Senate
10 September 1937

14th Parliament · 2nd Session

  1. Senate
  2. 14th Parliament
  3. 1937

TheDeputy President (Senator Sampson) took the chair at 11 a.m., and read prayers.

page 903

QUESTION

SURVEY OF WESTERN AUSTRALIAN COAST

Senator E B JOHNSTON:
WESTERN AUSTRALIA

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

  1. Has the attention of the Government been drawn toa (statement by the Director of Navigation made at Darwin on the 31st ultimo to the effect that a properly planned hydrographical survey of the const of Western Australia is essential for defence and other purposes, and that there was sufficient survey work along the Western Australian coast to keep one ship of the type of H.M.A.S. Moresby busy for 50 years?
  2. What stops have the Government taken towards carrying out the necessary hydrographicalof thecoast of Western. Australia, and when will the work be continued?
Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The Minister forTrade and Customs states that the information is being obtained.

page 903

QUESTION

ALIEN RESIDENTS IN QUEENSLAND

Senator BROWN:
QUEENSLAND

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

  1. Were Messrs. Garrett and Peters, of the Department of the Interior, or other officers, sent to Queensland on a mission of inquiry into the alien position? 2.If so, will their report he madeavailable to senators immediately it is received ?
Senator Sir GEORGE PEARCE:

– The Minister forthe Interior has supplied the following answers : -

  1. Messrs. Garrett andPeters were sent to Queensland to inquire into and report upon the alien position.
  2. This report will he a departmental one. It is not customary to make such reports public, but the question of making it available to senators will receive consideration.

page 903

QUESTION

NATURALIZATION

Senator BROWN:

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

  1. Is the Minister for the Interior within his rights in refusing to give reasons to a senator why a certain applicant for naturalization has on several occasions been refused suchnaturalization?
  2. Have similar requests by a senator or member of the House of Representatives always been refused?
Senator Sir GEORGE PEARCE:

– The Minister for the Interior has supplied the following answers : -

  1. Yes.
  2. In some cases senators and members of the House of Representatives have been advised confidentially of the reasons for refusal.

page 904

INCOME TAX BILL 1937

SecondReading.

Senator Sir GEORGE PEARCE:
Minister for Externa! Affairs · Western Australia · UAP

[11.8].- I move-

That the bill be now read a second time.

This is the measure under which the rates of income tax for the current financial year are imposed.

As the Government is not making any change in the rates of tax at present in force, thebill simply re-enacts the rates which were applied in last year’s assessments. I shall, therefore, confine my remarks to a brief explanation of the several schedules embodied in the bill under which the rates on the different amounts and classes of taxable income are ascertained.

The first schedule prescribes the rate of tax payable on an income derived by an individual solely from personal exertion. In imposing the rate of tax payable by individual taxpayers, . the principle of graduating the rate is followed; that is to say, as the amount of taxable income increases, the rate of tax payable on that taxable income also increases. Therefore, the taxpayer whose taxable income is greater than his neighbour’s pays not only the tax on a higher amount of income, but also at a higher rate. At the commencing point, viz., a taxable income of £.1, the rate of tax payable is 2.29d., but when the taxable income reaches £6,900, the rate of tax is 35.285d. On every £1 of taxable income in excess of £6,900, a flat rate of 68.85d. is imposed.

The second schedule sets out the formula for arriving at the rate of tax payable by an individual whose income is derived solely from property. The principle of graduation also operates in the calculation of the rate payable under this schedule. The rate of progression is, however, much steeper than in the case of personal exertion incomes. This is shown by the fact that on a taxable income from property of, say, £3,000, the rate of tax is 35.325d., whereas on the same amount of taxable income derived from personal exertion, it is only 16.638d. The property rate is, therefore, at this point more than double the personal exertion rate. Under the formula provided in this schedule, the rate of tax commences at 2.7d., and increases in severity until upona taxable income of £3,700, the rate payable is 42.57d. Upon every £1 of taxable income in excess of £3,700, a flat rate of 81d. is charged.

The third schedule applies in the case of the taxpayer whose total taxable income is derived partly from personal exertion and partly from property. The schedule provides that the taxpayer shall pay income tax on the separate amounts of personal exertion and property incomes at the rate applicable to his total taxable income.

The fourth schedule relates to the averaging system, and provides that the rate of tax payable on the taxpayer’s taxable income shall be the rate attributable to his average income, which is based on his income of the year ended the 30th June last, and the four preceding years. I inform honorable senators that, except in the case of the primary producers, this is the last year in which the averaging provisions will apply.

The Royal Commission on Taxation recommended that the averaging system should be abolished except in the case of the primary producers.

The Government adopted this recommendation, but to give the taxpayers the benefit of the reduced incomes derived during the depression years, decided that the recommendation should not be put into operation until the financial year 1938-1939.

The fifth schedule provides for a special rate of tax to be paid in those cases where the taxable income includes a premium received in respect ofa lease. The assessment act provides that a premium received on the granting or assignment of a lease of property is taxable to the recipient, the view taken being that the premium is a. lump sum payment of rent. Owing to theprinciple of graduation which I referred to previously, honorable senators will appreciate that if a landlord receives a premium in a lump sum, he pays tax at a much higher rate on that sum, and consequently much more tax, than he would have paid had he received an equivalent amount in the shape of rent over the period of the lease.

As a measure of relief, the assessment act provides that in the case of lease premiums, the rate of tax payable thereon shall be the rate payable on a notional income ascertained by dividing the amount of the premium by one-half the number of years of the lease. This means that the recipient of the premium pays tax on the amount thereof in the year it is received, but at a much lower rate than he would otherwise be required to pay. Of course, if he derives any other income during the year, such other income is added to the notional income in ascertaining his rate of tax payable on his total taxable income. Honorable senators will appreciate that the scheme is somewhat involved, but in essence it is simply a modified system of averaging, For this reason, the assessment act further provides that the scheme is not to be applied in any case where the present averaging provisions already apply. Although the averaging provisions are still in operation for this year’s assessment, it is necessary to include the schedule in the rates bill to meet the isolated case of the taxpayer to whom, for some “reason, the averaging provisions do not apply.

The sixth schedule provides for the rate of tax payable by trustees in those cases where, under the provisions of the assessment act, the trustee of a trust estate is liable to pay tax on the whole or some part of the estate income. In such a case, the trustee pays tax in his representative capacity, and is taxable at the same rate as the individual beneficiary he represents. In many cases, however, the trustee is a trustee company, and as the bill provides for the rate of tax to be paid by companies, it is necessary to make a special provision to cover trustees, so as to ensure that the company rate will not apply when the trustee is :i company.

The seventh schedule prescribes the rate of tax payable , bv a company, and being a flat rate of ls. needs no explanation. Sub-section 6 of section. 4 continues the principle which has prevailed since 1927, of imposing a minimum liability of 10s. Sub-section 1 of section 5 is so framed as to enable assessments to be made for subsequent financial years in those circumstances where it is necessary to- issue such assessments before the rates bill for next year is passed by Parliament. Overseas taxpayers visiting Australia and earning income here, such as theatrical and concert artists, and tourists from Australia, who desire to pay their tax before leaving, are generally the only taxpayers affected by this provision.

I take this opportunity to reply to complaints made by Senator Grant, who said that notwithstanding the work of the Royal Commission on Taxation, our income tax returns are still complicated. The principal work of the commission was not to simplify returns, hut to obtain uniformity, so far as is possible, in Federal and State income tax returns. Quite a number of recommendations were made by the commission, most of which, I believe, have been passed into law by the Commonwealth, and many by the State Parliaments. While uniformity is not necessarily simplification, it is an aid to taxpayers. The income tax returns for Federal and State purposes ave now more uniform than they have ever been. Senator Grant is not alone in the views he holds on this subject.

Senator GRANT:
TASMANIA

– The returns are becoming more complicated each year.

Senator Sir GEORGE PEARCE:

– The Treasurer (Mr. Casey) was consulted to see if something could be done to simplify them, and he pointedout that most of the complications arise from the desire and intention of Parliament to provide for rebates and remissions in various forms. The simplest form of tax would be a flat rate with no exemptions and no rebates; but . when we commence to make remissions, allowances and rebates, difficulties are introduced and simplification becomes impracticable. Attempts to meet hard cases lead to complications. Most, if not all of those in our income tax returns arise from the desire of Parliament to meet hard cases and to do justice to all. Therefore, -it must be remembered that whilst on the one hand there is a desire for simplicity, on the other hand the granting of allowances to meet cases of hardship adds to the complexity of the income tax schedule. The point raised by the honorable senator has not been overlooked by the Government. The Treasurer, in particular, has given much attention to it.

Senator COLLINGS:
Queensland

– I do not rise for the purpose of offering opposition to this bill, but merely to’ ask -why it is necessary. I accept unreservedly the assurance of the Leader of the Senate (Senator Pearce) that no alteration of the rates of tax is proposed. I imagine that the reason for the introduction of the bill is that a measure of this kind is necessary each year.

Senator Sir George Pearce:

– That is the position.

Senator COLLINGS:

– I admit my profound ignorance of these abstruse mathematical problems, and therefore, I ask what is meant by notional income?

Senator Sir George Pearce:

– In order to deal with any exceptional amount that may come into a person’s income in a particular year, an average over a number of years is arrived at. That is done in order that the burden of tax shall be spread over a number of years. The notional income in any year is not necessarily the actual income.

Senator E B JOHNSTON:
Western Australia

– I regret that the Government has not seen fit to reduce both direct and indirect taxes. It is worthy of mention that, in spite of n reduction of the rates of taxes, the total revenue collected from the Australian people is increasing each year.

Senator Sir George Pearce:

– That is because of greater prosperity.

Senator E B JOHNSTON:

– If prosperity is the direct outcome of reduced taxes, why not continue the reductions? Apart from the poor taxpayer, almost every section of the community has’ received some benefit from the greater prosperity which exists. I shall quote some figures from the Treasurer’s own statement to show the results of the taxes imposed during the last five years -

It will be seen that the total direct taxes, including income tax, has averaged nearly £12,000,000 a year.

In addition to a reduction of the rate of income tax, there has been a reduction in the items subject to primage duty also. The amount received from this source in 1933-34 was £4,080,456. In the following year the yield was £4;259,210; in. 1935-36 it was £4,678,358; and in 1936-37 it was £3,833,165. For the current year primage duty is estimated to yield £4,100,000.

The position is similar in respect of sales tax. The revenue from this source amounted to £8,695,689 in 1933-34; in the following year the . amount was £8,554,076 ; in 1935-36 it was £9,432,483, and in 1936-37 it amounted to £8,008,427. The estimate for 1937-38 is £7,700,000.

I wish to emphasize not only that there is no reduction of income tax this, year, but also that emergency taxes imposed during the depression are estimated to yield £11,800,000 from sales tax and primage alone. That is a burden which the taxpayers of Australia ought not to be called upon to bear. I am glad that pensioners and others in the community have been assisted, but I submit that the benefits should have been more evenly distributed.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– If taxes were reduced, the grants to the States might be reduced also.

Senator E B JOHNSTON:

– The grants to the States are lower than they were.

Senator Sir George Pearce:

– Western Australia will receive £75,000 more this year.

Senator E B JOHNSTON:

– Of the amount to he granted to that State,. £136,000 represents an advance against grants to he made two years ahead. The real grant for this year was reduced to £439,000. I repeat that the taxpayers should not be called upon to-day to pay emergency taxes imposed during the depression.

SenatorCollings. -They do not pay unless they, have taxable incomes.

Senator E B JOHNSTON:

– That is not so. A man may have no taxable income and yet be called upon to pay primage duty and sales tax. I desire to see a reduction of the sales tax and primage ‘ duties as well as income tax, so that the taxpayers may share in the general prosperity of the community.

Senator Plain:

– How would Australia provide for its defence if its revenue were greatly reduced ?

Senator E B JOHNSTON:

– Australia is paying less for defence this year out of revenue than was paid last year. It is proposed to raise a loan of £2,500,000 in London this year, and also to utilize money from trust funds, as well as from revenue. I repeat that, in spite of the reduced rates of tax, the total yield from the taxes imposed is increasing year by year. The Government is collecting and spending more revenue than ever before in our history. The total receipts from direct and indirect taxation during the last four years have been -

The estimate for 1937-38 is £64,425,000. The Australian people are remarkably patient to be able to bear such a huge burden of tax levied by the Commonwealth Government alone, and including about £12,000,000 of emergency taxation. I am not at the moment taking into account the very heavy taxes imposed by the States and by local-governing bodies. I hope that next year the rates of sales tax, income tax and primage will be very substantially reduced.

Senator ARKINS:
New South Wales

– I know that a great number of people believe that taxes should be considerably reduced.

SenatorCollings. - They are the patriots.

Senator ARKINS:

– When I have heard that sentiment expressed, I have always replied that I could see no possible way of effecting greater reductions than have already been made. The fact that, during its term of office, this Government has remitted over £15,500,000 of taxes seems to be forgotten. That is a wonderful achievement, and is an annual benefit to the taxpayer. Senator Duncan-Hughes yesterday gave us some enlightening figures regarding per capita expenditure on defence in Australia and Great Britain. The honorable senator said that, whereas the cost in Australia is only about £11s. a head of the population, in Great Britain it is probably in the vicinity of £7. I do not see how any substantial reductions of taxes can be effected at a time when we are compelled to undertake the essential work of building up the defences of this country.

Senator Brown:

– Senator DuncanHughes would take the money from the invalid and old-age pensioners.

Senator ARKINS:

– I am sure that that is not so.

Senator Brown:

– The honorable senator said the other day that he was opposed to the increase of the total amount of pensions.

Senator ARKINS:

– What I think Senator Duncan-Hughes wished to convey was that we should endeavour to devise a more scientific scheme to replace the present system of invalid and old-age pensions.

Senator Collings:

– To shift the burden ?

Senator ARKINS:

– What would be better than to have an equitable scheme of national insurance, even if, in its operation, everybody had to bear a share of the burden? A pension would then be every man’s right because he had contributed for it.

Senator Brown:

– Does the honorable senator regard the tax on income as the fairest tax?

Senator ARKINS:

– I think that every country does. If I were asked to name the greatest objection of taxpayers to the present system of collecting taxes, I should say, unhesitatingly, that it is the harassing investigations carried out by the department, in respect of past transactions. Some means should be devised to obviatethe necessity for such investigations which result in taxpayers being put to great trouble and expense. On almost every occasion when people have attacked me, either in private or on a public platform, in regard to taxation, their main arguments have usually boiled downto the fact that they objected to these harassing departmental investigations of a retrospective character. Of course, I know that there is another side to this matter; many people try to avoid the payment of taxes, and in the interests of taxpayers generally it is necessary that the departmental officers should have access to their records in order to see that no evasions take place. The conflict between the taxpayer and the tax gatherer is ages-old; we read that there was constant friction between the taxpayer and the” tax gatherer even in the earliest days of his- tory. As I have said, the greatest objection to the tax is not to the rate levied, but to the incidence of the tax, and to the fact that frequent demands are made for retrospective payments. In this connexion it must be remembered that only a few short years ago, practically every man and woman who had a stake in this country went through a period of great trial, during which many were ruined and many more were on the verge of ruin. To ask them to go over their transactions during that difficult period is to impose great hardship on them. If we can devise means to overcome the necessity for conducting these investigations, I feel sure that the taxpayers will be quite satisfied, because payers and nonpayers alike realize that we have a great responsibility for the defence of this country.

Senator BROWN:
Queensland

– I do not intend to enter into a long disquisition on. the schedule of this bill; one would need to be an Einstein to understand it. Pew of us, I am sure, are sufficiently well equipped to do so. Unless there be a complete -and fundamental alteration of the system of finance in this country, I cannot see how we can make any great taxation reforms. The Leader ofthe Senate has pointed out tha t owing to remissions and rebates made each year, our income tax law is becoming more and more involved. Naturally, those who pay most in taxes, and who would have most to lose in the event of war, are the biggest squealers. It is also true that the richest taxpayers in the land are the greatest tax evaders. There is not the slightest doubt that thousands of pounds are lost annually by scientific evasion of taxes. There is a growing school of thought in the Commonwealth whose adherents contend that taxation could be simplified by its elimination. Honorable senators may laugh at that, but among those who believe that it is possible are many intelligent men who put up very sound arguments for the complete elimination, of taxation as we know it. That, of course, would be a revolutionary move which would never be made by the present reactionary government. The idea is of course, that instead of the present system of levying taxation, we should finance all governmental expenditure by the use of national credit.

Senator Grant:

– Douglas Credit?

Senator BROWN:

– It is not unlike the system advocated by Major Douglas; as a. matter of fact Major Douglas has written several books in regard to this matter, some of which are almost as difficult to understand as the schedule to the bill now before the Senate. We must, however, not be foolish and think that those expressing these ideas are necessarily asinine. I myself believe that Major Douglas has a. mathematical brain, and I do not think it behoves us to sneer at him; on the contrary, we should try to understand him. I say emphatically that the application of the principles enunciated by the leaders of the school of thought to which I have referred, to the finances of this country, would bring about a greater revolution than has occurred in Italy, Germany or Russia.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Is it a new thought? Is it not as old as civilization? Is it not merely the idea of getting something for nothing?

Sena tor BRO WN. - Although I am not an adherent of the Douglas Credit party, I think Senator A. J. McLachlan’s interjection is entirely wrong. It shows the conception held by many troglodites in the community that every new financial thought is a scheme for getting something for nothing. No serious student of Douglas Credit or of economics generally would say that the application of this new idea to the business of the country will give something for nothing. It it absurd to think it. No seriouslyminded man would believe that you can get something for nothing merely by changing your financial system. Underlying the Douglas Credit conception there is, however, an element of truth. I believe that there can be used in this or any other country a financial system which, when once applied, will release the productive forces to the end that greater production will follow. That is the theoretical idea underlying the Douglas Credit school of thought. Its supporters believe that the application of this new thought to governmental finance will so release the powers of the people of Australia as to enable them to produce a greater income.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– But the Douglas Credit people are not going to take the money by taxation. They propose to confiscate the lot.

Senator BROWN:

– I desire to be fair. I consider that the application of the Douglas Credit system to Australia would involve a revolution that the people are not prepared to accept atthe present time. At the same time, the conception behind it is such that if it could bc applied, it would undoubtedly eliminate all those intricate calculations of income and taxes and all the trouble that arises from their application to the taxpayer, and substitute a simple operation for the meeting of governmental expenditure. It would certainly not give something for nothing, because, after all, the work has to be done, goods have to be produced, and we cannot produce goods unless we work. I remember Theo Gumm, who used to lecture in the

Sydney Domain some 25 years ago, when I first graced this country with my presence. He had a great chart above his head depicting Australia. According to him, there was to be a second coming, the gates were to be opened, and the goats separated from the sheep, on the last great day. He told the people that there would be no work when that time came. Somebody said to him: “Theo, how do you explain that? “. He replied :.” Years ago we used to work sixteen hours a day ; then by the introduction of machinery the working hours were reduced to twelve; now they are down to eight, and when the last day comes, and we enter this earthly paradise, which will be the real Heaven, there will be no work at all, because everything will be worked by automatic machinery, and all you will have to do will be to touch a button “. Then a man in the crowd interjected : “ But, Theo, would not touching the button be work?”. Therefore, even in that earthly paradise that Theo spoke of, there would still be some work to do. because the button would have to be touched in order to set the machinery in motion. Joking aside, all financial reformers who understand what they are driving at know that it is impossible to eliminate the need for the application ‘of labour to the land and to the raw materials of the country. We must have the expenditure of energy., but the idea behind the efforts of all these reformers is to obtain the greatest return from the expenditure of our energy. If we can expend less energy for a greater return, that will be good business. At the present time we are living under a financial system whereby the labour of thousands is wasted.

Senator Herbert Hays:

– Does the honorable senator think that the Leader of the Opposition (Senator ‘Collings) will get any definite reward for the expenditure of his energy?

Senator BROWN:

– The Leader of the Opposition expends his energy in a way which is very satisfactory to himself. I know of no other man in Australia, from little Tasmania to Cape York, and from Brisbane to Perth, who gets greater pleasure out of life than Senator Collings does. He is happy in expressing his thoughts and ideas, he lives every moment when he is doing so; he is happy when he is making a speech, but lie is happiest when he is criticizing the Government.

I wish to deal for a few moments with the bill, that is, with things as they are. I am, I hope, a monetary reformer, and Senator Collings 30 or 40 years ago was advocating monetary and financial reform.

Senator Sir Georgie Pearce:

– This bill has nothing to do with the currency.

Senator BROWN:

– It has this much to do with it, that it provides for taking currency from the people. The ideal of taxation is to take money from the people according to their ability to pay. The rich men squeal the loudest because they have to pay the most, but they have the ability to pay the most. One interjecter said the other day that the people of Queensland were the most highly taxed in the world, but he was absolutely wrong. Certain sections of the community in Queensland have to pay somewhat higher taxes than people in other parts do, hut they have the ability to pay it. One gentleman situated in Canberra made a trip to Queensland less than six months ago. On his return he said, “ Despite the fact that many of my members are highly taxed, they are very happy indeed, because they are doing very well in Queensland, and are therefore able to meet the taxes”. That is the position. If you can do better and make more, you can pay more, and the man who makes more should, be made to pay more. Unfortunately, this Government has taken such action that it has relieved the burden on the rich of the community, and put it upon the poorer section. Labour’s little blue book, which has been so often quoted here, says on page 14 that the amount raised by taxation by the Lyons Government in 1935-36 was the highest ever collected by any Commonwealth Government. I should like to ask Senator Sir George Pearce whether that statement is right or wrong. The honorable senator has said that in the little blue book there are many mistakes, and I desire to know whether that is one of them. I know that Senator E. B. Johnston says that this is true.

Senator E B Johnston:

– I quoted that.

Senator BROWN:

-The blue book -also says that the amount of taxes per head was the highest ever inflicted upon the people. It then states, and I am sure Senator E. B. Johnston will not agree with this, that the remissions made largely benefited taxpayers in receipt of high incomes.

Senator Grant:

– What about the exemptions at the lower end? Do not forget that they were raised.

Senator BROWN:

– The increased taxation imposed by the Government bore most heavily on the working man. Senator E. B. Johnston showed how direct taxation had decreased, and indirect taxation had increased, ‘or so I gathered from his figures.

Senator E B Johnston:

– No, that is not what I said.

Senator BROWN:

– The increase of the receipts from indirect taxation was from £36,000,000 in 1931-32 to approximately £51,000,000 in 1936-37 - the amount for 1936-37 being only estimated at the time this book was printed. That shows an increase of practically £15,000,000 in indirect taxes, which are mainly paid by working men and women. According to the same book, in 1936-37 - and again this is only an approximate figure - there was a decrease in income tax of over £5.000,000. That meant a decrease in the burden of direct taxation. I put it to the rich senators in this chamber - and most of those on the other side are fairly rich - Is it fair that we should take the burden off those best able to bear it and place it upon the men and women who are receiving a mere pittance?

Senator Herbert Hays:

– The indirect taxation, goes over the whole community.

Senator BROWN:

– The basic wage in Queensland is £3 18s. a week. The man on the basic wage pays so much a week for food, and the man who receives £100 or £200 a week does not eat much more than the worker does, so that, relatively, he is paying practically the same amount through indirect taxation as the worker is.

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

– But in addition, the man in receipt of the high income pays more through direct taxation.

Senator BROWN:

– Yes, but bis direct taxation has been reduced, whilst the indirect taxation, which bears most heavily on the worker, has been increased. That is the burden of our argument.

Senator Herbert Hays:

– On that line of argument, the worker gets an increase in wages on account of the increased cost of living.

Senator BROWN:

– According to the bine book, the indirect taxation per head was £5 12s. lOd. in 1931-32, and £7 14s. Id. in 1935-36. The direct taxation per head was £2 12s. 6d. in 1931-32, and £1- 14s. 4d. in 1935-36. In spite of that decrease, the rich senators and other rich members of the community squeal. So far as I can see, a tory government, once it gains power, invariably seeks to lift the taxes from the rich and place them on the poor, whilst Labour governments try ,to the best, of their ability to lift taxes from the worker and place them upon those shoulders which are broad enough to bear them.

Senator Herbert Hays:

– They often bring about unemployment by doing that, as the honorable senator knows quite well.

Senator BROWN:

– I do not think so. It has been repeatedly stated by antiLabour members in this chamber that Queensland is the most heavily taxed community in Australia, but the figures show that Queensland has the lowest percentage of unemployment; that is owing to the methods that have been adopted by the Queensland Government, limited and confined as it has been by the present financial system. That is an irrefutable argument. To the best of its ability, the Queensland Labour Government has exercised its powers of taxation in such a way as to improve the general conditions of the people and increase employment, lt has succeeded, even though it is limited by the present financial system.

Senator Herbert Hays:

– But that is not all due to government action.

Senator BROWN:

– I am not so foolish as to make such an assertion. Neither is the present relative prosperity of Australia due to the Lyons Government. If we say that prosperity is entirely due to governmental effort, then conversely depressions are also entirely due to governments. Such an argument would be wrong. I was making a com parison between the years 1931-32 and 1935-36, and showed that, while there had been a decrease of 18s. 2d. per capita in direct taxation, -indirect taxation had increased by £2 ls. 3d., so that the total increase of taxation was £1 3s. Id. per capita. On page 15 of Labour’s election blue book there appears an interesting statement by a good tory ex-Minister, Sir Henry Gullett. When criticizing the budget introduced by Dr. Earle Page in 1926-27, Sir Henry Gullett - he was then Mr. Gullett - said -

The Treasurer’s claim that he has reduced taxation since he has been in office is one of the most fantastic ever made in Parliament. He merely shifted the load on income from the top to the bottom.

That is just what this Government ha9 been doing - shifting the tax load on to the shoulders of those least able to bear it. .

Senator Grant:

– The majority of those people do not pay any income tax at all.

Senator Collings:

– The majority in that class have very little income.

Senator BROWN:

– I was just about to say that I knew that some Government supporters would invite me to examine the Federal and State income tax returns to see that the working classes paid no taxes, although I am pointing out that, as a result of legislation passed by tory Commonwealth governments, the workers are actually heavily taxed indirectly. Mr. J. White, of the New South Wales Taxpayers Association, recently computed that a married man on the basic wage paid taxes per annum amounting to £17 6s. 10d., made up as follows : -

In the face of these figures, how can any one say that the workers are not being taxed heavily?

Senator Grant:

– I said nothing about indirect taxation.

Senator BROWN:

– I know that, and I am showing that, in various forms of indirect taxation, the working classes are shouldering a heavy burden. In fairness to the Douglas Credit Association, I should say that the last figures which I have cited appeared in the New Bra, the official organ of that body. I hope that soon there will he in power in the Commonwealth a different Government, which will eliminate this involved system of taxation and place the burden, on the shoulders of those best able to bear it.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– My intention is not to discuss the whole field of taxation - that would not be permissible at this stage - but to confine my remarks to the incidence of income tax. Senator Brown’s remarks under this head are not in accordance with the facts. We have always had, on the one hand, demands for a reduction of taxes, and, on the other, requests for expenditure on various forms of social legislation which render difficult, if not impossible, a reduction of existing taxes. Whenever people approach me on the subject of tax reductions, I invite them to mention some of the services rendered by the Commonwealth with which they could dispense, and ‘remind them that if these demands were not so insistent the Government might be able to ease the tax burden. The Leader of the Senate (Senator Pearce) this morning emphasized the Government’s difficulty in this respect. Taking it by and large, taxes are simply collections of national income to be used for the benefit of the people, and, provided the incidence is fair, no reasonable people can complain. On page 27 of the budget-papers there appears a table giving, in detail, statistical information relating to the federal income tax, which, in my opinion, proves conclusively that income tax is collected from the people best able to pay it. It shows that 162,295 persons with a taxable income of £200 or under in 1935-36 paid. £209,211. or 2.6 per cent, of the total income tax collected. Persons with the taxable income of £201 to £500 numbered 55.280. They paid £364,269, or 4.6 per cent, of the total income tax. Those with incomes of £501 to £1,000 a year numbered 27,483, and they paid £611,S67, or 7.7 per cent, of the total. Taxpayers with incomes of over £1,000 a year numbered 19,124, and they paid £3,831,543, or 48.1 per cent, of the total income tax collected. Companies, num bering 9,101, paid income tax amounting to £2,944,527, or 36.9 per cent, of the total.

Senator E. B. Johnston complained that this bill made no provision for further reductions of taxation, and endeavoured to justify his grievance by pointing out that, although there had been reductions of various forms of taxes since the Lyons Government came into office, the total amount collected in 1935-36 was much higher than in former years. I do not think there is anything wrong with that. Obviously, the reduction of the various forms of taxes has stimulated private enterprise, and the taxes are now being collected from a larger number of people. I regret that the circumstances do not permit of a reduction of the income tax this year, but 1 consider income tax is the most equitable of all forms .of taxation, and my only regret is that my own assessment is not higher than it is.

Senator MARWICK:
Western Australia

– It is not my intention to enter into a discussion as to whether or not the rate of income tax should he reduced. My chief concern is indirect taxation. This will be the first time for many years that I shall have the pleasure of joining the happy band of income taxpayers, including the Leader of the Opposition (Senator Collings) and Senator Brown. Hitherto, I have been among those unfortunates with little or no income upon which the Government could levy a tax. Recently, I emphasized the apparent injustice inflicted upon primary producers by the method of assessment, and pointed out that a taxpayer with an income of £500 a year from personal exertion, paid income tax of £6 7s. 9d., or for the three years, £19 3s. 2d. ; whereas a primary producer who had no income for two years, and in the third year earned £1,500, paid under the averaging system £29 7s. 6d., or £10 more than a taxpayer who has a regular annual income derived from personal exertion. If I understood the Leader of the Senate aright, he stated, when moving the second reading of this bill, that, in the case of primary producers, the average income for four years would be considered when assessing the tax to he paid.

Senator Sir George Pearce:

– No; I said that the averaging system would not be applied in future in regard to other than primary producers.

Senator Sir GEORGE PEARCE (Western Australia - Minister for External Affairs) [12.14]; - in reply - I must confess that I am surprised at the somewhat querulous tone adopted by Senator E. B. Johnston. His obvious intention was to make it appear that the Government has not given relief to taxpayers.

Senator E B Johnston:

– I said that it had reduced the rate by one-half.

Senator Sir GEORGE PEARCE:

– If the Government had not made reductions of various forms of taxes, what would have been the result? The honorable gentleman referredto the sales tax. If we had not, from time to time, brought in long lists of exemptions, we would, this year, be collecting in sales tax £18,000,000 instead of £7,700,000; and if we had not made reductions of income tax we would be collecting £15,500,000, on the basis of the 1931 tax, instead of £9,000,000 estimated to be received this financial year. Had the land tax not been reduced, the Government would have been collecting this year, not £1,500,000, but £3,000,000. The honorable senator also referred to primage duty and sales taxes. The Government has not only reduced the rates, but has removed primage duty and sales tax from practically every commodity used by primary producers and the mining industry, and many essential commodities such as food and clothing. The honorable senator did not utter one word about those reductions. He complained of higher collections of taxes. What is the explanation? Increased production of wealth due to increased prosperity. I refer the honorable senator to the CommonwealthYearBook No. 19 of 1936. It is not the latest available, but is the one I have before me. Taking industrial production in a haphazard way - it may interest the honorable senator if I mention brewery production - I find that in 1930-31 the total production of Australian breweries was valued at £3,450,904 and in 1934-35 it was £3,892,190. In that period those engaged in that industry produced increased wealth totalling nearly £500,000, on which, of course, they made a good profit, as also did the shareholders in the breweries. The rate of income tax has been reduced, but the income received increased enormously, necessitating the payment of additional taxes. What is the position in Western Australia, the State represented by the honorable senator? Without going through all the industries I take again the brewing industry. Perhaps the honorable senator has seen the interesting paragraph which appeared in the Melbourne Herald of the 3rd September. It read -

Western Australia Drinks as. 6d. a Head More.

Perth, Thursday.

Alcoholic liquorscost Western Australia £2.428,996 in the year ended the 30th Junean increase of £110,130 on the total for the previous year, according to the Government Statist. Expenditure represents £711s. 9d. a head, an increase of 3s. 6d. a head.

To every person in Western Australia who has an interest in hotels and breweries, that £110,130 means increased income. Increased production and consumption of alcoholic liquors means more grist to the mills of those who have money invested in hotels and breweries. Notwithstanding this, we hear these complaints, these grumblings, because certain persons have to pay more income tax. The honorable senator referred grudgingly to the reductions already made, and complained because he is paying more income tax. Of course he is paying more. But is he not sharing in the benefits of the increased production? Has not his income increased in consequence of greater production? Instead of the Government collecting £15,500,000 in income tax as it was doing some time ago, it is collecting only £9,000,000, and taxpayers should be gratified to find that they are not being asked to provide the higher amount.

Question resolved in the affirmative.

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

page 913

POST OFFICE WORKS BILL 1937

Second Reading

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– I move -

That the bill be now read a second time.

The bill is to appropriate £1,000,000 for postal works. As the Appropriation (Works and Buildings) Bill includes £2,250,000 for postal works for the current year, this measure may be regarded as complementary. The Government therefore proposes to make £3,250,000 available this year for postal works, to be provided from two sources - £2,250,000 from revenue of the current year by means of Appropriation (Works and Buildings) Bill. £1,000,000 from the excess receipts of last year by means of this Post Office Works Bill.

The sums provided during recent years for postal works indicate the expansion of the equipment necessary in that department and also are an indication of the increasing prosperity of the community. The provision has been -

This bill, in effect, supplements the sum already voted for the works programme.

Senator BADMAN:
South Australia

– As I was occupying the Chair during the committee stages of the Appropriation (Works and Buildings) Bill I was precluded from obtaining information concerning certain postal works from the Postmaster-General (Senator A. j. McLachlan). As I may be similarly precluded when this measure is in committee I take this opportunity to ascertain the intention of the department in connexion with postal buildings on Eyre Peninsula, South Australia. For some years there has been an agitation at Ceduna near Port Thevenard, the most westerly port on the South Australian coast, for a new post office. Ceduna is in a thriving district, and has an increasing population, and the present post office is quite inadequate. Will the Minister state whether the department intend to erect a new post office at that centre? There has also been a strong agitation for a postmaster’s residence at Minnipa, also on Eyre Peninsula, and I should like the Minister to state whether provision has been made in this year’s Works Estimates for such a. building?

Senator FOLL:
Queensland

– Will the Postmaster-General (Senator A. J. McLachlan) state who is carrying out the administrative work of the Director of Post and Telegraphs while that officer is abroad? I offer no criticizm concerning his absence, because I recognize that it is essential that such an able administrator should have opportunity to become acquainted with the latest practice in other countries. I should, however, like to know who is carrying out his duties.

Senator GRANT:
Tasmania

– By way of interjection yesterday I asked the Postmaster-General (Sena to r A. j. McLachlan) what was being done in connexion with a ‘ direct main trunk telephone service between Hobart and the west coast which has been requested by all Tasmanian members in this Parliament. A main arterial road now connects the principal towns on the West Coast with Hobart, hut between those points the telephone lines follow a most circuitious route via the North West Coast. The proposed telephone line would follow a main arterial road on which accidents frequently occur, because of heavy falls of snow and severe frosts making the surface slippery. Because of inability to communicate by telephone with either Hobart or other towns, the results of some of those accidents have been more serious than would otherwise have been the case. It is true that the hydro-electric station at Tarraleah has its own telephonic communication with Hobart, but that is not for public use. Surely the Postmaster-General’s Department, with its huge surplus, should have an official line, especially as it would be a paying proposition for the department from the start.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– If it can be proved that the line would pay, I do not think that there would be any difficulty about obtaining approval for its construction.

Senator GRANT:

– I think that it ha.’ already been proved that the line would pay. In this connexion I refer the PostmasterGeneral to the satisfactory financial position of the Straits telephone line which now connects’ Tasmania- with the mainland. Officials of the department estimated that that line would be run (it a loss for many years. Similarly i heir estimate of revenue in respect of the line .to which I have referred may me much astray. Experience has proved that when facilities are provided they are availed of. They cannot be used if they do not exist. Yesterday, I had to wait about one and a half hours before I could’ communicate with Tasmania .by telephone. I mention that delay, not by way of complaint, but in order to show how heavy is the traffic on the line. The country through which the West Coast line would pass includes the great scenic district in the vicinity of Lake St. Clair, no portion of which is at present connected with the telephone service. . 1 point out, moreover, that the district had direct telephonic communication with Hobart about twenty years ago.

Senator Sir George Pearce:

– Why was the line taken away?

Senator GRANT:

– I do not know. Probably the cost of maintaining it in such difficult country was too great in the days when there was no road; also there was not the same development as there is to-day. It cannot be said that the agitation for the line comes from any one section of the Tasmanian people. The Postmaster-General will admit that he has been bombarded by all sections of the people in Tasmania with requests on this subject.

I hope that action will be taken to increase the number of automatic telephone exchanges in Tasmania. In this connexion I especially urge that action be taken to convert to the automatic system the exchange at Ferntree. The business now transacted there may be not quite sufficient to justify a continuous manual exchange, but an automatic exchange, which would be continuous, would be of great value to the people whom it would serve.

Senator LECKIE:
Victoria

– Yesterday, when we were asked to vote money for various works, the locations of the proposed undertakings were given. We are now asked to place £1,000,000 in a trust fund, without knowing how the money will be used. That appears to be in the nature of asking us to sign a blank cheque. Can the Postmaster-General (Senator A. J. McLachlan) say whether the works which will be undertaken will be subject to inquiry by the Public Works Committee?

Senator DUNCAN-HUGHES:
South Australia

– I suggest, for the consideration of the Postmaster-General (Senator A. J. McLachlan), that better paper be used for telegraph forms. The quality of the paper now in use is far from satisfactory, and persons using the forms find their nibs stick and splutter - and that remark applies not only to the nibs supplied by the post office authorities.

Another matter which may appear at first sight to be of minor importance, but really is not, is the artistic quality of the postage stamps produced in Australia. Throughout the world the numbers of people who are interested in collecting postage stamps is increasing. It is, therefore, most desirable that Australian stamps should be artistic, so that they will create a good impresson in other countries. In the nature of things, stamps are among our exports. It may not be generally recognized that stamps are the medium by which other peoples form their impressions of our art standards. I am afraid that most Australian stamps must give to the people of other countries a bad impression of the general level of art in this country. Last year, for instance, a stamp was issued in connexion with the centenary of South Australia. It depicted a scene in 1837 when Colonel Light occupied a little hut on North-terrace, Adelaide, and another scene showing King William-street and the General Post Office in 1937. A friend with sharper eyes than mine told me that the street scene showed a man riding a bicycle along the street in the wrong direction. The stamp also contained a representation of the old gum tree at Glenelg, and on top of that - most inappropriately, in my opinion - was a bunch of oranges and a sheaf of wheat. The Premier of South Australia, who stated that he thought that it was not a bad effort, admitted that he had ta.ken steps to have a picture of a ram’s head removed before the stamp was printed. In passing, I point out that it is not necessary for a stamp to show such a variety of things in order to be artistic. Indeed, there is a great deal to be said for simplicity in art, as well as in other things. My point is that it is highly desirable that we should send to other countries stamps which will give a good impression of the aesthetic standards of Australia. I understand that the department proposes to issue a stamp containing a representation of the koala bear. It would be a pity if the stamp were to contain a poor picture of an animal which is regarded by the people of the whole country as being particularly interesting. In my opinion, the best stamp which Australia has produced is that which is known as the “ ram “ stamp issued in connexion with the MacArthur centenary. That, of course, is a matter of personal opinion, but it is generally agreed that our stamps are poor, and ought to be improved. I trust that something will be done in that direction. The stamps issued in Australia soon after the coronation of King George VI. and Queen Elizabeth, although not regarded as coronation stamps, were, in my opinion, better than the New Zealand coronation stamp, but they were not of high quality. The coronation stamps for the whole of the Crown colonies of the Empire were identical except for the difference in the names of the colonies, and they were printed in London. I regarded them all as first class, and far superior to ours. Surely, a dominion should have a stamp at least equal to that of a small Crown colony. As I have said, this may be regarded by some as a matter of minor importance, but the relation of poor stamps to the imagined standard of art in Australia should not be lost sight of.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– On pages 10 and 11 of the budget-papers for 1937-38, the consolidated revenue fund of the Commonwealth is set out. On the expenditure side, the surpluses of recent years are shown. The statement shows a surplus of £1,276,558 for. 1936-37, and indicates how that amount is to be appropriated. Some of it is to be appropriated under various acts for invalid and old-age pensions.

Sitting suspended from 12.45 to 2.15 p.m.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

. - in reply - Perhaps delay will be avoided if, at this stage, I reply to some of the points raised by honorable senators. Dealing first with telegram forms mentioned bySenatorDuncan-Hughes I rather agree with his statement that theclass of paper on which they are printed is inferior. When telegram forms were made into blocks a much better writing surface was provided, but unfortunately, when blocks were extensively used itwas found by the department that they disappeared with rather alarming regularity. I agree with the honorable senator that; some steps might well be taken to improve the quality of telegram forms. Recently, forms of more ornate character, for the sending of greetings, have been introduced ; they are printed on paper of much superior quality. The honorable senator also spoke of the lack of artistry in the stamps issued by the department. All I can say in regard to this is that philatelic journals, which profess to be the mouthpieces of stamp collectors in the Commonwealth and in other countries, have written in high compliment of the artistic designs ofthe Commonwealth stamps. The departmental officersare constantly endeavouring to secure the best possible designs; and the printing is carried out by an expert staff in the note-printing branch of the Commonwealth Bank. I draw the attention of honorable senators to the excellent designs of the lyre bird, kookaburra, and jubilee stamps which have been very favorably commented on by philatelists all over the world.

Senator BADMAN:
SOUTH AUSTRALIA · CP

– Why was no coronation stamp issued showing Their Majesties in their coronation robes?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Because we were unable to get satisfactory photographs for reproduction. It is hoped that before his return to Australia, the Director of Postal Services will be able to secure suitable photographs of Their Majesties, in their coronation robes.

Senator E B Johnston:

– At present Australia is the only British dominion that has not issued a special coronation stamp.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– That, is one reason why the department is making special efforts to secure suitable photographs.

Senator Duncan-Hughes:

– Does the Minister consider the South Australian and Victorian centenary stamps are successful ?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

-I spent a good deal of time considering the design For the South Australian stamp. I invited the Acting Premier of South Australia (Sir George Ritchie), and various other authorities, to examine a design which had been accepted as suitable to mark the historic occasion of the centenary of South Australia. The piece de resistance, sofar as I was concerned, was the ram’s head. “When the design was first submitted to me it was found that the head of a long-wooiled ram had been used. I could not accept that, because I knew that the economy of South Australia has been largely based on the merino sheep. The Director of Postal Services then communicated with either the Premier’s Department or the UnderSecretary for South Australia, who, unfortunately, brought the matter under the notice of the Prime Minister. One has to bow his head to the wishes of the Prime Minister and the Premier of a State. I was rather amazed that these two should have objected to the inclusion of a ram’s head in the design, but they did so, and the stamp was issued in the form to which the honorable senator has referred. With regard “to the koala stamp, many designs were submitted which were examined by the. experts of the department, who claim that the one accepted is much superior to any others submitted. Although the koala design is a very good one, it may not reproduce satisfactorily in print I assure honorable senators that the experts of the department are doing everything possible to see that the artistic quality of the stamps issued in Australia is at. least up to world standard.

Senator Badman:

– The kookaburra, lyre bird and jubilee stamps are very excellent productions.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– That is so. During the debate, one honorable senator was good enough to hand me a sample of a South Australian duty stamp. I shall not, however, express an opinion of the work of the artists in my own State ; I content myself by saying that, in my opinion, the designs of the postage stamps compare, at least, favorably with this one.

If Senator Leckie will turn to clause 4 of the bill, he will sec the various directions in which moneys standing to the credit of the Post Office trust account may be applied. The department i.-. limited in the expenditure of that money in exactly the same way as it is in connexion with moneys provided under the works estimates which were passed by the Senate last night. The sum of £1,000,000 to which he referred is provided out of the surplus of last year. I f the department is not aware until late in the year what amount of money will be made available to it, it is considerably hampered in its operations, particularly at a time like this, when it is not possible to secure requirements as quickly as one would like. When the amount of £1,000,000 was ear-marked out of the surplus of last year, I knew that that amount of money, at least, would be made available in addition to the ordinary votes of the department.

Senator Badman referred to the post office at Ceduna; that has been provided for in the Estimates. Provision hasalso been made in this year’s Estimates for the post office at Minnipa.

Senator Grant brought to my notice the post office at Ferntree. I shall look into the matter and see what can be done in regard to it.With regard to the Hobart-Queenstown line, the most cheering news I have had is the assurance of the honorable senator that it would not mean any loss to the department. If it can even nearly approach the results he has predicted, I shall 3ee that the work is undertaken.

Senator Grant:

– I shall refer the Minister to the telephone superintendent.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The project will be investigated on the honorable senator’s pressing request. Senator Foll asked who is discharging the duties of the Director of Postal Services during his absence abroad. The divisional heads of the department have had direct access to me ever since the Director left Australia. Contracts are dealt with by a committee of departmental heads. The Director is kept advised by air mail of all the activities of the department and, in addition, J. have hud frequent conversations with, him by telephone. “While ti broad, he has been engaged on governmental business of most vital importance to the external communications of Australia and the Empire. Eis work is now complete and it is hoped that he will be sailing for Australia -almost immediately. I can assure honorable senators that, while his absence has made my duties more onerous during the last three months, I have kept in constant touch with him. I think it right to make this explanation, because there seems to have been some misunderstanding o.t his absence.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 (Payment to trust account).

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– This clause provides that, “there shall be payable out. of the Consolidated Revenue Fund, which i3 hereby appropriated accordingly, to the credit of the post office works trust account, the sum of ?1,000,000.” I should like some information from the Postmaster-General on this matter. I learn from the budget-papers that the surplus for 1936-37 was ?1,276,558, but by Act No. 50 of 1936, that money was appropriated to old-age pensions. On the other side appears “ excess receipts for 1936-37, ?1,276,558. “ Is it only a coincidence that the amounts are the same? Apparently the ?.1,000,000 proposed to be allotted to the credit of the post office trust account is to come from that sum, but the money cannot be used for two purposes. If it is appropriated to oldage pensions, how can it be allotted to the purposes of the Postal Department?

Senator A J McLACHLAN:
General · SOUTH AUSTRALIA · NAT

– I am not familiar with the practices of the Treasury, but I understand that, when there are excess receipts, real or anticipated, the Treasurer, in order to retain the money for the Commonwealth, proceeds to place it in a trust account, ‘and it is usually allocated to old-age pensions, following, I understand, the Treasury practice because the hurden of the old-age pensions upon the revenues of the country each year is known. To all intents and purposes, the provision made in this bill is to enable an exchange to be brought about; in effect, the money is removed now from that category, and placed to the credit of the post office works trust account. The honorable senator will see what happens if he reads the clause carefully. It provides “ there shall be payable out of the Consolidated Revenue Fund, which is hereby appropriated accordingly, to the credit of the post office works trust account the sum of ?1,000,000.” The previous clause establishes that trust account. Prior to this, no such account was in existence in the Treasury. The account is now created, this amount is appropriated to it from the surplus of last year, and then it is allocated to the purposes of the post office. This may appear to the honorable senator a rather devious way of doing things.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Not only to me, but to most other people.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I agree, but the necessity arises out of certain constitutional provisions.

Clause agreed to.

Clause 4 agreed to.

Preamble and title agreed .to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 918

REPATRIATION FUND (BAILLIEU GIFT) BILL 1937

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator A. J. McLachlan) read a first time.

Second Reading

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I move

That the bill be now read a second time.

The necessity for this measure arises from the fact that in 1916 the Honorable W. L. Baillieu, and Messrs. E. L. Baillieu, A. S. Baillieu, C. Baillieu, N. Baillieu and M. H. L. Baillieu joined in making a donation to the Australian Soldiers Repatriation Fund established under the Australian Soldiers Repatriation Fund Act 1916. The donation consisted of debentures of a face value of £20,000 and a cash amount of £5,000. By the act of 1.916 the fund, to which the donation had been paid, was vested in trustees named in the act. The trustees were charged with the duties of (a) allocating to the various State war councils such sums or property out of the fund as the trustees from time to time determined ; (b) investing such part of the fund as was not immediately required for allocation to State war councils; and (c) selling or otherwise dealing with property forming part of the fund. The State war councils held any moneys allocated to them as aforesaid upon trust to apply them for such purposes (being purposes for the assistance and benefit of Australian soldiers and their dependants) as the councils in their discretion thought fit.

The act of 1916 was repealed by the Australian Soldiers Repatriation Act 1917, and by section 16 of the latter act “ all real and personal property, securities and funds “ vested in the abovementioned trustees were vested in the Repatriation Commission constituted by the new act, subject to the same trusts as those upon which the trustees had held the property. By an amending act of 1918 the property and funds tb.er.eto- for rested in the commission became vested in the Minister, still subject to the original trusts. In 1920 the Australian Soldiers Repatriation Act 1917- J8 was repealed. A new Repatriation Commission was set up and the property and funds previously held by the Minister were vested in the commission, subject to the trusts upon which they had been held by him. The present position therefore is that the balance remaining in the fund (including the gift made by Messrs. Baillieu in 1916) is vested in the commission subject to the trusts declared by the act of 1916. By reason of the discontinuance of State war councils it has become necessary to make statutory provision for the variation of the original trusts in order that the money may be appropriately applied- for the benefit of returned soldiers and their dependants.

The Government, after consultation with the donors, has decided that the trusts expressed in this bill provide the most suitable and advantageous use to which the donation may be put. In 1918 the donation was, with the approval of the Governor-General in Council and the concurrence of the donors, applied to the purchase of a hostel at Brighton, Victoria, for totally and permanently incapacitated soldiers. This hostel was known as the Anzac Hostel, and was utilized in accordance with this decision. In 1927 a part of the land attached to the Anzac Hostel was sold for £19,962. The sum was invested and has earned interest to the amount of £10,507. The last valuation of the hostel and remaining land, together with improvements, was £36,689. “Whether this amount will actually be realized when the property is sold will depend largely upon the extent to which the building depreciates in value. When the purposes of the Anzac Hostel have been served the hostel will be sold, and the proceeds applied to the carrying out of the trusts specified in this bill. It is proposed first to use the income of such moneys as are at present available or which may become available from the sale of the Anzac Hostel when its purposes have been served, in the post primary school education and maintenance of children of deceased or incapacitated members of the forces. It is expected that all the children entitled to benefitunder this proposal will have received the advantages thereof at the expiration of some fifteen years. As capital amounts become available, either because the necessity for provision of education and maintenance of children as above-mentioned has ceased, or by reason of the sale of the Anzac Hostel, those amounts will be applied in establishing and maintaining university scholarships for the purpose of conducting post graduate research in medicine, law, commerce, economics, architecture, or any of those subjects. The lineal descendants of deceased, blinded or permanently and totally incapacitated members of the forces are to have preference in the allotment of these scholarships. The universities of Australia will receive these moneys in the following proportions : - Sydney and Melbourne, 25 per cent, each; Brisbane and Adelaide, 15 per cent, each; Perth, 12 per cent.; and Hobart, 8 per cent. That is the allocation recently agreed upon in connexion with the Commonwealth grant of £30,000 for research. I commend the hill to the Senate. It is really an effort, and I think an effective one, to obviate the possible failure of the trusts upon which the money was ‘ given. If resort were had to the courts, the donors being alive, I think they would have given effect to the provisions of this measure on the equitable principles which provide, in the event of the failure of the trust, for giving effect, as nearly as possible, to the wishes of the donors.

Senator Duncan-Hughes:

– Have the donors approved of this bill?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The donors have approved of it entirely.

Senator Sir GEORGE PEARCE:
Minister for External Affairs · Western Australia · UAP

[2.45]. - I wish to avail myslf of this opportunity to pay a tribute to the late Mr. W. L. Baillieu, the man who originated this fund. I well remember, when incapacitated Australian soldiers were returning, an interview which he had with me. He said that he and his brother desired to show, in some practical way, their appreciation of what members of the Australian Imperial Force had done for Australia. He added th at they thought the gift which they intended to make should be something that would mean a real sacrifice; something, the loss of which they would feel.. He then told me that they had decided to set aside this sum of money. At that time the Government was considering the establishment of a repatriation fund for the benefit of returned soldiers; but as we had not had experience of a great war no one could foresee the magnitude of the obligation. It was thought at first that a fund established by the Government, and to which the people would make voluntary contributions, would meet all requirements. Later we found that our provision would have to be on a very much larger scale. I thought it fitting that I should tell the Senate how this fund originated. The gift was entirely spontaneous ; it was the outcome of a patriotic desire to show appreciation of what members of the Australian Imperial Force had done.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 5 agreed to.

Schedule.

Senator ALLAN MACDONALD:
WESTERN AUSTRALIA · UAP; LP from 1944

– I, with other honorable senators, appreciate the spirit in which this gift was made as a tribute to the members of the Australian Imperial Force; but if the information is available I should like to know the basis of distribution to the various State universities. I find that 12 per cent. is to be allocated to the University of Western Australia. It is well known that, in proportion to population, the number of enlistments for the Australian Imperial Force in Western Australia was higher than in any other State, and there is no doubt that the proportion of the disabilities and disablements was also very great.

Senator A J McLACHLAN:
Postmaster-General · SOUTH AUSTRALIA · NAT

– The fund has been distributed on the same basis as that adopted for the allocation, in 1936-37, of the grant of £30,000 to universities for research. I understand that this arrangement was agreed to by representatives of the various universities at a conference.

SenatorAllan MacDonald. - Without regard to the number of enlistments?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I admit that the basis of distribution may not quite meet the point raised by the honorable senator. The disablements among men who had enlisted in Western Australia may be, as the honorable senator has suggested, higher in proportion to population than in other States, but finality had to be reached in order to clarify the position. Therefore the basis for the distribution of the Commonwealth grant to universities for research purposes was adopted.

Schedule agreed to.

Preamble and title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 920

SPECIAL ADJOURNMENT

Motion (by Senator SirGeorge pearce) agreed to -

That the Senate., at its rising, adjourn till Tuesday next at half-past ten a.m.

Senate adjourned at 2.55 p.m.

Cite as: Australia, Senate, Debates, 10 September 1937, viewed 22 October 2017, <http://historichansard.net/senate/1937/19370910_senate_14_154/>.

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