12 November 1930

12th Parliament · 1st Session

The President (Senator theHon. W. Kingsmill) took the chair at 3 p.m., and read prayers.

page 166



Senator DALY:
Vice-President of the Executive Council · SOUTH AUSTRALIA · ALP

– As the Loan Council sat until a very late hour last night, I ask the honorable senator to give notice of his question.

page 166


Flightfrom England to Australia

Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP

by- leave - I move -

That the Senate tenders to Air-Commodore Kingsford Smith its congratulations on his successful accomplishment of a recordbreaking flight fromEngland to Australia.

It is a matter of great satisfaction to honorable senators that one of Australia’s sons has been able to accomplish a record-breaking flight from England to Australia. Air-Commodore Kingsford Smith merits the congratulations’ of this Parliament, and I move this motion because I take it that honorablesenators wish to associate themselves with sentiments already expressed in another place in this connexion.

Senator Sir GEORGE PEARCE (Western Australia) [3.3]. - I second the motion. Honorable senators of the Opposition join with the Leader of the Government in congratulating AirCommodore Kingsford Smith upon his wonderful exploit. With those he has already performed he has made his name and that of Australia widely known in the air world. He has established phenomenal records in the air and his flights have been of great benefit to aviation. We heartily associate ourselves with the motion. .

Question resolved in the affirmative.

page 166


Resolution of Sympathy

Senator DALY (South Australia-

Vice-President of the Executive Council) [3.4]. - by leave - I move -

That the Senate expresses its profound regret at the tragic loss of life which occurred in the destruction of the airship R.101, and tenders its heartfelt sympathy to the Government of Great Britain and to the relatives of the victims of the disaster.

Honorable senators are well acquainted with the facts attending this unfortunate disaster. It is a matter for regret that on the very day that we have to congratulate an Australian upon a feat in the air, we have also to express our sorrow at a disaster to a British airship. I am sure that the motion will commend itself to honorable senators. It may be some small solace to the relatives of the victims included among whom were the Secretary of State for Air (Lord Thompson) ; the Director of Civil Aviation in Great Britain (Sir Seftou Brancker) ; and Squadron-Leader Palstra, of the Royal Australian Air Force.

Senator Sir GEORGE PEARCE (Western Australia) [3.6]. - I second the motion. It is one of the concomitants of scientific progress that of those who pioneer, a certain number fall by the wayside. The victims of theR.101 disaster undoubtedly lost their lives in what was a notable attempt to demonstrate the suitability of the class of airship constructed by Great Britain, and it is unthinkable that because of this disaster there will be no further progress in the science of air navigation. The victims were national heroes. They gave their lives in the cause of science, and we associate ourselves with the words of regret that have fallen from the lips of the Leader of the Government in the Senate (Senator Daly).

Question resolved in the affirmative, honorable senators standing in their places.

page 167


Senator DALY:
Vice-President of the Executive Council · South Australia · ALP

– I lay on the table the financial statement delivered in the House of Representatives by the Hon. J. A. Lyons, M.P., Acting Treasurer, and move -

That the paper be printed.

Debate (on motion by Senator Sir George Pearce) adjourned.

page 167



Senator CHAPMAN:

– In view of the tremendous drop in the prices of wheat, wool, and other primary productswill the Government consult with the banks and other financial institutions in regard to the advisability of un-pegging the rate of exchange and allowing a normal rate of exchange which will correct the trade balance in a natural and economic manner ?

Senator DALY:

– The Government has been, and is, taking steps to make matters easier for the primary producers.

page 167



Senator PAYNE:

-Have steps been taken by the Government to ascertain if its direction that rigid economy should be exercised in all public departments is being carried out?

Senator DALY:

– The control of the Public Service, as the honorable senator knows is in the hands of the Public Service Board, and I presume that all instructions given by the Government have been loyally observed by its servants.

page 167


Assent to the following bills re ported : -

Appropriation (Works and Buildings) Bill 1930-31.

Superannuation Bill.

Acts Interpretation Bill.

Commonwealth Employees’ Compensation Bill.

Sales Tax Bills (Nos. 1 to 9).

Sales Tax Assessment Bills (Nos. 1 to 9).

Commonwealth Conciliation and Arbitration Bill.

London Naval Treaty Bill.

Flax and Linseed Bounties Bill.

Dried Fruits Export Control Bill.

Canned Fruits Export Control Bill.

Wine Overseas Marketing Bill.

Grafton to South Brisbane Railway Bill.

Income Tax Assessment Bill.

Income Tax Bill 1930.

Invalid and Old-age Pensions Appropriation Bill 1930.

War Pensions Appropriation Bill 1930.

Loan Bill.

Appropriation Bill 1930-31.

page 167


The following papers were pre sented: -

Balance-sheets of Commonwealth Bank of Australia and Commonwealth Savings Bank at 30th June, 1930, and Statement of the Liabilities and Assets of the Note Issue Department at 30th June, 1930; together with. Auditor-General’s Reports thereon.

Audit Act - Regulations amended - Statutory Rules 1930, No. 87.

Commonwealth Bank Act-Treasurer’s Statement of the Combined Accounts of the Commonwealth Bank of Australia and Commonwealth Savings Bank at 30th June, 1930, certified to by the Auditor-General.

Commonwealth Conciliation and Arbitration Act - Regulations amended - Statutory Rules 1930, Nos. 97, 101.

Cotton Industries Bounty Act - Regulations - Statutory Rules 1930, No. 105.

Customs Act - Regulations amended - Statutory Rules 1930, No. 91.

Customs Act and Commerce (Trade Descriptions ) Act - Regulations amended Statutory Rules 1930, No. 104.

Dried Fruits Export Control Act - Regulations amended - Statutory Rules 1930, No. 117.

IncomeTax Assessment Act - Regulations amended - Statutory Rules 1930, No. 89.

Navigation Act - Regulations amended - Statutory Rules 1930, Nos. 95, 106.

New Guinea Act - Ordinances of 1930 -.

No. 16 - Superannuation (No. 2).

No. 17. - Public Service.

No. 18- Supply (No. 2) 1930-1931.

No. 19 - Maintenance Orders (Facilities for Enforcement).

No. 20- Supply (No. 3) 1930-1931.

Papua Act - Ordinances of 1930 -

No. 1 - Legitimation.

No. 2 - Amendments Incorporation.

No. 5 - Compensation to Relatives.

No. 7 - Customs Tariff.

Public Service Act -

Appointments - Department of Health - T. G. B. Boston, I. F. Stephens, C. V. Vaughan.

Regulations amended - Statutory Rules 1930, Nos. 107. 108, 109, 110, 111.

Seventh Report on the Commonwealth Public Service by the Board of Commissioners, dated 23rd October, 1930.

Sales Tax Assessment Acts - Regulations. &c.- Statutory Rules 1930, Nos. 98, 102.

Science and Industry Endowment Act - Auditor-General’s Report on the Science and Industry Endowment Fund asat 30th June. 1930.

War Service Homes Act - Report of the War Service Homes Commission, together with. Statements and Balance-sheet,year ended 30th June, 1930.

Wine Export Bounty Act- Regulations - Statutory Rules 1930, No. 96.

Air Force Act - Regulations amended - Statutory Rules 1930, No. 94.

Australian Imperial Force Canteens Funds Act-

Tenth Annual Report, 1st July. 1929. to 30th June, 1930.

Report by the Auditor-General upon the Accounts of the Trustees of the Fund for the year 1929-30.

Defence Act - Regulations amended - Statutory Rules 1930, Nos. 90. 92, 99, 100, 115.

Lands Acquisition Act -Land acquired at - Mascot. New South Wales - For Defence purposes.

Rocklea, Queensland - For Defence purposes.

Naval Defence Act - Regulations amended - Statutory Rules 1930, Nos.88, 93.

Northern Australia Act -

Central Australia -

Ordinances of 1930 -

No. 7 - Local Courts.

No.8 - Marriage Validating.

No. 9 - Crown Lands.

No. 10 - Coroners (No. 2).

No. 1 1 - Interpretation.

No. 12 - Pounds.

Dog Act of South Australia as applied to Cental Australia. - Regulations amended.

North Australia. -

Ordinances of 1930 -

No. 9 - Local Courts.

No. 10 - Crown Lands.

No. 11 - Coroners (No. 2).

No. 12 - Hospitals.

No. 13 - Interpretation.

No. 14 - Pounds.

No. 17 - Darwin Town Council (No. 3).

Dog Act of South Australia as applied to North Australia - Regulations amended.

Post and Telegraph Act - Regulations amended -

Statutory Rules 1930. Nos. 85, 86, 103. 112, 114.

Seat of Government Acceptance Act and Seat of Government. (Administration) Act-

Ordinances of 1930 -

No. 9 - Police Offences.

No. 10 - Court of Petty Sessions.

No. 11 - Administration and Probate.

No. 13 - Medical Practitioners Registration.

No. 14 - Police.

No. 15 - Land Advisory Board.

No. 16 - Education.

No. 17 - Bank Holidays.

No. 18- Public Health.

No. 19 - Real Property.

No. 20 - Interpretation.

City Area Leases Ordinance - Regulations amended.

Medical Practitioners Registration Ordinance - Regulations.

Public Health Ordinance - Regulations - Dairy.

Medical and Dental Inspection of School Children.


Wireless Telegraphy Act - Regulations amended - Statutory Rules 1930, No.113.

page 168



Senator DUNN:

asked the Minister representing the Postmaster-General, upon notice -

Is it the intention of the PostmasterGeneral’s Department to cancel the orders to overseas firms for wireless equipment which can be made in Australia; if not, why not?

Senator BARNES:
Assistant Minister assisting the Minister for Works and Railways · VICTORIA · ALP

– The order for one equipment, which was included in. the contract, has been cancelled; but it is impracticable to cancel the order for any of the remaining stations,as the work is already well advanced.

page 168



Is it a fact that the Commonwealth Governmenthas decided to promise to pay a bounty of 10s. an oz. on all new gold produced from leases not now working for the financialyear 1931-32?

Senator DALY:

– The question of the payment of a bounty on gold is under the consideration of the Government.

page 169




asked the

Minister representing the Minister for Trade and Customs, upon notice -

  1. Is it a fact that merchants in Western Australia are unable to obtain supplies of linoleum from the Australian manufacturers?
  2. If so, what relief or assistance is it proposed to extend to such merchants?
Senator DALY:

– The answers are - 1.It has been so stated, and inquiries are being made, the result of which will be available shortly?

  1. This will he considered as soonas the result of the inquiry is available?

page 169



Primage Duties


asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. Is it intended to exempt mining machinery and requisites for the gold-mining industry from the operation of the primage duties?
  2. If not, why not?
Senator DALY:

– The answers are -

  1. No.
  2. No exemptions are being made to the primage duties as originally introduced, and they are intended to apply to all importations.

page 169



Senator DUNN:

asked the Leader of the Government in the Senate, upon notice -

Was the Scullin Government the first Federal Government to prohibit the export of stud sheep from Australia to foreign countries ?

Senator DALY:

– Yes. The proclamation was issued on the 28th November, 1929.

page 169


Order of the day for the resumption of the debate from 11th July (vide page 4071) on the motion by Senator Daly “ That the paper be printed “, called on and discharged.

page 169


Bill received from the House of Representatives and (on motion by Senator Daly) read a first time.

page 169


Bill received from the House of Representatives and (on motion by Senator. Daly) read a first time.

page 169


Debate resumed from 10th July (vide page 3962) on motion by Senator Sir Georgie Pearce -

That,in order to assist Australia to redress the overseas trade balance, the Senate is of the opinion that the Government should give consideration to the formulation of proposals, by which the manufacturing industries of the Commonwealth could be encouraged to export manufactured goods to overseas markets.

Senator DALY:
Vice-President of the Executive Council · South Australia · ALP

– Since the right honorable the Leader of the. Opposition (Senator Pearce) submitted this motion, in July last, certain circumstances have arisen, and as it is my desire to present a complete case supported by the views of the right honorable the Leader of the Government (Mr. Scullin), I nsk leave to continue my remarks.

Leave granted; debate adjourned.

page 169


Exchange Position - Sales Tax Anomalies - Bankruptcy Law

Motion (by Senator Daly) proposed -

That the Senate do now adjourn.

Senator CHAPMAN:
South Australia

– I cannot allow the Senate to adjourn without protesting against the answer furnished to me this afternoon by the, Leader of the Senate (Senator Daly) with reference to the exchange position, which I regard as of vital importance to the people of Australia, and particularly our primary producers. The Minister did not so much as touch on the difficulties of our farmers as affected by the exchange position, and he did not indicate whether or not this matter had been or would be examined. All he said was that the Government was considering the position of our primary producers. What has this Ministry done for that section of our people? It has issued proclamations prohibiting the importation of certain classes of goods, it has imposed prohibitive tariffs on other classes of commodities, and it has placed an undue burden of taxation on the community generally, with the result that our primary producers are to-day in a much worse position than ever before. I have made suggestions, which, if adopted, would afford relief. I have urged that, instead of pegging the exchange, the ordinary economic methods for the adjustment of our trade balance should be adopted. If the exchange rate had been allowed to rise to its normal level during the last few years, our trade position would not have been so bad as it is to-day. “ Senator 0’HALLORAN - Surely the honorable senator does not blame this Government for the present position?

Senator Sir William Glasgow:

– As a’ matter of fact the exchange has only recently been pegged.

Senator CHAPMAN:

– In an address delivered in 1930 in Melbourne, Mr. T. E. Ashworth, President of the Employers Federation, examined the trade position of Australia, for several years prior to the economic crisis in the early ‘nineties. Mr. Ashworth showed that for some years Australian imports had exceeded exports and the people were spending too freely. The position was, however, corrected without resorting to prohibitory tariffs or embargoes, and after the crisis had passed exports again exceeded imports. The following figures, which I have taken from a statistical return issued by the Commonwealth Statistician, ‘throw some light on the trade position of Australia during the five-year period, 1886-1890 : -

Senator Sampson:

– That was before federation.

Senator CHAPMAN:

– What does that matter? The figures represent the imports and exports of the whole of Australia for that period, .and they disclose that the former exceeded the latter by £8,092,000 annually for the five years quoted.

Senator Daly:

– Will the honorable senator indicate in what way he suggests the Government should interfere with the banks in the matter of exchange?

Senator CHAPMAN:

– Surely, in such an extreme position as that which now exists, the Government is entitled to consult with the Commonwealth Bank and the associated banks on the subject. Here are the figures for the next fiveyear period -

These figures disclose an annual excess of exports of £6,106,000. The reversal of affairs was brought about without recourse to tariff embargoes or to prohibitary tariffs, which merely put up the cost of living, and hamper the producers. For the information of honorable senators, I shall read a statement by Mr. F. S. Alford, of South Australia. It deals with the exchange position, and is concise and clear.

Senator Sampson:

– Who is Mr. Alford ?

Senator CHAPMAN:

– A gentleman who corresponds extensively through the press on financial subjects. I believe that he used to edit the Liberal Leader, the official organ of the South Australian Liberal party. He is a brother of the manager of Louis Dreyfus and Company, Adelaide. I admit that the article is written from the point of view of the wheat merchants, who, in many cases, advanced more than the wheat was worth, and naturally want to see the grain bring a better price.

Senator GUTHRIE:

– So does everybody else.

Senator CHAPMAN:

– That is so. Financiers, brokers, storekeepers, and everybody else wish to see it bring a higher price. There will be trouble if we cannot effect an improvement in th, matter. The article reads -

An Arbitrary Rate. “Unfortunately for producers >of commodities for export,” said Mr. Alford, “exchange. on the transfer of credits from London to Aus- (tralia lias been, and is still, pegged down to an artificial rate. ‘ Since February lost that rate has been £U 10s. per centum. Thus the telegraphic transfer of £100 from. London to Australia carries with it a premium of £6 10s. Conversely, £100 in Australia is worth only £93 10s. in London. In other words, the present unfavorable exchange rate means a premium or bounty on exports of 61 per cent., and, at the same time, is equivalent to a surcharge of CI per cent, on imports. A pegged rate of exchange is artificial, restrictive, and uneconomic, for it helps to defeat the very object of a mobile exchange as a corrective of an unfavorable balance of trade. The more unfavorable that balance; - the greater the difficulty of arranging credits abroad- the higher must rise the adverse rate of exchange on that debtor country’s paper or bills. “ The purpose of the movement of the exchange rate, as a natural corrective of an unfavorable balance of trade, is to stimulate the exports of the debtor country by providing a premium or u bounty on such exports, and to restrict imports by making importers in that debtor country pay, as a surcharge on their imports, the premium or bounty enjoyed by exports. To achieve this purpose the restrictions must be lifted - the peg on the rate withdrawn. An open market for exchange must prevail. Exchange must be auctioned, so that, with the law of supply and demand in operation, the rate will rise to its natural or economic level. With exchange credits available to pay for only £65,000,000 worth of imports (after providing for the £35,000,000 required for interest, &c, abroad) the demand of importers for accommodation in London would be- so keen that the rate would soar to at least 15’ per cent, premium’ on telegraphic transfers. A bounty of 15 per cent, on wool and wheat would help to save those industries from bankruptcy. It would mean a bounty of ld. per lb. on wool and 6d. per bushel on wheat on the basis of 3s. 4’d. f.o.b., or nearly 3Jd. per bushel more- than the present 64 per cent, would provide.

There now arises the difficulty. “ “Who is going to pay?” This is bow Mr. Alford deals with the problem. £15,000,000 ob £5,000,000.

The pegging, of. the exchange rate at an arbitrary level deprived wheat-growers of between £2,000,000 and £3,000,000 on the last crop. Wool-growers probably lost more. It wu.8 not. right that the “ powers that be “ should, by the retention of artificial means, go on mulcting growers on to what they were properly entitled. It was not right that the restoration of economic equilibrium should be retarded by the refusal of those same “ powers that be “ to apply the corrective* - the open market for exchange. If restrictions were removed and- the exchange rate rose- to 15 per cent., it would, of course, cost the Governments of Australia about £5,000,000- to arrange1 for credits: in London with which to meet interest payments. On the other hand, that exchange rate- would mean a premium or bounty of £15,000,000 to producers oi £100,000,000 worth of exports. As the solvency of Australia was dependent upon the ability of primary producers to win through, it was obvious that a premium- of £15,000,000 was more important to the nation than the impost of £5,000,000 - in exchange on Australia’s interest bill on her oversea’s debt.

That is the position ns put forward by Mr. Alford. It is one that merits the serious consideration of the Government.

Senator Sir GEORGE PEARCE (Western Australia) [3.40]. - I take this opportunity of bringing before the Senate what appears to me to be a case of injustice in connexion with the sales tax, and I ask the Leader of the Government in the Seriate (Senator Daly) to bring it under the notice of his colleague, the Acting Treasurer (Mr. Lyons), with a view to seeing whether; in the amending legislation which I understand is being brought forward, a provision can be inserted to meet this class of case. It is, perhaps* unnecessary for me to give the name of the writer of the letter I pre pose to read, but I shall do so. I have here a letter from Mr. F. McClean, a manufacturing furrier of Carlton-, Victoria, and as his case may be one of many throughout the Commonwealth, I bring it forward now. Mr. McClean sets out the position concisely in the following terms : -

On account of the hardship which the operation of the Sales Tax Assessment Acts imposes on- me ad. a manufacturer selling by retail, I am compelled to’ write you in the hope of enlisting your sympathetic consideration of the circumstances peculiar to my case, with a1 view to gaining relief.

The Deputy Commissioner at Melbourneinforms me that I, as a retail manufacturer,, must pay sales tax on all goods manufactured by me which were held in stock on the 1st August, and on- all subsequent additions to that stock, which I manufacture.

I would like to explain the incidence of this method of collection as briefly as possible -

I must find a lump sum for payment of tax at a. time when business is being conducted at a loss, with’ the result that” what might otherwise be devoted to purchase of raw materials and wages for an- already rationed staff is diverted en Moe, the Commissioner, upon inquiry, not having power to accept extended payments.

My stock turns over very slowly, some articles having to be held’ for two or’ three years, while others, not ever selling for reasons of fashion, have to be cut up and used for repair work as occasion offers. Were the’ turnover a prompt one its in the case of food manufacture, the tax on manufacture would be scarcely different from tax on the sale of articles, but, as circumstances apply to businesses of this kind, the law as it stands anticipates sales which may -never eventuate, and compels payment before realization.

A wholesale manufacturer is permitted to pay when sales are actually realized. Is it quite inst to compel a retail manufacturer to pay before he realizes ? On this account the tax becomes a tux on manufacture (and so, enterprise), and is not actually a sales tax.

A retailer who imported his stock is tax free on such goods as he had on hand on the 1st August, while an employer of Australian labour who sells by retail must pay tax on his holding at that dato.

Permit me to stress the fact that the hardship is involved by the onerous requirement to pay tax before goods are sold, a requirement which is made to press on one section of the trading community, viz., the manufacturer who sells retail.

Will you kindly alford this matter your sympathetic concern, and seek in your representative capacity at the coming sitting of Parliament to have retail manufacturers placed on an even footing with other businesses which are required to pay tax only on concrete sales.

After I had acknowledged receipt of that letter I received a further communication from Mr. McClean, who, apparently, had had further negotiations with the department in the meantime. In his second letter Mr. McClean said -

In a letter received from the Acting Federal Treasurer, it is stated that the method of imposing sales tux. in the case of retail manufacturers, by taxing stock on hand at the 1st August, and as it is manufactured, was followed “ for thu express purpose of saving thum from the risk and responsibility of attempting to keep a distinct track and record of all such stocks (as were on hand at the 1st August) separate from their future stocks, and also to enable them to pay the necessary tax on these articles on the lesser wholesale value, rather than on the subsequent actual sale price (retail price) which, of course, would bc higher.”

To be as brief as possible, I would point out that no method of applying the tax could be more simple than on the basis of the record of sales. This would be clear, and free from vexatious complications entailed by the method required by the act, which docs involve keeping distinct and extra records of stock at the 1st August, and manufactures .since that date. The statement that the method followed enables payment to be made on the lower wholesale price really does not mean anything, for payment could still be made on that value when goods are actually sold.

There may, of course, be an explanation of this matter, but it seems to be an

Senator Sir George Pearce. injustice that a manufacturer who sells retail should be in a worse position than an importer or a wholesale manufacturer. It should be possible so to adjust the machinery for administering this law that the three classes of traders would at least be placed on the same basis. 1 hope that the Government will give this matter careful consideration, and that, should an injustice he found to exist, steps will be taken to rectify it.

Senator DUNN:
New South Wales

– When the Senate last met, Senator Chapman charged the Government with having neglected the interests of the primary producers of the Commonwealth. To-day, the honorable senator has repeated the charge.

Senator Chapman:

– I have brought forward to-day the exchange position.

Senator DUNN:

– I remind the honorable senator that during an earlier part of this session the Government introduced the Central Reserve Bank Bill, the object of which was to place the finances of this country on a sound basis. When that measure reached this chamber Senator Chapman voted to refer it to a select committee. The Opposition in this chamber, by reason of its big majority, was able to take the business of the country out of the hands of the Government, and to defeat one of its principal legislative measures by appointing a select committee to inquire into and report upon its provisions. Among those nominated for membership on that committee were several honorable senators, including myself, from this side of the chamber. Some of us felt that we could not accept the invitation to act on that committee, seeing that we supported a Government which, although in a minority in the Senate, had a majority of seventeen in another place. On the committee was my friend Senator Sir Hal Colebatch, who, I believe, is a prospective Senate candidate for New South Wales.

Senator E B Johnston:

– He will stick to Western Australia and Western Australia will stick to him.

Senator DUNN:

– I think it will pay him to do so. I do not purpose setting up as a censor of the views of honorable senators opposite; they are entitled to their opinions just as I am entitled to mine; but I naturally thought that to this short financial session Senator Chapman would have brought a spirit of optimism instead of that gloom so characteristic of representatives of South Australia in opposition.

Senator Daly:

– The gloom does not come from Sonth Australia.

Senator DUNN:

– I was speaking of those in opposition who represent a waterless, treeless, and moneyless State. The business was taken out of the hands of the Government, no doubt because bankers outside had spoken. The result of the select committee’s endeavours may soon see the light of day with showers of blessings from the financial institutions who have put the whip across some of the opposition. But after hearing Senator Chapman I really believe that the Labour party has gained a convert. I do not know what is likely to happen when the honorable senator goes into the caucus meeting. My friends opposite do not attendcaucus meetings, they attend party meetings. He is now appealing to the Government to do something which he opposed a few months ago-

Senator Chapman:

– I am not doing so.

Senator DUNN:

– Of course you are.

The PRESIDENT (Senator the Hon W Kingsmill:

– Order!

Senator DUNN:

– I appealto you, Mr. President, to protect me from these hos- tile attacks.


– If the honorable senator will not invite hostile attacks by addressing senators personally, I shall afford him my protection.

Senator DUNN:

– I am pleased that you are prepared to protect me at all times, because I feel sure that I shall have in you a friend indeed when the battle front is inclined to get a bit murky. When Senator, Chapman is trying to hurl a brick at the Government, he must realize that next week he will have an opportunity to take a seat between Senator Rae and myself when the Central Reserve Bank Bill comes np again for discussion.

Senator PAYNE:

– I wish, briefly, to supplement the statement made by the Leader of the Opposition (Senator Sir George Pearce) in regard to the anomalies in the operation of the sales tax laws. 1” do it with the same object - that the Minister may confer with his colleagues so that we may be able to deal with these anomalies possibly when next the Sales Tax Assssment Bills come before us. ‘I have not been able to understand why a differentation is made between a manufacturer who is’ not a retailer, and one who is a retailer. As pointed out by Senator Pearce, a furrier who is a manufacturer and retailer of the finished article is compelled to pay sales tax on goods he held in stock prior to the beginning of August, whereas a wholesale furrier who is not a retailer pays no tax until the 1st August. The tax is called a sales tax; but the retailer who imports goods from overseas has to pay it at the timeof importation. The actualities are that a certain proportion of the goods upon which he has thus paid tax are never sold. They go out of fashion before it is possible to sell them, yet the tax has been paid on them. It is, therefore, a misnomer to speak of it as a sales tax, when it is really an importers’ tax. The matter is one that calls for the consideration of the Government.

I have receiveda letter from an individual representative of many hundreds of small business people in Australia who are conducting small confectionery shops. The great bulk of their stock is based on standard lines, the price of which is fixed by the manufacturer, and is advertised on the packages. I am referring to half-penny, penny, and threepenny lines, the main trade in which is done with school children. I have seen four invoices received from the manufacturers, each averaging about £3 10s. or £4, and on the bottom of each was the line, “sales tax, 2s.”, or “sales tax, 2s. 6d.” The retailer has no opportunity whatever to pass on this sales tax. I estimate that each small shopkeeper is compelled to pay at least £13 a year, with no opportunity of recovering one penny of it. It is impossible to pass on the sales tax on two half-penny sticks of liquorice. It was never intended that elderly people depending upon these small confectionery shops for their living should have to pay as much as 5s. a week in sales tax, with no earthly hope of recovering it.

Senator Hoare:

-Can the honorable senator show us the way out?

Senator PAYNE:

– I cannot; but thore should be some way out. It was never intended that this particular section of tho trading community should bc penalized in this way. I hope that these comments will be borne in mind by Senator Daly, and that he will confer with his colleagues in regard to them.

Senator DALY:
Vice-President of the Executive Council · South Australia · ALP

– I shall certainly bring under thenotice of the Acting Treasurer (Mr. Lyons) the matters raised by Senator Pearce and Senator Payne, and I hope to be in a position to furnish the Senate with a reply to both queries at the earliest possible moment.

At the last sitting Senator Lynch mentioned the operation of the Bankruptcy Act in its ‘relation to the suggested legislation in Western Australia for the relief of primary producers. I have received an opinion from the Acting Solicitor-General which I am prepared to make available to any honorable senator. It points out that the Bankruptcy Act does not prescribe the conditions under which a creditor may obtain judgment and execution in respect to a debt, as these matters are within the legislative sphere of the State.

In regard to the point raised by Senator Chapman in my reply to his question without notice, I said that the Government was taking certain action. My reason for doing so was that the honorable senator had concluded his question by urging certain grounds for the unpegging of the rate of exchange. It should be unnecessary for me to draw attention to the fact that, under existing legislation, the Commonwealth Government has no power over the banking institutions of Australia. It has no control over the pegging, or unpegging, of the exchange.

Senator McLachlan:

– Does the Minister say that the pegging has not been done at the request of the Commonwealth Government?

Senator DALY:

– I do not say anything of the sort. It is competent for the Government to make representations to the Commonwealth Bank to unpeg the exchange; but, if that was the actual question, Senator Chapman knows that it is a matter of policy, and that questions relating to policy are not answered at’ question time. The honorable senator, however, oan rest assured that the exchange position - and, in fact, every position - is being explored by the Government. I repeat what I said to him in answer to his question - I thought the honorable senator would understand me - that the Government is fully appreciative of the very great problems at the present time confronting the primary producers, and that it will take whatever action can be taken within the law in order to bring about the relief of that deserving section of the community.

Question resolved in the affirmative.

Senateadjournedat 4.3 p.m.

Cite as: Australia, Senate, Debates, 12 November 1930, viewed 22 October 2017, <>.