton above the price of raw sugar. That makes the price of the Java sugar about £18 a ton, and even if we could take advantage of the full duty, that would only make the price in Australia £27. This sugar, however, is not quite as good in quality as. the Australian refined sugar, and it sells at from £1 to 30s. a ton less. In the present circumstances of the world’s markets £9 6s. 8d. per ton duty would probably mean a little over £30 a ton for refined sugar, or some pounds a ton less than the present price. It will be a serious drop indeed, and will .create a very serious position. I must say that I feel myself in a very great difficulty. We know that these are the closing hours of Parliament, and I would very much like to submit to the Senate an amendment which, t have not the slightest doubt, would bo carried, but I do not know what effect it would have upon another place. I am not blaming the Government for the unsatisfactory proposal. The Government’s proposal was better than what is provided in the Bill now before the benate, and seeing that this is a matter which affects the cane-farmers and their employees chiefly, I certainly expected that those who claim in another place to be the special representatives of the primary producers, and those others who claim to specially represent and look after the interests of the wage-earners, would have treated the Government’s proposals in a very different manner. The duty proposed is insufficient to encourage growers to spend their money, and give that measure of employment which they would do under a higher duty. It might seem that a loss of £2 per ton is not a serious matter. While it would mean an increase of, perhaps, Id. per week in the household budget of consumers, it would also mean an addition of almost os. a ton in the price which the farmers would receive for their cane^ Apparently, while the southern people are prepared to give Id. per lb. extra for a White Australia, and all the other advantages accruing from a great industry like that of sugar production, they are not prepared to give l£d.
– Can the honorable senator give any information regarding the population maintained by this industry in Northern Queensland?
– The electorate of Herbert depends almost entirely upon the sugar industry, with the exception of part of the population of Cairns and part of the population of the city of Townsville. At the last census that electorate had a population of 91,000 persons, and I should say that 75,000 of the people were dependent directly or indirectly for their livelihood upon the sugar industry.
– I think one of the main factors in making public opinion in the southern States, perhaps hostile to the sugar industry, is the belief that extraordinarily luxurious conditions exist in regard to labour in that industry. Are. the workmen abnormally paid by comparison with those in other industries ?
– I would not say so. It has to be borne in mind that the sugar industry is carried on in a remote part of the Commonwealth and in the tropics, where conditions are supposed to be less tolerable than in the more temperate parts of Australia. Moreover, the work is seasonal.
– It is intermittent.
– It is not intermittent in the sense that the men are employed for a week or two and are then idle, but it is seasonal. When I was in Tasmania a few months ago I paid al visit to the Electrolytic Zinc Works, in which I am very much interested. Tasmania is fortunate in having such an industry. I learned that the lowest wages paid there to men in constant employment was a little under 15s. per day. I stated earlier in my remarks that the daily wage in the sugar industry is about 16s. 8d. That is not a high wage when compared to the wages paid in Tasmania, taking into account the difference in the conditions under which the mcn work, and the fact that employment in the Electrolytic Zinc Works is constant, whilst employment in the sugar industry is only seasonal. I do not think it can be said that the conditions of employment in the sugar industry are as luxurious as Senator Bakhap has suggested.
– I do not say that they are luxurious, but that there is an impression in the southern States that that is the case.
– “Unfortunately there seems to be -a num’ber of very erroneous impressions in the southern States regarding the conditions under which the sugar industry is carried on in Queensland. I can quite understand that it is very easy for the southern people to be misled. I am afraid it has been the deliberate purpose of some interests -to mislead the people of the south. It is not very long since a gentleman waited upon me at Parliament House and offered his services in conducting a press propaganda in the south, which he told me he considered very necessary, in view of the prejudice existing here against the. Queensland sugar industry. I asked him what were his qualifications. I asked him if he were a journalist. His reply was that he was not a journalist in the ordinary sense, but he wrote quite a lot for the press, and as a matter of fact, he was the author of a number of articles which had appeared in a Melbourne newspaper in opposition to the Queensland sugar industry.
– He was prepared to write on either side.
– I asked him what it would cost, and he offered to do the work for the modest remuneration of £40 per week. He said, “I am a freelance journalist, and it is immaterial to me by which side I am employed.” It was clear that this gentleman had been employed by the other side in conducting a propaganda against the sugar industry. Honorable senators will recognise that that places an industry carried on in a remote part of the Commonwealth in a very unfair position indeed. If the industry belonged to Victoria, New South Wades, or South Australia, or were divided amongst those three States, the columns of the metropolitan press would not only be open to those interested to defend the industry, but the proprietors of the newspapers would make it their business to set out .the claims which the industry had on the people of Australia. When we desired to do that the columns of these newspapers were closed to us. [Extension of time granted.’]
– The honorable senator might address himself to paragraphs 4, 5, 6, and 7, on page 5 of the report- of the Tariff Board.
– Can the honorable senator say whether the people of the sugar districts are large consumers of jams manufactured in southern Australia?
– They are large consumers, not only of jams, but of ,fruit in other forms, such as canned fruit, dried fruit, and dehydrated fruit, and also of condensed milk manufactured in the south. In fact, as I stated before, the ships that bring sugar from North Queensland ports to the refineries in the southern States carry to the .north southern goods of practically equal value. The sugar industry, therefore, assists in promoting the prosperity of the Commonwealth as a whole. There is an idea very popular, but quite erroneous, that the benefit of Protection is enjoyed only by people engaged in the protected industries. That is a very popular fallacy. If we had to send abroad for our sugar, it would mean that every year we would have to send out of the Commonwealth several millions of money. I ask honorable senators to ‘ consider what would be the cumulative effect of sending out several million pounds a year in the course of, say, ten or twelve years? The balance of trade would be very seriously affected. The exchange position would become very adverse. The effect of that would be felt by every section of the community. In all the circumstances I ask honorable senators to consider what I have said, and I hope they will be good enough on some future occasion to grant to the sugar industry that necessary measure of Protection which it is denied under the Bill now before the Senate.
asked me to say some-, thing with respect to some paragraphscontained in the report by the T»rij£ “Board. Paragraph 5 of the report reads -
The imposition of so high a rate as lid. “per lb. will injuriously affect the fruit-growing, jam-inaking, and other industries using sugar tf&r consumption in the Commonwealth.
T presume the assumption is that it would so increase the price of jam that there would be less of it consumed. The extra id.’ per lb. which we ask for, and which ia beiDg denied, would mean an increased (jost of -Jd. on each- 1-lb. tin of jam. Will any one say that the consumption of jam would, be seriously reduced if the price were increased by Jd. per 1-lb. tin? The increase to the household of Id. per week would mean an increase of 53. per ton of cane to the farmer, and that might make all the difference in many instances between profit and loss in the industry.
– It would meanan increase of id., instead of id., on a 1-lb. tin of jam.
– Yes ; it would mean an increase of Ltd. on eight tins df jam. No one would contend that such a slight increase in price would affect the consumption of jam. I should like to say that the fruit-growers have my sympathy. I know that the fruit industry is in a very serious condition. But that is not at all due to the price of sugar. Ct is due to other causes. It is partly due to the fact that fruit-growers have given so much attention to the price of sugar that tlhey have neglected the consideration of other factors in the situation which more seriously affect their industry.
– What was the price of a 1-lb. tin of jam before the war?
– Before the - ar, the price was 4id., and it is now 9d. Jam is now twice the price it was before the war, and it cannot be successfuly contended that that is wholly due to the increased cost of sugar. It is due to the increased cost of the containers, the increased cost of labour in the factories, of wages paid to retailers and others concerned in the business, and, to some extent, to the increased profit made by the distributers.
Passing from that, paragraph 6 of the report reads -
Goods using sugar will be largely deprived of the protection afforded them through a heavy duty being imposed on their raw material. lt does not seem reasonable to speak of refined sugar as raw material. It is a more highly finished product than the jam itself. Seeing that jam has a protection of 3d. per lb., and all that we ask ‘for is a duty of lid. per lb. on sugar, that amount of duty would, as I said previously, only amount to $d. on the sugar, as against 3d. per lb of jam, or one-fourth of what the jam manufacturers and fruitgrowers will receive.
– That is on a basis of a duty of ljd. per lb.
– Yes. The sugar in a 1-lb. tin of jam will only receive id: protection out of 3d.
Paragraph 7 of the Tariff Board’s report reads -
The consumers will be called upon to make an unnecessarily large contribution towards an industry which has recently been reported upon as inefficiently conducted, should the duty be fixed at £14 per ton.
I have already dealt with the question of efficiency. There is no agricultural industry in Australia in which farm efficiency has reached so high a level as in sugar-growing in Queensland. In the wheat industry, for example, the practice is to plough only a few inches deep, whereas for the cultivation of sugar the grower ploughs, not only deeply, but a number of times to a depth of from “10 to 12 inches.
– But what area is cultivated ?
– No other form of agriculture carried on over broad acres requires anything approaching the intense cultivation necessary for the growing of sugar.
– That is a misstatement of the case. The honorable senator must know very well that fallowing is an essential part of the preparation of land for wheat cultivation.
– But I have never heard that termed intense cultivation.
– It is very intense cultivation over broad acres, to use the honorable, senator’s own terms.
– And it is absolutely essential.
– Agricultural experts would not regard that form of cultivation as intensive, so much as extensive, whereas the most intensive methods are followed in tihe preparation of land for sugar-growing. Moreover, it must always be borne in mind that whilst producers in other rural industries are in competition with white labour, the cane sugar-grower, alone among producers in Australia,, has to compete against the cheapest of all forms of coloured labour.
– Wheat-growing also is carried on in competition with black labour.
– But not to the same extent. Only a small proportion of exportable wheat is produced by coloured labour, whereas cane sugar outside Australia is produced wholly by coloured labour.
I shall not detain the Senate any longer. I thank honorable senators for their very kindly hearing and for their courtesy in granting me an extension of time. While I know that -my words will not bear fruit immediately, still I hope they will be as bread cast upon the waters.
– It is certainly unfortunate that an important measure like this dealing with the sugar industry, an industry so vital to Queensland, should be brought on at this late hour in the session, and at 5 o’clock in the morning, when the Senate is exhausted. In a former debate I made my attitude upon this question quite clear. I think it would have been wiser for the industry to have insisted upon a continuation of the Sugar Agreement. We have heard a great deal about the difficulties of obtaining a renewal of the Agreement and the turmoil which, it is alleged, would surround any attempt to get a renewal every five years, but if the present position is any indication of what would happen, it would be better, I think, to have one big fight on the issue and be done with it. After perusing the report of the Tariff Board, which is against the renewal of the Agreement, I would not be in favour of remitting this issue to a body of men who, apparently, have not visited Queensland specifically in regard to the sugar industry, and two of whom, I understand, are manufacturers who would necessarily be under the influence of southern interests. The reference to the Tariff Board of this matter certainly was not wise, and in my judgment it was equivalent to a confession of a dereliction of duty on the part of the Government.
– Why does the honorable senator say that?
– Because six months ago those concerned in the sugar industry appealed to the Government to declare their policy, and, although we are now within thirty-six hours of the close of the session, we aire still without any pronouncement of the policy of the Government.
– Surely that policy is indicated in this Bill ?
-No doubt the intentions of the Government are suggested by the Bill, but the Ministry say nothing about the more important question of a renewal of the Sugar Agreement.
– I think the honorable senator may. safely assume that Parliament, as at present constituted, would not approve of any extension of that Agreement.
– And this Chamber will be constituted as at present when next we meet.’
– It is doubtful if, after the election, Parliament will be constituted as at present. It is generally assumed that in every election the casualties represent about 30 per cent., and, since the Government in another place have a small majority, there- is some prospect that when Parliament reassembles there may be some changes.
– I ask the honorable senator to discuss the Bill, not the election prospects.
– The Bill and. the Agreement, which has been ignored in connexion with this matter-
– The honorable senator must not dispute my ruling except in a proper and orderly manner.
– I cannot understand the reason for rushing this Bill through, because, although Senator Crawford did not appear to be clear about the matter at the time, and I was in some doubt about it myself, the fact that the Agreement will not expire until the 30th June next gives plenty of time for the new Parliament to do practically anything it likes in the way of altering the duties or even of sanctioning a renewal of the Agreement.
– This Senate could not do that.
– No; not tonight, because this matter baa been remitted to this Chamber from another place, but it may be altered elsewhere, and, therefore, we appear to be doing something six months before its time. I see no reason for urgency unless ‘ this Bill is put forward as an invitation to the sugar-growere to give up all hope of a renewal of the Sugar Agreement, and also to provide the Government with a convenient ‘ ‘ get-away “ from the Agreement.
I agree with what Senator Crawford had to say about the economic conditions of the sugar industry. If we are to depend upon Customs protection for its de» velopinent, I should like to see that protection as high as possible, consistent of course, with a due regard for the consumer and the fruit-growers and allied industries, including the jam manufacturers. I have never taken the view that in connexion with this matter there is no case for the consumers. “While we in Queensland believe that the sugar industry should receive proper consideration, we do not expect the industry to produce a band of sugar barons, or workers living in a state of luxury, such as was suggested by Senator Bakhap is the case. I regret that we have not an opportunity of addressing ourselves on this occasion to the question of a renewal of the Agreement, but I am satisfied that an effort will be made in the next Parliament to revive this issue. The whole business has not been ‘handled with discretion by the Government. The fact that within a few hours of the closing of the session we are discussing a measure of such vital importance to the prosperity of Queensland is substantial evidence that the right course has not been pursued. The motive behind the reference to the Tariff Board, and the move for a duty instead of the continuation of the Agreement, is certainly a political one. We know that the policy of the present Government is directed against Government trading; but the sugar industry is deserving of special treatment in view of the difficulties of tropical production. I very much regret that “there has been this eleventh-hour dropping of the question of the Agreement and the reversion to the import duty. The whole matter could very well have been left over for the new Parliament, because the duty will not come into force until the 30th June next. It has been said that the question of a new agreement should not have been raised, because we are in the dying hours of the present Parliament, and any- agreement arrived at could be altered by thenew Parliament. Of course, that argument applies equally to the duty. It is regrettable that we are not in possession of the Public Accounts Committee’s report on sugar transactions, though that information is said to be ready. When Parliament is supplied with full information concerning the industry, I am satisfied that Parliament will not allow it to languish, and let the large areas in the north remain practically unpeopled..
– Personally, I regret that the Government have not been able to see their way clear to have some agreement with the growers rather than introducethe proposed duty, but I realize that, at the closing of the session, there would he difficulties in framing an agreement that would be satisfactory alike to the growers and the consumers. I do not look upon the present measure in the same light as Senator MacDonald does. I cannot understand the frame of mind that some honorable sena’tors - get into when they look with suspicion on every proposal brought forward by the Government. They seem to imagine that those opposed to them politically are incapable of “ playing the game.” Members on this side- are just as free from political trickery as any others, and I resent the suggestion that the Bill is a’ political move.
When I was in Queensland .some time ago, <I acquainted -myself, to some ‘extent, with the sugar industry, and I am quite satisfied that it requires the measure of protection that is given to several of the other primary industries of Australia. Whatever treatment is meted out to the growers, due regard should be had to the price that has to be paid for sugar by all sections of the consumers, and we should be icareful to see -that in assisting one industry we do not injure another. I know that it is almost impossible to do that, but we should .approach, as near as possible, -to that ideal. I quite agree that this industry is a most ‘important one to the people of Australia. ‘ Sugar is being grown in a part of the Commonwealth which, so far, has been found -largely unsuitable for any other primary pro’diidtion. The people engaged in the industry oan be appropriately regarded as being the outposts of the White Australia policy. I cannot imagine that the people would hesitate to give the measure of protection to this industry that has been afforded to others. It is the price they must pay for the White Australia policy. I recently saw some of the new settlers on sugar lands in Queensland. They were busily engaged in clearing the land. First they had to clear the timber and dense jungle, and then they ploughed and cultivated the land for the ‘first time; and if honorable senators could see the conditions under which these men have to live in the early stages, they would be quite satisfied that the sugar-grower, as he is known in Queensland, is not the sugar “baron” deecribed iri the Melbourne’ newspapers. It is easy for a city editor to write trash of that description from his easy-chair. The conditions of these sugar-growers in the early stages are no better than those faced by the mallee farmers in South Australia. “The men were living in iron “ humpies,” ami had put in their first crop on so much of the land as they had been able to clear. They were industriously clearing further land, and were looking forward to the time when they would have a decent home there.
If it can be shown that- the millers -or the middlemen are making more than a fair profit out of the sugar to the detriment of the growers, I shall do all in my power to assist the struggling producers to get a fair price for their cane.
In discussing this question, the Minister (Senator Earle) suggested that if the sugar-millers wish to improve their position, they should install more modern appliances, but that could be said of any industry in Australia. When I visited the sugar district the crushing season was to commence in about two months, and at the four mills I inspected machinery costing from £30,000 to £50,000 was being installed. Some one has to pay for that. The old plants are’ apparently becoming worn Out, and the millers are justified in having the most modern appliances available in order to meet competition.
– The rollers, at least, have to be replaced every season.
-^-I was informed by Ohe miller that he had to crush 40,000 toils of cane before he derived any profit at all.
– When visiting the district I made very careful inquiries as to the manner in which the work, was carried on and the profits derived. I was also supplied with some interesting figures which, unfortunately, I have not before me. It appears, however, that no undue profits are being made. On the larger cane-fields further north we saw improved appliances such as steam ploughs and other agricultural implement’s used in cultivating the soil, and while these are utilized by the larger growers the smaller cane-growers have to use a plough and tSam, because they have not the means with which to provide more up-to-date implements.
– He would overcapitalize his undertaking if he purchased a tractor. ‘
– Yes, and it should also be said in justice to the millowners that they have spent fairly large Sums’ in constructing railways for many miles- to assist the growers in transporting their cane to the mills at the cheapest rate. Railways cannot be constructed and rolling-stock provided without incurring considerable expense;
– The latest mill in Queensland cost £500,000, and it lost £100,000 before it worked up-. to. a profitable output. … < ,. ,
– That -is sufficient to indicate that heavy : expenditure is incurred.
Frequent reference has been made to the Colonial Sugar Refining Company, and it has been described by some as an octopus which is endeavouring to strangle the smaller men; but the impression I gained was that the company has a very good name on the cane-fields. It- has been said that if we impose a duty instead of renewing the Agreement the Colonial Sugar Refining Company in time will endeavour to secure control of the industry; but the more successful growers and the millers have no such fear. There is a friendly feeling on the part of inost people towards the company, Which ‘has been of great benefit to the growers, as, apart from assistance giveil in other ways, it has placed the services of its highly-trained chemists and accountants at the disposal df the millers and the canegrowers. If any effort should’ be made by the Colonial Sugar Refilling Company to secure control activo steps should be taken to prevent it. I’ was also ‘ pleased to find that there was not any desire for a re-introduction of coloured labour, and an. overwhelming majority believed that white men working under fair conditions could do all the work that was required, and at the same time make a fair living. The industry is considerably handicapped in connexion with the handling and sale of its byproducts, and there is a terrible loss because there is no market for them. Molasses, which is one of their most valuable by-products, was unsaleable, aud was either being burnt in the furnaces or spread on the soil as a fertilizer. At Millaquin tremendous quantities of rum were stored. iWe were informed by the manager of the distillery that an attempt was being made to convert it into motor spirit, but that the Customs ‘Department had objected to the method suggested by the mill manager for denaturing it.
– That has been adjusted now.
– “When there, an attempt was being made to overcome the difficulties, and their formula was claimed to bc as effective as that of the Customs i Department, and more economical. If the matter has been adjusted considerable assistance will be given to the millers. There are many other byproducts in connexion with the industry which it does not pay to use owing to the population not being sufficiently dense to absorb the output, and the freights being too high to enable it to be exported. As the population increases the by-products will become more valuable, aud the industry will then be able to show a better return. I do not wish to delay the Senate unnecessarily, but I did desire to express the opinions I formed when visiting the sugar districts. I am anxious that not only those who belong to Queensland should support the industry, but also those from other States. I have found that those who have been able to visit the cane-fields have always come away under the impression that the industry is one which should receive our support.
Mention has been made of the extent to which industries in other parts of the Commonwealth are protected. I am confident that if the sugar industry goes out of existence in Australia 90 per cent, of the people now engaged in it in Queensland will have to leave that State. Owing to the conditions of life in the sugar district, and its distance from civilization, wages must necessarily be high there. The man who sits in his chair in the Age office and writes the trash which we read in that journal has no idea of the conditions under which these people live. The fact that a cane cutter is receiving a wage in North Queensland which appears to be very extravagant in Melbourne, leads me to recommend the gentlemen who write the articles to go up to Queensland and do some cane cutting themselves. I am not prepared to say whether the price paid is too high or not, but men who work by contract cutting cane in the heat and moisture that are inseparable from that district and that part of Australia, deserve to be well paid. Men in Melbourne, with their limited knowledge of local conditions in Queensland, are not entitled to look upon the cane-grower as being too highly paid. The cost of living is very high, and the work is very arduous. I hope and believe that the Bill will go through as it is, and I trust the sugargrower will be encouraged when he knows that this Parliament, comprised as it is of representatives from all the States, is determined to see that this industry is not allowed to suffer any more than any other industry in Australia.
, - I desire to add a few remarks to those of my colleagues from Queensland, and Senator Newland. I regret, with Senator Crawford, that the Bill has been presented to us with the original intention of the Government very much altered. I furthermore regret, and I’ hope that due notice will be taken of it by the critics of the Government, that the sugar industry has received a severeblow to-day from a combination of alleged representatives of workers and primary producers in another place. The whole of the so-called primary producers’ party, with the exception of two members, voted against this great industry. The Labour party, the alleged representatives of the workers, the alleged Protectionist party, voted solidly against the industry. I hope that the same notice which has been taken of the Government’s actions in several directions during the last few months will be taken of the actions of the Labour party and the alleged primary producers’ representatives. It is a repetition of the treatment which has been meted out by the -so-called representatives of the primary producers on every occasion when a Queensland primary industry has sought protection. When the banana Tariff was under review, where were they then? They voted against us. Of the Labour party, which allegedly represent the workers who receive £6,000,000 every year from the sugar industry, there was not one-
– The honorable member must not allude to the proceedings in the other branch of the Legislature.
– I have no desire to dispute your ruling, Mr. President, but I shall take every opportunity, in the place where I am allowed to express my views, to let the people of this country know how some of their so-called representatives are acting.
I regretted to hear the speech in which Senator MacDonald blamed the Government for the fact that the Queensland sugar industry is not getting all that it is entitled to. No previous Government in Australia has ever given to the sugar industry the same consideration as the present Government. I think that statement will be borne out by every section of the sugar industry. I, like Senator MacDonald, intend to use my endeavours when the time comes to secure a renewal of the Sugar Agreement; but I recognise that it is advisable, at the present time, in view of the hostility of honorable members f rom’other States towards the Queensland’ industry, and the approaching elections, to increase the duty. Senator MacDonald would do well to remember that the present Agreement does not expire for seven months, and .that the duty, consequently, will not become operative until such time as the Agreement expires. Therefore, the Government have done nothing to warrant the ivnjust criticism indulged in by Senator MacDonald. When he has done as much for -that great primary industry of Queensland as the Prime Minister (Mr. Hughes) and his colleagues, he will be entitled to stand up in this Chamber and talk about it. Until such time, it, behoves him to hold his peace and not indulge in the carping criticism that we heard from him this morning. I ask him to remember that members of his party in another place did their damndest to deal a death-blow at the sugar industry. I hope the people of the country will realize the action they took. How will Mr. Blakeley be able to justify his vote to thousands of Australian Workers Union workers in the sugar industry? How will Mr. Lambert justify his. vote to thousands of members of the Australian Workers Union who work in the sugar industry in Queensland? The members of the Labour party pride themselves on being Protectionists; but when the screw is put on by the Melbourne Age and Argus, they, are not game to stand up for the principles of their own platform, but they grovel ,to the daily press. The public of this country will have an opportunity from now onwards to study the division that took place in a certain deliberative Assembly, not a thousand miles from this place, and I hope they will take full notice of the way in which the so-called champions of Democracy and the so-called representatives of tho primary producers have acted.
It was refreshing for me to hear the remarks of Senator Newland. He paid a visit to the sugar districts last year, and after having seen for himself what the actual position was, he altered his views very much. I regret that more members of Parliament did not have the time and opportunity to make a similar visit. If they could see the circumstances under which .the people in the industry work, they would not .’be so prone to believe statements which appear in the lying press of Melbourne. They would not believe a statement that men who grow sugar-Kjane live iu magnificent palaces and’ become extremely wealthy. Senator Newland, Senator Plain, other members of Parliament, and myseK, saw the industry from every point of view. We saw the settlements that had been in existence foi many years. We visited some of the- older sugar-mills, and found associated with them little townships. There was ona at Bingera, where, I think, the attendance of children, at school was something oyer one hundred. . Then we went further north and. visited a new settlement, known as Carmila Scrub. To see that, scrub, and the difficulties that had to be overcome before cane . could be planted, made one realize that the sugar industry should receive every consideration and encouragement. Our admiration must go out to those who are working. in the industry. If some of the critics who write in the journals of this city about sugar-growers’ palaces could see the conditions under which new settlers are living and rearing their children, ‘they would not be so prone to write about palaces. I can assure honorable senators that, in many districts which we visited, men were struggling and hardly making enough out of their plantations to keep body and soul together, and yet we have the so-called workers and fair-wage champions, and the alleged primary producers’ representa:tives, when they get an opportunity to make life a little bit easier for those engaged in one of the greatest primary industries of this country, voting against it. I hope that at the forthcoming elections the people will record their votes against them, and be done with these hypocrites who are sitting in another place at the present time.
It is deplorable that, a section of the community and a section of the press of Australia should’ have endeavoured for months past by every means in their power to strike a blow at the great sugar industry of Queensland. Every good Austraiian should be as proud of that industry as he is of the wheat industry. Do we hear people in North Queensland say that the wheat industry should go out of existence, and that if we imported our wheat we would get it cheaper ? Do we hear them say that those engaged in the fruit-growing industry, or in any other primary industry, should not be given the consideration they deserve?.
– They do not speak in- that way of secondary industries either. “ Senator POLL. - I intended to refer to their attitude towards secondary indus tries. A vendetta has been pursued by a certain section of the press of this country aaainst the sugar industry, for reasons bpst known to those who have’ been reh sponsible for it. This country is greatly indebted to the sugar industry. If there had been no such industry in Queensland during the’ period of the war, when sugar prices went to enormous heights elsewhere, the hundreds of thousands of pounds’ of extra profit that were made by the m’anu=facturers of jam and condensed milk, &c., in Victoria would not have been made. The Australian householder, instead of getting the sugar he required at 3£d. per jib., would have had to pay ls. per lb. for it, as people in other countries had to do. The huge expansion that took place’ in manufacturing, industries in the southern parts of the Commonwealth was due to the Queensland sugar industry, because it enabled manufacturers of jam and condensed milk to secure huge military contracts in competition with manufacturers in other parts of the world. We may fall upon abnormal times again, and the sugar industry may be required to come to the aid of Australia as it did during the war period. I do not believe there is a single member of this Chamber who desires that any harm should come to the industry. I realize that, in the dying hours of the session,, it is practically impossible to carry any amendment of this Bill. I believe that if an amendment were made; the result would be that even the duty proposed in this measure would be denied to the sugar industry by a majority in another place. Senator Crawford interjected a few moments ago that the people- of the North make no complaint concerning the protection afforded to- secondary industries; I have no wish- to make disparaging remarks concerning the Tariff Board. Honorable senators who are opposed to high duties have continually complained that we are piling up higher and higher duties on’ manufactured articles. I heard Senator Lynch ask- the other day what we could expect from a- Tariff Board composed as our Tariff Board is. The sugar industry is the -first- primary’ industry concerning which the Board’ has been asked to give advice, and it has stabbed it in the back in- the most treacherous way possible. I say that deliberately. The members of the Tariff Board have shown themselves to be merely the tools of the manufacturers. This great primary industry, which calls for protection, is denied it by this .Southern Board of manufacturers’ representatives.
The, sugar industry has its centre in the most vulnerable jpart of Australia. If there is one part of Australia which more than another requires population, it is that in which this industry is carried on. If the sugar industry is taken from that part of Australia, Senator Crawford, who knows the position, will agree frLth me that there is nothing :that can replace. ,dt. Travelling up the coast of’ Queensland, town after town is reached which is wholly dependent on the sugar industry for its continued existence. ‘Queensland representatives have never asked for anything but justice for the sugar industry.
– I think we shall have tp ask for mercy soon.
– We shall have to do so after the vote recorded in another place. When, during the war period, other industries were claiming for their products the world’s parity, those engaged in 4he sugar industry never made any such ‘elaim. That industry has always been prepared to sacrifice itself in the interests of the rest of Australia, and I believe that that fact is recognised by honorable senators. I repeat my regret at the vote which was recorded in another place, and I sincerely trust that this Bill will be passed through all its stages.
– In common with my colleagues in the representation of Queensland, I must say that I am very disappointed with this Bill, which places the sugar industry in a very awkward position, and makes its future very uncertain. At present, those engaged in it are dependent on the continuance of the Sugar Agreement. I have no doubt -that the opponents of Government .control of <any industry are responsible for <the feeling dis^ played against the Sugar Agreement, and for the vote that has been recorded in another (place. -I do not loibject to Government control df it is shown to be ‘good for ithe industry controlled. I believe that all the people engaged in the ‘sugar industry are ‘unanimously in favour of a renewal. of the Agreement, but they will see from the vote recorded in another place that a proposal for its renewal would have very little chance of being carried.
It is significant that those who are responsible for reducing the original proposal of the Government for a duty of Hd. per lb. on cane sugar to one of Id. per Vo. did not interfere with the duty proposed on beet sugar. -They have supported the Victorian beet-sugar industry, and it is strange that they should have allowed their prejudice against the Queensland industry to carry them so far. The Minister (Senator Earle) and members in another place seem ‘to have been influenced by the reports of the Tariff Board. The measure under which that Board was appointed was strongly opposed. I believed in the appointment of such a Board because I thought it would make direct investigation into an industry, concerning which it was .asked to -give tadvice. But the Tariff Board, instead of making personal investigations into .the sugar industry, has submitted recommendations based upon old reports of Commissions that inquired into the industry. Parliament did not intend that the Tariff Board should frame its recommendations upon second-hand information. I am extremely disappointed with that body. In view -of the fact that so much, is at stake in Queensland, the Board should have made a personal investigation into the conditions of the industry, having regard to the capital invested, the area under cultivation, the production, and the number of -men employed in the industry.. The1 Minister (Senator Earle), when moving the . second reading of the measure,, and in order to< snake the case for the Government proposal as strong as possible, quoted some paragraphs from the report of the Tariff Board to the effect that expert .opinion held to the view that the sugar industry, in regard to efficiency of methods, was somewhat behind the times,, and did not deserve higher Tariff protection. I asked the Minister at the time whose ‘expert- opinion -was referred -to, and’ he -was unable ‘to supply the ‘information, but 1 remember -reading a report of ithe inquiry, and the evidence given by -one witness, who stated that some of ‘the mills might /he brought up to date. In this cxnrnexion T should like to say, for the benefit *df the -Minister and -‘those people in the south who take up a position akin to antagonism to the industry, that the Colonial Sugar Refinery Company have not very much to learn from any firm or organization in the business anywhere in the world. Those who have been over the company’s mills, and are acquainted with the methods adopted, will admit that they are thoroughly up to date. in. every particular. The best’ol machinery obtainable anywhere in th« world is being installed in the mills, Senator Crawford,- who is a cultivatoi himself, and is thoroughly conversant with all phases of the industry has told us that it is quite up to date and efficient. If I were asked for an opinion I should certainly say the sugar-growers are the most intelligent of all classes of agriculturists in the Commonwealth, and, generally speaking, that they employ the latest equipment in connexion with their operations. It is interesting to note that one of the measures introduced this evening had to do with the carrying out of an important immigration scheme. No other industry in Australia, excepting, perhaps, dairy farming, is so eminently suited for a settler working small areas. In Queensland there is plenty of room for development. It is encouraging to know that the vast majority of those engaged in th« sugar industry are small holders.
– The tendency is in that direction always.
– It is unfortunate, therefore, that the industry is not encouraged to a greater extent. Senator Crawford, who is to be congratulated upon his excellent speech to-night, pointed out very clearly that the cost of the sugar used in the manufacture of jams was only a fraction of the total cost of the output, although if one believed the critics in the southern States, one would almost be persuaded that the present price of sugar had about ruined the jam manufacturers of the Commonwealth. The uncertainty as to the future of the industry will, no doubt, affect the planting and preparation of new areas. Growers realize that the existing Agreement will expire at the end of June next, and that the Tariff Board will not recommend a renewal. They have declared that a duty of ljd. per lb. is about the lowest upon which- the industry could be carried on successfully, but notwithstanding this the duty has been fixed at Id. per lb. It is contended that wages in the industry are altogether too high, but I point out that the wages and conditions are determined by a properly constituted tribunal, and all those engaged in the industry must pay the wages and observe the conditions. The rates paid in the pastoral industry are also very high, but like the sugar industry, work in it ia intermittent and seasonal. No doubt this factor influenced the Court in fixing the wages for the sugar industry, and, therefore, the growers are not to blame. Much of the objection that is raised in the southern States to a renewal of the Agreement is due to a misunderstanding for which the southern press mainly is responsible. It is . regrettable to know also that one section of a party that is supposed to be in favour of protecting the interests of the workers, when this measure was under consideration elsewhere, moved an amendment, the effect of which would have been to delay any decision until the report of the Pu’blio Accounts Committee upon the sugar industry had been presented to Parliament. If that party had been so anxious to assist the industry, even if they were not in favour of the Agreement, they would have voted for the Government Tariff proposals instead of for an amendment submitted by a private member. Their sincerity is doubtful, ‘ if one may judge from their actions.
– What about the sincerity of the Queensland supporters of a Government that have not striven to get a renewal of the Agreement?
– As Senator MacDonald very well knows, a renewal of the Agreement is out of the question with Parliament as at present constituted and with public opinion against it. As far as one oan gather, there would be no chance of an agreement being sanctioned either by another place or this Chamber. Many members would object to it for the simple reason that they do not believe in Government control. There was nothing to be gained by attempting to secure a renewal of the Agreement, because if a majority of members in another place had been favorably disposed toward the industry, they would have voted for the Tariff proposals of the Government. The new Parliament will, of course, have an opportunity to consider the renewal of the Agreement. In the meantime the industry will suffer to some extent, be- cause the Tariff protection is not so high as would be justified by the circumstances of the industry.
– Do not forget that eight members of your party made up the majority in another place.
– There were three parties who were opposed to Government control - certain members of the Nationalist party, the so-called Country party, and what is known as the Labour party.
– Not one member of the Labour party voted for the increased duties, and only two members of the Country party.
– If honorable senators would visit Queensland, and study for themselves the extent of the industry, they would see what it means to Australia, and I am sure that it would then be better supported. Queensland will not be able to get the Agreement or the increase in the Tariff until wo can dispel the ignorance on the part of the people in the south. The sugar question has always been the battledore and shuttlecock of political parties. As Queenslanders we can only keep on agitating until we can convince Parliament of the necessity, from an Australian point of view, of stabilizing the industry. No State is more in need of population than Queensland. Tt has always been the uncertainty surrounding the industry that has kept it in check; ‘but, if the Agreement were made for ten years, there might be new mills and new machinery provided, and various improvements effected. I would have liked to seo a Tariff that would remove the industry from the field of uncertainty. We accept the present Bill as q modicum of the greater benefits anticipated, and I hope that in the new Parliament they will be realized.
– ‘I desire to say a few words in defence of the Tariff Board. It has been subjected to some scathing criticism by two or more honorable senators. Although it has ondeavoured to bring in a report in a limited time, and probably was not able to make a personal investigation on the field, I am convinced, knowing the members of the Board as I do, that if they made a mistake they made it unintentionally. They have been con sistent Protectionists, so far as the primary and secondary industries are concerned.
– Do you think it was a mistake for them to pick out the most unfavorable parts of the reports of the Royal Commissions?
– Unconscious southern bias.
– Senator Crawford marred his speech by the invidious comparisons made between Queensland and the southorn States. His remarks only serve to continue the rivalry. .1 am BUre the southern States are not to blame for the fact that Senator Crawford has not obtained all he wanted. I am satisfied that the Board came to its conclusions honestly.
– The report bristles with mistakes.
– When any judgment is given, there are always som< people dissatisfied. The Board was impartial, and, having no interest in any particular State, I am sure that -it came to its decision fairly. Senator Crawford cannot understand why the Board used extracts from the Royal Commission’s reports.
– Only those quotations of an adverse character.
– The evidence quoted certainly indicates that, in the opinion of the witnesses, there is room for improvement in the methods of sugar production.
Question resolved in the affirmative.
Bill read a second time, and reported from Committee without requests; report adopted.
Bill read a third time.
Senate adjourned at 6.45 a.nv. (Friday).
Cite as: Australia, Senate, Debates, 12 October 1922, viewed 22 October 2017, <http://historichansard.net/senate/1922/19221012_senate_8_101/>.