View PDF View XML View in Voyant

Senate
7 December 1927

10^th Parliament · 1^st Session

QUESTION
- OLD AGE PENSIONS
QUESTION
- FEDERAL CAPITAL
QUESTION
- FEDERAL CAPITAL COMMISSION
PAPERS
INCOME TAX BILL
INCOME TAX ASSESSMENT BILL
- Second Reading
APPROPRIATION BILL 1927-28
ADJOURNMENT

The President (Senator the Hon. Sir John Newlands) took the chair at 3 p.m., and read prayers.

page 2708

QUESTION

OLD AGE PENSIONS

Inmates ofchairitable Institutions.

Senator NEEDHAM:
WESTERN AUSTRALIA

– I ask the Leader of the Senate if he has anything to add to the statement which he made last night in connexion with the pensions of those pensioners who are inmates of charitable institutions?

Senator Sir GEORGE PEARCE:

– I was not armed with a reply when the honorable senator raised this matter last night. I now invite him to study the following paragraph in the budget speech of the Treasurer: -

The Government has given consideration to anomalies in the present method of dealing with invalid and old-age pensioners who become inmates of public institutions, and has decided to call a conference of representatives of the Commonwealth and the States with a view to placing the matter on a more satisfactory basis.

Prior to this conference the Treasurer proposes to discuss the matter with the Treasurers of the States, and ascertain what action the States desire the Commonwealth to take to give effect to its intention. The States have already been communicated with, and it is anticipated that this discussion will take place after the meeting of the Loan Council next week.

page 2708

QUESTION

FEDERAL CAPITAL

TransportServices.

SenatorFINDLEY asked the Minister representing the Minister for Home and Territories, upon notice -

Is it a fact that the contract for transport services in the Federal Territory entered into by the Federal Capital Commission with the approval of the Government has fallen through ?

Is it a fact that the contract was let to a motor salesman for ten years and that no companyhas materialized since the letting of the contract?

Was any penalty provision inserted in the contract fornon-fulfillment of it?

Is it proposed to call fresh tenders, or does the Federal Capital Commission, with the approval of the Government, now intend establishing a community-owned transport service within the Territory, as advocated by the Labour Party ?

The commission has cancelled the contract owing to the inability of the contractor to commence the service, as stipulated, on the 5th December, 1927.

As a result of public tenders, a contract to conduct a bus service, under certain conditions, for 10 years, was entered into with Mr. E. T. Holmes, who had been engaged in motor sales business. The contractor represented his intention of forming a company to take over the contract if approved later by the commission. It is understood that there has been difficulty in forming the company for financial reasons.

No; but the contractor was given to understand that, in the event of failure to commence the service on the date arranged, the failure would be a ground for immediate cancellation of the contract.

As the project was evidently not sufficiently attractive to induce the public to finance the proposed enterprise, the Federal Capital Commission is arranging to establish and maintain a bus service under its own control.

page 2709

QUESTION

FEDERAL CAPITAL COMMISSION

Salaries and Wages

Senator OGDEN:
TASMANIA

asked the Minister representing the Minister for Home and Territories, upon notice -

What is the total amount at present being paid in salaries and wages by the Federal Capital Commission ?
What are the proportions of such sum which are being charged to Loans and Revenue respectively?

Senator Sir WILLIAM GLASGOW:

– The answers to the honorable senator’s questions are as follow : -

The amount paid during the current financial year up to the 30th November, 1927, is £320,562. The rate of expenditure varies slightly from month to month.
The whole of the moneys advanced by the Treasurer to the Federal Capital Commission are from Loan Funds, and are paid to the Seat of Government Fund. The commission also collects certain revenue, which is also paid to the Seat of Government Fund. All expenditure is mot from this fund, as prescribed in section 17 of the Seat of Government (Administration) Act, 1924-1920.

page 2709

PAPERS

The following papers were presented-

New Guinea Act. - Ordinances of 1927 - .

No. 33. - Town Boundaries.

No. 34- Supply (No. 3) 1927-28.

No. 35. - Germans Admission.

page 2709

INCOME TAX BILL

Bill read a first time.

page 2709

INCOME TAX ASSESSMENT BILL

Second Reading

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · West ern Australia · NAT

[3.7]. - I move -

That the bill be now read a second time.

I draw the attention of the Senate to the fact that the permanentsettlement which has been achieved in the matter of the financial relations of the Commonwealth and the States has opened the way to a full consideration of all the anomalies and hardships that exist under our income tax legislation. The Government has therefore, decided to not only reduce the rate of income tax payable, but also introduce a bill dealing generally with the removal of a number of anomalies and giving concessions of various kinds to taxpayers. I crave the indulgence of the Senate whilst I explain the various alterations in our income tax law, for which this bill provides in the terms’ of a document thathas been prepared on the subject. Honorable senators who are familiar with legislation of this character can appreciate how technical and involved it is. I am not a taxation expert and must, therefore, rely for my information upon others who possess that knowledge.

The bill contains probably the greatest number of concessions to taxpayers which have yet been embodied in one bill submitted to Parliament. In addition to the proposed reduction by 10 per cent. in the rate of tax payable by individuals, there is to be a reductionof the minimum tax from £1 to 10s. The subjects dealt with in the bill are : -

Carrying forward of losses of one year which are not recouped out of the income of that year, to be deductions from the profits of any of the four years next succeeding the year of loss. (Clause 16.)
Deduction of certain capital expenditure incurred in connexion with opening up land for increased production, so as to encourage persons to undertake that pioneer work. (Clause 14, amendmentf).
The extension of the deduction for obsolescence of plant, machinery, &c, used by primary and secondary industries, so as to grant it also to taxpayers whose annual deduction for depreciation has hitherto been calculated on what is known as the annual diminishing value basis. Also the extension of the deduction for depreciation so as to allow it in the case of fences, dams, and other improvements on land owned andused by the taxpayer for agricultural or pastoral pursuits, but not including improvements used for domestic or residential purposes. (Clause 14, amendmentb).
Removal of an inequity to a purchaser of wool growing on sheep’s back, in order that he may obtain a deduction of the price paid for the wool as distinct from the sheep. (Clause 12.)
The extension of the present deduction of gifts exceeding £5 made to public charitable institutions, so as to cover -
1. Gifts in cash and gifts in kind purchased out of assessable income, and representing £1 or over, each;
2. gifts to public universities and colleges affiliated therewith;
3. gifts to public funds established and maintained for providing money for the construction or maintenance by or on behalf of the Commonwealth, a State, or Territory of the Commonwealth of a public memorial relaxing to the great war;
4. gifts to public funds established and maintained for the purpose of providing money for public charitable institutions or for the relief of persons in necessitous cases. (Clause 14, amendment c.)
Protecting the revenue against loss by the abuse of a provision in section 23 (1) n of the principal act, which enables a lessee of land who has covenanted to expend money on improvements on the leased land and who has no tenant rights in the improvements, to deduct in his assessment the annual sinking fund required to amortize his expenditure. (Clause 14, amendment d.)
Protecting the revenue against loss through the claims by husbands and wives that partnerships exist between them in business with resultant reduction in income tax payable on the profits of the business. (Clause 18.)
The removal of an anomaly created by a recent judgment of the Supreme Court of Victoria and confirmed by the High Court, in which it was held that under section 17 of the principal act, exemption from tax on the proceeds of sales of live stock which in the opinion of the Commissioner were ordinarily used by the vendor for breeding purposes, could be successfully claimed by a person carrying on a continuing business as a pastoralist, although the intention of Parliament when enacting the section was to limit the exemption to cases of walk-in-walk-out sales to put an end to the taxpayer’s business or to sales of the whole of the assets in other manner for the same purpose. (Clause 11, amendmentb.)
Revision of the averaging provisions of the law so as to ensure -
1. that a taxpayer who has once been assessed by reference to an average income of a fiveyear period shall thereafter continue to be assessed by reference to a five-year period. (Clause 9, amendment d, new sub-section 12.)
2. that a person whose income is not received from a business carried on by him, but is received from salary or salary and investments, shall be assessed on the income of the year when he first becomes liable to assessment without reference to his financial position of any previous year. (Clause 9, amendment d, new sub-section 11.)
3. that there shall be no doubt that in the case ofa person whose income has been permanently reduced to less than two-thirds of the average taxable income by reference to’ which his assessments would be under the ordinary averaging provisions of the act, he shall commence a new averaging period as from the year in which his income was so reduced. (Clause 9, amendment c.)
4. that in the case of a person who may have been assessed , for several years, but who then may cease for a year or more to have any assessable income from Australian sources (e.g., he may leave Australia for one or more years) a new averaging period is to be commenced in respect of any income which he may subsequently derive from Australian sources. (Clause 9, amendment d, new subsection 13.)
To grant a deduction, not at present allowable, to timber-millers in respect of the purchase price of standing timber purchased for felling, removal, and sale. (Clause 14, amendment g.)
The prevention of a double deduction for cost of leases when the purchaser is taxable on profits from the sale of leases. (Clause 15, new paragraph ii.)
Exemption from tax on the proceeds of the sale in Australia of produce from specified islands in the Pacific Ocean the residents of which must trade with Australia. (Clause 10, amendment c.)
Exemption from tax of profit on the sale in Australia of gold mined in the mandated territory of New Guinea. (Clause 10 amendment a).
Amendment designed to create the position of Second Commisioner of Taxation in place of the Assistant Commissioner, and to improve the methods by which the work arising under the act may be more expeditiously dealt with by setting out in the act the powers and functions which may be exercised by the Second Commissioner. (Clauses 5, 6 and 7.)
Provision to specify the exact dates when the present terms of office of the members of the Income Tax Board of

Review will expire, and to empower the Governor-General to make any fresh appointment for any period of time up to seven years. (Clause 21.)

A provision which will preclude the Income Tax Board of Review deciding any question of law, and requiring it to refer a question of law for the determination of the High Court. (Clause 22.)
Improvements in the provisions relating to companies in liquidation. (Clause 23.)
Deduction to co-operative companies of bonuses paid to purchasers based on the volume of purchases. (Clause 13.)
Machinery to enable the Commissioner of Taxation to secure payment of income tax in any case in which a person, whose income is taxable, may have died, but whose estate is not being administered by any person. (Clauses 24 and 31.)
An amendment of the definition of “absentee” so that the provision which entitles an officer of the Commonwealth who is absent from Australia on Commonwealth duty to be treated as a resident, may be extended to the officer’s wife who may have accompanied her husband to reside with him abroad. (Clause 3.)
Alterations in the wording of section 67 of the principal act which imposes penalties for breaches of the act - in cases where legal proceedings are not taken - so as to enable the amount of the penalty to be calculated in certain cases. (Clause 27.)
Further exemption for five years of income from primary production is the Northern Territory.
Minor alterations in machinery clauses to facilitate their application.

Re 1. Deduction of losses from profits. See clause 16. - The concession will commence to apply in assessments for the current financial year 1927-28. In that year the concession will be in respect of losses of the previous four years to the same extent as if the provisions of the concession had operated in those four years. Losses will be taken in theiro rder of occurrence, i.e., the earliest loss in the five-year period will be the first to be set off against the earliest subsequent profits of that period. If that loss is greater than the profits of the four years next succeeding the year of loss, the excess of the loss ceases to be a deduction from any later profits. The Government considers that a period of four years after the year of loss is sufficient in practically all cases to permit of recoupment of losses. Where that period is not sufficient, the case would probably receive sympathetic consideration by the Relief Board. This concession is being combined with the present averaging system which provides for the taxation of the actual taxable income at a rate applicable to the average taxable income of that year and the four (preceding years. Under the proposal in the bill, the rate will be affected in cases where losses have occurred because the taxable income of a year succeeding a year of loss will be reduced by the amount of the loss, if it is less than the income. If the loss exceeds the subsequent income, then that income is not taxable. The scheme is a distinct advantage to taxpayers who suffer losses. There are, unfortunately, many such persons in the Commonwealth, more particularly among those engaged in primary production. I say regretfully that during the present financial year many taxpayers in Australia will appreciate that provision.

Senator Sir Henry Barwell:

– Is it intended to average the income or the rate of the tax?

Senator Sir GEORGE PEARCE.The rate. Several methods of meeting this position have been examined by the Government. It has been found that that which is proposed in the bill is the most acceptable from all points of view, having regard to the necessity for reasonable certainty as to revenue for the annual budget and for reasonable costs of administration. The explanatory document from which I have been reading continues -

Re 2. Deduction for cost of opening up new lands for agricultural or pastoral purposes. (Clause 14, amendment /). - It is expected that this provision will be a distinct incentive to persons engaged or desirous of engaging in primary industry to undertake the opening up of new country. Under the present law such expenditure cannot be deducted because it is a capital outlay. It should, how ever, be borne in mind that the expenditure is incurred for the sole purpose of converting by natural means the elements of the soil into food stuffs and other necessaries of life and well being. In this connexion there is a striking distinction between rural lands and urban lands. In the case of the latter lands, nothing is drawn from the soil per se. The land is useful only for sites for buildings or factories, or other similar income producing assets. It is those assets, in this case, which produce the income. On the other hand, the rural land itself yields the income only after its potentialities have been made available for that purpose by the expenditure of money in clearing timber and other obstacles which prevent the effective use of the constituents of the soil. The secondary industries obtain a deduction of an annual sinking fund to amortize expenditure on factory buildings, machinery, &c, which produce their income. The proposal in the bill is an adaptation of that principle, given in the proposed form because there is no effective method by which a sinking fund to amortize the expenditure might reasonably be calculated. The effect of the proposal on an assessment will be so to increase the deductions in the relevant case as possibly to cause the aggregate of the allowable deductions of that year to exceed the total assessable income of that year. The excess of deductions over assessable income will thus represent a “ loss “ for the purpose of ascertaining the average income when assessing any actual taxable income of a succeeding year, and for the purpose of deduction of lossess from profits of the next succeeding four years.

Re 3. Extension of the depreciation deduction to cover absolescence in all cases; and to allow depreciation deduction to farmers and pastoralists on certain assets. (Clause 14, amendment b). - The proposal of the bill extends the special provision inserted in the law by the 1924 amending act, under which a deduction for obsolescence of plant and machinery could be allowed. That provision was limited, however, to cases in which the deduction for depreciation was calculated at a fixed proportion of the cost of the asset being dealt with. It permitted the owner of the asset to write off any part of the cost which still remained to be written off at the date when the asset is sold or otherwise disposed of, i.e., thrown on the scrap heap or given away. This concession did not, however, apply to cases in which the deduction for depreciation was calculated on what is known as the diminishing value basis. There are very many secondary industries which obtain the deduction for depreciation on the diminishing value basis, and those have found it impracticable to change from that basis to the alternative basie known as the “ prime cost basis,” on account of insuperable difficulties encountered in ascertaining the original cost of their respective assets of plant and machinery. These taxpayers have, by the terms of the existing law, been deprived of any deduction for depreciation of the plant and machinery on and from the date when they cease to use it for the production of income. The proposal in the bill will, however, place those taxpayers in the same position as regards writing off un recouped expenditure on plant, &c, as the taxpayers who have adopted the “ prime cost basis.” The wording of the existing law has, therefore, been re-arranged to give “effect to this policy. At the same time, the opportunity has been taken to include among the items in respect of which deduction for depreciation may be allowed, fences, dams, and other improvements on land owned and used by farmers and pastoralists for the purposes of their particular business. Hitherto, fences, dams, &c, have been regarded as part of the land, and, therefore, not subject to deduction for depreciation. It has also been considered that the increment in value of land would offset any loss sustained through depreciation of fences, dams, &c. Experience, however, does not support that view. On the contrary, it has shown, in some cases at least, that the expenditure is never recouped out of the sale prices. It is considered that the new provision represents delayed justice to the primary producer in this respect. lie 4. Sheep sold in the wool (Clause 12). - This amendment will in future enable a purchaser of sheep in the wool to obtain a deduction of the purchase price of his wool. In the past, it has not been possible to allow this deduction in cases where no purchase price of the wool has been specified in the contract of sale, and many purchasers who have elected to bring live stock to account at cost have thus suffered double taxation on the value of the wool, because they have had to bring the sheep to account at the end of their trading years at the price paid for them in the wool. The purchased wool has also been brought to account at its shorn value, or at its sale price, as the case requires, and thus the unfortunate purchaser has had to bring his wool to account as income twice - once as shorn wool, and once as new wool on the sheep’s back - and pay tax on it.

Re 5. Gifts to public charitable institutions, &c. (Clause 14, amendment c). - The existing law has had a limited application. It was confined to gifts in cash exceeding £5 each, paid to a public charitable institution. !N”o deduction could therefore bc allowed for gifts in kind, or for contributions to such funds as the fund of the. Lord Mayor of Melbourne, which collects money and distributes it among specified public charitable institutions in Victoria, or to a similar fund of the Sydney Chamber of Commerce, , or to special relief funds organized by a Lord Mayor for relief of distress among persons who might suffer calamity through bush fires, floods, or tempests. The proposal in the bill will include gifts in kind and all the objects mentioned, and will extend also to public universities and colleges affiliated therewith. The definition of “ public charitable institution “ is included in the bill on the suggestion of one of the Justices of the High Court, made during the delivery of a judgment in a case in which the question arose as to what is a public charitable institution. lie 6. Protection of the revenue against subterfuges (Clause 14, amendment d). - This proposal will limit the deduction under section 23 (1) n of the principal act to cases of bona fide lessees who have no connexion directly or indirectly with a lessor. That section permits a deduction to a lessee of the sinking fund required to amortize expenditure covenanted by him to be made on improvements on building leases when the lessee has no tenant rights’ in the improvements. This prevents the lessee from being taxed on the part of his annual profits which represents the recoupment of his capital outlay which Would otherwise be lost to him. That concession is, however, being abused by freeholders of laud forming themselves into private companies in order that the company might take a lease of the land, mid so secure a deduction in the assessment of its income of the sinking fund required to recoup the cost of the improvements made by the company on the land. The freeholder in such cases provides the capital for the erection of the building, and thus obtains indirectly a very great advantage through the deduction allowed to the company in its assessment. It is proposed, therefore, te deny the amortization deduction to lessees in cases where there is a lease of land to a company from any individual who directly or indirectly controls the voting power of the company or in any other case in which the commissioner is of the opinion that, in consequence of the terms and conditions of the lease or of any circumstances associated with the lease, the lessor is in substantial control of the operations of r,he lessee.

Ite 7. Husband and wife partnerships. (Clause IS.) - The department has, during the past two years, been faced with great difficulties in dealing with cases in which partnerships between husband and wife have been alleged to exist. The claims submitted have been for separate assessment of husband and wife of their alleged respective interests in the partnership profits. Many extraordinary claims of this kind have been received, with the obvious object of reducing the amount of income tax which was formerly paid without objection by the husband as the sole owner of the income. The possibility of reducing the tax has apparently been brought very prominently before many taxpayers carrying on business in an individual capacity by some taxation agents who have gained their fees bv suggesting and causing the formation of partnership arrangements between the taxpayer and his wife. The department has critically examined each case in *.he large number which have come under notice. In some, the joint subscription of capital and the joint active assistance rendered by both husband and wife in the. production of the income have shown clearly that the partnership exists in fact, and should be recognized. But there are a great many others in which the husband supplies all the capital and does all the work while the wife attends to domestic duties at home, and others in which the wife supplies the whole of the capital but the husband does all the work while the wife remains at home attending to domestic duties. In the former class it is obvious that the alleged partnership arrangement is a subterfuge to reduce or entirely avoid taxation. In the latter class, the husband is in the same position in regard to his wife’s capital as he would be if he had borrowed capital himself from some other person or from a bank. In such cases, the most which the husband could reasonably claim is a deduction of interest on his wife’s capital upon which the wife would be taxed if it were of a taxable amount. But the claim for division of the profits equally between husband and wife would, in a number of cases, render both of them not liable to tax, or would very considerably reduce the amount of tax which would be assessable if the profits were taxed to one person. The proposal is aimed, at the fictitious cases here indicated, and will authorize the commissioner to assess the profits as the profits of one individual if he considers the arrangement was entered into for the purpose of avoidance of liability to tax by either the husband or the wife.

Be 2. Walk-in-walk-out sales of businesses. (Clause 11, amendment (b). - This amendment deals with a very important matter, and is urgently necessary to protect the revenue against loss unexpectedly encountered through a recent judgment of the Supreme Court of Victoria, confirmed by the High Court on appeal in the case of Weatherly v. Commissioner of Taxation. This appeal was based upon the contention that section 17 of the principal act entitled a vendor of live stock which, in the opinion of the Commissioner were, ordinarily used by the vendor for breeding purposes, to exemption from tax on the proceeds of the sale of such stock even though the sale were made in the. ordinary course of a continuing business. When section 17 of the principal aci was enacted it was intended, and Parliament was so informed, to overcome the detrimental effect upon the revenue of two judgments which had then recently been delivered by the High Court on the question whether there could be any taxable profit from the sale of ::i business on a walk-in walk-out basis. The court decided that there could* not be any taxable profit in such a case. Section 17 of the principal act therefore provided that there should be a possibility of taxable profit arising from the sale of the whole or part of the trading stock of any business, whether on the sale of a business as a going concern or in any other manner for the purpose of discontinuing the business. But the courts have recently held that the words “ whether on the sale, &c.” really moan “ whether oi not on the sale of the business as a going concern or in any other manner for the purpose of discontinuing the, business.’5 This was not the unanimous judgment of the court, but a majority judgment. The result is so opposed to the intention of Parliament that the Government has taken this first opportunity of re-expressing its intention in a manner which, it is expected, will be free from any doubt. The amendments for this purpose are being included in section 16 of the principal act as that section deals with what is assessable income of a taxpayer.

Re 9. Revision of the average provisions of the act. Clause 9, amendments c and d). - These are partly due to the introduction into the law of the principle that losses of one year may be deducted from profits of th, next succeeding four years. Most of the amendments proposed, however, ar.e. not directly connected with that principle. The amendment which was first described in my remarks is to make it quite clear that when once a taxpayer has come under the averaging provisions of the law, and has completed a five-year period he shall thereafter be assessed on the basis of a five-year period. This is not the present position. a° the wording of sub-section 5 of the principal act, though originally intended only to ascertain the first average year which was to be used when a taxpayer first became taxable has been found to necessitate a re-ascertainment of the first average year when a second five-year period is due to be considered. It has happened, therefore, that some persons whose income of the five-year period had been assessed at the rate applicable to an average income of five years, were assessed on their income of the sixth year at a rate applicable to an average income of a period less than five years, in some cases a fouryear period, in others three years, and in some, two years, merely because the income after the second year of their first five-year period was on the down grade. The matter will be more fully explained in committee. The amendment secondly described is to prevent heavy unproductive administrative work. When the averaging scheme was first introduced into the law it was intended that a person who was not carrying on a business should be taxed upon his first taxable income at the rate appropriate thereto, but that a person who is carrying on business should be taxed on his first taxable income at the rate applicable to an average ascertained by associating that first taxable income with any previous losses which may have arisen in years to which the averaging would have applied if there had been any income. The business man was to have the benefit of any previous business losses arising after the averaging scheme was introduced. The salary or wage-earner was to be taxed without reference to any previous nontaxable years which he may have had. If this had not been done the department would have had to call upon all salary and wage-earners coming into the taxable field for the first time to lodge statements of their earnings during the preceding four years so as to ascertain the average income for the five-year period. It was decided that the circumstances would not justify the heavy unproductive expenditure which would thus have been involved. It was recently ascertained, however, that a judgment of an English court on the question of whether an employee in receipt of salary or wages waa carrying on a business within the meaning of the English Income Tax Act, supported a contention raised under the Commonwealth law that a ‘ person in receipt of salary or wages was entitled to be treated as carrying on a business. As this is contrary to .the original object of the law, this amendment is proposed in order that the original object may be carried out. The amendment, thirdly described is a drafting amendment only which will make clearer the intention of the sub-section dealt with. The amendment fourthly described is necessary in order that a person who might leave Australia for several years after having been a taxpayer should not have his tax on any subsequent Australian profits assessed at a rate ascertained from the earlier income, together with nil results during his absence. Such persons should commence a new averaging period upon their return to Australia.

Be 10. Deductions to timber millers. (Clause 14, amendment g). - The underlying principle of this amendment is similar to that present in the case of wool growing on sheep’s backs. The standing timber is part of the ground, just as the growing wool is part of the sheep. The reasons for the amendment in this case are similar to those in the case of the growing wool. The amendment will remove an anomaly.

Be 11. Double deductions to lessees trafficking in leases. (Clause 15.) - The amendment in this case is necessary in order to prevent a lessee of property obtaining a double deduction of the cost of his lease.

Section 25i of the principal act grants a deduction to a .lessee of the annual sinking fund required to amortize the purchase price, if any, paid by him for the lease, over the unexpired period of the lease from the date of purchase. It sometimes happens that if the person at any time sells the unexpired period of his lease the circumstances of the transaction may be such as to render him liable to pay tax on any profit which he might make by the sale. In that case there would be a deduction of the whole of the purchase price of the lease. The discovery of this liability in many cases is not made until several years hav. elapsed after the original purchase of the lease, and, in the meantime, the deduction of the sinking fund mentioned has been allowed, thus exempting profits representing a part of the original purchase price. If, therefore, the full purchase price of the lease is deducted from the final selling price the taxpayer would receive an advantage to which he is not entitled. This amendment will place the matter on a proper footing.

Be 12. Exemption in respect of profits by the sale of Pacific Island produce. (Clause 10 amendment c). - The object of this amendment is to remove a cause of considerable irritation among residents of the Pacific Islands controlled by any part of the Empire or by a condominium in which any part of the Empire is interested. Practically all of those traders are obliged to send their produce to Australia for sale. The produce is usually sold to an agent who is able to purchase all the produce from all the traders, and then can export it himself for sale in ex Australian markets. There is practically no market in Australia for this produce, and the traders have no alternative to sending it to Australia for re-export. They cannot secure oversea freight from their islands. The revenue involved is negligible and the probability is that the proposed exemption will produce a very desirable attitude among the island traders towards the Commonwealth. The amendment will apply to produce from the territory of Papua if it is immediately exported from Australia.

Be 13. Exemption of profit on sale in Australia of gold mined in New Guinea. (Clause 10 amendment a). - This amend ment is desirable, because the law already exempts profits from gold produced in the adjoining territory of Papua, and also from mining in Australia. If the amendment were not accepted by Parliament the Department of Taxation would have the greatest difficulty if. ascertaining the true amount of profits upon which tax should be levied. The work involved would be great, the irritation to the gold-miners would be still greater, whilst the results in revenue would be extremely small.

Be 14. Second Commissioner of Taxation. (Clauses 5, 6 and 7). - The provisions of the bill relating to the Second Commissioner of Taxation and expressing the powers and functions which the Assistant Commissioner of Taxation may exercise have been found to be both necessary and desirable in order that the work of the department might be carried on expeditiously. It should be explained that the position of Assistant Commissioner of Taxation is created by the Estate Duty Assessment Act. That act is not being amended at present, and therefore it is necessary in this bill to retain references to the Assistant Commissioner of Taxation. By the Estate Duty Assessment Act, the Assistant Commissioner of Land Tax is made the Assistant Commissioner of Taxation. Therefore the person who was appointed Assistant Commissioner of Land Tax is by the statute at once the Assistant Commissioner of Taxation. The work of the Assistant Commissioner of Taxation does not, as might perhaps be supposed, consist of minor matters of management. The necessity of the Comissioner of Taxation to visit each of the capital cities of the Commonwealth at frequent intervals, together with the necessity for the Commissioner to be in Canberra while Parliament is sitting, has thrown the bulk of the administrative work upon the, Assistant Commissioner, and it has been necessary for the Assistant Commissioner to give rulings on matters which would otherwise be dealt with by the Commissioner. The position is, therefore., more aptly described as that of Second Commissioner. At the same time, it is very desirable that the powers and functions which may be exercised by the. Second Commissioner should be expressed in the law, as litigation is now pending in which a decision and determination by the Assistant Commissioner of Taxation is # challenged before tha court. The Assistant Commissioner had made the decision and determination under authority delegated to him by the Commissioner. It is very undesirable that an administrative officer’s decisions should be exposed to challenge in the court on the ground of invalidity. The bill will therefore overcome this risk in future. Provision is continued in clause 32 (1) proviso of the bill to conserve all gain which the appellant in the pending appeal may obtain from the judgment of the court in his case; but all other acts, decisions, and determinations of the Assistant Commissioner are validated by the provisions of clause 29 (1), which make the amendments under reference operate retrospectively to 1st July, 1924, the. date when the

Assistant Commissioner commenced to make determinations of the kind now challenged by the appeal mentioned.

Re 15. Members of the Income. Tax Board of Review. (Clause 21).- -The amendments in this clause are required because of the declaration by the High Court that the body known as the, Income Tax Board of Appeal had no valid existence. The present members of the Board of Review had been appointed members of the Income Tax Board of Appeal for periods of seven years, varying by a few days owing to the variations in the dates of appointment of the respective members. The declaration of the invalidity of the Board of Appeal was immediately followed by legislation to constitute the Board of Review and provision was made that the persons appointed members of the Board of Appeal should be deemed to have been appointed members of the Board of Review. The law provided for appointments to be for :i period of seven years. The intention “was that the members so appointed as members of the Board of Review should hold office until the expiration of seven years from the dates of their original appointments as members of the Board of Appeal. The amendment will have this result. At the same, time the amendment will enable the Government to make future appointments to the board for any period not exceeding seven years.

Re 16. Decisions on questions of law. (Clause 22). - This amendment will curtail the power of the Board of Review so as to cause it to refer all questions of law to the High Court for decision. Some, unsatisfactory positions have been created by recent decisions of the Board of Review having decided points of law in a manner contrary tol the -advice received by the Commissioner from the Crown Lav.’ Department. The Board of Review ;s not a judicial body. It is not intended to be such a body, but was intended to be a body which would ascertain facts and decide disputes between taxpayers and departments as to the actual facts. All questions of law associated with the facts were to be left to the High Court. The amendment will produce this result.

Re 17. Liquidators of Companies. (Clause 23.) - The amendment proposed has been found necessary owing to the provisions of the company law in one State making it illegal to appoint a liquidator in the case of certain companies. The law requires the liquidation to be carried out by persons concerned in the management of the company. This has been found to mean that in such a case the persons charged with the liquidation of the company are not responsible under the Income Tax Assessment Act to retain sufficient funds out of which any tax due by the company might be paid. The amendment will remove this risk of loss of revenue.

Be 18. Deduction of Bonuses paid byCo-operative Companies. (Clause 13.) - This amendment will remove an anomaly from the act under which a cooperative company which has paid bonuses to purchasers based upon the volume of purchases is required to pay tax on the bonuses whilst the purchaser who receives it is exempt from tax upon it. Co-operative companies are at. present entitled to a deduction in their assessments of all interest and dividends distributed to shareholders in respect of their shares. This amendment will place the bonuses in the same position as dividends and interest, and will exempt the bonuses from tax. It may be added that dividends and interest received by shareholders of the company are taxable to the shareholders. The bonuses merely represent a return of part of tha purchase money paid by the member of the company for goods supplied.

Re 19. Recovery of tax on certain trust estates. (Clauses 24 and 31.) - This amendment will enable the commissioner to recover taxes in the cases mentioned in the amendment. He is not able to do this at present because there is no person in whose name the assessment may be made or against whom recovery action might be instituted. The amendment will authorize the commissioner to make an assessment in such a case and to secure payment of the tax by levy and distress upon the assets left by the deceased person.

Re 20. Definition of “ absentee “. (Clause 3). - Cases have como under notices in which the wife of a Commonwealth officer who is stationed abroad on fluty is liable to be assessed as an absentee without a deduction on account of the general exemption of £300, while her husband is, by the act, treated as not being an absentee. This incongruity is removed by the proposed amendment.

Re 21. Amendments in the penalty section. (Clause 27.) - Section 67 of the Principal Act which is amended by this clause causes a penalty automatically to apply to any person who has failed to lodge a return or information as and when required by the act or regulations or by the commissioner. The penalty is the greater of two amounts, £1 or 10 per cent. per annum upon any tax payable. As the section at present stands it requires the penalty of 10 per cent. per annum to be calculated from the due date of the payment of the tax, but it does not state any definite period for which it should be calculated. It has been found in practice that this defect in the wording of the section has rendered inoperative the penalty of 10 per cent. per annum. The clauses expresses the period for which the penalty should be calculated, namely, for the period commencing on the last day allowed for furnishing returns or information and ending on the day upon which the return or information is furnished or -the day when the assessment is made, whichever first happens. The opportunity is taken to reexpress the latter part of the existing section in simpler language.

Re 22. The remainder of the amendments are minor machinery alterations designed to facilitate the work of the department without in any way altering the principles expressed in the sections which are being amended.

Debate (on motion by Senator Needham) adjourned.

page 2718

APPROPRIATION BILL 1927-28

In committee: (Consideration resumed from 6th December, vide page 2634).

Second schedule.

Department of the Attorney-General.

Proposed vote, £154,170.

Senator NEEDHAM:
Western Australia

– I should like information concerning the proposed expenditure of £11,321 onthe Commonwealth Investigation Branch. Has this department. come into being as the outcome of the incident at Warwick many years ago when the now famous egg was hurled at a certain gentleman who was then the Prime Minister of Australia? The Commonwealth police force, which was then established, and which T believe is now known as the Commonwealth Investigation Branch, is evidently making progress since it is necessary to vote over £11,000 in respect of it this year.

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

[8.48]. - The investigation branch is composed of officers employed by the Commonwealth for the gurpose of preventing breaches of the ommonwealth law, and for the protection of the revenue. Many inquiries have to be made in connexion with the administration of the various departments. When I was administering the Home and Territories Department, I found it necessary, on many occasions, to enlist the services of officers of this branch to inquire into attempts to defeat the Immigration Act. I presume Senator Needham will agree that it, is desirable to prevent any breaches of that law. It is necessary also to have trained officers to make certain investigations. In many instances the ordinary police methods are not successful. As far as possible we utilize the services of the State police, but very often, when we get advice of a conspiracy to defeat the Commonwealth law it is desirable that the investigations shall be carried out by specially trained officers. It happens sometimes when a special investigation has been ordered, that the officers of the State investigation branches are busily employed on other inquiries. Moreover, it is essential in some instances that outside authorities should not know what investigations are being conducted by the Commonwealth.

Senator Needham:

– What is the number of the staff?

Senator Sir GEORGE PEARCE:

– It totals 20, including clerical officers. I can assure honorable senators that the branch is doing very valuable work not only in preventing breaches of the Commonwealth laws, but also in protecting thf: revenue.

Senator FINDLEY:
Victoria

– I desire to address the committee on a recent appointment to the Arbitration Court bench. Not very long ago we had in this chamber a gentleman, who, with others, represented the State of Western Australia. I refer to ex-Senator DrakeBrockman. He filled an important position in the Senate, being whip to the Government, and was exceedingly helpful to the Ministry on many occasions, particularly in the matter of legal advice in respect of measures that came before the Senate. In fact he looked upon himself as part and parcel of the Ministry.

Senator Sir George Pearce:

– I rise to a point of order. I submit that this discussion in committee is relevant only if it refers to some payment under the bill to the gentleman concerned. The bill makes no provision for the salary to be paid to judges of the High Court or the Arbitration Court. Those salaries are provided for by a special appropriation in the act under which they are appointed I contend, therefore, that Senator Findley is not in order in discussing the appointment of ex-Senator DrakeBrockman to the Arbitration Court Bench.

Senator Findley:

– The appointment to which I take exception was made by the Government on the advice of the Attorney-General, whose department is now under review. I consider that I am in order in making reference to it. In another place there was a long discussion concerning the appointment when Estimates for the Attorney-General’s Department was before the members of that chamber.

Senator Sir George Pearce:

– That does not make it right here.

Senator Findley:

– The Government did not make any attempt then, as the Leader of the Senate is doing now, to prevent criticism of the appointment, which cannot be justified by the Government.

Senator Needham:

– I contend, Mr. Chairman, that you cannot give a ruling along the lines suggested by the Leader of the Senate. Senator Findley was criticizing the action of the Government in respect of a certain appointment which was made on the advice of the AttorneyGeneral, whose department is now under discussion. The Attorney-General is the legal adviser to the Ministry, and I consider that Senator Findley is in order in directing attention to an appointment made on the advice of that department.

The CHAIRMAN (Senator Plain).I have examined the list of divisions in the Department of the Attorney-General, and T see no reference in it to the appointment of ex-Senator DrakeBrockman to the Arbitration Court Bench. The honorable senator had an opportunity to discuss the appointment on the motion for the first reading of the bill, and he would be in order in referring to it in the committee stage if, in any of the divisions, there was an item relating to it. As there is not, I must rule the honorable senator out of order.

Senator PAYNE:
Tasmania

– I direct attention under Division 35, which relates to patents, trade marks, and designs, to the custom that has arisen of employing a fairly large number of returned soldiers in a temporary capacity in the various departments. The Public Service Act, which was passed in 1922, provides in sub-section 9 of section 84 - in the making of appointments to positions in the Commonwealth Public Service of a nonclerical nature, the order of preferenc to returned soldiers shall be as follows: -

Returned soldiers who have been temporarily employed continuously for not less than two years, but have not passed the prescribed exaxmination, and in respect of whom the Chief Officer certifies that their duties have been performed in a satisfactory manner.

I have been advised recently that one returned soldier, and I dare say his case is typical of many others who have been employed by various departments in a temporary capacity, after .having been employed for more than two years, had his engagement terminated to make room for some one else who had qualified t» take his position. He is now temporarily employed in the Patents Office, and he anticipates that this job will last for only three months. He fears that what happened to him a short time ago may happen to him again. He is a married man with a couple of children, and is incapacitated to the extent that he cannot use his right hand; but with a great deal of care and attention he has been able to master that difficulty, and now he can write fairly well with the left hand. He is employed as a temporary clerk. One can understand the feelings of a returned soldier who has been giving satisfactory service to his department, but because he is on the temporary staff has to lose his occupation and take on any casual work until there is another. Opening in a public department where he can again be employed as a temporary hand. It was the intention of the Commonwealth Public Service Act that eases similar to his should receive the greatest consideration. If the services of a returned soldier have been satisfactory, provided he has not been less than two years in the service, he may be admitted as a permanent employee in an non-clerical capacity. I dare say there are many cases similar to the one I am now presenting to the Minister. This young man is not complaining, but he is terribly afraid that he may be thrown out of employment at any time. I can vouch for his honour and integrity, and I understand from those who are in a position to know, that his service in the Customs Department was eminently satisfactory. I submit to the Minister that the Public Service Board might be approached with a view to relieving men like him of this terrible anxiety which is always hanging over them. The prospect of losing one’s employment at any moment conduces to unhappiness and worry. The man who knows that his position is secure usually gives better service than the officer who is employed as a temporary hand, no matter how willing he may be. I hope that the remarks I have made will result in an investigation of this deserving case, and in a recognition of the spirit in which paragraph 9 of sub-section 4 of the Public Service Act was framed, especially sub-paragraph c relating to men who cannot pass the prescribed examination for employment in a clerical capacity. That is the class of returned soldier in whom I am interested at the present time. I trust that the Minister will do something to bring to an end the unsatisfactory state of affairs to which I have drawn attention. I know that his sympathies are with those who suffered disabilities during the war, yet can render satisfactory service in our public departments.

Senator Sir GEORGE PEARCE (Western Australia - Vice-President of the

Executive Council) [4.4]. - I am not conversant with the facts of the case that have been put forward by Senator Payne, but if he will supply me with particulars of it, I shall see that it is brought under the notice of the Public Service Board; because the Public Service Act provides that a considerable preference must bc given to returned soldiers. There are provisions in that act which enable persons who are filling temporary positions to become permanent officers. Two of the members of the board are returned soldiers, and I should think that their consideration for other returned soldiers is most sympathetic. Dealing with the employment of soldiers, the board in its last annual report says -

The policy enunciated by the Public Service Act of extending to returned soldiers preference for permanent or temporary employment has continued to be observed by the board, which has insisted upon the employment of soldiers to the exclusion of other applicants, so long as there are soldiers available and competent for the work to bc done. It is the practice of the board when dealing with applications for re-appointment ‘to the Service from persons who have previously voluntarily resigned to accord preference to returned soldiers.

During the year under review, appointments of returned soldiers to the permanent Service have numbered 54S. The total number of returned soldiers permanently appointed to the Commonweal th Service from the inauguration of the arrangement for preferential treatment of soldiers up to 30th June, 1926, is 3,425. The number of returned soldiers in the permanent Service at that date was 5,281.

In order to assist, the Repatriation Department in its policy of finding suitable employment for partially trained returned soldiers, a conference was held in October, 1921, between representatives of the Public Service Commissioner, the Postmaster-General’s Department, and the Repatriation Department to consider the appointment of vocational’ trainees as junior mechanics in training. Following upon this conference, a decision was reached as to the conditions of employment of trainees, and as to their continuance in temporary employment until the course of training, covering three years, as prescribed for these positions, had been completed, when steps would be taken for appointment to the permanent staff of the Service.

The cost of remuneration of trainees - not less than the adult minimum wage being paid in any case - was borne conjointly by the Repatriation Department and the PosmasterGeneral’s Department, the amount payable by the former department becoming a diminishing figure as the services of trainees became increasingly of more value to the PostmasterGeneral’s Department. It is satisfactory to record that generally the scheme of vocational training proved a success, and it has now been brought to a conclusion by the appointment, to the permanent staff of 27 trainees who have completed their course.

– The honorable senator would be quite out of order if in his allusion to travelling expenses he brought in the judges of the Arbitration Court.

Proposed vote agreed to.

Department of Home and Territories.

Proposed vote, £298,269.

Senator FOLL:
Queensland

.- I notice in connexion with the Common wealth Foresty Bureau that provision has been made for the payment of a salary of £.1,200 a year to the Inspector-General of Forests, and that a foot note gives the information that the Inspector-General also receives £150 whilst he is acting as principal of the Australian Forestry School. I was under the impression when the Forestry Bill was introduced last week that it was part of the duties of the Inspector-General of Forests to act as principal of this schoool. I was not aware that his work in connexion with the school was an extra duty, from which he was to receive extra remuneration.I should like to know if he is filling the position temporarily or if this additional item of £150 is to remain for all time. If so, I should like to know why it is not included in his salary.

Senator Sir WILLIAM GLASGOW:
Minister for Defence · Queensland · NAT

[4.12]. - The honorable senator will find that provision is made in the Estimates for the salary of the principalofthe Forestry School. The Inspector-General of Forests is merely acting temporarily until a suitable man can be found to take control of the school.

Senator KINGSMILL:
Western Australia

– I should like to know if this vote is recouped from the fees paid by the students at the school, and if it is the intention of the Governmentto erect decent accommodation for the students. I should also like to know if it is the intention of the Government to provide by an amendment of the Forestry Bill a chance for the graduates of the Forestry School to secure appointments throughout Australia, and particularly ir their own States.

Senator Sir WILLIAM GLASGOW (Queensland - Minister for Defence) [4.14]. - The States which ‘ have sent students to the Forestry School at Canberra have undertaken to employ them upon the completion of their course of training. Their fees are now paid by the Commonwealth, but their maintenance is paid by the States. Pro vision is about to be made in the immediate future for accommoda tion for the students at the school.

Senator GRANT:
New South Wales

– I invite the attention of the committee . to the continued delay in securing joint rolls for State and Commonwealth elections. A large portion of the time of the electoral officers, at least in New South Wales, is occupied in taking out summonses against people who enrol only for the State in the belief that that is sufficient to ensure their becoming automatically enrolled for the Commonwealth. Arrangements for joint rolls have been made in a number of the States. I wish the necessary steps to be taken without further delay to ensure that when a person enrols for either the State or the Commonwealth that will be sufficient for both purposes. [ should like to know what steps the Governmentis taking, or contemplates taking, io bring about that desirable reform?

I also invite the attention of the Minister representing the Minister for Home and Territories to the unreasonable and inexplicable delay in making available building sites at Canberra, thus hindering the proper development of the Territory. The charge of going slow is sometimes levelled against persons in the social, the commercial, and the financial life of this country; but the most efficient exponent of go-slowism is undoubtedly the Federal Capital Commission. On the 6th October last I* was informed by the Minister that up to that date only 447 building sites had been leased by the commission in Canberra. I say without fear of contradiction that the Government and the commission, both singly and conjointly, are determinedly crucifying Canberra and preventing its development. No matter how experienced or expert bricklayers may be, they have not the ability to erect a house without a site.

The CHAIRMAN (Senator Plain).The honorable senator may not discuss the Federal Capital Territory on this vote.

Senator GRANT:

– Then I shall refer again to the matter when the appropriate item is before us.

Senator Sir WILLIAM GLASGOW (Queensland - Minister for Defence) [4.22] . - The Commonwealth Government has always been in favour of a uniform roll for State and Federal elections, and at the present time it is working under a joint roll with the States of Tasmania, Victoria, and South Australia. Negotiations are proceeding with Western Australia, and it is hoped that a joint roll will be in operation there before very long. Only Queensland and New South Wales have rejected the proposal.

Senator GUTHRIE:
Victoria

– The proposed vote for the Meteorological Department is only £38,030. In view of the enormous importance of meteorology to an island continent like Australia, which for its prosperity depends to such a large extent upon primary production, the Government would be wise to spend a great deal more, so that our meteorologists would have accurate data to guide them. Throughout this year a drought, of considerable severity has ruled over a vast area in Australia; but for some reason or other the Commonwealth Meteorologist, in his reports to the press, has stated that the reason is a normal one. That occurred only recently. I took out his own rainfall figures at the end of October, and found that, with the exception of coastal towns like Port Darwin, the fall had been 33 per cent, below normal. These reports would induce people to believe that our output of wool, wheat, and meat would not be curtailed ; whereas it is well known that, our sheep losses have exceeded 10,000,000 head, that there will be no exportable surplus of wheat from New South Wales, Queensland, and Victoria, and very little from South Australia - although Western Australia has a good crop - that there will be practically no meat to export, and that the wool clip shows a decline of 400,000 bales. Those who are associated with the pastoral and farming industries know that the reports regarding normality were not only misleading, but also ridiculous. What is the position to-day? A widespread drought unfortunately still rules, and there will be a tremendous shrinkage in our exports of all produce, with the result that, our already serious adverse trade balance will swing still further away from us. The expenditure on meteorology ought to be increased, and the misleading nature of the reports ought to be pointed out to the person who has been responsible for them.

Senator Sir WILLIAM GLASGOW (Queensland - Minister for Defence) [4.27]. - I am not aware whether the honorable senator refers to the Australian meteorological report or to that which relates to the State of Victoria.

Senator Guthrie:

– I refer to the Australian report.

Senator Sir WILLIAM GLASGOW:

– The Commonwealth Meteorologist does not issue a report concerning the whole of Australia. A map is published showing the rainfall, but reports are issued by State meteorologists.

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

– I refer to the reports that appear in the press every month. They must be supplied by the Commonwealth department.

Senator Sir WILLIAM GLASGOW:

– I have not seen any recent reports. Some were issued about April last, at the end of the dry season in Victoria. The meteorologist then pointed out that the season at that particular time was normal. Had the usual winter rains fallen the yield of wheat would have been up to the average. Everybody knows that in Victoria last autumn was very dry.

Senator Guthrie:

Senator Sir WILLIAM GLASGOW (Queensland - Minister for Defence) [4.35]. - I agree with Senator Guthrie as to the importance of the Meteorological Department. The accuracy or otherwise of the statement to which he has referred depends on the time it was issued.

Senator Guthrie:

– A statement was issued every month up to October.

Senator Sir WILLIAM GLASGOW:

– In October it was thought that the Queensland wheat crops would be an absolute failure, but, as a result of rains which fell opportunely, the position has changed entirely. Instead of a failure, some portions of Queensland an’ experiencing a record year. A Brisbane newspaper which I received this morning says that yields of from eight to seventeen bags of wheat per acre are being obtained in some districts. The Commonwealth Meteorologist has informed me that he would not attempt to issue a long distance forecast.

Senator Guthrie:

– No one expects him to do so.

Senator Sir WILLIAM GLASGOW:

– Throughout Australia there are numbers of recording stations which gather data as to weather conditions and rainfall, and forward them to the department. The information thus obtained enables the Commonwealth Meteorologist to make his forecasts; but he does not attempt to predict the weather conditions for any great period ahead. I recognize the value of these recording stations throughout the Commonwealth. An intending new settler requires to know more than the annual rainfall of the district in which he proposes to settle.. He should know the rainfall month by month over a period of years. A district may have a good total annual rainfall, but the rain may not fall at times suitable for crops. Evidence of the value of the Commonwealth Meteorological Department was given some time ago. At a time when the indications on the coast of Queensland pointed to a continuance of fine weather, the meteorological station at “Willis Island in the Pacific gave warning of an approaching storm, with the result that the people of Queensland, particularly those engaged in shipping, were prepared for the cyclone when it arrived. The department contains a number of enthusiastic officers who are doing excellent work, but they cannot be expected to forecast weather conditions for any considerable distance ahead.

Senator GUTHRIE:
Victoria

– The Minister has misunderstood me. He admits the value of the Meteorological Department, and has supplied evidence of its usefulness. The instance he quoted is sufficient to show its importance, and justifies my contention that a larger amount than £38,000 should be set apart for its use this year. In my opinion, more stations should be established, not only on the coast of Australia and in the adjoining islands, but also in inland areas.

Senator Sir William Glasgow:

-We have a number of recording stations in inland areas.

Senator GUTHRIE:

– I repeat that the shrinkage in our exportable products, upon which our prosperity so largely depends, is ample evidence of the poorness of the season.

Proposed vote agreed to.

Department of Defence.

Proposed vote, £4,713,500.

Senator NEEDHAM (Western Austra mation from the Minister regarding the exchange of Secretaries of the Defence Department and the High Commissioner’s office. Under the heading “ Administrative efficiency and economy,” the Public Service Board in its report states that efforts have been made to restrict expenditure. I understand that a few months ago the then Secretary of the Defence Department, Mr. Trumble, who had been connected with the department for many years, including the catastrophic years of Avar, was transferred to London as Secretary to the High Commissioner. For the last two years during which he occupied the position of Secretary to the Defence Department, he received £1,350 per annum. I assume that when he took over the duties of secretary to the High Commissioner he received a salary equivalent to that paid to Mr. Shepherd. Mr. Shepherd, who has been transferred from the High Commissioner’s Office in London, now occupies the position of Secretary to the Defence Department at a salary of £2,000 a year, or £G50 a year more than was paid to Mr. Trumble. Mr. Trumble and Mr. Shepherd are both able men, but I. think Mr. Trumble’s experience in the Defence Department would enable him to render greater service to the Government than Mr. Shepherd. I should like to know whether that salary is to be paid only to the present occupant of the position, and whether it was approved by the Public Service Board. The Secretary of the Defence Department has important duties to fulfil, but secretaries of other Government departments of equal importance do not receive £2,000 a year. The salaries of secretaries of other departments are : - Prime Minister’s Department, £1,300; Department of the Treasury, £1,500; A ttorney-General’s Department, £2,000 ; Department of Trade and Customs, £2,000, and Department of Works and Railways, £1,000. The disparity between the salary paid to the Secretary to the Department of Works and Railways and that of the Secretary of the Defence Department is too great. One is either receiving too much or the other is underpaid. The Director-General of Works and Chief Architect receives £1,400 a year, and any one who knows the work which Mr. Murdoch has been carrying out for many years, which has been almost invaluable to the Commonwealth, must admit that the difference between that which he receives and the amount paid to the Secretary of the Defence Department is too great. The Chief Engineer in the Department of Works and Railways, another able officer, receives £1,300 a year. The Director-General of Health, who controls a very important department, receives £1,700, and the Secretary to the Minister for Markets and Migration £3,100 a year. As there are other departments controlling work which is quite as important as that of the Defence Department, particularly at this juncture, I should like to know why the salary of the Secretary of the Department of Defence has been increased by the amount. . I have mentioned.

Senator Sir WILLIAM GLASGOW:
Minister for Defence · Queensland · NAT

[4.48]. - In reply to the point raised by the Leader of the Opposition (Senator Needham) I may say that the salary at, present paid to Mr. Shepherd was fixed bya previous government at £2,000a year, on the condition that it would be continued when he returned to Australia on the termination of his association with the High Commissioner’s office in Lon don. The salary paid to the present secretary of the department is nol regarded as permanent. Any future occupant of that office may not receive a similar salary. The Public Service Board does not fix the salaries paid to the heads of departments.

Proposed vote agreed to.

Department of Trade and Customs.

Proposed vote £8S4,500 agreed to.

Department of Works and Railways.

Proposed vote, £351,324.

Senator FINDLEY:
Victoria

– Will the Minister representing the Minister for Works and Railways explain the increased expenditure in connexion with the Governor-General’s establishment? The vote for “caretakers, charwomen and miscellaneous expenditure” for 1926-27 was £940, the actual expenditure £898, and the vote for this year £1,874 for the same purpose, or a difference between the previous and proposed vote of £934. The vote for “ maintenance - house “ for 1926-27 was £3,670, the expenditure incurred £3,587, and the proposed expenditure for this year £4.236, or an increase of £566. The vote for “maintenance - grounds” for 1926-27 was £4,125, the actual expenditure £3,182, and the vote for this year £5,575, or an increase of £1,450. Are we to understand that there is to be an additional expenditure of £1,450 for the maintenance of the grounds of the Governor-General’s residence at Canberra ?

Senator Crawford:

– Provision for the maintenance of the grounds at Government House, Canberra, is £1,500, but last year nothing was set aside for- that purpose.

Senator FINDLEY:

– The expense incurred in the upkeep of the grounds at Canberra is apparently as high as in Melbourne. Last year the total vote for the Governor-General’s establishment was £11,600, and the amount actually expended £11,388. The difference between the actual expenditure of £11,388 of last year and the amount proposed to be expended this year is £3,870. In sub-division No. 2, “ Melbourne and Sydney Government Houses,” the proposed expenditure this year is £1,330, whereas the amount actually expended last year was £2,562. The committee is entitled to some information on these points.

Senator CRAWFORD:
QueenslandHonorary Minister · NAT

– I am at the moment unable to explain the difference between the actual expenditure last year and that estimate for this year. The details of the expenditure of £1,330 on the Melbourne and Sydney Government Houses are as follow: - Melbourne, erection of potting sheds £330, asphalting footpaths, main drive, and tarring roads £500 ; and Sydney, miscellaneous minor works, £500. These three items make up the total of £1,330.

Senator FINDLEY:
Victoria

The CHAIRMAN (Senator Plain).The honorable senator is in order. There is an item in the Estimates for maintenance of Government House and grounds.

Senator CRAWFORD:

– Expenditure for that work was provided on the Loan Estimates. However, the honorable sena tor’s protest will be communicated to the proper authority, and I hope it will b-j productive of good results.

Senator Reid:

– I was not sure that 1 should be in order, but I directed attention to the matter because the Minister for Works and Railways is responsible for the Estimates iu which these items art included.

Senator NEEDHAM (Western Australia) [5.14 . - Senator Reid need make no apology for having mentioned the expenditure at Yarralumla House, aud the other three works to which he referred. This is not the first time that the Federal Capital Commission has endeavoured to drive a coach and four through the Public Works Committee Act. This matter was discussed in the Senate on a previous occasion, when the commission attempted to evade the provisions of the act. I agree with Senator Reid that the same tactics were adopted in connexion with the expenditure at the Governor-General’s residence at Canberra. It would have been better to pull down Yarralumba House instead of spending so much moneY on it by making alterations and additions. That would have been much cheaper in the long run. I hope that. Senator Reid will not allow the matter to drop, but that he will persist in his endeavour to compel the Federal Capital Commission to observe the law.

Senator Crawford:

– The Works and Railways Department was not concerned in that expenditure.

Senator NEEDHAM:

– Under item 1, there is provision for £1,874 for caretakers, charwomen and miscellaneous expenditure; £4,236 for the maintenance of Government House, and £5,575 for the maintenance of Government House grounds. The Minister has not yet given the committee the details of extra expenditure in respect of these items. In addition we have to provide for the maintenance of Government House grounds at both Melbourne and Sydney. This is a vast amount of money to spend on such a small building, an.d, so far as I have been able to follow the Minister, he has not given us the information which we require.

Senator FOLL:
Queensland

.- Now that Parliament has been transferred from Melbourne to Canberra, I fail to see any reason for keeping up an establishment for the Governor-General in Melbourne. The winter in Canberra may be unpleasant for many people who reside here, but Queensland has the finest winter climate in the world, aud I suggest that if another residence is required for His Excellency and his staff a Government House should be built in Brisbane or in some other part of Queensland. I understand that the State Government of Victoria has recently intimated that it is not prepared to take over Federal Government House there on account of the costly upkeep, aud that it is asking for a largely increased contribution from the Federal Government towards the maintenance “of the establishment. A reputable journal in Melbourne states that the State Premier is now asking £10,000 a year from the Commonwealth Government instead of the £2,000 a year which was asked for by his predecessor. Furthermore, I understand from this journal that the State Government is looking for another house for the State Governor. I do not say that it is no longer necessary for the Commonwealth Government to maintain a house in Melbourne for the Governor-General, as long as there is work for him to do in Victoria; but, as the ramifications of the Commonwealth extend over nil the States, I think the time has arrived when, if it is necessary to provide more than one establishment for the Governor-General, a house should be built for him in Queensland, which is undoubtedly one of the most important States, and has a wonderful winter climate.

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

[5.2ft]. - I ,should like to make a short statement on this question which is of considerable public interest and also of interest to Parliament. It is not proposed to build an additional residence for the GovernorGeneral anywhere, and therefore the question of building another residence does not arise. While the seat of Goernment was in Melbourne the Commonwealth was using the Government House there; but it is a fairly expensive building to maintain - the expense, indeed, is far more than the State Government wishes to undertake. The Government of Victoria which preceded the Hogan Government intimated its willingness to make a reasonable arrangement with the Commonwealth for the maintenance of Government House- in Melbourne. It was a generous arrangement, and the Commonwealth Government thought that it would be of advantage, at any rate for some time, to maintain a Governor-General’s residence there. One or two reasons actuated the Government in coming to that determination. Some people scoff at the value of sentiment in our Empire relationships, but with the growth of the significance of the Commonwealth and the other Dominions as nations, one readily recognizes that the ties which bind our Empire together are largely sentimental ones. Sentiment must find expression in some way. The GovernorGeneral is the embodiment of that sentiment that binds the various parts of the Empire together - the idea of a common sovereign. His Majesty King George is as much the King of Australia as he is the King of Great Britain, and it is desirable that his representative should have an opportunity to move among the people in our great centres of population and meet as many as he can by appearing at public functions and so forth. Every GovernorGeneral, I am pleased to say, has realized that it is part of his duties to do this, and has travelled as much as possible throughout Australia. There is also another point of view peculiar to the Commonwealth itself. Our Federation is based largely on sentiment and the Governor-General plays a conspicuous place in the outward expression of that sentiment. The Government thinks that it is in the public interest that the Governor-General, as the embodiment of the sentiment of a united Australia, should be able to visit the more populated parts and remain in residence in the larger centres for some little time. Therefore, if a suitable arrangement can be made with the Government of Victoria, it has determined to maintain, for some time at any rate, a Government House in Melbourne. Its decision in that regard is in no way derogatory to the claims of other States. It is recognized that every State has something to recommend it, and that every State has claims to visits from the representative of his Majesty the King. But, of course, it would be impracticable to have a Government House in every State. For the reasons I have given the Government thinks that it would be inadvisable to abandon Government House in Melbourne, at any rate for the present, if the matter can be arranged on anything like reasonable terms. The terms proposed by the previous Government in Victoria were eminently reasonable, and acceptable to the Commonwealth Government. Negotiations are still in progress between the Commonwealth Government and the present Government of Victoria.

Senator Needham:

– Can the honorable senator give the nature of those terms ?

Senator Sir GEORGE PEARCE:

– Not off hand. They have been published in the press, and there is no secrecy about them. Speaking from memory the arrangement was for a Commonwealth contribution of about £2,000 a year. That was the arrangement with the previous Government. No particular sum has been mentioned officially by the present Government. All we have to guide us in the matter is a statement by a State Minister that the contribution expected by his Government is in the neighbourhood of £10,000 a year. I have no desire to express any opinion on that particular point, because it is now the subject of negotiation between the Prime Minister and the Premier of Victoria. Of course the State Government has to look at the matter from its own standpoint, and I do not blame it for asking for a proper contribution from the Commonwealth. The Government does not feel that it would be justified in incurring a heavy expenditure in order to maintain an establishment in Melbourne for the Governor-General, but is prepared to shoulder a fair expenditure for the reasons I have already stated. I hope that the negotiations that are now proceeding will have a satisfactory termination, because it is in the public interests of the Empire and Australia that the Governor-General should have in the largest centres of population resi dences where be can spend some time of the year.

Senator FINDLEY:
Victoria

– Senator Reid has made a statement which I take very seriously as should every honorable senator. In a measure he reiterated statements that were made by Senator Duncan and Senator Elliott to the effect that the expenditure on certain additions to Yarralumla, the residence of the Governor-General, was a public scandal. His statements having been broadcast, a certain atmosphere of doubt and suspicion has been created as to the justification for this expenditure. Senator Reid has urged that the matter should be fully inquired into by the Public Accounts Committee. Personally, I think that the statements made are so serious that the Government itself should take action in the matter. In the best interests of those who are closely associated with the big undertakings in this Territory, an inquiry should be held in public. Senator Reid said that, in his opinion, the Federal Capital Commission had deliberately prevented, by manipulation, the investigation by the Public Works Committee of certain undertakings within the Capital. If there is anything wrong or fishy about these matters, they demand the fullest inquiry by a body that should be named by the Government. Unless the matter is cleared up definitely these statements will continue to be made from time to time. Honorable senators who are responsible for them ought to be prepared to back them up. and should spur the Government to action. As public men we must be careful to see that the taxpayers are given value for the money which is expended on works that are carried out by either the Government or the commission. From time to time workmen arccharged with the observance of a go-slow ‘ policy. It is scandalous for a Government supporter to make such an assertion, seeing that the Government itself is always going slow. I trust that in this instance it will act quickly and probe to the utmost degree the allegations that have been made and the rumours that are in circulation respecting certain buildings in the Territory. Statements of this sort are having a damaging effect on the Territory. In the American language there is the word “ graft.” The inference from Senator Reid’s remarks >s that there must have been either direct or indirect graft in connection with some of these works.

Senator Reid:

– I did not say anything of the kind.

Senator FINDLEY:

– I grant that the honorable senator did not; but the statement which he made conveyed to me, at all events, the inference that there was something of that nature in connection with these undertakings.

Senator Reid:

– I implied that there was gross carelessness.

Senator FINDLEY:

– If there is nothing either shady or fishy, why waste the time of the committee? The honorable senator has something definite in his mind. He protested earnestly, aud said that it was a public scandal. He disclaimed any intention to castigate the commission because these works had not been referred to the committe of which he is a member, and said that personal considerations did not weigh with him. His argument that the expenditure cannot be justified must have some foundation, or he would not have used it. He and Senators Duncan and Elliott are in duty bound to move the Government to have the fullest inquiry possible made into these matters, in order that the mind of the public may be set at rest. The public are very greatly interested, because some of the newspapers have published these statements with big headlines, thus conveying, by innuendo, the impression that there is something wrong.

Senator PAYNE:
Tasmania

– I have no knowledge of the matter which has been raised by Senator Reid, but I have heard comments passed regarding the expenditure on alterations and additions to the Governor-General’s residence. If Senator Reid has gained certain knowledge from an inspection of those alterations, he is justified in having raised the matter in this committee, and I applaud his action. But I do not approve of an honorable senator lashing himself into a fury, as Senator Findley has done, in an attempt to dictate the course of action that another honorable senator should pursue. From my knowledge of Senator Reid I can say that he is prepared, equally with Senator Findley, to fight to a finish. The fact is that certain senators who have visited the Governor-General’s residence have stated openly that in their judgment there has been a great waste of money. I believe I have read that the Prime Minister has given an assurance that this matter will be investigated. The statements are serious enough to demand an investigation, and I hope that it will be made as speedily as possible, because it is essendon that those who have to find the money for these works shall have their minds set at rest.

I should like the Minister to justify the large increase in the vote for the “ conveyance of members of Parliament and others.” The reason is not apparent to me. The provision for the conveyance of members of Parliament and others shows an increase of a little over £7,000, and I cannot see the necessity for it. The amount expended last year was £20,S97, and this year it is proposed to expend £27,950.

Senator Herbert Hays:

– The Tasmanians have now to travel to Canberra.

Senator PAYNE:

– The New South Wales members and senators have not now to travel to Melbourne; therefore, one can be offset against the other. It has not cost the Government anything to send me back to Tasmania since the session began, because I have been compelled to remain in Canberra to attend to my duties as senator. Another item to which I wish to refer is that of maintenance of members’ rooms in the capital cities. Last year the sum expended was £1,275, and this year we are asked to vote £4,710, tin increase of approximately £3,500. There is also the item, rent of buildings. Last year the expenditure was £58,393, and this year we are asked to provide £75,715. I always understood that after the removal of certain departments to Canberra there would be a decrease in the amount of rent paid for buildings in which the departments were housed. Instead of that, there is to be a substantial increase this year. I should like the Minister to explain the reason for it.

Senator CRAWFORD:
Honorary Minister · Queensland · NAT

– I wish, first, to say a few words with respect to the statements that have been made regarding the cost of converting Yarralumla into a residence for the GovernorGeneral. As honorable senators are aware, I represent in this chamber the Minister for Works and Railways, who is a member of another place. I have no doubt that they also are aware that the work at Yarralumla, and in other parts of the Federal Capital Territory, is not the responsibility of the Minister for Works and Railways, but of the Federal Capital Commission, which is under the Minister for Home and Territories. I shall bring to the notice of that Minister the representations that have been made, and I see no reason to doubt that the matter will be investigated, and that the information which honorable senators seek will be furnished to them.

The vote for the conveyance of members of Parliament and others represents an increase on last year’s provision of £6,950. During the financial year, 1926-27, the annual charge for a member’s pass was increased from £120 to £150, to date from the 2nd October, 1926. The payment of £120 on behalf of each member was made from the year’s appropriation, pending a decision by Cabinet in regard to the increased rate. On these Estimates provision has been made for a further increase, to £160, from the 1st July, 1927, together with the arrears due in respect of the 1926-27 increase. Honorable senators will thus see that an additional £40 per member, together with arrears, has had to be provided for.

Senator Payne:

– The States were given an extra £60 a member two years ago.

Senator CRAWFORD:

– The provision for the maintenance of members’ rooms represents an increase of £4,010. That increase is due to the establishment of rooms for the use of members in Temple Court, Melbourne. The estimated expenses in connexion with the establishment of those rooms are as follow : -

To that amount has to be added the sum of £S72 for rent of rooms, Commonwealth Bank, Sydney, which was previously charged to rent of buildings, Prime Minister’s Department. It has been provided for under this subdivision in consequence of a Treasury direction that all expense in connexion with the maintenance of members’ rooms must be shown under that heading. The actual amount required to meet rentals in respect of properties occupied by Government departments is £80,715, which is £14,925 in excess of the appropriation for 1926-27. The amount of the vote is £5,000 less than the total of the liabilities, but it is anticipated that this saving .can be effected because the accounts for the month of June are not submitted until the following month. The increase of £14,925 is due principally to the heavy rentals that have to be paid for office accommodation for “the departments at Canberra. The following Canberra rentals will be necessary for the first year, but at the end of that term they will be subject to review in the light of the experience gained : -

Senator GRANT:
New South Wales

– In his reply to Senator Payne the Minister did not state how much of the £27,950 is for the conveyance of members of Parliament and how much for the conveyance of other persons. If railway fares for members of Parliament cost £17,920 per annum, that still leaves £10,030 not accounted for. The committee is entitled to know what persons other than members of Parliament are conveyed free on the railways.

I also take this opportunity to enter my emphatic protest against the imposition of what I regard as a poll tax of 2s. in respect of every person who lands at Launceston or Burnie from the mainland of Australia. No other State imposes such a tax. The practice should be discontinued. Members of Parliament who visit Tasmania do not’ themselves pay the tax. ‘ It is wrong that the taxpayers of the Commonwealth should be required to pay to the Tasmanian Government 2s. every time a member of this Parliament lands at either of the ports I have mentioned. I should like to know how much these payments represent each year.

Senator PAYNE:
Tasmania

– I thank the Minister for the answers he has given to my questions. The explanation is satisfactory so far as it goes; but I protest against the Government agreeing to pay such large sums to the States for the conveyance of members of Parliament over their railways.

Senator Crawford:

– The States own the railways.

Senator PAYNE:

– Until about two years ago the amount charged to the Commonwealth for a pass for members was about £60 per annum. The States then asked for £130. To my surprise the Prime Minister made an offer of £120, which was accepted. Now the States are asking for £160 per annum. Is there to be no limit to their demands? It would be better to pay for the actual trips undertaken by members of Parliament.

Senator Millen:

– Does the honorable senator know of one railway in Australia that is paying?

Senator PAYNE:

– No attempt has been made by the States to double the railway fares charged to the ordinary travelling public. A charge is made against the Commonwealth Government for every member of Parliament, although many of them rarely use the railways.

Senator Millen:

– But they have the opportunity to do so.

Senator PAYNE:

– That may be so; but they do not always avail themselves of it.

Senator VERRAN:
South Australia

– I notice that a large sum of money is voted for maintenance of members’ rooms in Temple Court, Melbourne, and in the Commonwealth Bank, Sydney.

In South Australia the only accommodation provided for them is a small room in a basement at Parliament House with furniture suitable for a bachelor’s quarters. The heavy expenditure in this connexion in Melbourne and Sydney is not justified.

Senator Payne complained of the increasing cost to the Commonwealth of the conveyance of members of Parliament on the railways of the States. We cannot expect to make use of those railways without paying for them. The people of South Australia are called upon to compensate the tramway authorities to the extent of £17 for each member for the free passes granted to members of Parliament. These transport authorities should not be expected to carry large numbers of passengers free.

Senator Payne:

– No one has suggested that; but £160 a member per annum is too much.

Senator VERRAN:

– The honorable senator should remember that railway fares generally have increased during recent years.

Proposed vote agreed to.

Department of Health.

Proposed vote, £174,904, agreed to.

Department of Markets and Migration.

Proposed vote, £88,113, agreed to.

Miscellaneous Services.

Proposed vote, £313,623.

Senator OGDEN:
Tasmania

.- I direct the attention of honorable senators to the item “ Industrial Mission, United States of America, £1,000.” At considerable expense the Government sent to the United States of America, a delegation consisting of four representatives of the employers, four representatives of trades unionism in Australia, and a woman observer. If honorable senators have not carefully perused the report of the delegation, they should do so.

Senator Needham:

– Is it worth the expense incurred?

Senator OGDEN:

– Yes; it is worth more than that. If those interested in industrialism in Australia followed the practice adopted in the United States, it would be to their advantage. We ought to study the commission’s recommendations and place on record some of the facts disclosed. Of course, there is a considerable difference between the methods adopted by Australian unionists and the practice followed in the United States of America, which, in my opinion is to the disadvantage of the Australian worker. The delegation travelled very extensively in the United States of America, and had, as is stated on page 6 of this report, an opportunity to visit a number of factories in the United States of America. In addition, public bodies in America assisted it in obtaining information concerning the conditions prevailing in that country. The American Federation of Labour gave the delegates every assistance in obtaining information regarding conditions of labour in the United States, and the President of the Federation, Mr. William Green, and other prominent officers conferred with the whole of the delegation. .In addition, its members met various representatives of the industrial bodies, churches and other organizations. I wish to quote a statement by Mr. Hugh Frayne, the general organizer of the American Federation of Labour, who, in a speech at a representative gathering said : -

There was no group in America which gathered together for the purpose of discussing any public or social service question that did not to-day include a representative of Labour.

That is a recognition of the claims of Labour.

– Then I give notice of dissent from your ruling, because, as the Minister (Senator Pearce) . correctly stated, the Government has expended a certain sum of money in securing information which is embodied in the report of the commission. I am entitled to quote from the report to show whether, in my opinion, the expenditure is or is not justified. I move -

That the ruling of the Chairman be dissented from.

The CHAIRMAN:

- Senator Ogden has now notified me in writing as follows : -

That the Chairman’s ruling be dissented from, on the ground that under Item 12, “Miscellaneous Services,” it is perfectly permissible to discuss the report of the industrial delegation to America.

In accordance with the usual practice, I shall now report to Mr. President.

In the Senate:

The CHAIRMAN:

- Mr. President, I have to report that Senator Ogden has dissented from my ruling that he is not entitled to discuss the report of the Industrial Mission to the United States of America under an item to provide £1,000 to meet the expenses of the delegation, on the following ground : -

That under Item 12, “Miscellaneous Services,” it is perfectly permissible to discuss the report of the industrial delegation to America.

Sitting suspended from 6.15 to S p.m.

The PRESIDENT (Senator the Hon. Sir John Newlands). - Very extensive privileges are allowed to honorable senators on the first reading of an Appropriation Bill; and if any honorable senator was anxious to quote from the report of the industrial delegation to America, the proper time for him to do so was on the first reading of this bill. If Senator Ogden lost that opportunity it was his own fault. There is very little to guide the chairman as to what latitude should be allowed during the discussion of the schedule to an Appropriation Bill. It is largely a matter for the discretion of the Chair. If the Chairman thinks that an honorable senator is transgressing the rules, he is entitled to say he thinks so, and it is the usual practice for his ruling to be obeyed, unless dissent is taken, as on the present occasion. If the Chairman did not sometimes limit discussion on items in strict compliance with the Standing Orders, how long do honorable senators think it would take them to put through all the items embraced in the vote under discussion?

Senator Ogden:

– Surely that is not the question at issue.

The PRESIDENT:

– If the honorable senator will allow me, I shall give my ruling in my own way. I point out to him also that when the presiding officer is on his feet, he must be heard in silence. In dealing with questions of this nature the Chairman of Committees must exercise his own judgment. I consider that the honorable senator would have gone beyond the bounds of .legitimate discussion if at this stage he had dealt in detail with the findings, and the reasons therefor, of a body whose report was not before the committee. I must, therefore, rule that the Chairman adopted a correct attitude when he asked the honorable senator not to discuss those details. It would be quite in order for the honorable senator to make a passing reference to the report, such as to say it was worthless or was obtained at too high cost, but not to discuss it in detail. I share the opinion of the Charman, and therefore uphold his ruling.

In committee (Consideration resumed) :

Senator OGDEN:

– I am prevented from mentioning the report of the delegation. -

– I support the expenditure incurred in sending the Industrial Delegation to the United States of America. I cannot understand the attitude of honorable senators opposite, particularly as it should be the desire of every man to help another, and to endeavour to study the great’ problems of life from not only his own viewpoint, but that of the other fellow. The delegation went very thoroughly into industrial matters in America, and has submitted a report containing much valuable information. It is true that certain difficulties arose prior to its departure, but they were such as we might have expected when all the circumstances were considered. Its suggestions should act as a tonic to Australian trade unionists, and if some of them are adopted it will be of benefit to our industrial life. I know that if the recommendations get into the hands of certain individuals, they will not be allowed to see daylight. It is not surprising to find that piece-work - a system under which -I have worked all my life - is generally adopted in America to the complete satisfaction of the workers. This is only natural, as under it they are able to earn more money than under the daywork system. Unfortunately in Australia the unskilled labourer very often earns more than the skilled workman. One would almost think that work was something of which we ought to be afraid. Man, who is the greatest of God’s creation, should always be willing to exercise his physical and mental ability, not only in his own interest but for the benefit of the country in which he lives. Who made Australia ? Who put her on the slate if not the men who work? In these days some people think that to work is a disgrace. We find men laying only 400 bricks a day. At all events, that is what they were doing on the Thousand Homes scheme in Adelaide. They lay bricks not according to principle, but according to policy. The principle of trade unionism ‘ demands that a. man should lay 90C bricks a day; but the policy is to lay only 400. In America the home life is so interwoven with the industrial activities of the nation that the workers are equal to any task that is set them. Unfortunately, a certain section in this country was born tired, and has not had a rest yet. The mission has presented a report which contains much valuable information ; but two shiny-eyed trade unionists, signed an addendum behind the backs of the other delegates. What is going to happen to those members of the mission who were denounced by the executives of the Labour movement? Presumably they will have to earn a living somewhere else. It is impossible to get the best out of men when they are guided by an unscrupulous set of leaders - men whose souls are gone.

The CHAIRMAN (Senator Plain).Order ! The honorable senator’s remarks have nothing whatever to do with the items before the committee.

Senator VERRAN:

– The’ mission went to America to discover the best that is being revealed in the industrial life of that country. The Government is to be congratulated for having appointed the mission, and certainly I shall support payment of the amount asked for.

I notice, on page 264, an item £1, funeral expenses of late members of the Commonwealth Parliament. Can the Minister explain that ? What sort of a “ sendoff “ did they get ? Senator Pearce knows that whenever a Cornishman dies he gets a good “ send-off,” but it costs more than £1.

Senator Sir GEORGE PEARCE:

– That was for a wreath.

Senator GRANT:
New South Wales

– It is unfair to compare the work done by Australian bricklayers with the output of American workers, because the American brick, is much smaller than the Australian product. Senator Reid informed us that he knows all about flooring work on the piece-work system. I also have seen that class of carpentering done by piece-work, and I know what happens. >

The CHAIRMAN:

– Order ! The honorable senator is repeating a statement which he made some time ago. His remarks have nothing whatever to do with the items before the Chair.

Senator GRANT:

– Senator Verran made reference to Australian bricklayers. It is only fair that I should be allowed to refute his statement. The Australian bricklayers-

The CHAIRMAN:

– Order ! If the honorable senator continues to repeat statements in this way I shall have to call upon him to resume his seat.

Senator GRANT:

– I am glad that this discussion has taken place. Honorable senators supporting the Government have failed entirely in their attempt to show that conditions in America are better than those in Australia. It is apparent that some of them at all events can never forget that Australian trade unionists after their experiences in 1891, decided to take political action, which is now regarded as a necessary complement to industrial action. Men like Senator Verran and Senator Ogden can never forget or forgive them for doing that. I am satisfied, however, that trade unionists will always return some Labour members to represent them in this Parliament. We have been told of the wonderful results to be obtained from co-operation and profit-sharing in business. That system has been extensively adopted in Great Britain, and yet no one will deny that to-day there are 1,500,000 able-bodied persons in Britain unable to obtain work. Co-operation and profit-sharing have not solved the industrial problem in either Great Britain or America. The latter country is blessed with a diverse climate, magnificent soil, an unrivalled system of internal waterways, and yet the workers in Australia would not willingly change places with the workers of America. Industrial conditions here are better. I, for one, am not prepared to accept the recommendation of the industrial mission in regard to the piece-work system.

Proposed vote agreed to.

Refunds ofRevenue.

Proposed vote, £800,000 agreed to.

Advance to the Treasurer.

Proposed vote, £1,500,000, agreed to.

War Services Payable out of Revenue.

Proposed vote, £1,168,358, agreed to.

Business Undertakings - Commonwealth Railways.

Proposed vote, £586,165.

Senator REID:
Queensland

.- I have no grievances to ventilate under this item. I merely wish to say that honorable senators should be proud to learn from the report of the Commissioner of Commonwealth Railways that the transAustralian line is commencing to pay expenses. By the end of next year, if the present rate of progress is maintained, there ought to be a return on the amount invested. That is in large measure due to the able management of the Commissioner. It is a gratifying position considering the long stretch of poor country which the line traverses, and the small consignments of goods that are forwarded by it on account of the fact that there is so little settlement along the route. It is especially pleasing, also, as the States are unable to show a credit balance, despite the fact that they have large populations and plenty of freight upon which to draw for their revenue.

Senator VERRAN:
South Australia

– I draw the attention of the Government to the statements that are contained in the following letter that I have received from a society in South Australia -

To safeguard the aborigines in this State the South Australian Government has taken the following measures: -

All railway construction camps and surrounding country within a radius of 10 miles has been declared prohibited territory for all aborigines other than those employed in such camps.

No aboriginal women are allowed to be employed in any capacity whatever in the construction camps.

Extra police have been appointed to patrol the line. Also the officer in charge is a strong man capable of enforcing authority.

So far these measures have been efficient, and the native women have not been interfered with.

In order that the same protection may be given to aborigines in the Federal Territory, we ask that the following be done: -

That the Federal Government through the administration of the Northern Territory and Central Australia, should . exercise the power given in section 11 of the principal ordinance of the Northern Territory (1918), to declare all construction camps and surrounding country within a radius of 10 miles thereof to be a prohibited area for all aborigines other than those employed in such camps. Also that the police be instructed rigidly toenforce this regulation, especially section 4, as added by the Amendment Ordinance-. 1923 and 1924.

That those in control of the camps and employment in connexion therewith be instructed not to employ any aboriginal or half-caste woman. (We received an assurance from the Government that no women would be employed on any part of the line constructed departmentally. )

That sections 45 and 53 of the above-mentioned ordinance be more rigidly enforced than hitherto.

That extra police be employed to ensure the carrying into effect of these regulations, and that the officer in charge of such police be specially chosen for his strength of character and suitability for’ the task. So much depends on the man in charge.

I trust that the Minister will recognize the wisdom of bringing the Commonwealth regulations into conformity with those of the State.

Senator CRAWFORD:
Honorary Minister · Queensland · NAT

– I shall see that the matter is brought under the notice of the Minister without delay.

Proposed vote agreed to.

Postmaster-General’s Dep artmen t.

Proposed vote, £10,040,253.

Senator THOMAS:
NEW SOUTH WALES · NAT

– At present a subsidy of £130,000 a year is paid to the Orient Steamship Company for the carriage of overseas mails. Although it is termed a mail subsidy, I have been informed by the department, in answer to a question that I asked in this chamber recently, that it is granted not merely for the carriage of mails, but also for the provision of refrigerated space. The Orient Company provides not more than 2,500,000 cubic feet of refrigerated space, whilst other boats provide about 40,000,000 cubic feet. I desire the Minister to state how much longer the contract has to run, and whether any future contract will contain a similar clause. If it is to be a part of the contract, I desire to protest against the amount being charged to the Postmaster-General’s Department. It might be said that it does not matter which department pays the money, but I maintain that each department should bear its own burden. Sometimes when we make requests for additional postal facilities we are told that they cannot be provided because the department is not paying its way. Here is a direction, in which £100,000 may be saved annually to the PostmasterGeneral’s Department. I realize that the existing contract cannot be altered, but in any future contract entered into the position should be rectified. It is absurd to pay any subsidy for the provision of refrigerated space. A subsidy might have been necessary twenty years ago, when few vessels had cooling chambers, but this is not the position to-day. I have long advocated the abolition of the mail subsidy, because I believe that we should do better by having our mail matter carried at poundage rates. The contract provides for a four-weekly service.

Senator Sir George Pearce:

– Vessels belonging to the Orient Company come and go every fortnight.

Senator THOMAS:
NEW SOUTH WALES · NAT

– That may be so, but the subsidy is for one trip each way per month.

Senator Crawford:

– The contract is on a four-weekly basis, but vessels of the Orient Company call here fortnightly.

Senator THOMAS:
NEW SOUTH WALES · NAT

– The additional trip each month is run to suit the convenience of the company, and not to meet the requirements of the mail contract. That is a further argument for the abolition of the subsidy. Although the contract provides for only one trip each way per month, we really get a fortnightly service. What further evidence is required that there is no longer any need for a subsidy? The competition among the shipping companies is so great that their vessels will come here irrespective of any mail subsidy. The granting of the subsidy has not resulted in a quicker service. We do not get our letters now much more quickly than we did 25 years ago. In fact, 40 years ago letters from England took less time to reach us than is the case to-day, because at that time they were taken overland to Brindisi, in Italy, whence they were conveyed by a fast steamer to Suez. The result was that letters which left London a week after the mail steamer were placed on board that vessel at Suez. Now mails from England are unloaded at Marseilles, so that they take only four days less to reach Australia than if placed on board the steamer in London. I understand that the alteration from Brindisi to Marseilles was considered advisable because of the unreliable nature of the Italian railways at that time. As that condition no longer exists it might be advisable to revert to the previous system. I should like to know whether in future the carriage of mails will be combined with the provision of refrigerated space.

Senator HERBERT HAYS:
TASMANIA · NAT; UAP from 1931; LP from 1944

– I desire to refer to the allowances made to non-official postmasters. On previous occasions I have urged that these officers in the outback districts should receive more generous treatment.

Senator Crawford:

– The Treasurer’s budget announced that increases would be granted to them this year.

Senator HERBERT HAYS:

– I am aware of that, and I appreciate the action of the Government. No body of public servants renders a greater service to the people in the outback districts than do these allowance postmasters. They have to deal with many matters, including telephone, money order, savings bank, old-age pension, and other business, besides that of the post office itself. Their duties are indeed varied, and their working hours long. Only those who live in sparsely populated districts can realize the service they render to the community. If an allowance postmaster wishes to take a holiday he must find some one approved by the PostmasterGeneral’s Department to relieve him, and he must pay that person. Notwithstanding what has ‘ been done, there is still a want of appreciation on the part of the PostmasterGeneral’s Department of the services rendered by these officers. They are entitled to more generous treatment than has been given to them.

Senator PAYNE:
Tasmania

– I endorse the remarks of Senator Herbert Hays respecting allowance postmasters Any one whose business takes him into the outback district cannot but appreciate the valuable services that they are rendering to the community. I am glad that this year something is being done for them. An increase of about 20 per cent, being made. If post offices were not provided in the outlying districts of this country the development of those areas would be retarded. These officers are entitled to every consideration.

Senator CRAWFORD:
QueenslandHonorary Minister · NAT

– I am unable to inform Senator Thomas of the future policy of the Government with respect to mail contracts. The points raised by the honorable senator have not been overlooked by the department. The mail contract, which may be terminated by twelve months’ notice on either side, is for a lump sum of £130,000 a year. The contract does not show how the amount is apportioned between the carriage of mails and the provision of refrigerated space.

Senator Herbert Hays and Senator Payne are aware that the Treasurer stated in his budget speech that the remuneration of the officers in control of non-official post offices would be increased by the expenditure of an additional £80,000 a year. I will see that the honorable senators’ further representations are brought under the notice of the Postmaster-General.

Senator REID:
Queensland

– I cannot understand why. the PostmasterGeneral’s Department shouldbe burdened with the cost of the refrigerated space which is made available on mail boats, and paid for in a lump sum under a contract which also covers the carriage of mails.

Senator Crawford:

– It is not the only unnecessary burden which the department has to carry.

Senator REID:

– It seems unreasonable that that department should have to provide the money, which should be found by the Department of Markets and Migration.

Senator Andrew:

– Possibly it is an advantage to include it in the one contract.

Senator REID:

– I trust that when a further contract is entered into the cost will be apportioned between the departments concerned.

Evidence was given before the Public Works Committee to the effect that of late years the telephone system in the metropolitan areas has been so successfully developed, that it is now one of the best sources of revenue to the department. While the telephone activities of the department were confined largely to the cities, thousands of pounds of profit were being made; but when country services were extended, the sur-‘ plus was absorbed, and. the telephone department is now losing money. This is one direction in which the city people are helping the rural settlers, who, I think, are entitled to a service whichwill make country life more attractive.

Senator ANDREW:
Victoria

– Senator Reid will find that the Postal Department has found it more advantageous to combine the carriage of mails and the provision of refrigerated space in the one contract. There is no necessity to apportion the costs. Even if the Department of Markets and Migration were charged with the cost of the refrigerated space provided it would only be a book entry.

Provision is made in division 138 for the payment of £2,000 in connexion with the agreement with Amalgamated Wireless (Australasia) Limited for the upkeep of stations. I should like toknow if any of this amoun t is to be used in connexion with the installation and maintenance . of redistributing stations in country districts, which are of great importance to primary producers in supplying weather forecasts and market reports. I know of an instance where a sheep-breeder lost a considerable sumbecause, in the absence of the latest market reports he had to offer his stock ona falling market.

SenatorCRAWFORD (QueenslandHonoraryMinister) [10.25]. - It has already beenannounced that a new agreement is tobeentered into between the Commonwealthand Amalgamated Wireless (Australasia) Limited, which will be brought before Parliament for ratification. The honorable senator will then have an opportunity to fully discuss the point he has. raised.

Senator THOMAS:
NEW SOUTH WALES · NAT

– Are any of the boats of the Orient Company, which are providing a fortnightly service, carrying mails on a poundage basis?

Senator CRAWFORD:

– The company with which the contract is made receives £130,000 a year, and poundage rates are paid only on the mail matter carried on boats other than those carrying mails under contract.

Proposed vote agreed to.

Territories of the Commonwealth.

Proposed vote, £301,025.

Senator GRANT:
New South Wales

Senator Cox:

– The honorable senator led us to believe that it had been abandoned.

Senator PAYNE:

– This is what the Administrator in his report to the League of Nations says -

The central campaign of the year (1925) was that devoted to the combating of gonorrhoea. Over 1,000 natives in al! were treated for the disease, but owing to lack of funds the -campaign was unable to be pushed to a satisfactory conclusion.

That is my point. What is the use of spending money on a campaign of this kind unless sufficient funds are available to carry it to a satisfactory conclusion, I am not condemning the Government.

– Has the Minister expressed himself satisfied that the Administration has sufficient funds to conserve the native life? I should be lacking in my duty if I did not express my opinion on the matter. The medical staff at Rabaul is doing magnificent work. It is training hundreds of natives to act as medical assistants to assist the department in the fine work it is doing, but, after all, it is a matter of £ s. d. The territory is worth the expenditure of money, and for that reason I urge the Minister to give special attention to the need for preserving the health of the native population. I hope that, as the result of what I have said, this phase of the development of New Guinea will receive more prominent and careful consideration.

Senator Sir WILLIAM GLASGOW (Queensland - Minister for Defence) [10.58]. - The honorable senator, who has been to New Guinea, knows very wel that there is an excellent medical organization there, controlled by an enthusiastic medical officer who is doing splendid work.

Senator Payne:

– I agree with that.

Senator Sir WILLIAM GLASGOW.In regard to venereal disease, a very fine hospital has been erected at Rabaul, and in conjunction with that institution a lock hospital has been established, where the natives will be treated before they are returned to their villages. I think the honorable senator will admit that the Government is giving a great deal of assistance in the direction he desires, particularly in connexion with provision of means of communication and a grant for the welfare of the natives. That the Government fully realizes its responsibility towards New Guinea and Papua is, I think, shown, by the excellent administration we have in Papua. It is an obligation of all British Administrations in control of territories like Papua and New Guinea, to do everything possible to raise the standard of the natives, not only for economic purposes, but also for humanitarian reasons. The Government accepts that responsibility in regard to our territories, and the Administrations in Papua and New Guinea are doing excellent work. I shall bring the honorable senator’s remarks under the notice of the responsible Minister, who will probably have an opportunity to discuss the matter with the Administrator when he arrives in Melbourne in a few days’ time.

Senator OGDEN:
Tasmania

Senator Ogden:

– Does the honorable senator believe in taxing the nigger?

Senator PAYNE:

– I think it is a reasonable thing to impose a tax upon the native, who is receiving a benefit from the work that is being carried on there.

Proposed vote agreed to.

Second schedule agreed to.

Postponed clauses 2 and 3 agreed to.

Preamble and title agreed to.

Bill reported without requests; report adopted.

page 2752

ADJOURNMENT

Settlement of Trouble on Waterfront.

Senator Sir GEORGE PEARCE:
Vice President of the Executive Council · Western Australia · NAT

[11.13]. - In moving -

That the Senate do now adjourn.

I desire to inform honorable senators that I have received advice from both Sydney and Melbourne which indicates that it is practically certain that the recent dis- pute between the waterside workers and the ship-owners has reached a satisfactory solution. Both parties came before Judge Beeby this morning. The Court was in possession of a written undertaking by the Committee of Management that they would wire to all their branches in these terms -

The committee advise you that the overtime embargo is declared off, and instructs you to resume on conditions of existing awards.

The Court was also in possession of a resolution by the committee that they would, advise their branches to carry out the existing awards, agreements, &c, and also undertake to exercise all their powers to enforce strict compliance on the part of the members with any future award made by the Court, or any agreement arrived at from time to time. Upon that basis, the Judge made an interim award for three months, which provides that the time and places of picking up shall be those prevailing in the different ports on the 10th January, 1927, which was the date on which the Court commenced the hearing of the men’s plaint. This award is made without prejudice to the rights of either party. The date of announcement of hearing is not yet fixed, but it will be within a few days. Only this afternoon the Prime Minister received a message indicating that the owners are very hopeful that it will be possible for the men to start work to-morrow morning at 8 o’clock at all ports in Australia. I am sure that all honorable senators will be both pleased and gratified that a settlement of this dispute appears to be in sight.

Senator NEEDHAM:
Western Australia

– The statement made by the Leader of the Senate is welcomed by every honorable senator and by the people of Australia as a whole. I take this opportunity of saying that we should recognize the efforts of the Federal industrial Disputes Committee, headed by Mr. Charles Crofts, and the Melbourne Trades Hall Council, headed by Mr. E. J. Holloway. Those bodies have worked incessantly to bring about industrial peace, and it is mainly due to their efforts that hostilities on the waterfront have ceased. Days before the Government moved in this Parliament in a certain direction these bodies were at work in an effort to bring about a settlement of the dispute..

Senator Sir George Pearce:

– The honorable senator would do well not to continue along those lines.

Senator NEEDHAM:

– With other honorable senators, I rejoice that there is peace on the waterfront.

Question resolved in the affirmative.

Senate adjourned at 11.15 p.m.

Cite as: Australia, Senate, Debates, 7 December 1927, viewed 22 October 2017, <http://historichansard.net/senate/1927/19271207_senate_10_117/>.

View PDF View XML View in Voyant

Senate 7 December 1927

QUESTION

OLD AGE PENSIONS

Senator NEEDHAM:WESTERN AUSTRALIA

Senator Sir GEORGE PEARCE:

QUESTION

FEDERAL CAPITAL

QUESTION

FEDERAL CAPITAL COMMISSION

Senator OGDEN:TASMANIA

Senator Sir WILLIAM GLASGOW:

PAPERS

INCOME TAX BILL

INCOME TAX ASSESSMENT BILL

Second Reading

Senator Sir GEORGE PEARCE:Vice-President of the Executive Council · West ern Australia · NAT

Senator Sir Henry Barwell:

APPROPRIATION BILL 1927-28

Senator NEEDHAM:Western Australia

Senator Sir GEORGE PEARCE:Vice-President of the Executive Council · Western Australia · NAT

Senator Needham:

Senator Sir GEORGE PEARCE:

Senator FINDLEY:Victoria

Senator Sir George Pearce:

Senator Findley:

Senator Sir George Pearce:

Senator Findley:

Senator Needham:

Senator PAYNE:Tasmania

Senator FINDLEY:Victoria

Senator Sir George Pearce:

Senator FINDLEY:

Senator Sir George Pearce:

The CHAIRMAN ( Senator Plain:VICTORIA

Senator FINDLEY:

The CHAIRMAN:

Senator FINDLEY:

The CHAIRMAN:

Senator FOLL:Queensland

Senator Sir WILLIAM GLASGOW:Minister for Defence · Queensland · NAT

Senator KINGSMILL:Western Australia

Senator GRANT:New South Wales

Senator GRANT:

Senator GUTHRIE:Victoria

Senator Guthrie:

Senator Sir WILLIAM GLASGOW:

Senator GUTHRIE:VICTORIA · NAT; UAP from 1931

Senator Sir WILLIAM GLASGOW:

Senator Guthrie:

Senator Guthrie:

Senator Sir WILLIAM GLASGOW:

Senator Herbert Hays:

Senator Sir WILLIAM GLASGOW:

Senator Herbert Hays:

Senator Sir WILLIAM GLASGOW:

Senator HERBERT HAYS:Tasmania

Senator GUTHRIE:Victoria

Senator Guthrie:

Senator Sir WILLIAM GLASGOW:

Senator Guthrie:

Senator Sir WILLIAM GLASGOW:

Senator GUTHRIE:Victoria

Senator Sir William Glasgow:

Senator GUTHRIE:

Senator Sir WILLIAM GLASGOW:Minister for Defence · Queensland · NAT

Senator FINDLEY:Victoria

Senator Crawford:

Senator FINDLEY:

Senator CRAWFORD:QueenslandHonorary Minister · NAT

Senator FINDLEY:Victoria

Senator Reid:

Senator CRAWFORD:

Senator REID:Queensland

Senator Crawford:

Senator REID:

Senator Findley:

Senator REID:

Senator Ogden:

Senator REID:

Senator Duncan:

Senate
7 December 1927

Senator NEEDHAM:
WESTERN AUSTRALIA

Senator OGDEN:
TASMANIA

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · West ern Australia · NAT

Senator NEEDHAM:
Western Australia

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

Senator FINDLEY:
Victoria

Senator PAYNE:
Tasmania

Senator FINDLEY:
Victoria

The CHAIRMAN ( Senator Plain:
VICTORIA

Senator FOLL:
Queensland

Senator Sir WILLIAM GLASGOW:
Minister for Defence · Queensland · NAT

Senator KINGSMILL:
Western Australia

Senator GRANT:
New South Wales

Senator GUTHRIE:
Victoria

Senator GUTHRIE:
VICTORIA · NAT; UAP from 1931

Senator HERBERT HAYS:
Tasmania

Senator GUTHRIE:
Victoria

Senator GUTHRIE:
Victoria

Senator Sir WILLIAM GLASGOW:
Minister for Defence · Queensland · NAT

Senator FINDLEY:
Victoria

Senator CRAWFORD:
QueenslandHonorary Minister · NAT

Senator FINDLEY:
Victoria

Senator REID:
Queensland

Senator CRAWFORD:
Honorary Minister · Queensland · NAT

Senator FOLL:
Queensland

Senator Sir GEORGE PEARCE:
Vice-President of the Executive Council · Western Australia · NAT

Senator FINDLEY:
Victoria

Senator PAYNE:
Tasmania

Senator CRAWFORD:
Honorary Minister · Queensland · NAT

Senator GRANT:
New South Wales

Senator PAYNE:
Tasmania

Senator VERRAN:
South Australia

Senator OGDEN:
Tasmania