13th Parliament · 1st Session
The President (Senator the Hon. P. J’. Lynch) took the chair at 3 p.m., and read prayers.
– On the 25th July, Senator Collings asked the following questions upon notice -
I am now able to furnish the honorable senator with the following information : -
Canhe inform the Senate why the Commonwealth Oil Refining. Company, although half owned by the Commonwealth of Australia, refuses to sell any of its products in Tasmania?
If so, can there be any valid reason why this discrimination against one of the States of the Commonwealth should be permitted to continue?
Will he make representations to the company that in the opinion of the Government Tasmania should be placed in the same position as other States?
I am advised that in view of the comparatively small market in Tasmania, which is already well catered for, the Commonwealth Oil Refineries Limited does not trade inthat State at present because it is unable to sec an opportunity of doing so without loss.
DEATH OF MR. D.C. McGRATH, M.P.
. [3.4] - by leave - I move -
That the Senate expresses its profound regret at the death of the honorable member for Ballarat, David Charles McGrath, esquire, places on record its appreciation of his notable public services, and tenders its sincere sympathy to his widow and the members of his family in their bereavement.
Since the adjournment of the Senate last Thursday, death has removed from our midst another member of this Parliament. The late Mr. McGrath was first elected to the Federal Parliament in1 91 3. He was out of Parliament for a short period, but was re-elected at a by-election in 1920, since which time he had continued to represent Ballarat. He was a member of the Joint Committee on PublicWorks from 1926 to 1929, and from 1929 to 1931 was Chairman of Committees. Prior to his election to this Parliament he was a member of the Victorian Parliament as the representative for Grenville from 1904 to 1913. During the GreatWar he was a member of the Australian Imperial Force for about two years until his discharge through medical unfitness. The deceased gentleman was well known to most honorable senators. We all knew of his fidelity and the earnestness with which he strove to carry out his public duties during a parliamentary career extending over 30 years. I am sure that all honorable senators will join with me in expressing sincere sympathy to his widow and the members of his family in their bereavement.
.- I second the motion. The late Mr. McGrath was well known to mo. For many years we were associated in political contests in the days when it was necessary to fight strenuously for the principles of the Labour party, but, unhappily, some years ago, we reached the parting of the ways, a break which 1 regretted very much, because of my high regard for the deceased gentleman. We can easily understand the tremendous blow which his death has caused to his wife and family, because I know that they were very much attached to one another. I offer my most sincere condolences to Mrs. McGrath and her family in their bereavement.
Question resolved in the affirmative, honorable senators standing in their places.
Motion (by Senator Sir George Pearce) - by leave - agreed to -
That leave be given to introduce a bill for an act to amend sections 73 and 84 of the Commonwealth Public Service Act 1922-1933.
Bill brought up and (on motion by Senator Sir George Pearce) read a first time.
The following papers were pre sented : - “ The Case for Union “ - A reply to the case for the Secession of the State of Western Australia, prepared by a Committee consisting of Sir Robert Garran, The Honorable J. H. Keating and Messrs. William Somerville and David John Gilbert.
Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - No.15 of 1934 - Arms, Explosives and Munition Workers Federation of Australia: Amalgamated Engineering Union; and Australasian Society of Engineers.
Commonwealth Public Service Act - Regulations amended - Statutory Rules 1934, No. 83- No. 84- No. 85.
Lands Acquisition Act - Land acquired at Mundiwindi, Western Australia - For Postal purposes.
Post and Telegraph Act - Regulations amended - Statutory Rules 1934, No. 86.
New Guinea Act - Ordinances of 1934 -
No. 1 1 - Prisons.
No. 12 - Maintenance Orders (Facilities for Enforcement).
No. 13 - Liquor.
No. 14 -Evidence.
No. 15 - Legal Practitioners.
No. 16 - District Courts.
No. 17 - Native Administration.
No. 18 - Superannuation.
No. 19 - Insolvency.
No. 20 - Judicial Proceedings (Regulation of Reports).
No. 21 - Police Force.
No. 22 -Public Service,
No. 23 - Appropriation (No. 4) 1932-33.
No. 24 - Appropriation (No. 2) 1933-34.
No. 25- Supply 1934-35.
No. 26 - Criminal Code Amendment.
No. 27 - Licences.
No. 28- Stock Brands.
No. 29 - Expropriation.
No. 30 - Diseases of Plants.
No. 31 - Mortgagors Relief.
No. 32 - Divorce and Matrimonial Causes. Norfolk Island Act - Ordinance No. 10 of 1934 -Mortgagors Relief.
Lands Acquisition Act - Land acquired at Bacchus Marsh, Victoria - For Defence purposes.
Senator MCLACHLAN laid on the table reports and recommendations of the Tariff Board on the following subjects : -
Reaper and binder twine.
Dynamo electric machines.
Onions in their natural state.
Peanuts in the shell.
– Has the Leader of the Senate seen the severely critical “ Open letter to the Lyons Government “, printed in this morning’s Canberra Times, above the name of Frederick “Watson? Is the writer of the letter the same Dr. Watson whom the Hughes and BrucePage Governments placed in charge of historical records?
– I understand that the writer of the letter referred to is the Dr. “Watson who was previously in charge of historical records.
– In view of the fact that the Leader of the Senate has tabled “ The Case for Union “, are we to under stand that the Government is opposed to the secession movement? Can the right honorable gentleman explain the association of two Senate candidates of the United Australia party in “Western Australia with Senator Johnston, VicePresident of the Dominion League which advocates secession?Will the right honorable gentleman explain where the Government stands in relation to this team?
– The arrangements of the various political parties in Western Australia for the next election have nothing to do with the public business concerning which alone Ministers may be questioned.
asked the Minister representing the Treasurer, upon notice -
Senator Sir HARRY LAWSON.The Treasurer has supplied the following answers to the honorable senator’s questions : - 1 and 2. The following table shows, under the main items, the actual amounts for 1933-34 and the estimated amounts for 1934-35 in respect of payments by the Commonwealth to or for Tasmania: -
Assent to the following bills reported : -
Distillation Bill 1934.
Electoral Bill 1934.
Wheat-growers Relief Bill 1934.
River Murray Waters Bill 1934.
War Service Homes (South Australia)
Agreement Bill 1934.
Flour Tax Assessment Bill 1934. Land Tax Assessment Bill 1934. Colonial Light Dues Collection Bill 1934.
The PRESIDENT presented Report No. 1 of the Standing Orders Committee.
Ordered to be printed.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motion by Senator Sir Harry Lawson) read a first time.
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motion by Senator Sir Harry Lawson) read a’ first time.
[3.23]. - I move -
That the bill be now read a. second time.
This bill is designed to simplify the administration and collection of income tax, particularly with regard to the assessment, of shareholders in companies. It is based principally upon the recommendations of the Royal Commission on Taxation, which was appointed in 1932 to inquire into the simplification and standardization of the taxation laws of the Commonwealth and the States, and has now completed its inquiry so far as income tax is concerned. This bill, however, deals with aspects which affect the Commonwealth system of taxation, leaving for later discussion and agreement, if possible, a large number of other matters, dealt with by the royal commission, which affect the State governments as much as they do the Commonwealth. Since uniformity of treatment is the main aim in relation to these items, it is necessary that agreement should be reached so far as is possible before either the Commonwealth or any of the States proceeds to pass legislation relating to them. This bill, however, introduces reforms iu the Commonwealth law which are urgently necessary and which are not dependent upon agreement with the States.
Under the present law, the assessment of a shareholder upon dividends is so complicated that it is impossible for him to check it and ascertain whether he has been correctly assessed or nor. The main difficulty is connected with what are known as “rebate” calculations, which are of two kinds, namely, “ income rebates “ and “ tax reba tes “. The “ income rebate “ is the calculation necessary to ascertain what portion of a dividend should be included in the assessable income of a shareholder. The “ tax rebate “ is that necessary to ascertain the deduction which should be allowed from his gross tax to prevent double taxation in view of the fact that the company has paid tax on all, or part of, the profits distributed as dividends often at varying rates of tax. On this subject, the royal commission on page 24 of its first report summarized the position as follows: -
The complications which disfigure the present system as at present applied are not necessarily inherent in it, and we believe that the adoption of the recommendation we have made will, to a very great extent, remove them. They are almost entirely due, in our opinion, to the meticulous .analysis of every dividend and the attempt to trace back each pound, of it to the source from which it was originally derived. We feel it our duty to gay with great emphasis that until this attempt be abandoned it is hopeless to expect that any effective simplification of the present system can be looked for.
I draw particular attention to the last paragraph of the above extract.
The recommendations of the commission in this respect, which, with slight modifications, have been adopted in this bill, may be described as follows: -
In furtherance of the scheme of simplification, the bill provides that where any allowable deduction under the act, except the “ statutory exemption “ which is later referred to, does not relate directly to any particular class of income, it shall be set off against the different classes in the following order, namely - Income from personal exertion, income from, property, other than dividends, income from dividends. The royal commission has pointed out that to remove troublesome complications, the “ statutory exemption “ should be the same for all classes of income, and it has therefore been decided that the present maximum in respect of income from property be increased from £200 to £250, thus making it the same for both classes. The exemption diminishes by £1 in every £2 by which the net income exceeds £250 and vanishes when the net income is £750. The “ statutory exemption “ is to be set off against the various classes of income in the following order, viz. : - Income from property (other than dividends) ; income from dividends; and income from personal exertion. By this means all apportionments of deductions will be obviated. It is considered that the alterations will tend to counteract each other in their effect upon the revenue and that, in achieving simplification, little difference will be made in the tax payable by any person affected. The “flat rate “‘deduction of £250 given under the existing law for the purposes of arriving at the income liable to “ special property tax “ will be continued under the bill.
The measure introduces new provisions in substitution for section 21 of the present act, to deal with insufficient distributions by companies. Liability to tax in this respect is to be limited to “ private “ companies and a large number of definitions has become necessary to define what is a “ private “ company for the purposes of the new provisions. These provisions are, however, based upon those appearing in the laws of Great Britain and New South Wales, which have stood the test of time. Apart from the limitation to “ private “ companies, the main alterations of the law, in principle, are -
The necessity for this provision is amply demonstrated by the examples of avoidance of tax set out by the royal commission on pages 118-121 of its third report.
Further provisions are included to prevent avoidance of tax by the distribution ).f profits to shareholders disguised as loans, advances, remuneration, &c. The bill provides that as the statutory exemption is now £250 in respect of all classes of income, returns should in future be required from resident individuals only if their assessable, or gross, income amounts to £250 or more.
The bill makes one further amendment which is not the result of the recommendations of the royal commission. This extends the power of the Commissioner of Taxation to reduce an assessment after three years have elapsed from the date when the tax was originally due and payable if within that period a taxpayer has made application for the reduction and has supplied all the information necessary for the application to be decided.
It is considered that in an ordinary case, where there is no question of fraud or evasion, a period of three years should be sufficient, both for the taxpayer and the department to obtain all information necessary to indicate that an assessment should be made either by way of reduction or increase. The bill will achieve this result.
The amendment of the principal act, will, with the exception of the last mentioned,apply to assessments for the financial year 1934-35. The exception will apply to allow an amendment for any financial year, provided that the necessary conditions exist.
I realize that it is not easy for honorable senators to follow such a technical exposition of the bill, but I may remind them that it is the result of a considerable amount of investigation and study by the royal commission on taxation, and has already passed the Houseof Representatives.
– Did the royal commission recommend increasing the present maximum in respect of income from property from £200 to £250?
– Yes, for the sake of uniformity, and to dispense with the technical nature of many assessments. The averaging system relates principally to dividends.
– Does this bill cover dividends declared before the measure is enacted?
-It is not retrospective. In the distribution of bonus shares certain technicalities have to be complied with, and by fixing the 31st December ample time is given to companies or individual taxpayers. Copies of the second-reading speech of the Assistant Treasurer (Mr. Casey) were sent to organizations likely to be interested or affected, and when the measure was in committee in the House of Representatives, amendments were made as a result of the representations by such organizations. The measure, when enacted, will simplify the legislation, prevent the evasion of taxation, and greatly facilitate the administrative work in the Taxation Department. It will also be of considerable assist ance to taxpayers. The amendments contained in the bill have been recommended by His Honor, Mr. Justice Ferguson and Mr. Nixon, members of the royal commission, who have carefully studied their legal and commercial bearings.
SenatorO’Halloran. - What effect will the measure have upon the revenue of the Commonwealth?
– It will be improved, but not to any considerable extent. It provides for an adjustment of anomalies and a simplification of procedure. It is not a taxation measure in the sense of adding to the burdens of the people.
– Will bonus shares, provided out of reserves which have already paid tax, be subject to further taxation?
Senator Sir HARRY LAWSON.That and other points can be explained in committee.
Debate (on motion by Senator Barnes) adjourned.
Debate resumed from the 27th July (vide page824) on motion by Senator Sir Harry Lawson -
That thebill be now read a second time.
.- This bill proposes to give benefits to certain people to whom promises were made at the last election by the party now in power. On that occasion the leaders of the United Australia party were prolific in promises to the people, and the Government has since received considerable publicity out of what has been claimed on its behalf to be a legitimate fulfilment of those undertakings. Our desire to populate this country as fast and as beneficially as possible is expressed in the law which grants an allowance to mothers in respect of each child born in Australia. That the native-born child is the best migrant we could possibly get was admitted by all. But when the depression commenced a majority in this Parliament determined to make the poorer sections of the people contribute heavily to the financial recovery of the country. Formerly the amount distributed in maternity allowances was £630,000; but this amount was substantially reduced by curtailing the allowance for each child and by restricting it to persons having a very limited income. This bill proposes to restore merely £60,000 of the amount which was taken from the mothers, by slightly raising the income level of recipients; the present income limit of £208 per annum is to be progressively increased by £.13 for each child under fourteen years of age, subject to a maximum income limit of £299 per annum; and the present allowance of £4 is to be increased progressively by 5s. in respect of each child under fourteen years of age, subject to a maximum payment of £5. Thus a mother will get £4 in respect of her first child if the husband’s income does not exceed £20S; £4 5s. in respect of the second child if the husband’s income does not exceed £221 per annum, and so on. The Government stated that the sacrifices imposed upon the people were only emergency measures and would be discontinued at the earliest opportunity; but it has been very lax in keeping that promise. The public servants were forced to submit to heavy reductions of salaries and wages in order to enable the Government to balance its budget. In July, 1931, Mr. Lyons, then Leader of the Opposition, said that the reductions were only to help the country in the emergency, and that as soon as the public finances warranted it, the reductions would be restored. That promise has not been honoured, but the two budgets immediately preceding the present one made remissions of taxation amounting to approximately £9,500,000, principally foi’ the benefit of large landholders who are not so much in need of relief as are wageearners. Although some public servants are receiving high salaries, because of their great responsibilities, the big majority of them are wage-earners at very low rates and are suffering severe hardships because of the reduction of salaries and wages. The land tax has been reduced by 50 per cent.; but it was never regarded as art emergency impost. It was originally imposed for definite economic purposes, some of which it has accomplished. “When the country was in the throes of the depression, the - landholders were not taxed for emergency purposes, but when the public finances improved, they were the first to be relieved and were granted huge remissions of taxes at the expense of the public servants and wage-earners in other walks of life. All the promises made hy Mr. Lyons- at the time when the emergency legislation was passed have been lostsight of in the preparation of his latest budget. In 1934 the Government paid to the Public Service £1,900,000 less than in 1930, and of that amount, £1,550,000 represented reductions of the cost of living. The balance of £350,000 represented the actual “ cuts “. The Government proposes in this budget to restore £270,000 of that amount, leaving a balance of £80,000 yet to be given to the public servants before Mr. Lyons’ promise is redeemed. There is no excuse for breaking such promises. It cannot bo claimed that the country has not recovered to a very large extent; or that the Government has been just in respect of the sacrifices it has imposed upon the people. The remission of £9,500,000 of taxes was largely for the benefit of people who could well afford to bear the burden ; they had made huge fortunes in prosperous times, but when in a troublous time sacrifices became necessary, relief should not have been given to the wealthy, at the expense of breaking the promises that had been made to the wageearners.
– “Would the honorable senator re-impose that tax if he got a chance.
– The Scullin Government levied certain imposts on the people, but had it remained in office it would have given relief long ago. One of its first steps to meet the difficulties confronting Australia was the conversion of £550,000,000 of internal public debt. The lower rate of interest resulting from that successful operation meant ah annual saving to this country of £6,500,000 in interest, an advantage which has been enjoyed by this Government for nearly three’ years, and which, I suggest, has been of material assistance to it in balancing the budget. This Government has remitted taxes to the big landlords and insurance Companies - in fact, it has given relief to nearly all sections of the people except the wage- earners. The remissions in the last budget amounted to £7,500,000, of which £1,100,000 represented relief to big landowners, chiefly banks and other financial institutions occupying valuable city sites. These are the people who have been benefited most from the remissions of taxes by this Government. For this reason I claim that it has broken many of its promises, and for this Ministers and their supporters will suffer at the hands of the electors shortly.
Although this Government has a majority in both Houses, it is appealing to the people six months before the expiration of its full term. It is idle to say that this is necessary in order to obtain a fresh mandate. The Government obtained its mandate at the last election, and it should make an effort to give effect to the promises contained in the policy speech of the Prime Minister (Mr. Lyons). The sudden decision to appeal to the people is probably due to the dry rot that has become apparent in the ranks of the great army of ministerial supporters, and since the Government has not kept its promises the electors will be glad of the opportunity to deal with it.
– I welcome the bill because it contains many features that will be acceptable to the people. The remissions of sales tax will bo particularly welcomed, and will be of great assistance. One has only to look through the long list of exemptions to appreciate the difficulty which taxpayers experience in making up their returns. In some cases, it is said, the cost of preparing returns exceeds the amount of tax payable.
I am glad that, probably as a result of representations made to Ministers, the Government has seen fit to continue the subsidy to assist farmers to purchase artificial manure used for the growing of crops other than wheat. Last year, we voted a similar amount, and I assure the Senate that it was of great assistance to a large number of dairy farmers, potatogrowers, mixed farmers and graziers, who will heartily welcome the continuance of the subsidy. While there is evidence of returning prosperity to Australia, I am quite sure that the majority of the farmers are not getting their share of it. I regret, however, that the Government has not included agricultural lime in the definition of “ artificial manure.” To have done so would not have involved much additional expenditure. Personally, I would prefer to see clause J25 struck out and provision for the payment of a subsidy on agricultural lime included in clause 21. Certain types of soil require the application of lime, which is an expensive treatment as the land requires to be dressed heavily. If the Government had included agricultural lime in the definition clause, it would have been of very great help to our farmers. I also think that if the Ministry had consulted with the State authorities with regard to this subsidy on artificial manures, the State Governments would have agreed to make an equal contribution so that the amount available for the assistance of farmers in this way would have been doubled. I express this view because, during the recent election in Tasmania, the then Government announced that, if returned, it would provide free railage for agricultural lime and manure, and as this would represent 8s. or 10s. a ton added to the 15s. a ton subsidy granted by this Parliament, it would have been a very real help. I do not know that it is too late even now to make representation to the State Governments in this matter. Clause 25, paragraph b. provides that the purchaser of “ agricultural lime or other soil amendment “ will not be subsidized. I suppose “ other soil amendment “ means a commodity that will alter the constituents of the soil without supplying plant food. Then in paragraph c there is the provision prohibiting payment of subsidy in respect of the purchase of “ any product prepared primarily for supplying lime to the soil “. I am sure that definition will bo very hard to interpret, and I should not be surprised if it leads to litigation. I say that for this reason: A mixture containing 19 cwt. of lime and 1 cwt. of sulphate of potash is applied to certain classes of soil. How could any one say whether “ that mixture was prepared “ primarily “ for supplying lime to the soil, or primarily for the purpose of applying potash as a plant food? I believe that 1 cwt. of potash would bo slightly dearer than 19 cwt. of lime, and I am sure that it could be argued that a mixture of this nature would be regarded as a fertilizer. Any difficulty in the future could be avoided by an amendment providing that if the plant food in the product exceeded the monetary value of the lime, it could be regarded as a fertilizer. The definition clause should be made clearer, otherwise it may be tested at law, and I am afraid that interpretation of the word “ primarily “ may lead to difficulties.
I note also that the Government has again set aside the sum of £125,000 for assistance to fruit-growers. This amount, as I said when the grant for last year was under consideration, is totally inadequate, because the fruit-growers of Tasmania, at all events, are down and out, and require a very much larger measure of assistance. I am glad to know, however, that the money is to be made available to the State governments for distribution, without any hampering conditions. The fruit-growers have had a very lean time for many years and the out-‘ look for this industry is causing a great deal of concern. It is one of the most important industries in Tasmania. No other rural activity gives more employment, because for fruit-growing the land has to be cultivated intensively and heavily manured ; the trees have to be pruned, sprayed and cared for. It also provides a great deal of work for saw-millers. In Tasmania the millers provide 20,000,000 superficial feet annually for case-making alone. In addition, it gives a great deal of employment to pickers, packers, carters, and wharflabourers, and the freight charges on overseas shipment are an important addition to ship-owners’ revenue. If something is not done very soon to rehabilitate the industry, it will come to an end. That would be a disaster for Tasmania, because if our orchardists fail and are obliged to grub out their trees, there is no other industry for which the land is suitable, as the areas are too small to provide a living by growing any other commodity.
The present position of our fruitgrowers is, to a large extent, the result of federal legislation. High tariff charges have increased production costs tremendously. About twenty years ago the industry was prospering, because, while returns then were only slightly better than the price received for the early shipments this year, production costs were very much lower, and if fruitgrowers were not making much money, they were at least getting along very nicely, but now, with the high costs, they are unable to live. A reputable grower told me that expenses to-day amount to 7s. 6d. a bushel case, made up as follows: - picking, packing, grading, cases, &c, ls. 5d. ; cartage and freight to wharf, 4d. ; shipping charge, 2£d. ; freight to London 4s. 1-id.; consolidated charge and selling, ls. 5d. Nothing is provided for interest, rent, depreciation of plant, cultivation, spraying and general upkeep, or the living expenses of the orchardist. The gross return this year was, in many instances, only equal to about 7s. 6d. a case. In many instances this year’s small credits went to pay off last year’s debits. Prior to the war the shipping freight was 2s. 6d. a case; now it is 4s. lid., a difference of ls. 7-Jd. Other costs also have increased. By restricting the varieties grown for export, the fruit-growers have tried to assist themselves. I agree that there should be some restriction of varieties, with a view to giving consumers what they want; but the greatest care should be taken in this connexion. The restrictions which were made were recommended by fruit-growers on the mainland, and were, in many instances, particularly hard on Tasmanian growers, who had been in the fruit-growing business many years before the mainland States took it up, and had planted their orchards to a greater extent with the older varieties. I tried to get the restrictions removed from the variety known as’ the “ Wolseley,” but without success. I did not altogether blame the Minister for refusing the request, because representations in favour of the restriction were made to him by the growers’ representatives who were advising him. It is, however, significant that “Wolseley” apples give good returns to New Zealand growers. Apples of that variety ex the Sultan Star and Middlesex, realized from 8s. to 10s. a case in London, compared with 7s. 6d. and 10s. a case for “ J Jonathans.” Those figures show the need for care in restricting the varieties for export. One grower told me that the restriction on the export of “ W olseley “ apples meant that he was unable to export one-sixth of his crop. He had 900 cases which had to be sacrificed although there was a good market abroad. It may be said that the trees can be grafted over to more desirable varieties, but the prevalence of fungus diseases makes the reworking of fruit trees a hazardous undertaking. Moreover, there is the danger that by the time the re-worked trees are in full bearing the fashion will have changed again. Honorable senators may not know that there are fashions in apples. At one time growers were advised to plant the “ Spitzenberg “ variety ; to-day that variety is barred from the export trade. The best way to deal effectively with this industry is to reduce costs. Given a fair deal, Tasmania can produce apples at competitive prices for disposal in the world’s markets. If freights were reduced to pre-war rates, a great fillip would be given to the industry. Unfortunately, under existing conditions in Australia, we cannot produce apples in competition with other countries. Unless costs and freights can be reduced considerably, a guaranteed price for apples will be essential. In all probability, the wheat-growers of Australia will be given a guaranteed price for their wheat in the home market.
– There is nothing in this bill to indicate that.
– Fruit cannot be dealt with in the same way as wheat. There are too many varieties to permit of that being done. As citizens of the Commonwealth, the fruit-growers of Tasmania ask for a guaranteed price for next season’s crop. The fruit industry is as important to Tasmania as the wheat industry to the mainland. Although manufacturers may not be guaranteed certain prices, they can rely on being able to pay their way, because the tariff eliminates competition to that extent.What is done for our secondary industries should also be done for our primary industries.
– Would it not be difficult to arrange for a guaranteed price in the home market?
– I was speaking of the export trade. Before shipment, all fruit is inspected, and only the best quality is exported. The owner of the factory in which ploughs are made is assured of a fair profit; the man who works in the factory is guaranteed a fair wage; but the man who uses the plough is not protected; he has to accept for his product what he can get for it in competition with the world. Spray-pumps and other requirements of the orchardist have increased considerably in price, but no protection is given to the man who uses them. Primary producers, whether they grow fruit, potatoes, wheat or other products, should share the good things of life, with the manufacturers and factory workers. There is evidence of a return to prosperity in Australia, but those who work the land are not sharing in it.
– What evidence is there of returning prosperity?
– During the last two or three years shares in most industrial undertakings have doubled their value. In support of the claim for a guaranteed price of 4s. 6d. a case for fruit, I point out that no industry provides more employment than does fruit-growing, and that in New Zealand’ there is a guaranteed price for fruit. What is done in New Zealand for the orchardist should be done in Australia. I hope that the Government will do something for the fruit-growers, many of whom are in a serious plight.
– Would the honorable senator agree to a fruit pool and a guaranteed price ?
– In the case of wheat, a pool may be all right, because a fair average quality can be arrived at; but there are so many varieties of fruit that I do not think that a pool would be successful. There might, with advantage, be more co-operation on the part of producers than there is now. I trust that the Government will give these representations its earnest consideration.
– I am glad that the Government is able to give financial relief to some sections of the community. My only regret is that it is not able to go further, and remove some of the burden imposed by the tariff. The reduction of the sales tax, the increase of the maternity allowance, the restoration of war pensions, the partial restoration of salaries and wages, and the small measure of relief to primary producers, including growers of apples and pears are most welcome.
I wish to refer particularly to part VI. of the bill, which provides for the” granting of relief to primary producers by means of a subsidy of 15s a ton on artificial manures. Two years ago similar relief was granted at a cost of £250,000, and at the same time the wheat industry was given a bounty of £2,000,000 by means of a bonus for each acre cropped. On this occasion no assistance is promised to the wheat-growers. I disagree with the restriction that the £250,000 shall be expended in the relief of primary producers other than those who grow wheat, but the wheat-growers should be given the same subsidy of 15s. a ton on the fertilizers they use. Had the wheat-growersbeen given no concession in respect of fertilizers two years ago, when other direct assistance was given to them, I could have understood the action of the Government; but I cannot understand why, on this occasion, when no other assistance is promised to them, they should be deprived of the subsidy on fertilizers. I agree that orchardists, potato-growers, dairymen and others who use fertilizers, should be granted a subsidy, but I claim that the wheat-growers should share in the amount.
SenatorO’Halloran. - The pastoralist who top-dresses his pasture will benefit.
– That is so; and the producer of beet or cane-sugar will also be assisted. I fail to understand why only the producer of wheat is to be excluded from these benefits. It is an unjust and unwarranted discrimination against a most deserving section of primary producers.
– Is not the wheat industry being dealt with separately ?
-I do not know. Generally, the policy of the Government in such matters is revealed in the budget, but the budget presented a few days ago does not include any provision to assist the wheat-grower. I saw in to-day’s press a statement that wheatgrowers may he permitted to find money for themselves by means of a home consumption pool or some other such arrangement, but that is no reason why they should be excluded from the fertilizer bounty. The bill provides for assistance to every producer of cereals, except wheat, to the amount of 15s. a ton of any kind of fertilizer he chooses to apply to his land. I see no reason why it should discriminate against the wheat-grower at a time when, so far as we know, the Government is giving no assistance to his industry.
– Why is the Government giving £125,000 to the apple-grower and nothing to the wheat-grower ?
– That is the burden of my complaint. The Government selects superphosphate, which is widely used for the improvement of pastures and the production of cereals, and says to people on the land : “ We want you to use superphosphate on your properties; if you use it to encourage the growth of grass, or for the production of hay, so long as it is not wheaten hay, or the growth of barley, oats, rye, or any other cereal which is not half so valuable a support of human life as wheat is, we shall subsidize you to the amount of 15s. a ton. But if you use it for wheat, the essential for bread, which is the staff of life, we can give you no such assistance “.
– If the Government had given assistance in another direction to potato-growers, it would not have allowed them a subsidy on the fertilizer they used. A bounty on potatoes would be the same as the bounty on wheat.
– The honorable senator may be right on that point. I do not know whether he is or not. I do know that the wheat-growers are getting nothing now. We are copying legislation which we passed two years ago in different circumstances. At that time, when we accepted a bill in the same form as this, excluding the wheat-grower from participation in the fertilizer subsidy, we made a direct grant of £2,000,000 to the wheat-grower. Last year we granted £3,000,000 in the same way for his assistance. This year, however, so far as I have been able to ascertain, we are giving him no assistance, but rather are discriminating against him by preventing him fromsharing in the fertilizer subsidy. I object to such discrimination and do not understand why the producer of wheat should be put at a disadvantage under this legislation in comparison with all other primary producers. Even if it is the intention of the Government to assist him in another direction after the elections, we should, in the meantime, so amend this measure that he will be given a subsidy of 15s. a ton on the fertilizer he uses.
I come now to the provision of £125,000, for the second successive year, for the assistance of the growers of apples and pears.
– It should have been more.
-I should have been pleased, with the hon- orable senator, had the amount been larger, but I compliment the Government upon the fact that it is learning by experience, in that this year it is not confining the distribution of the vote for this purpose to necessitous growers, but is giving it to the States to distribute without restriction, I take it, to all those exporters of apples and pears who made a loss on this season’s operations. Last year the bill was introduced in this form, but when it reached this chamber, the Minister in charge of it, for some reason that did not appeal to members of the Country party, sought to confine the distribution entirely to those who had not only made losses on their export operations, but could also prove that they were in necessitous circumstances. The members of the Country party in this chamber voted against that alteration.
– Why should not citrus-growers have a share of this vote?
– There is no reason why all fruit producers should not be included, whilst the Government is in its present beneficent mood. Much dissatisfaction has existed among the exporters of apples and pears throughout the Commonwealth with the method in which the relief has been granted under last year’s act. We learned a few days ago that up to that time no distribution had been made in Western Australia of last year’s grant. I believe that some States still have in hand a great deal of money from last year, and I urge the Minister in charge of the bill to see that, in those States where it has been found difficult to distribute last year’s grant to the exporters of apples and pears who made a loss on their operations - a difficulty which has to a great extent arisen over the interpretation of the word “ necessitous “ - arrangements are made to distribute the balance in hand on the same basis as is adopted in this bill in relation to this year’s grant. Such a policy would do away with a great deal of the confusion and annoyance experienced in some of the States. I hope the Government will take that suggestion into consideration while the bill is still before the Senate. I am glad that the Government is again making the grant, of which Western Australia will receive £14,505, to those who are making a loss on their export operations in apples this year.
– The freight paid on apples from Western Australia to the home market is a good deal less than the freight from the Eastern States.
– Western Australia is in a slightly better freight position than is Tasmania, but, on the other hand, its apple and pear industry has not nearly attained* the proportions that have been so happily reached in the island State. In any case, this assistance is being given on an allAustralian basis, and is most welcome. I am glad the Government is granting it again, but I urge it to see that the balance of last year’s grant is distributed by the State Governments to all those who are entitled to receive it, on the basis adopted in this measure.
.- I wish to express appreciation of the measure. It is a tribute to the Government that it has managed the affairs of the Commonwealth during the past year so satisfactorily as to be able to introduce another hill that will give considerable financial relief to the people. I hope that these measures of financial relief will each year’ confer increasing benefits upon the people, at any rate, until a normal condition of affairs is again established in Australia. That would, after all, be only carrying out the promise made by the Minister who introduced the original Financial Emergency Bill. It is as well to remember that when the emergency legislation requiring heavy sacrifices from various sections of the community was first introduced, it was definitely and distinctly stated that whilst the Government very much regretted its necessity, it hoped, within a reasonable period, to be able to bring forward a financial relief bill. That is practically the contract made with the people, not only by this Government, but by its predecessors. The undertaking was that the Financial Emergency Act was to be only a temporary measure to meet the abnormal conditions then existing, and that relief would be afforded to the community as speedily as possible. The result is that we now have before us tho second or third instalment of help which is very much appreciated by all sections of the community.
I am gratified that so much attention has been paid to the need for adding to the list of exemptions from sales tax. This is one of the best forms in which relief could be given to tho community as a whole. It is interesting to note the caro that has been exercised in the selection of additional items for exemption from the operations of the tax. Any one who goes carefully through the lengthy list embodied in the bill must realize the amount of care and interest shown by the Treasurer (Mr. Lyons) and his responsible officers in allocating this portion of the assistance afforded by the bill- It will, as I say, be gratefully received by many sections of the community.
The relief to be afforded once more to the growers of apples and pears has already been discussed by Senator J. B. Hayes, who, with other honorable senators, expressed regret that the Government had not been able to see its way clear to give even greater help in this direction, seeing that the fruit export season through which we have just passed has been literally disastrous. I do not suppose any honorable senator knows more about the progress and development of the fruit industry in Tasmania than I do. When a youth, I was in the Huon dis- trict looking over the lands which are now the leading fruit-growing area of Australia. Not one acre of them was then being used for any purpose whatever. The country was looked upon as a desert which could not be utilized for any good purpose, but after a while it was discovered by experiment to be eminently suitable for the growing of apples and pears, and for nothing else. There is to be found there to-day the closest settlement existing in Australia. The areas are small, and settlement is compact. Every inch of ground that can be used for fruitgrowing in the Huon district has been taken up. One good point made by Senator J. B. Hayes was that unless measures are taken by the community to preserve the industry it must eventually perish, and this wonderful settlement be wiped entirely off the map, because the land can be used for no other purpose. Agriculturists regard the Huon soil as the poorest to be found anywhere, and it is the poorest imaginable for agricultural purposes. However, for fruit-growing it is excellent, but I know of no other purpose to which it could possibly be put. The fruit-growing industry, which has developed considerably during recent years, is the most important in Tasmania. The greatest difficulty with which orchardists have to contend is that, while the cost of production has increased - mainly through the adoption of our standard of living - returns from the sale of fruit have been lower, as the purchasing power of the people in whose countries our fruit is sold has not increased. As the growers have to shoulder additional responsibilities Parliament should provide them with some permanent form of relief, and thus ensure the stability of the industry which is so important to Australia.
It is pleasing to note that the Government proposes to renew the assistance previously given to primary producers by subsidizing the purchase of fertilizers used in the production of crops other than wheat, to the amount of 15s. a ton. The measure does not embrace so many sections as did a similar bill passed last year; but as the Government has endeavoured to afford relief to those most needing it the bill will be welcomed by a large section of the community.
– I congratulate the Government upon being able again to introduce a financial relief bill under which assistance is to be given to a large number of the Australian people. Even the Leader of the Opposition. (Senator Barnes) found it difficult; to offer any serious criticism of the Government’s financial proposals. He said that; relief would have been afforded in other directions, such as by providing a greater restoration of public servants salaries, had the financial position of the Commonwealth warranted it.
– The honorable senator has placed a peculiar interpretation upon my remarks.
– The Leader of the Opposition does not criticize the Government merely for the sake of doing so; and commends the Government when commendation is warranted. I am pleased to find that the relief afforded to primary producers during the last year or two is to be renewed this year, as upon them the burden of taxation has pressed perhaps more heavily than upon any other section of the community owing to the enormous fall in the prices realized for our exportable products. This has resulted in tremendous financial embarrassment to many primary producers, who in common with other sections of the community have had to submit to additional taxation. Moreover, owing to our fiscal policy, the financial emergency legislation passed by Parliament and the high exchange rates at present prevailing between Australia and Great Britain, the tourist traffic has been interfered with and freights have increased.
The relief proposed in respect of sales taxation will be of direct benefit to the whole community, but I regret that fruitpicking bags have not been included in the Hat of exemptions. Last, year representations were made to Sir Walter MassyGreene, concerning the disabilities experienced by fruit-growers as a result of the imposition of the sales tax on these bags, and it was then said that through an oversight they had not been included. As I believe an undertaking W Fl S then given that they would be included in the next list of exemptions I trust that when the bil] is -in committee the oversight will be remedied. Many of the growers of apples and pears in Tasmania are receiving debit notes instead of credit notes in respect of their overseas shipments of fruit, and consequently are experiencing the greatest difficulty in arranging finance for this year’s crop. A tremendous volume of work is entailed in cultivating and fertilizing the ground and in pruning and spraying the trees. At this time of the year they have to make arrangements to purchase casing material required when the crop is being picked. Senator J. B. Hayes mentioned that 20,000,000 super feet of timber is used for this purpose.
– How much of that material is imported from Canada?
– Some of those in the trade prefer the use of soft woods for case-making, but in view of the extensive supplies of Australian timbers available, it is regrettable that imported soft woods are used. Much employment is provided in felling the timber and in cutting it and manufacturing it into causes to pack the enormous crop. Arrangements have also to be made early in the year for the supply of case material and space for shipment overseas of from 3,000,000 to 3,500,000 cases of fruit, and this trade necessitates about 40 of the large overseas ships calling at Hobart. Honorable senators will readily realize what the apple trade means to transport and other workers. A great amount of capital is invested in this industry, which is now in serious difficulties. Whilst 1 appreciate, as I am sure the growers do, the help which the Government is giving to the industry in the form of an unconditional bounty, I regret that the amount is inadequate to meet fully the desperate straits of. the growers. I cannot suggest any method by which the Government could substantially help the industry other than those measures already proposed by my two colleagues. I believe that the growers, in conference, have come to an agreement as to ways and means of assisting the industry, and among these are proposals for reducing the freight overseas by ls. 6d. a case, and guaranteeing to the growers a minimum price of 4s. 6d. a case. These steps, it is claimed, would be of substantial help to the industry. Another proposal to which the Minister for Commerce (Mr. Stewart) has given a lot of attention, is that the fruit floors of Great Britain should be cleared of foreign fruit earlier than at present so as to give the Australian crop, when it arrives in Britain, a clear market, unhampered by the tail end of the American crop. This proposal is worthy of the closest consideration of the Government. It is the declared policy of the Government to encourage reciprocal trade with Great Britain, and something of this nature could be done as part of that policy. A deputation representing the Tasmanian fruit-growers has discussed this matter with the Minister and has suggested to him that this is one way in which the Government can substantially assist the industry.
– What the Minister thinks and what Great Britain will agree to are two different matters.
– Tasmanian primary producers have nothing but words of commendation for the Minister, and’ they feel confident that if he fails to accomplish the objective he has in mind, it will not be because of lack of interest or effort on his part. The Minister for Commerce is doing his job remarkably well in the interests of all those engaged in the export of primary products.
I have no doubt that the subsidy for the .purchase of artificial fertilizers will be greatly appreciated by those who find their use essential. I commend the Government for having repeated the provision made last year to assist the primary producers in this way. Already the subsidy has been of immeasurable benefit to the man on the land. Senator E. B- Johnston referred to the omission from the bill of any provision for the wheat-growers, even in connexion with the purchase of fertilizers, but I feel sure that the Government, at the proper time, will see that that industry does not suffer. The Government realizes the importance of the wheat industry; and Senator Johnston knows quite well that the Government will again, as it did last season, come to the assistance of the farmers. As a primary producer myself, and a representative of a State that is mainly concerned in primary production, I have no doubt that what the Government proposes jo do in this bill will bc appreciated, not only in Tasmania, but throughout the Commonwealth. I hope that the relief afforded in the bill is only a forerunner of even more substantial relief to be given when the Government introduces its budget proposals for next year.
– We all know this bill is submitted, to some extent, as a bit of political window-dressing on the eve of the elections. While all my Tasmanian friends have been congratulating the Government on the assistance it proposes to give to the fruit-growing industry, it seems to mc that some fruit-growers, equally deserving of such assistance, and with equally great obstacles to contend with, have been overlooked altogether. I refer particularly to growers of citrus fruits.
– Assistance has been given to citrus-growers.
– It has not been given to growers of mandarins. I have seen tons of mandarins left to rot in the orchards, owing to lack of markets. I do not believe we shall all become rich by subsidizing o«e another, but I think assistance should be given to mandaringrowers in the hills, the Kurrajong district, and other parts of New South Wales. This fruit has been a waste product so far this season, and the market will not improve as the season advances and other fruits come into competition with mandarins. It is unjust to exclude mandarin-growers from the benefits of this measure. It is self-evident that if the fruit-growing industry is to be subsidized, all sections of it should participate in such assistance. I was an orchardist for seventeen years, in a district in which the soil is incapable of growing anything but fruit trees, and it would not have grown them if it had not been heavily fertilized over a period of years. The cost of fertilizer thu3 absorbed a fair proportion of the income, and the orchardist could subsist only with the aid of the supplementary returns from peas and bean 3. Any help given to one section of fruit-growers should be given to all. I have expended upwards of £4 an acre on fertilizers to grow citrus and passion-fruits.
In regard to wheat-growing, I understand, from newspaper rumours, that some measure of relief will he given :o the farmers, but Senator Johnston is perfectly correct in stating that they have been overlooked in this measure. The wheat-producers form a very large body of men who, at the moment, are having a desperate uphill fight against unusually low prices and other obstacles. I hope that this measure will be supplemented by another to give substantial relief to the wheat industry, not as a mere haphazard grant to be appealed for annually, but in accordance with a permanent, and well balanced plan. At one time I was, for a few years, a wheat-grower, and my experience was similar to that of many growers of the day. When I commenced to grow wheat the price waa round about 4s. 6d. a bushel. Gradually, it fell until, when I abandoned the industry, it was down to about ls. lOd. a bushel. I mention my experience in order to show that unprofitable prices are not by any moans of recent date, and to emphasize also that the benefits of the Government’s policy with reference to the purchase of fertilizers should not he confined to a mere handful of fruitgrowers.
The slight addition to the maternity allowance provided for in this measure is farcical. The Government should revert to the original conditions under which this allowance was payable, so that it may he available to every mother at a time when it is most needed. The idea of attaching to the payment, property qualifications of any kind is repugnant to every fair-minded person. This attempt to make paupers of those who claim the allowance by compelling them to undergo an examination of a most intimate character as to their financial position is scandalous. I happened to be a member of the Senate when the Fisher Government introduced the bill for the payment of maternity allowances, and I well remember the emphasis then laid on the provision that it was to be payable without class distinction of any kind; that it was to be a recognition by the community of the value of the contribution t>> the nation’s assets made by every woman who gave birth to a child. There is no justification for this attempt at piecemeal restoration of any of our social services in view of the fact that the Government has remitted £9,900,000 in taxation to the wealthier sections of this community who can well afford to bear that burden. It is scandalous that pensions, maternity allowances and other social services have not been restored in full. I cannot congratulate any government that fails to realize that taxation should be levied on the people in proportion to their ability to bear it, and neglects to remove unconditionally the restrictions in respect of social services. Instead of congratulating this Government for what it has clone I feel like indicting it, because it has bestowed benefits on those who least require them, and has refrained from showing simple justice to those of our people who are in the greatest need.
Senator Herbert Hays this afternoon endeavoured to show that the remarks of Senator Barnes, with respect to the maternity allowances, were indirectly a tribute to the Government, when, as a matter of fact, Senator Barnes was merely trying to prove that if, as is claimed, this Government has been responsible for the restoration of prosperity, it should be in a position to make greater concessions to the poorer sections of the community. When the financial emergency legislation was under discussion the people were told distinctly that the sacrifices required of them would be removed as soon as possible. No one dreamed then that restoration of Public Service salaries and of social services would be made in this piecemeal fashion, especially when such wholesale concessions were being made to the wealthier supporters of the Government. Public servants are having restored to them merely a fraction of what they have lost, although I know that a great song is being made about the “ generosity “ of the Government in its dealings with the Public Service. Before important concessions are made to the wealthier classes of this country, all public servants should have restored to them in full the deductions made under the Financial Emergency Act.
The way in which the laws of this country are being administered against the poorer classes is well illustrated in to-day’s issue of the Labor Daily, which publishes an article stating that a crippled young woman, the sole support of her unemployed brother, is being billed by the Pensions Department for about £7. the balance remaining, after paying funeral expenses, from a life insurance policy on the life of her mother, who died recently. That case is a scandal to the Government, and also to a community that permits to continue the conditions which make it possible. It seems that this claim has been made under those provisions of the amended Invalid and Old-age Pensions Act which enable the Government to levy on the estate of pensioners. In this case there was a life insurance policy of £33, and after the funeral expenses amounting to £26 had been deducted, there was a balance of £70s.10d. which is being claimed by the Government.
– Under the law, relatives of pensioners are entitled to retain more than the allowance for the funeral of a deceased pensioner; so if the statement made by the honorable senator is contained in the article referred to, it is not correct. There must have been other circumstances.
– If the right honorable gentleman will read the article to which I have directed attention, he will find that the Deputy Commissioner is claiming from the crippled daughter the amount mentioned. The facts are beyond dispute. They are contained in the memorandum from the Deputy Commissioner.
Under this bill a small amount of relief is being given to dependants of returned soldiers, but thousands of returned soldiers are still suffering very serious disabilities due to the fact that there has not been complete restitution of the pensions payable to them. The many complaints that are brought under the notice of honorable senators indicate quite clearly that the relief given by the Government is very partial. I believe that the people of this country will show that they realize that these small concessions are only political window dressing, and that the Government does not intend to do simple justice or honour its promises.
Any property comprised in the estate of the pensioner which -
property which passes under the will of the pensioner to a relative who -
Under the law as it exists, the case presented by the honorable senator could be dealt with under sub-section 6 if application is made for relief.
– Why does the memorandum of the Commissioner refer to the insurance policy?
Senator Sir HARRY LAWSON.The section quoted does not refer to insurance policies. The provision for the recovery of the debt operates when a stranger is to benefit, or when the pensioner’s estate is so large as to justify the Government in claiming a refund of the amount paid to him. There is full power to the Commissioner to make such remission as he thinks fit in cases of hardship.
– In the case mentioned by SenatorRae, £7 of the insurance money was taken from the pensioner’s daughter.
Senator Sir HARRY LAWSON.If particulars of the case are submitted, I undertake that an investigation will be made, and that the law will be administered compassionately. The amount owing to the Government by pensioners is not given priority over other debts as is generally the case with amounts owing to the Crown ; it is payable only when the circumstances fully justify it, and no hardship is entailed. Having found the officers of the department most sympathetic and considerate, I have no reason to doubt the fairness of their administration.
– If the facts are as stated in the newspaper, the persons affected should appeal on the ground of hardship.
– Why was the demand made in the first instance?
– I can only repeat that if details of the case are submitted to me, I shall have them investigated.
Senator Rae also referred to the granting of assistance to the growers of mandarins. A sub-committee of Cabinet has been considering this subject, and I hope to make a pronouncement of the Government’s policy in due course.
– Parliament is to rise on Thursday.
– There will be ample time before then for the Government’s policy to be announced.
The honorable senator described as paltry the proposed restoration of salaries to public servants. I suggest that there is nothing paltry in a full restoration to all public servants in receipt of a salary up to £388 per annum.
Senator Herbert Hays said that a promise was made by Senator Massy-Greene, when Minister, that fruit-picking bags would be exempted from sales tax. I have asked the officers of the department to search Hansard and the departmental records in order to ascertain whether there is any record of such a promise having been made. If the promise was made, the Government will honour it. So far, no record of the promise referred to has been found.
The Government, in giving careful consideration to the requests tor exemptions from the sales tax,has endeavoured to provide the maximum relief to primary producers by extending the list of exemptions as far as possible, having regard to the loss of revenue involved. The policy of the Government ‘is to grant relief in equal ratio to all sections of the community; this bill embodies that principle. Every claim for exemption is considered by the Government in the light of its effect on the whole scheme, and the amount of revenue involved.
Several honorable senators have suggested a guaranteed price for fruit. Provision to that end could not well be incorporated in a measure of this kind. That the Government has not lost sight of the plight of the fruit-growers will be recognized when it is remembered that last year £125,000 was provided for their relief. The Government is asking Parliament to vote a similar sum this year to assist them. I ask honorable senators not to press this matter unduly.
Senator Payne spoke in complimentary terms of this bill, and commended the Government for what it had done. I am confident that his sentiments have the support of the community generally.
To Senator E. B. Johnston, who drew attention to the words “ other than wheat “ in clause 19, I would say, as was said in olden times, “ Oh ye of little faith “. The honorable senator has been promised several times that a statement of the Government’s policy in regard to wheat will be made before the termination of the session.
– We want something more than promises.
Senator Sir HARRY LAWSON.Those honorable senators who are trying to make political capital out of the noninclusion in this bill of any provision for granting relief to wheat-growers will be disappointed when the Government’s policy is declared, because they will find one of their best arguments taken from them.
– The Government does nothing but make promises.
– Promises made by this Government become realities in due course.
– So little faith has the Minister in the Government of which he is a member that he is retiring from the Senate; he is leaving a sinking ship.
Senator Sir HARRY LAWSON.If I thought that the ship was sinking, I would remain with it. The reason why wheat is not mentioned in this bill, is that it has not been the practice to include assistance to wheat-growers in an omnibus measure.
– It was done two years ago.
– In 1931- 32 wheat-growers were assisted to the amount of £3,400,000.
– The Scullin Government was responsible for that assistance.
– In 1932- 33 the wheat-growers were granted £2,000,000 and in 1933-34, £3,000,000. The proposals of the Government for 1934-35 will be announced before the end of the session.
Senator Johnston referred to trouble that had occurred in Western Australia in the distribution of the relief grant to fruit-growers. I am advised by the officers of the department that the difficulty in that State, relative to last year’s apple and pear grant, has now been settled. The amount to be distributed is £10,918.
– That difficulty was not with the Commonwealth Government. It was experienced by the State Government.
Senator Sir HARRY LAWSON.That is correct. The difficulty was not the creation of this Government, but was found by the State Government to exist in administration. It has now been overcome, and we hope that everything will proceed smoothly.
Senator J. B. Hayes referred to agricultural lime, and deplored its exclusion from definition of artificial manure. Clause 25, to which the honorable senator drew attention, and particularly paragraph c, was prepared under the advice of the agricultural chemists of one of the State departments. The Government is acting on the advice of the State Departments of Agriculture in excluding lime from the operation of this measure. Agricultural lime is a soil amendment, and not a fertilizer, which is plant food. Lime is relatively cheap, and a subsidy of 15s. a ton would be too great. The Government wishes to devote the whole of the funds available to encourage the use of fertilizer. The experts of the State agricultural departments support the omission of agricultural lime. We are trying to do the greatest good to the greatest number, and so to render assistance that the greatest benefit will be reaped.
In reply to my genial colleague, Senator Barnes, who characterized the remission of land tax as quite improper, I may state that land tax was remitted by this Government as part of its policy for the assistance of those engaged in country industries. They were down and out, and the tax had to be paid out of capital, or out of liabilities, instead of profits. The Government, therefore, felt that some remission was due, and made it accordingly. In that action it was supported by both Houses. The honorable senator also spoke about the promise to restore salaries to the Public Service. In this connexion, I wish to repeat what I said a little earlier, that the underlying principle of the financial emergency legislation was equality of sacrifice. On the one hand, burdens were imposed upon the people, and, on the other, reductions were made in salaries and social services. The Government has, from year to year, endeavoured to give relief on a symmetrical basis, bearing in mind the underlying principle of equality of sacrifice. Reference has been made to relief from taxation. We have by no means given relief from all the depression or emergency taxes that had to be imposed. We still have the sales tax, the primage duties, and the super property tax of 6 per cent. The Government remitted taxation in equal ratio with the benefits which it was giving in other directions, that is, with the lifting of the burdens on other classes of the community. It endeavoured to spread the burdens according to the ability to bear them, and in keeping with a definite public policy, and to restore salaries and other payments in the same ratio. The Leader of the Opposition (Senator Barnes) regarded it as a sin on the part of the Government that it had made certain concessions to life assurance companies. He condemned the Government for what it had done. Its action was, of course, supported by Parliament, and inferentially, therefore, the honorable senator is blaming, not only the Government, but the whole Parliament. I remind him that people in glass houses should not throw stones, and that people, when they charge others with failure to fulfil promises and carry out election pledges, should make sure that they and their party and their government have given effect to the promises and pledges for which they made them- selves responsible. If the honorable senator refers to the policy speech made by the Right Honorable J. H. Scullin, at Richmond, Victoria, when he appealed to the electors in 1929 for a mandate, and was returned with a triumphant majority, be will discover that it contains the allegation that the tax which the BrucePage Government had put on life assurance companies was a tax on thrift, and, therefore, to be deprecated, and that one of the first acts of the Scullin Government would be to lift it. What did the Scullin Government do?
– I know that the situation changed with lightning-like rapidity, but the Scullin Government did something else. It said to the life assurance companies, “You were formerly chastised with whips, but now you shall be chastised with scorpions’’ and it. enormously increased the burdens which such companies had to bear. It is only because of the emergency conditions operating in this country that the continuance of that kind of taxation is justified. These are thrift institutions, like friendly societies, making provision for widows and children and other dependent people. As a matter of public policy, speaking now for myself and not. for the Government, the greatest measure of exemption from government taxation should be afforded to life assurance funds.
– The companies lend millions to the Government at high rates of interest.
Senator Sir HARRY LAWSON.They lend at current rates of interest only. They invest in government securities, and in that way help governments.
– The Scullin Government forced down the interest rates charged by them by 22½ per cent.
Senator Sir HARRY LAWSON.That interference with the contract was justified only by conditions of national emergency. The reduction in the rate of interest originally contracted to be paid has been made permanent for so long as the contract between the Government and the bondholder endures-, but we are gradually ameliorating the other emergency measures in the shape of reductions of salaries and other payments according to a well-considered scheme or plan, bearing in mind during the whole time the principle of equality of sacrifice and the ability of the section of the community concerned to bear the burden. We favour no one section more than another. This measure is introduced as a scheme to give effect to that programme. Not all the old taxation has gone, although some of it has. The honorable senator is condemning the Governmentbecause it has made a reduction of taxation, but he knows as well as I do that if taxation is made too oppressive and too burdensome, it reacts adversely upon the whole community, and that, if excessive burdens are imposed on industry and enterprise, business is retarded, and employment is restricted, becauseopportunities for the proper employment of the people at reasonable rates of remuneration are lessened. We were finding very definitely that this very heavy and burdensome taxation was having upon the community a repressive, instead of a stimulating, effect. It was retarding industry, reducing the area of employment, and checking business enterprise and the investment of funds. People were simply closing up their purses. They would not enter into enterprises. It therefore became part of the definite policy of the Government, not favouring any particular section, and bearing in mind the public welfare, the natural flow of trade and business, and the imperative necessity for providing employment, to endeavour to encourage and stimulate business enterprises, and so to create work for the people. It recognized unemployment as the greatest social evil which this country has to face.
– But the Government did not do those things.
– It did, although it did not completely cure the then existing conditions. Australia is not yet out of the wood. It is all very well for the honorable senator to say that we could do this and that, and that if he was occupying my position to-day, the Government would restore the Public Service salaries in full, and, in short, give back everything.
– Unemployment has dropped from 30 per cent. to 20 per cent.
– But that is not a real decline.
– We admit with sorrow that serious unemployment still exists, but the position is not so bad as it was. We have been able to introduce only this measure of financial relief. The amount of restoration which the bill provides is due to the sanity that has prevailed in government business since this Administration took office, and to the fact that confidence has been restored in the minds of the community by the methods which the Government has employed. I suggest to the honorable senator that if, unfortunately, he and his party had been allowed to remain in charge of the nation’s affairs, we should not to-day be in a position to introduce any of these measures of relief which it has been our good fortune to be able to bring in from time to time.
SenatorO’Halloran. - The correctives were enacted two and a half years ago when we were in power.
Senator Sir HARRY LAWSON.The honorable senator’s party when in power was travelling headlong to perdition. Matters were going from bad to worse, and the drift was arrested only by the action of the people in returning . to power a government that stood for sound finance. Since then the position has immensely improved, although it is not yet right. The work is not finished, but the Government proposes to ask the country to give it another mandate to continue along lines of sound and safe finance. In regard to the matter of insurance, there is one other word I should like to say to Senator Barnes. He knows of the industrial insurance policies which are specially designed for the benefit of the industrial section of the community and of the poor in our midst.
– I suppose that is why the Government is grabbing the old-age pensioners’ pittances now.
– I do not think Senator Brown was present when I made a lengthy and interesting exposition of the law in regard to the debt due in certain circumstances to the Crown by old-age pensioners.
– Such as the robbery of £7 from the crippled daughter of the woman who died !
Senator Sir HARRY LAWSON.Charges of robbery are easily made, but are much more appropriate when uttered on a soap box than in the Senate chamber.
– The truth is the truth whether spoken from a soap box or in the Senate. The honorable senator should deal with facts, and whatI said is a fact.
– The honorable senator will find the facts clearly set out in what I said earlier. The relief given to industrial policy-holders through the remission of some taxation in respect of mutual life assurance societies, is much appreciated by the section whom the Leader of the Opposition (Senator Barnes) professes primarily to represent.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 5 agreed to.
Clause 6 (Exemptions - Sales Tax Assessment Acts Nos. 1-4).
– I understand that photographs used for reproduction in newspapers are exempt from sales tax, but that those produced by a photographer for sale are subject to the tax.
– Photographs for reproduction in newspapers are not subject to the tax, but if sold to the public they are taxable.
– The Minister will admit that it would be very difficult to determine whether the tax is paid on photographs produced for newspaper proprietors and eventually sold to the public. Why should newspaper proprietors receive this concession while many photographers who have to depend upon their work for a living have to pay the tax ? If the Government wishes to extend leniency in the matter of exemptions, it should commence with those on the lowest rung of the ladder, and not with the wealthy newspaper proprietors who are quite capable of looking after themselves.
[5.55]. - Up to the 2nd September, 1932, newspaper proprietors had to pay sales tax in respect of blocks purchased or manufactured by them for use in the production of their newspapers. Administrative difficulties arose in determining the sale value upon which tax should be paid in respect of blocks manufactured by the newspaper proprietors themselves, because these were generally of a type not purchased from other block makers in the ordinary course of trade. In view of these difficulties, and the comparatively small amount of revenue involved, it was decided that blocks used in the production of newspapers should be exempt from 2nd September, 1932. The difficulties encountered in respect to these goods also exist in connexion with photographs, and for similar reasons, the Government deems it expedient to grant the exemptions provided for in the bill. The position of photographs generally has, at the same time, been fully inquired into, but it is not considered that, at present, a complete exemption of all photographs is warranted. The Government has already granted relief to professional photographers by requiring payment of tax on only 40 per cent, of the amount payable by individual customers for photographs made to their order. I presume that all types of photographers are included, and that they will obtain the benefit of this exemption. The amount of revenue involved is negligible.
Senator O’HALLORAN (South Australia) L6.2J. - In looking through the lang list of exemptions in respect of materials used in the building trade, I am somewhat perturbed as to whether the slates produced at the Mintaro quarry, in South Australia, are exempt. Building stone is exempt, and it is quite possible that this particular type of slate may be included under that heading; but before the clause is passed, I should like an assurance to that effect.
– Are not such slates included in paragraph ai ?
– I presume that the slates produced at Willunga, in South Australia, and which are used for roofing purposes, are exempt, but I am referring to slabs used extensively throughout Australia for flooring and paving purposes and in the manufacture of billiard tables.
– They are included in paragraph af.
– If the Minister assures me that they are exempt I have no further objection to offer.
– On expert; advice, I give the honorable senator the assurance.
– I move -
That after the word “therefor”, item “water pipes,” the following item he inserted: - “ concrete and concrete asbestos pipes for reticulation and irrigation purposes “.
On the 26th July I received the following telegram from James Hardie and Company, Rivervale, Perth -
As we manufacture asbestos cement water pipes at Rivervale works please endeavour have same placed on similar Sales Tax exemption as galvanized iron pipes which latter being manufactured only New South Wales.
As soon as I received this telegram I placed the request before the Assistant Minister (Senator Lawson), who promised that the representations would receive consideration. Thus the Minister has had this request before him for the last five days. It is a very reasonable request which does not need labouring. I consider that if exemption is provided for galvanized iron water-pipes which are made in New South Wales, it should certainly apply to concrete pipes made in Western Australia for similar uses. We have very few secondary industries in Western Australia, and I think it is only fair that concrete and asbestos cement water pipes, wherever they are made in the Commonwealth andused for the same purpose as galvanized-iron pipe’s, should be exempt from sales tax.
Senator Sir HARRY LAWSON (Victoria - Assistant Minister) [6.7].- It is true that the honorable senator handed to me a copy of the telegram he has read and that I promised that the matter would be investigated. The matterhas been investigated,but it cannot be dealt with as an isolated instance. We are proposing here a limited extension of exemptions in order to assist the primary producers; this action is in consequence of representations made during the last session of Parliament: The department has supplied to me a long list of applications for exemption of pipes, and we could not deal with concrete pipes with- out considering all the other applications. The Government feels that it has already granted sufficient exemptions.
– Why make any distinction between concrete pipes which are used for reticulation purposes, and galvanized-iron pipes which are used for the same purpose?
– The Government is not prepared to accept any further exemptions, as such a step would involve further loss of revenue. The honorable senator’s request will be noted and will be considered at a later date. I shall not be here to carry out the promise, but I am sure my successor will see that the fullest consideration is given to the matter. We have endeavoured in theseexemptions to help primary producers in every possible way, but I ask Senator E. B. Johnston not to press this amendment because it would involve too great a sacrifice of revenue.
– I cannot see why galvanized iron pipesused for reticulation should be exempt, and the concrete article used for identically thesame purpose’s not exempt. Both classes of pipes aremade in Australia, but whereas the galvanized iron pipes are made only in New South Wales, thecement pipes are made in various parts of the Commonwealth.
– The logical thing to do would be to refuse exemption to galvanized iron pipes.
– I intend to’ press my amendment. It is very rarely that we ask for any aid for a secondary industry in Western Australia. I think this industry is entitled to be encouraged as much as the manufacture of galvanized iron, which is confined to New South Wales.
.- I cannot understand the reasoning of the Government in regard to this matter. The clause defines the exempt pipe as “galvanized.” I assume that “wrought” iron is not exempt, but is in the same class asconcrete pipes. But galvanized iron pipes, which are manufactured in only one State, and arethe product of a wellsheltered industry, are to he exempt. Competition in the manufacture of wrought iron and concrete pipes in various parts of Australia will tend to keep prices low; but in respect of galvanized iron pipes, there is no competition, and the makers can fix any price they choose. I agree with the amendment. We should exempt all classes of pipes for reticulation purposes, or none at all.
Senator Sir HARRY LAWSON (Victoria - Assistant Minister) [6.13]. - The real logic of the arguments adduced by honorable senators is that the exemption to galvanized iron pipes should be struck out-. As the Government cannot agree to the amendment, is Senator Johnston prepared to strike out the exemption of galvanized iron pipes? The Government has to take a stand and say, “ Thus far and not farther “; it cannot face the loss of revenue that would result if it were absolutely logical: and yielded to the persuasiveness of the two honorablesenator’s who have just spoken. We must admit the soft impeachment.
– Suppose we delete the word “galvanized” and substitute “concrete “?
-I have here a longlist of classes of pipes for which exemption has beenclaimed, and for financial reasons the Government has been unable to accede to such requests.
Question - That the words proposed to be added be so added (Senator Johnston’s amendment) - –put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)
Majority . . . . 3
Question so resolved in the negative.
Sitting suspended from6.18 to8 p.m.
Clause agreed to.
Clause 7 (Exemptions - Sales Tax Assessment Act No. 5).
. -I should like to know if the Government has received any representations for the exemption of cloths for tailored suits. Since I mentioned the matter some time ago. I have been informed that a letter was sent to the Government, hut, apparently, no notice was taken of the request contained in it, because the item “tailored suits” has not been added to the list of exemptions. The tailors of Brisbane contend that they are being unfairly treated; they have to pay the full amount of sales tax, not only on the cloth received from wholesale distributors, but also on completed suits.
Senator Sir HARRY LAWSON (Victoria Assistant Minister) [8.3].- . This is not the relevantsection under which we can discuss ‘the matter mentioned by the honorable senator. Sales Tax Assessment Act No. 5, which is amended by this clause, deals with imported goods.
The sales tax on tailored . suits is dealt with in another measure. The represent tations referred to by the honorable senator have been considered and dealt with. The previous Government allowed 20 percent, off the retail sale price, and, by regulation, this concession has been increased to 33 per cent. Therefore, the Government feels that the position has been met as far as it is possible to do so,
Clause agreed to.
Clauses 8 to 11 agreed to.
Clause 12 (Who may be claimants).
.- I move -
That the House of Representatives be requested to leave out the clause with a view to insert in lieu thereof the following new clause -
Amaternity allowance shall be granted to any woman who produces evidence satisfactory to the Commissioner or Deputy Commissioner that she is the mother of a living child, such allowance not to be less than £5.
On many occasions in both the Senate and the House of Representatives, Ministers and their supporters have declared that, because of the Restoration of confidence since this Ministry took office, there has been a steady return of prosperity in Australia. This amendment gives Ministers and their supporters an opportunity to prove their sincerity. In the course of a few days they will be appealing to the electors for a further mandate. The Government has granted remissions of taxation totalling approximately £10,000,000 to the wealthier sections of the community; so it is not too much to ask that the maternity allowance be restored to the original amount. The Fisher Government, which introduced the original measure under which the maternity allowance has been payable, declared emphatically that it was to be a recognition, regardless of class distinctions, of the service rendered to the nation by every woman who bore a child. The Government has given relief in many directions to other classes of the community. If it is honest in its declaration that it intends to deal fairly with all section’s of the people, it should accept my amendment. Ministers will, no doubt, be advised by departmental officers that, for financial and other reasons, the concession cannot be made. I do not blame the officials ; they are doing their duty as they see it. But Parliament, as the voice of the people, is master of its own business, and if, in its wisdom, it decides to accept my amendment, there need be no further argument. It is not necessary for me to labour this subject. The amendment will test the sincerity of the Government and its supporters. We may be told that provision for the restoration of social services will be outlined in the policy speech to be delivered shortly by the Prime Minister. I am not disposed to rely upon promises. I want action, And, above all, I wish to see the will of Parliament paramount.
[8.15]. - By his amendment, Senator Dunn seeks to restore the maternity allowance to £5, irrespective of the income of the claimant. This bill proposes to restore in part the amount by which the maternity allowance was reduced under the financial emergency legislation passed by this Parliament. This clause provides for the raising of the income limit in cases in which the claimant has had other children. Theexisting limit of £208 will be retained where there are no surviving children under the age of fourteen years; but, in cases in which children of fourteen years and under are living at the time of the birth in respect of which a claim is made, the income limit will be increased by £13 per annum in respect of each such child, up to a maximum of £299 per annum, and the allowance will be increased by 5s. in respect of such child, up to a maximum of £5. On this basis theposition will be as follows: -
The cost of this concession is estimated at £60,000 per annum, whereas the amendment would involve £260,000 per annum. A provision which would result in that increased expenditure would throw the whole measure out of balance, because the several proposals of the Government have been considered in relation to one another. No government could consent to a vital alteration of its budget proposals, and, in any case, an additional £260,000 is more than the budget could stand. We all hope that the time will soon come when the proposal of the honorable senator will be justified, in view of the improved prosperity of the country; but the proposals embodied in this measure are the beat that can be done in existing circumstances. The Government would have more pleasure in restoring all that has been taken away than in asking the people to continue to make sacrifices; but, until a full measure of prosperity has returned, sacrifices will continue to be necessary. I ask the committee to reject the amendment.
– I shall support the amendment. The Minister said that the object, of the Government throughout had been to ensure equality of sacrifice; but I fail to see where that principle has been embodied in any of the legislation which it has introduced. ‘Equality of sacrifice should be measured, not by what has been surrendered, but by what is left. A millionaire may surrender half his income and yet not make so great a sacrifice as would be made by a man in receipt of the basic wage who gave up 10s.
– Under the Government’s proposals a claimant in receipt of £10,000 a year could not receive the allowance, whereas, under the amendment, she could.
– We want to do away with the present discrimination, and to make it unnecessary for a person to prove the amount of income when making a claim.
– The maternity allowance applies to persons in receipt of income ranging from £208 to £299 per annum, according to the number of surviving ‘ children under fourteen years of age.
– The Minister objected to the amendment on the ground that it would involve an additional expenditure of £260,000 a year. He would probably have rejected it if it meant only an additional 5s. a year. The Govern- ment insists on its supporters falling into line, even to the extent of dotting an “ i “ or crossing a “ t “. The amendment provides the Government with an opportunity to shine before the people in a new light. Acceptance of the amendment would increase its prestige.
– The Government is actuated by a stern sense of duty.
– The Minister himself is so generous that, were he the Government, he would accept the amendment, even if the £260,000 had to be provided by those who are better able to bear it than is the average claimant of a maternity allowance. There are wealthy people in the community who would not claim the allowance.
– All classes have claimed it.
– The complications which arise under the existing legislation would disappear with the acceptance of the amendment, and, in addition, the expense involved in making inquiries would be saved. The amendment embodies the principle of the original enactment, that a woman who brings a living child into the world renders a service to the community. The majority of mothers belong to the working class, and sometimes they do not got the care and attention to which they are entitled. The maternity allowance has conferred a real benefit on Australia by diminishing infantile and maternal mortality.
The basis of computation in regard to the income of claimants is unfair, for it takes into account moneys received as superannuation payments. Sums put aside out of a small salary for superannuation purposes should not be regarded as income for the purpose of the maternity allowance. The amendmenit provides the committee with an opportunity to reverse an earlier decision to place heavy taxes on the poor and comparatively light taxes on cbe wealthy section of the community. It is claimed that, if taxes were removed from the wealthy people in our midst, they would hare more money available to expand their businesses, and provide employment for others. Unfortunately, remissions of taxation have not had that result. The chairman of directors of David Jones and Company Limited, Sydney, said recently that remissions of taxes meant £20,000 a year to his company.
– I ask the honorable senator to connect his remarks with the subject before the Chair.
– I can do so quite easily by saying that while requests for comparatively small concessions are refused, much larger amounts have been remitted to those who do not require relief. On the principles I have enunciated we take our stand, and are determined -to divide the committee on the amendment.
– Whilst I am anxious to give the Assistant Minister (Senator Lawson) credit for his desire to do what is fair to the working mothers of Australia, I seek further information. The Assistant Minister has intimated that the Government is keenly anxious to secure equality of sacrifice and to restore gradually what has been taken away, but can he tell me the total amount saved in the maternity allowance as the result of the Premiers plan? Some time after that plan was adopted, £60,000 was saved in the vote, by the benign efforts of the present Government, according to the budget statement, appearing in Hansard of the 1st December, 1932. The Assistant Minister now says that the Government proposes to restore £60,000, which, therefore, can be only a partial restoration. Evidently the principle of equality of sacrifice of which the Minister spoke so ably before, the dinner adjournment, is not being upheld by the Government in this instance. On principle, I am opposed to the system of requiring any person to he in receipt of less than a certain sum before becoming entitled to the allowance, because it has a pauperizing effect, and puts many working mothers in an invidious position. A few months ago the case came to my notice of a man employed on relief work at a nominal wage of £208 a year. The State Government retained from his pay a small amount towards unemployment relief, but for this he was given no credit, and his wife was refused the maternity allowance on the birth of their child, because his salary was officially stated to be £4 a week. He did not handle the money which was deducted from his pay.
– - The line must be drawn somewhere. It is impossible to secure ideal justice.
– I admit that the ideal allowance would be one payable to every mother irrespective of income. It should be a gift from the nation to the mother who is doing her duty to Australia. The object of the original legislation was to encourage the best immigrant that Australia can have - the native born. .
SenatorRae. - And to give him better care in infancy.
– The object was also to save the life . of as many infants as possible. In most cases the money is not kept by the mother, but is paid to the doctor and nurse. I do not find fault with that, because doctors and nurses doing properly the skilled work for which they are trained, are worthy of being paid in full. We on this . side believe that the labourer should receive full remuneration for the work which he does. In the aggregate the money has gone into the pockets of the doctors and nurses, with the result that many child ret, who would otherwise have died for lack of proper attention are growing up into good Australians. In its keen desire, as outlined by the Assistant Minister, to do its best for the community, the Government proposes a paltry addition for every child in the family of £13 a year to the allowable income. Such a policy shows the limited outlook and thetrifling mind of the Government. It. isakin to its paltry attitude in regard to pensions.
– Order ! The honorable senator will have other opportunities to discuss that matter. He must at present confine his remarks to the clause and the amendment.
– I deplore the fact that the Government is so lacking in a sense of its national duty to the mothers of Australia as to bring forward such a paltry measure, at the same time claiming in sanctimonious self-esteem to be doing equal justice to all sections. To my view it is only another evidence of the shortcomings of the Government, as we hope shortly to have the opportunity of explaining to the people, so that they may give to our party an opportunity to amend the law in the direction now sought by Senator Dunn, whose proposal’ is that £5 shall be paid to each of the mothers of Australia irrespective of whether the income is £200 or £2,000 a year. I appreciate the point made by the Minister that it would be unfair to pay the allowance to those in receipt of salaries of £1,000 a year and upwards, but every one has the right to refuse the money, and if those in comfortable circumstances are good Australian citizens, as all drawing such a nice salary from the community should be, they will not apply for the £5. The idea underlying Senator Dunn’s action is that the full allowance of £5 should be payable without any inquisition into earnings. That is the principle upon which we take our stand. The Government, is constantly setting up inquisitions into the lives of citizens, for the most part those of the working class. We admit that there is logic in .the Assistant Minister’s contention that, on the face of it, by moving this amendment, Senator Dunn is pandering to those whose income is more than sufficient to pay the fees of doctor and nurse when a child is born, but underlying our support of the amendment is the solid principle that in these sacred matters no inquisition into the amount of money that a man is earning should be tolerated. The poorest in the community have to suffer most, but proceedings of that kind seem to appeal to the conservative mind, and this conservative Go- vernment appears to think that there can be no progress without an inquisition of some description. Its policy is, therefore, in keeping with its mentality and outlook.I heartily endorse the amendment, which will enable an allowance of £5 to be paid to every mother who desires to take it from the Government as a gift, because it does away with inquisitions. I commend it to the favorable consideration of the Assistant Minister, who has expressed a desire to perform good works. I am sorry that he is leaving the Senate. If we had more men of his calibre on the Government side, I feel that we should not plead with thorn in vain to grant this piece of elementary justice.
Senator Sir HARRY LAWSON (Victoria - Assistant Minister) [8.45]. - Senator Brown claims to be fighting against the principle of inquisitions. That is to say, he thinks there should be no inquiry regarding the means of an applicant for a maternity allowance. The principle of inquisitions was established by the first financial emergency legislation introduced by the Scullin Government.
– Does the Minister favour inquisitorial methods?
Senator Sir HARRY LAWSON.No; but I believe in reasonable investigation being made. Under the original financial emergency legislation passed by this Parliament the maternity allowance was reduced from £5 to £4 and its payment limited to those whose annual income did not exceed £260 per annum. When that legislation was introduced the annual expenditure in this respect was £630,652, and in the succeeding year the amount claimed was £378,022, or a reduction of £252,630. The principle of the curtailment was established by the Scullin Government and endorsed by honorable senators opposite. I am not blaming the Scullin Government for its action in that respect, because the financial position demanded that some alteration be made. The Government now proposes that, in certain cases, those in receipt of incomes up to £299 a year shall be entitled to claim maternity allowance. It is affording additional relief to the amount of £60,000 annually, and what is proposed isin proper ratio to the other concessions given under the bill. It is easy for honorable senators opposite to oppose the principle, but they should remember that it was first established by a Government which they supported. By the concessions now proposed we are improving upon what was done by the Scullin Government.
Question - that the words proposed to be left out be left out (Senator Dunn’s amendment) - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)
Majority . . 7
Question so resolved in the negative.
Clause agreed to.
Clauses 13 to18 agreed to.
Subject to this Part, there shall be payable out of the Consolidated Revenue Fund, which is hereby appropriated accordingly, the sum of Two hundred and fifty thousandpounds for the purposes of financial assistance to the States in the provision of relief to primary producers in respect of the production of primary produce other than wheat and for the purposes of providing relief to primary producers in any Territory in respect of that production.
– In my secondreading speech, I mentioned that the measure provides that £250,000 is to be made available to subsidize the purchase of fertilizers for use in producing crops other than wheat. The Minister in charge of the bill charged me with having little faith. If the wheat-growers of Australia have little faith in what is coming to them it is entirely the fault of the Government, because during the seven months Parliament has been in recess and during the three weeks it has been in session this year, Ministers have not given to the wheat-growers the slightest indication of the assistance they are to receive this season. If assistance is to be forthcomingI do not know why an intimation of the Government’s intention should be left untilthe dying hours of the session. That, has been the practice during the past three years, and legislation has been passed at a time when honorable senators were in a state of exhaustiou. In this instance the Government has not only promised that assistance will be given, but it has also stated that the interim report of the royal commission on the wheat industry will be made available. The clause provides that assistance to the amount of 15s. a ton shall be provided for purchasing fertilizers used in the production of crops other than wheat; but I cannot understand why the wheat-growers should be excluded. The bill should be amended so that producers of all primary products should be assisted in the same way, particularly when the resources of the Government are not limited to the amount set out in this clause. Last year the amount to be made available for the assistance of wheat-growers was increased almost weekly by £500,000, until it reached £3,000,000. I move-
That the words “ other than “ be left out with a view to insert in lieu thereof the word “ including ‘’.
– This bill makes provision for an appropriation of £250,000 for the relief of certain primary producers “ other than wheat-growers “. The honorable senator’s amendment is designed to include among the recipients of this appropriation, producers of wheat, and would have the effect of altering the destination of the grant. A previous President of the Senate ruled a similar amendment out of order, and I rule that the amendment proposed by Senator Johnston is not in order because it seeks to alter the destination of the grant set out in the bill.
Clause agreed to.
Clauses 20 and 21 agreed to.
Clause 22 (Payments to primary producers in territories).
– What amounts have been paid out of a similar appropriation last year to the Commonwealth territories and the respective States ?
[9.2]. - The figures are: Queensland, £32,052; New South Wales, £19,632; Victoria, £85,878; South Australia, £34,899; Western Australia, £50,902 10s.; Tasmania, £17,903; and Federal Capital Territory, £28 10s.
Clause agreed to.
Clauses 23 to 27 agreed to.
Clause 28 (Payments to States).
– This clause allocates to the various States the amount to be provided for the assistances of growers of apples or pears. I would like the Minister to explain how the very small amount to be granted to Queensland is arrived at.
– These allocations are based on the quantities exported from each State.
– This grant then is essentially a fruit export bounty. If that is so it should be explicitly stated.
Senator Sir HARRY LAWSON (Victoria - Assistant-Minister [9.5] - The allocation to the different States is based on the quantities exported, but there is no provision binding the States in regard to the distribution of this relief. They may distribute it in any way they think fit. Although the amounts are made available on the basis of exports, this is not really an export bounty.
Clause agreed to.
Clause 29 (Application of moneys paid to States).
– Am I to understand from what Senator McLachlan said previously that assistance to growers of citrus fruits will be provided in another measure?
– I give the honorable senator that assurance. I have the matter under consideration at the moment. The Citrus Fruits Committee made certain recommendations and as a result of these an amount of £10,000 is to be made available for this purpose, and a similar amount is to be provided for citrus fruitgrowers in. New South Wales.
Clause agreed to.
Clause 30 (Repeal section 19, Financial Emergency Act 1932).
[9.8 J. - I ask the committee to negative this clause. It provides for the repeal of so much of section 19 of the Financial Emergency Act 1932 as is in force at the commencement of the Financial Relief Act 1934. Section 19 of the Financial Emergency Act 1932 relates to the Wine Export Bounty Act 1930-1931. Actually the whole of that section is in force and will be in force until the commencement of the Wine Export Bounty Bill 1934 which was before the Senate recently. If clause ;-i0 were retained, it would result in the omission of certain portions of the Wine Export Bounty Act 1930-1931, a result which is not desired until the new Wine Export Bounty Act comes into force on the 1st March, 1935. I assure honorable senators that the object of clause 30 was merely to remove certain formal parts of section 19 which it was considered would remain after the passage of the Wine Export Bounty Bill. Because of the postponement of the date of commencement of this latter measure, clause 30 would have a result which was not anticipated.
Clauses 31 and 32 agreed to.
Title agreed to.
Bid reported with an amendment; report adopted.
Bill read a third time.
[9.10]. - I move -
That the bill be now read a second time.
The purpose of this measure is to appropriate the sum of £1,000,000 for post office works out of loan funds to be raised under the authority which is provided for in the bill. No loan funds have been specially raised for the purpose of works expenditure since 1930; the only works expenditure from loan fund authorized since that date was the appropriation of £810,000 by Parliament last year, by a repayment to the loan fund of the proceeds of the sale of the Australian Commonwealth Line of Steamers.
With the exception of the appropriation of £810,000 last year, the works expenditure since 1930 has been met from the Consolidated Revenue Fund, and, owing to the financial stringency, coupled with the cessation of new loan moneys for works purposes, it has been necessary to restrict works expenditure to urgent and essential requirements. The provision of additional funds to carry on absolutely essential works has become a matter of urgent necessity. This bill provides for the expenditure of £1,000,000 for the carrying out of post office works, namely, telephone exchange services, trunk line services, buildings, and the acquisition of sites. In addition to this amount, the sum of £244,000 is being provided for other post office works on the estimates of works from revenue, making a total of £1,244,000. The amount actually expended on post office works during 1933-34 was approximately £865,000, so that the total now to be appropriated from revenue and loan represents an increase of approximate’ y £379,000. The past year revealed a considerable increase in the activities of the PostmasterGeneral’s Department. The post office revenue for 1933-34 exceeded the budget estimate by £406,000, and the revenue for the preceding year, 1932-33, by approximately £522,000. During last year, there was a net increase throughout the Commonwealth of 13,740 telephone subscribers as against a net increase of 3,036 during 1932-33. This bill provides tha minimum amount considered to be necessary to enable the requirements for telephonic services to be met. Provision is made for new buildings and sites, the expenditure on which will be approximately £150,000, which includes £60,000 for buildings required for the new regional broadcasting stations. The total expenditure on new works from all sources this year will be approximately £4,070,000, as compared with a total expenditure during 1933-34 of £2,330,000, or an approximate increase of £1,740,000. A considerable portion of this increase will provide additional employment in Australia, and to that extent will contribute, along with increases of expenditure in other directions, to the relief of unemployment during the current year.
Senator O’HALLORAN (South Australia [9.14].- I do not think any honorable senator on this side of the House will offer any opposition to the passing of this bill, more particularly as one of its objectives, as the Minister has pointed out, is to stimulate employment. All of us are cognizant of the facts which have necessitated this appropriation. The growth of the Postal Department’s activities has been due to the increase of population, and a growing demand for postal, telegraphic, and telephonic facilities. In addition, the wireless branch has also grown considerably during the last few years. Another feature connected with the expenditure of this money to which I direct attention is the practice that has prevailed, during the financial depression, of requiring any new proposed telephonic services to show a profit before expenditure upon them is authorized. This, no doubt, is the result of a direction on Government policy, but I think the time has arrived when some relaxation of that regulation should bo authorized so that essential services urgently required by people living in remote country districts may be provided. I have in mind the injustices that have been perpetrated in some country districts in South Australia, compared with other districts similarly situated. We are all aware that,’ as the result of the vigorous developmental policy initiated some years ago, telephonic services were given to districts with a relatively small earning capacity because it was considered, and I think rightly so, that the amenities of life should be provided for people who pioneer our outback country. But since the onset of the depression - from which some supporters of the Government appear to think we have emerged, although the Minister, judging by his attitude to suggested amendments to the Financial Belief Bill, would seem to be of the contrary opinion - country districts urgently in need of telephone services have been denied them or, alternatively, have been required to guarantee the- department against loss. In some cases they have been asked to subsidize the construction of the lines. I stress this point, and hope that the Government will give it consideration. The position is very much the same in all country districts. These services are essential to people living in out-back areas, and where possible they should be provided even if they do not show a profit at the outset. This is particularly true of one district in South Australia where a small community of men is engaged in the dangerous occupation of mining, using explosives. It is important that those people should have a telephone service because of the risk of accidents, but under the departmental regulation to which I have referred, such provision cannot be made, as it would not show a profit. I hope that, in future administration, the Postmaster-General will relax somewhat this regulation, so that once again people living in isolated country districts will be entitled to telephone services without being required to make good the loss. I heartily commend the bill.
. -I endorse all that has been said by Senator O’Halloran. Recently I paid a visit to Cooktown, the most northern port in Australia, and learned that efforts were being made by the people living there to get telephonic communication with Cairns. Up to the present their request has been refused by the department on the ground that it would bo too costly. I hope that the remarks of Senator O’Halloran will he noted carefully by the Minister, and that some action will be taken immediately to relax the regulations relating to new telephone services in country districts. It is important, from a defence point of view, that Cooktown should be in telephonic communication with Cairns.
– I heartily endorse the remarks of the previous speakers with regard to the provision of telephone services to country districts. Every honorable senator is aware of the difficulties experienced bycountry people in carrying on their operations, and how important it is that they should be given telephone services as cheaply as possible. The telephone is no longer a luxury. It is a necessity, and everything should be done to make it available to rural dwellers. I have always thought that departmental estimates of costs for some country telephone services were excessive. Provision is made for standard poles standing 20 feet out of the ground. In country districts where timber is readily available it should be possible to install a thoroughly satisfactory service without using standard poles. If shorter poles were allowed in country districts the cost would be less, and in the event of any interruption due to accidents, country people traversing the roads could easily make repairs without requiring the use of a long ladder, which would be necessary if poles of the standard height were used. In some country districts the departmental specifications make the coat of a telephone service prohibitive, whereas if shorter poles were used, and other departmental specifications modified, the people concerned could be given a service which would meet all their requirements for probably one-half the cost. In some instances farmers and station owners have their own private lines, and are able to get cheaper communication with outlying districts at a minimum of cost. I have had a private telephone on my property for years. It cost only a trifle of the sum that would be required to install a standard line, yet it has proved most efficient in every respect. I mention this matter because I feel sure that with some relaxation of the regulation governing the cost, it would be possible to provide small country communities with a cheap telephone service that would meet all their requirements, whereas the cost of a standard line would be prohibitive.
SenatorRAE (New South Wales) [9.28]. - I support the remarks of those honorable senators who have preceded me. The suggestion by Senator Herbert Hays” for the provision of cheaper telephone services is particularly good. Twenty or thirty years ago the telegraph lines in south-western New South Wales, down the Murrumbidgee towards Hay were carried along the tops of fences and were taken on high poles across intersecting roads. That service proved highly satisfactory. By that method, also, stationowners were able to communicate with their boundary riders and hut-keepers. Of course, all such makeshifts are liable to interruption or damage, but on the other hand, the cost of repair is correspondingly less than in the case of a standard line.
It is wrong to penalize people living in isolated parts of the Commonwealth by requiring them to subsidize or guarantee the department against loss for telephone services provided for them. Sometimes a serious illness or an accident occurs and the lack of telephonic communication may make all the difference between life and death. I am sure that Ministers will sympathize with this point of view.
Again I protest against this orgy of borrowing for public works. It seems to me that we cannot do anything - that we are absolutely gagged, muzzled and hobbled in all our activities - unless we float; a loan. No private individual could carry on his business in this way and remain solvent. This policy of continually borrowing may delude us that we arc enjoying temporary prosperity, but ultimately it will result in a greater collapse than any we have yet suffered. It seems impossible to do anything to improve conditions without first floating a loan. Clause 2 provides that the Treasurer may, from time to time, under the provisions of the Commonwealth Inscribed Stock Act, or of any act authorizing the issue of treasury-bills, borrow moneys not exceeding £1,050,000. The schedule to the bill shows that £1,000,000 is to be devoted to the requirements of the PostmasterGeneral’s Department. It would appear, therefore, that the difference of £50,000 represents the estimated cost of floating the loan. I should like to know if that is so. Sooner or later, we must put an end to this orgy of borrowing, otherwise our last state will be worse than our first.
. I endorse the remarks of Senator Herbert Hays with regard to the cost of erecting telephone lines-. I have previously seen the way in which money has been wasted when such work has been carried out bydaylabour. I have met men on their way to work in the country at 9 o’clock in the morning; they probably arrived at their destination by 9.30 o’clock, when they lit a fire and had morning tea. They were probably at work by 10 o’clock. Altogether they did not work more than five hours a day. Moreover, although suitable . poles were available in the vicinity of the line, other poles were carted 9 or 10 miles. In some places, growing trees could have been utilized, but that was not done. Country district^ are denied telephonic facilities largely because of the heavy expense involved - an expense which could be reduced considerably. I suggest that the practice of utilizing the wires of fences which I saw in use 30 years ago in New South Wales be tried as a temporary expedient when the expense of erecting a standard line is too great. Such lines would prove satisfactory for nine or ten months each year, although the absence of proper insulation might make them ineffective in wet weather.
In places where the cost of erecting land lines is too expensive, as, say, between Cooktown and Cairns, in North Queeusland, small wireless transmitting and receiving sets could be installed, so that outlying places could be brought into closer communication with the rest of the world.
Some of the telephones in general use are out of date. It is true that a generous department has given subscribers the privilege of installing their own instruments; but it charges 5s. for connecting them, notwithstanding that it is saved the cost of the instrument. Although, in many respects, the department is progressive and up-to-date, in other directions it is far behind the times.
Senator Sir HARRY LAWSON (Victoria - Assistant Minister) [9.37]. - I thank honorable senators . for their generous reception of this measure, and I assure them that their representations will be placed before the Postmaster General for his consideration. I am in sympathy with the observations which have been made regarding the provision of telephonic facilities in country districts. It is the policy of the Government to extend such facilities, where practicable, on ‘the best terms possible; but commercial principles cannot be disregarded entirely.
Senator Rae spoke of an orgy of borrowing. I assure him that the Government has been most careful in regard to its loan policy, and does not intend to embark on heavy loan expenditure. The works to be undertaken by the PostmasterGeneral’s Department are long overdue, and as the revenue of the department has been buoyant, the demands of the com munity for better facilities should not be ignored. The proposed works will pay interest and prove sound business propositions.
The honorable senator also said that, although it is proposed to borrow £1,050,000, only £1,000,000 is shown in the schedule, and he asked whether the other £50,000 represented the cost of floating the loan. That sum is a roundfigure estimate of the amount required to float the loan and to meet contingencies. The Treasury will offer the loan on the terms mo3t advantageous to itself. To that end, it may issue the loan at a discount, in order to get a lower rate of interest. Honorable senators may depend on the Government and the Treasury officials seeking the best terms possible.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed (from page 871), on motion by Senator Sir Harry Lawson -
That the hill be now read a second time.
– I have no desire to delay the passage of this measure, which, according to the explanation given by the Minister when moving the second reading, has for its object the simplification of the existing legislation, and neither remits taxation nor imposes greater burdens on the people. I understand, moreover, that it is in conformity with the recommendations of the royal commission which recently investigated taxation matters, but I regret that a more comprehensive measure, to give effect to the recommendations of that body for the standardization and simplification of taxation laws throughout the Commonwealth, is not before us.
– Before that can be done, the agreement of all the States must be obtained.
– I hope that every effort will be made to secure such an agreement. I do not know the position in all the States; but, in South Australia, the poorer sections of the people must look to State, rather than to
Common wealth legislation, for taxation relief. Working men and traders in a small way cannot expect much from this bill. I have looked with a fair amount of care through the marginal notes and clauses, and to me most of the definitions appear to relate to dividends, shareholders, private companies, and other things that are more or less mysteries to honorable senators on this side of the chamber, and the people whom we in the main represent. No doubt the effort of the Government will be commendable to those who derive some benefit from it. Seeing that no additional burden is placed upon the. people by this legislation, and no remission of taxation which could not in the circumstances be justified is included in it, I intend to offer no objection to its passage.
.- I do not rise for the purpose of opposing the bill. I support it because I consider that many of the amendments outlined in it are necessary, but I draw the attention of the Government and the Senate to a serious omission from it. This is not the first time that I have had to draw the Government’s attention to the omission from Income Tax Assessment legislation of a clause to right what I consider a very grave wrong that is being perpettrated by the operation of a section of the amending Income Tax Assessment Act of 1931. I now again remind the Government that the original Income Tax Assessment Act defines an income taxpayer as a person whose income exceeds £250 a year. That is the general exemption. At the tail end of the 1931 session when honorable senators had no opportunity to obtain full information or consider the possible ramifications of an amendment of the existing act, a bill was passed containing a provision that companies might, if they so desired, deduct from any preference dividend paid to a shareholder, the special property tax which, at that time, was 10 per cent, or 2s. in the £1. Certain companies have since exercised their right under that act by deducting from the income of their shareholders - which income is a dividend on preference shares held by them - the sum of 23. in the £1, although many of them are not income tax payers under the original act, their total income being less than £250 a year. The company after deducting the 2s. in the £1, pay3 it direct to the Taxation Department. It was never contemplated that an optional provision of that nature should drag into the taxation net hundreds of small people whose incomes are less than £250 a year, and make them pay the enormous impost of 2s. in the £1, as it was then, although it has since been reduced to 6 per cent., or ls. 2£d. in the £1.
– How would the honable senator propose to avoid that?
– By adhering. to the original act. If 2s. in the £1 has been deducted from any person who can prove that his income is under £250 a year, the department should’ refund it, because it has no right to it. If we provide that people with small incomes shall be exempt from income tax, we should see that the law is carried out. I do not blame the company, but I do blame the Government for not having devised some means by which the wrong can be righted.
– Why should not the company protect its shareholders by refraining from deducting the 2s. in the £1 ?
– I cannot see how the company protects the ordinary shareholder by deducting the tax from the dividend which it has to pay to the preference shareholder, and handing it to the Government. Rather the company penalizes that section of its shareholders which 13 really not liable to pay income tax at. all. I have Been furnished with instances to show how the existing act operates. A.B. has an income of less than the £250 general exemption, and in his income is included £20 representing preference share dividends. The company, exercising the power given to it by the 1931 act, deducts from the dividend the 10 par cent, amounting to £2. The shareholder receives only £18, thus paying £2 in further income tax, although, under the Income Tax Act, he is not a taxpayer.
– Does the honorable senator suggest that the company should not deduct the tax from the shareholder’s dividend?
– I cannot see the necessity for the provision at all. The company has no opportunity to ascertain the income of any individual shareholder
Consequently if it exercises the power given to it, it deducts the amount of tax from every shareholder irrespective of his income. This I claim is wrong.
– The company cannot help it.
– I am not criticizing the company for doing it.
– Is the company bound to do it?
– No; and comparatively few companies have exercised the power. The next instance is that of B.C. who has an income of £260 derived entirely from preference share dividends. The general exemption being £250, he is taxed by the department on £10, but if the company has deducted the special or further tax from his dividends, then he has paid £26 in tax although the act provides that he shall be taxed only on the excess of £10. With reference to what I have just stated, I should add that hy a further amendment of the act, the first £250 of a person’s income from property is not subject to the special property tax, although it is subject to the income tax on property, the additional income tax on property, and the super income tax on property. CD. has a taxable income of £1,000, £250 of which is derived from preference share dividends, and the balance from personal exertion. If the company has deducted the 10 per cent, tax from his dividends, he has paid £25 in further tax on this portion of his income which the act of 1933 says shall be exempt from the further tax, the act distinctly stating that the first £250 of income from property shall be exempt from the . special further property tax. D.E., a big man, has an income of £2,000, of which £500 is from property subject to the further tax. He is allowed his deduction of £250, leaving £250 of property income to be subject to the further tax. If £100 of this is from preference share dividends, from which the company has deducted the further tax of £10, he will be allowed a rebate of £10 from his total tax. Therefore, only the small people, particularly those who under the act are not income tax payers, are being penalized by having to pay this special property tax. I do not intend to suggest a way out of the difficulty; it is the duty of the Government to find the way out. I have conferred with Ministers, the Acting Commissioner of Taxation, and his officers, and also with unofficial experts, and am told that it is unfortunate that these people have invested their hard-earned savings in preference shares. What concern is it of any one how they invest their money? I am not blaming the officers of the department. They cannot be influenced by considerations of equity. Their duty is simply to administer the act as they find it; but it is reasonable to ask the Government to look at the subject from an equitable point of view, and devise means of affording the relief I have suggested as speedily as possible. It should also discover means by which, on sufficient proof being furnished to satisfy the Taxation Commissioner, a refund can be made of any taxation levied on people who either cannot take advantage of the full exemption of the first £250, or who are not taxpayers according to the law, and should therefore never have been called upon to pay a penny in taxation. I submit the matter to the Minister in the hope that he will confer with his colleagues with the object of devising a means of remedying the injustice, even if it means a repeal of the section which permits companies to make the deduction. I have tried to ascertain whether the repeal of that section will in any way penalize companies. I cannot see that it will. I have been told that it was made law for the protection of the ordinary shareholder; but I cannot see that ordinary shareholders are affected in any way by it. A contract is entered into by a company with any one who is prepared to buy its preference shares, and the undertaking entered into should be carried out. No law should be allowed to operate which gives the company an opportunity to refrain from paying in full to its shareholders the dividend which it declares, whatever the rate may he.
– If the company does not pay the tax, what happens?
– The shareholder, as a taxpayer, pays it if he sends in his return properly; but, if his income does not exceed £250, he is under no obligation to furnish a return. I hope the Government will look further into the matter, on which I have already spoken three or four times.
– J am sorry that the bill is being put through with such haste, because, although copies of it were sent to the outlying States as soon as it was tabled in another place, they apparently reached Western Australia only to-day. I have already received two telegrams regarding it. One is from Mr. Home, the secretary of the Taxpayers Association of Western Australia. He says, “ The income tax bill contains too little simplification and too many patches and contradictions.” His association is sending me further information on the subject. Taxation measures of this kind can ‘be dealt with for the most part only by experts; but the Government has decreed that tho bill shall pass to-night, and whatever expert information may be coming to me cannot reach Canberra in time to receive consideration. That i3 regrettable.
– It ls not proposed to take the bill past the committee stage to-night. I hope, however, that it will he passed to-morrow.
– That being so, it is impossible for honorable senators to obtain, full information from remote States with regard to directions in which the measure might be further simplified. I ask the Minister if the Government will assist those building societies which will be seriously affected by the proposed amendments. I have received a long telegram from the Perth Building Society, which is a purely mutual concern and the members of which comprise persons in the metropolitan area of Perth who are building their own homes. The directors perform their work for a small fee, but so far as I know, no one derives any profits. The society has made a special request that’ the income of building societies conducted on a mutual basis, within the meaning of section 20 of the principal act, shall be exempt from the special property tax. The telegram I have received from that society reads -
This society’s income is almost entirely derived from interest which although in the case of the society is addressed as income from personal exertion is nevertheless liable to special property tax because it comes within sub-paragraph c oi paragraph E in clause 3 of Income Tax Assessment Bill now before Senate. Clause 11 of bill is incomplete because it makes no provision re personal exertion income which is subject to special property tax and clause 11 as it now stands will inflict serious hardship on this society. Please endeavour secure the addition of the following paragraph at the end of clause 11: - “ (d) In the case of a building society which is a cooperative company within the meaning of section 20 of this act the deduction shall bo made successively from income which is not exempt from special property tax and from income which is exempt therefrom.” The society however trusts that instead of tho above you will be able to secure the undermentioned amendment which would exempt it from special property tax now charged upon its undistributed income which prudence requires shall be held to meet contingencies. The special property tax operates most harshly on building societies because of the peculiar nature- of our business. There is no difference in essence between a company trading in goods and one trading in money, the former is exempt from special property tax, but this society is taxed at present we consider that some measure of the relief afforded last year to insurance societies should be extended to societies such as ours. The society exists to encourage thrift and provide homes for the people by purchase on easy weekly payments. Please therefore endeavour to add the following words to clause 5 of the bill: - “And by inserting after subsection 2 the following new sub-section 3. The taxable income of a building society which is a co-operative company within the meaning of section 20 of this act shall be exempt from special property tax “.
This society exists for the purpose of encouraging thrift in the community, and of enabling persons with little capital to build homes for themselves. I commend its requests to the Minister, and I hops that, so far as possible, the Government will agree to the proposals made.
to explain whether the proposed amendment of the Income Tax Assessment Act in respect of dividends will affect only dividends paid after the act has been assented to. I suggest that clause 7 should be amended to read “ paid before the commencement of this act “. The bill is to provide for a changeover as from the 31st December next, when all companies making profits both within and outside of Australia must declare what proportion of dividend is paid out of Australian profits, and what proportion is paid from profits made outside Australia. It should be made quite clear that the act affects only dividends to be declared after the passing of the act. In respect of a taxpayer whose taxing period ends on the 31st December in each year, a return has to be made in July, 1935, and will include dividends received for the taxing period ending 31st December, 1934, and which were declared before the passing of the act. Will the Assistant Minister state at what period they will be affected. The Law Book Company’s Taxation Service Bulletin states that -
If the new proposals are brought into effect immediately upon the date of assent to the bill, it will be impracticable for companies to arrange their accounts in time to meet the new conditions. The date of the change-, over should, therefore, it is considered, be extended to the 31st December next.
As from the date of the change-over, the following provisions will apply: -
An absentee shareholder will be liable in respect of a dividend to the extent to which it is distributed out of profit derived from sources in Australia.
A resident shareholder will be liable in respect of dividends distributed by a company out of profit derived from any source, but the following dividends are accepted: -
a dividend received from a company which does not carry on business in, or derive income from a source in Australia;
a dividend paid wholly and exclusively out of the income derived by the company from sources outside Australia and in respect of which the companyis not liable to Commonwealth income tax.
Briefly, therefore, it may be said that in order to overcome the considerable difficulties and uncertainty arising out of the necessity to determine the proportion of any dividend paid out of profit derived from sources in Australia, a resident shareholder if to be taxed on the whole of the dividends received by him. In order, however, to overcome the harsh effects of this plan, companies which have exAustralian profits will, if they consider it worth while, be able to declare separate dividends, and so relieve their shareholders from the increased taxation which would otherwise result from the taxation of the dividend out of ex-Australian profits. This procedure will be much simpler than that at present in force, but hardship will arise if both companies and shareholders do not make themselves fully acquainted with the new proposals. From this it is obvious that the taxpayer should be fully advised of the difficulties and also any pitfalls in this new measure.
As Senator Johnston has stated, the bill should not be rushed through too hurriedly, especially as it is difficult for honorable senators to get into communication with those who may be seriously affected by the new proposals. I am particularly anxious that the Assistant Minister shall state that only dividends paid after the date on which the legislation is assented to will be included in the assessable income of the taxpayer.
– I wish to refer to section 21 of the principal act which provides that at least twothirds of the profits of any company shall be distributed amongst shareholders in every year, or else the company must pay an additional tax on the difference between the dividend actually paid and the two-thirds which the Taxation Department claims should have been distributed. I understand that the Assistant Treasurer (Mr. Casey) has stated that that section applied only to private companies, but from personal experience I can say that that statement is inaccurate. I have interviewed the Commissioner of Taxation on numerous occasions concerning a public company in Tasmania. The actual position of the company was that it was not only unable’ to pay a dividend, but was also being asked by the bank to reduce a substantial overdraft. The Commissioner of Taxation said that he could not make any allowance, and that although no profit had been earned, and the company was unable to pay a dividend and was being pressed by the bank to reduce its overdraft, it would have to pay a large additional amount. The words- used by the Assistant Treasurer were, “ I point out that provision will apply in the future as in the past only to private companies with a limited number of shareholders.” That statement is incorrect, as the company to which I have alluded is a large public company in Tasmania, and although during a period of years it was unable to pay a dividend, and had to reduce its bank overdraft, it was compelled to pay the tax.
I do not know whether any new provision has been inserted in respect of depreciation of plant. The royal commission’s report states that depreciation can either he a flat rate, or on the reduced value every year, but so far as I can ascertain, the Taxation Department has insisted that it should be on the reduced value which is most unfair. The owner of a plant cannot write off the full value of a plant however obsolete it may be, if allowed to write off each year only 10 per cent, of the reducing balance. The Royal Commission on Taxation said that it is optional, but the various companies with which I am connected have always had to pay on the reduced value. This causes a lot of confusion and trouble, and is an unfair way of trying to arrive at the true position with regard to plant. If a plant has a life of only ten years, it is only reasonable that the company owning it should be allowed to write off the whole of the value of that plant during that period, at the expiry of which it has to be replaced, either from a reserve built up in the meantime - which reserve is regarded as profit and taxed - or from further raisings of capital. That is not a proper system of finance.
I have always been in favour of the establishment of funds to assure superannuation of old-age benefits to the employees, but, in the past, hampering conditions have been imposed by the Government. If money for such benefits was paid to one of the large insurance companies, which have enormous resources at their credit, it was not deductible from the income of the employer, but if the company creates a fund, however small, its contributions thereto are free of income tax, although such a fund could offer nothing Hie the stability and advantages obtainable by the employees if the same amount of money were invested in policies in large insurance companies such as the Australian Mutual Provident Society or the National Mutual Life Association. I notice that the royal commission has dealt with this matter, and I understand that a modification is proposed in the bill. It is high time that it was.
With regard to gifts and donations to charitable institutions, I think all of us were astonished when we read recently that a very large donation for a charitable purpose would not be deductible from the donor’s income. If a man is patriotic or charitable enough to donate a large sum to some organization for the help of the sick or needy, the least the
Government can do is to exempt the gift from income tax, subject, of course, to necessary safeguards. I understand that an alteration is proposed to improve the past practice in this respect.
The Assistant Minister stated that this bill was designed to simplify the making of income tax returns. If it doe3 that we all shall be very thankful. I do not think that any layman can possibly understand the assessments made under the present law. It is impossible to check them entirely, as they involve page after page of calculations, running often into decimal figures, whilst allowances have to be made for certain proportions in respect of various rates. The taxpayer becomes so bewildered that finally he concludes that it is better simply to pay and trust to luck and the accuracy of the Taxation Department. Any proposal that tends towards simplifying these returns will have my support. The procedure in regard to the taxation of company dividends - a matter of importance to the Government - could be simplified by taxing at the source, as is done in England and other parts of the world. The tax-gatherers in those countries do not have to worry about following the dividend through to the ‘taxpayer ; they tax on the full amount of dividend at the source. If that method were adopted here, the Government would be able to reduce the taxation staff by one-half or more, and yet receive the amount it is now receiving or more. In this way the work of collection would be simplified, and the taxpayer would more readily know how much he was liable to pay.
Did I understand the Minister to say that if there is a distribution of bonus shares in the future, tax will have to be paid on the shares as if they were a dividend? If a company has placed some of its profits to reserves, it has paid income tax at the full rate on such sums, and it would be grossly unfair if these reserves when distributed were again taxed. The distribution of such profits does not increase the assets of the company, but only divides them up into a larger number of shares. Such reserves are really part of the capital of a company, and when distributed as bonus shares should be treated, not as income of individual shareholders and taxed again, but as a capital distribution.
I agree with the remarks made by Senator Payne on behalf of those people who have to pay the special property tax, although they are exempt because of the smallness of their income from ordinary federal income taxation. The super tax, as originally imposed, was an iniquitous impost. As a director of a trustee company I know of widows with incomes of about £200 a year; these people were not liable for ordinary income tax, and yet under the original provisions of this super tax had to meet a demand for £20. I am glad that the Government now proposes that this super tax should not be levied on any person whose income is under £250 a year. This anomaly could very easily have been surmounted, as very few companies are deducting super tax from the incomes of their shareholders. Most of them leave it to bc attended to by the individuals, knowing that the department follows these items right through to the final recipient. An effective method would have been to take from the companies the power to deduct the super tax from the income of shareholders, and to let the department make the allowance when the individual taxpayers put in their returns. It has been suggested that preference shareholders in the past have been getting off very lightly so far as taxation is concerned. That is not so, because they suffered a penal reduction of dividend by 22-J per cent, under the financial emergency legislation, and none of that has been restored to them. Nor has there been any restoration of the reduction of 22i per cent, compulsorily applied to those who derived income from mortgages. In addition to that reduction of income, they have had to pay a penalty rate of 2s. in the £1, since reduced to 6 per cent. The interest on debentures also was reduced.
I would like to have more time ;u which to consider the bill, hut I recognize that the Government wishes to get the measure through this session. Thus we shall have to accept the measure, being grateful that it proposes at least a step towards simplification and greater uniformity in Federal and State income-tax returns. I am convinced that these returns could still be made a great deal simpler than is proposed in this measure. Reasonable uniformity throughout Australia would be a valuable reform and one well worth every endeavour to obtain.
[10.28]. - Senator Payne made an appeal for persons who, although their income is below the ordinary taxable minimum, have had to pay the super tax because some of their income is derived from preference shares and is taxed in the hands of the company. For his persistence in regard to this matter, the honorable senator deserves to be rewarded with, some promise of relief for these people, but I am afraid that is impossible at this juncture. The object of this provision when introduced was to make for equality between ordinary and preference shareholders, and if we attempted to do as the honorable senator suggests we would probably remove one anomaly and create a worse. I promise’ that I shall take the opportunity of conferring with the Government’s taxation experts as to whether any means can be found to carry out Senator Payne’s suggestion.
Senator Millen raised several points which I undertake to investigate and reply to when the appropriate clause is under consideration in committee.
Senator Grant seemed to he under a misapprehension as to some of the objects of this bill. He referred to several matters quite outside iti scope, including the simplification of returns. That is a matter which will be dealt with in legislation to be introduced later. I explained in my secondreading speech that this measure deals merely with the Commonwealth aspect of taxation. We dealt with many of the recommendations of the commission that referred exclusively to the Commonwealth side of taxation measures, but certain other investigations have proceeded and recommendations were made concerning matters that were common to both Commonwealth and State legislation. It was considered wise to continue the negotiations through the taxation officers in order to arrive at uniformity with regard to a variety of subjects. When we reach agreement, we shall be able to ensure simplification of the forms of the returns. This measure will make possible the simplification of, as well as a greater measure of equity in, assessments, and simplification of administration, and will also make assessments more easily comprehended by the taxpayer. Senator Grant mentioned that when he received his assessment, all he could do was to pay the tax and hope it was all right. He trusted to Providence or the good sense of the Commissioner. When the recommendations of the Taxation Commission have been given effect and we have arrived at an agreement with the States, many of the present difficulties will, we hope, disappear.
Senator E. B. Johnston presented to the Senate a three-volume novel in the shape of a telegram from the Perth Building Society, in which the society asked for a complete exemption from the super property tax. An exemption could not be given to the Perth Building Society unless it were made general in its application. Certain relief has been given to building societies by the reduction of the rate of the super tax from 10 per cent, to 6 per cent. I shall consider the financial incidence of the suggestion made. Building societies are organizations which deserve encouragement because they provide a useful social service. Consequently no government desires unduly to hamper their operations by oppressive taxation. I am not by any means sure that the loss of revenue which the exemption would entail can be faced by the Government at this juncture, but, to-morrow, when the bill is in committee, I shall advise the honorable gentleman more fully.
Honorable senators will realize that this bill, being highly technical in character, is essentially one for consideration in committee. Only accountants and taxation experts who are continually dealing with these matters can be expected readily to understand its provisions. I am sure, however, that honorable senators will accept the assurance of the Government that the measure is an honest effort, based on the advice of the royal commission, to make taxation problems clearer, to simplify the administration and to make the tax itself less vexatious to the public.
Question resolved in the affirmative.
Bill read’ a second time.
Clauses 1 and 2 agreed to.
Message received from the House of Representatives intimating that it had agreed to the amendment made by the Senate in this bill.
Australian Export Trade: Restrictions by Italy - Pensions Administration.
Motion (by Senator Sir George Pearce) proposed -
That the Senate do now adjourn.
– I desire to bring under the notice of the Minister representing the Minister for Commerce the following telegram which 1 have received from Mr. Prater, the secretary of the Primary Producers Association of Western Australia : -
This association views with alarm Italian restriction of wool imports, which is yet another retaliatory measure against Australia’s protective policy, and requests that the recommendation of the Wool Inquiry Committee, particularly with regard to tariff reform, he given effect. Above telegram was sent to the Prime Minister to-day. Please ask Country party to press matter.
The Wool Committee, which was appointed a few months ago to inquire into this matter, made a number of important recommendations dealing with the appointment of a wool executive to control the sale of wool, and measures for relief through the tariff. I hope that the Minister representing the Minister for Commerce will urge the Government to give this matter its - earnest consideration and approval to the recommend ations.
– In the debate on the Financail Relief Bill this afternoon, reference was made to a memorandum sent by the Pensions Department, in Sydney, to Miss E. Wilson, of Kent-street, Newtown, making a claim for repayment of pension paid toher mother, who had died recently. ‘ The Leader of the- Senate (Senator Pearce) suggested that the whole of the particulars” were not given this afternoon. I now desire to bring under the notice of the Senate the following memorandum, which was sent to Miss Wilson : -
Invalid and Old-age Pensions Office, 72 Clarence-street,
Miss E. Wilson, 30 Kent street,
Re Agnes Wilson, deceased.
I have to notify you that the sum of ?64 15s. is a debt due to the Commonwealth in respect of pension paid to the above since 31st December, 1932, and is payable out of her estate.
There thus remains ?7 0s. l0d. with which to meet the Commonwealth debt. Therefore, I should beglad to receive the amount as early as possible.
Miss Wilson, who is a permanent cripple and is obliged to use crutches, came to see me at the Federal Members’ Rooms in the Commonwealth Bank, Sydney, on Monday last. Since the receipt of this communication from the department, she Las been in a state of nervous prostration. There can be no doubt about the correctness of the statement that the department has made this claim on Miss Wilson. I do not know what was in the minds of the Government; but. obviously, there has been some harshness in administration. This afternoon, Senator Lawson, replying to Senator Rae, quoted certain sections of the act dealing with the position of pensioners; but took good care to omit any reference to the claim by the department in respect of property in the form of life insurance policies. I protest against the manner in which the act is being administered. Miss Wilson, being a cripple, cannot hobble to Canberra to explain her position;but I can put up a fight for her in this chamber, and I am quite indifferent as to what the Leader of the Senate or his camp followers may think.
– The right honorable gentleman is a leading member of the Government, and must accept his share of responsibility for the administration of the law in relation to pensions’. The memorandum which I have quoted appears in the Labor Daily of today’sdate, and the article, which is based on it, is not a Labor Daily stunt. It may interest the Minister to know that 90,000 copies of that journal are run off the press every 24 hours. If the Minister thinks that this action can he justified, I invite1 him to get on the soap box, with which he was familiar years ago before he was knighted for cervices rendered to the United Australia party, and place his views before the people. I have no desire to use threats in the Senate, but unless a satisfactory reply is given to-night, it is my intention to move the adjournment of the Senate to-morrow and to hold up the business of the chamber until justice is clone to this crippled girl. I do not know who was responsible for demanding ?7 0s.10d. from her, but that the demand was made cannot be denied. The Labor Daily, with a circulation of 90,000 copies daily, has placed the facts before the public. The last of this case will not be heard in this chamber; it will be ventilated outside, where the Standing Orders will not apply, and polite language will not be insisted on. One would think that the mother, who was one of the pioneers of Australia, had attempted to rob the Treasury, whereas her only crime was that she took out an insurance policy for about ?33 15s. to make provision for her old age. After she had received the call from her Creator, this Government, practically over the woman’s dead body, held, as it were, a gun at the. ‘head of her invalid daughter. The Government, which remits taxation to the wealthy, and proposes to spend ?4,000,000 on defence, treats a helpless woman in this shameful way! I shall not be satisfied with a telephone conversation that things will be adjusted; I want the assurance in black and white.
Senator Sir HARRY LAWSON (VictoriaAssistant Minister) [10.54]. - In reply to Senator Johnston, who read a telegram from the secretary of the Primary Producers Association of Western Australia, I point out that, as trade relations with Italy, and the restriction of wool imports into that country, are now the subject of delicate negotiation between the two Governments, it would be both unwise and premature to make any announcement at this stage. I also inform him that the Italian consul has said that the action of his country is not in any way a retaliation for the Australian tariff. The tariff is blamed for manythings, but it is not responsible for what has occurred in this instance.
The notice sent to Miss Wilson, to which Senator Dunn referred, was obviously a statement of account forwarded to her in accordance with the law. Apparently, this unfortunate woman became fearful and anxious when she received the notice. Had she come to me in her difficulty I would first have endeavoured to allay her anxiety by telling her that everything would be all right.
– Why was the notice sent to her?
– The law required a notice of account to be given. The exposition of the law which I gave this afternoon was correct; there is full power vested in the Commissioner to make remissions in cases of hardship. Instead of endeavouring to make political capital out of the case, any member of Parliament who saw a crippled woman in distress because of the receipt of an official notice of a nature that she was not accustomed to receive, ought to have assuaged her fears, and taken steps to explain the position to the Pensions Department. . But, of course, the receipt of the notice provided awonderful opportunity to play upon the woman’s fear complex, and to make political capital out of her misfortune. I do not think it is playing the political game fairly to use the mental anxiety ofsome one who has just suffered bereavement, and is obviously in distress, as a means of staining a political advantage. I have already taken steps to bring the honorable senator’s remarks this afternoon under the notice of the proper authorities, and in due course I shall advise the honorable senator of the result of the investigation. He must not expect an immediate reply, because those administering the department cannot accept ex parte statements. If the facts are as represented by the honorable senator - and I do not doubt his veracity - no demand for payment of the debt will be made.
Question resolved in the affirmative.
Semite adjourned : at 10.58 p.m.
Cite as: Australia, Senate, Debates, 31 July 1934, viewed 22 October 2017, <http://historichansard.net/senate/1934/19340731_senate_13_144/>.