Senate
28 November 1940

16th Parliament · 1st Session

  1. Senate
  2. 16th Parliament
  3. 1940

The PRESIDENT (Senator the Hon. J. B. Hayes) took the chair at 3 p.m, and read prayers.

page 230

ADDRESS-IN-REPLY

Presentation to the GovernorGENERAL

The PRESIDENT (Senator the Hon. J. B. Hayes). - I have ascertained that His Excellency the GovernorGeneral vill be pleased to receive the

Address-In-Reply tohis Opening Speech at Government House at 11 a.m. on Wednesday next, the 4th December. I invite as many honorable senators as can make it convenient to accompany me when I present it.

page 231

STANDING COMMITTEEON REGULATIONS AND ORDINANCES

The PRESIDENT:

-Ihave received letters from the Leader of the Government in the Senate and from the Leader of the Opposition in the Senate nominating, in accordance with Standing Order No. 36a, Senators Cameron, Clothier, Cooper, Courtice, Herbert Hays, Allan MacDonald and Spicer as members of the Standing Committee on Regulations and Ordinances.

Motion (by Senator McLeay) - by leave- agreed to -

That a Standing Committee on Regulations and Ordinancesbe appointed, to consist of Senators Cameron, Clothier, Cooper, Courtice, Herbert Hays, Allan MacDonald and Spicer, such senators having been duly nominated in accordance with the provisions of Standing Order No. 36a.

page 231

LEAVE OF ABSENCE

Motion (by Senator Dein) - by leave - agreed to -

That leave of absence for one month be granted to Senator Grant on account of ill health, and that three months’ leave of absence be granted to Senator Wilson on account of military duties.

page 231

CONSERVATION OF STOCKS OF PAPER

Senator McBRIDE:
Minister for Munitions · SOUTH AUSTRALIA · UAP

– I lay on the table-

Fifth Annual Report of the Australian Meat Board for the year 1939-40, together with a statement by the Minister for Commerce regardingthe operation of the act.

With the concurrence of the Senate, I suggest that, in order to conserve stocks of paper, this report be not printed as a parliamentary paper this year.

page 231

QUESTION

CRITICISM OF COMMERCIAL BROADCASTING STATIONS

Senator E B JOHNSTON:
WESTERN AUSTRALIA · CP

asked the Postmaster-General, upon notice -

  1. Has the attention of the Government been drawn to the propaganda appearing in the editorial columns of the A.B.C.Weekly attacking the attractive programmes and legitimate activities of the Commercial (Bclass) broadcasting stations?
  2. In view of the fact that B-class stations pay a licence fee and receive no subsidy from the annual listener’s fee, will the Government see that they are protected from a recurrence of these attacks by a journal which is heavily subsidized from the publicpurse?
Senator McLEAY:
Vice-President of the Executive Council · SOUTH AUSTRALIA · UAP

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

  1. No, but I shall read the article referred to at the earliest opportunity.
  2. Since I am charged with the administration of the laws governing the operation of commercial’ stations as well as those relating to the national stations, I shall see that both classes of broadcasting activities are adequately protected from any unjust criticism.

page 231

QUESTION

A.B.C. WEEKLY

Senator E B JOHNSTON:
WESTERN AUSTRALIA

asked the

Postmaster-General, upon notice -

  1. Is it a fact that the Australian Broadcasting Commission has refused to give the Government details of the annual losses being made on the A.B.C. Weekly? If so, why?
  2. If not, will the Government make the information available to Parliament? 3.Is it intended to permit this loss to continue during the duration of the war?
Senator McLEAY:
UAP

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

  1. No. 2 and 3. These matters are at present under consideration.

page 231

QUESTION

TOBACCO INDUSTRY

Senator COOPER:
QUEENSLAND

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

  1. Will the Minister inform the Senate whether the latest Tariff Board report on the inquiry into the Australian tobacco industry has been received by the Government?
  2. If so, is this report available to members?
  3. If not, when is this report likely to be available ?
Senator LECKIE:
Minister without portfolio assisting the Minister for Trade and Customs · VICTORIA · UAP

– The Minister for Trade and Customs has supplied the following answer: - 1.2 and 3. - The report will be made available to-day.

page 231

QUESTION

HICKORY SCYTHE HANDLES

Senator LAMP:
TASMANIA

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

What are the conditions and/or regulations governing the importation of hickory scythe handles into Australia?

Senator LECKIE:
UAP

– The Minister for Trade and Customs has supplied the following answer : -

Hickory scythe handles arc admissible under the by-laws provisions of the customs tariff at rates of duty of free (British preferential tariff) and 15 per cent, plus ‘1 per cent, primage (general tariff).

Under the Customs (Import Licensing) Regulations the importation of all goods the produce or i manufacture of non-sterling countries is subject to licence. Licences are issuable to individual importers of hickory scythe handles to a value equivalent to . the value Qf like importations in the year 1938-39.

Hickory scythe handles produced or manufactured in sterling countries arc not subject to licence and may be imported without restriction.

page 232

QUESTION

ASSISTANCE TO WHEAT INDUSTRY

Senator CLOTHIER:
WESTERN AUSTRALIA

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

  1. Has the Government given consideration, to the payment of 6d. extra a bushel for wheat of the J’030-40 crop, as recommended by the’ Australian Wheatgrowers Federation J
  2. If so, with what result?
  3. If the wheat now held by the Australian Wheat Board docs not realize sufficient to meet the extra (id. a bushel, will the Government meet the difference as a form of assistance to the industry?
Senator McBRIDE:
UAP

– The Minister for Commerce has supplied the following answer : - 1, 2 and 3. An announcement has already been made that a further advance of 3d. a bushel has been approved in respect of the wheat of the 1039-40 harvest. Consideration will be given to the amount of the final payment when the realization from sales of all wheat in the No. 2 Pool are known.

page 232

QUESTION

APPLE’S AND PEARS

Senator CLOTHIER:

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

  1. . Is it a fact that in many parts of Western Australia it is almost impossible to purchase either apples or pears of fair average quality* at reasonable prices?
  2. Is it a fact that it is practically impossible to get first quality fruit at ali ?
  3. Is it a fact that in the wheat-growing districts of the State it is estimated that consumption of fruit has dropped by 80 per cent, as against that of the previous season?
  4. Will he have this matter investigated by the Apple and Pear Board with a view to such relief action as may be found possible?
Senator McBRIDE:
UAP

– The Minister for Commerce has supplied the following answer : - 1, 2, 3 and 4. The harvesting of apples and pears will soon commence, and it is hoped that ample supplies of good quality fruit will be available. It is not known whether consumption of fruit in the wheat-growing districts has dropped by 80 per cent.

page 232

QUESTION

COLLECTION OF SALES TAX

Senator AMOUR:
NEW SOUTH WALES

asked the Minister representing, the Treasurer, upon notice -

  1. Would the Minister inform the Senate from whom the Government collects the sales tax directly - the manufacturer, the distributor or warehouse, or the retail shop-keeper?
  2. Is the sales ta’x estimated on the manufacturer’s cost or on the retail selling price after it has been loaded with intermediary profits?
Senator McBRIDE:
UAP

– The Treasurer has supplied the following answers: -

  1. The Government collects tax directly - («.) From manufacturers on sales to retailers and goods sold directly by retail; (ft) From wholesale merchants whose sales are exclusively or primarily by wholesale - on all their sales; (fi) From wholesale merchants whose1 retail sales exceed their wholesale sales - on wholesale sales; (<i) At the customs upon goods imported by retailers and consumers; («) From manufacturers and wholesale merchants who manufacture goods or purchase taxfree goods’ and apply them to. their own use - on the goods so applied. 2. (or) When goods are sold by wholesale, the tax is calculated on the price for which1 the goods are sold : (6) When goods are sold’ by retail or applied to. a person’s, own use, the tax is calculated in accordance with rules set out in the appropriate acts, the general aim of which is to cause tax to be paid on the price for which the goods would have been sold by wholesale if they had been so sold; (c) When tax i-s paid on imported goods at the point of entry for home consumption, the value for sales tax is an amount which exceeds by twenty )>er centum the sum of the following: - (i) the value for duty converted into Australian currency; and (ii) the duty of customs payable in respect of the goods.

page 232

QUESTION

WAR FINANCE

Senator DARCEY:
TASMANIA

asked the Minister representing the Treasurer, upon notice -

  1. Is it a fact that the former Treasurer Mr. Spender, stated ah the Loan Council meeting in November, 193!), that to finance the present war in the same way as the last would lead, in. his opinion, to tragic and harmful results?
  2. If so, will the present Treasurer promise to use the national credit’ go that this cannot possibly happen?
Senator McBRIDE:
UAP

– The Treasurer has supplied the following answers : -

  1. No.
  2. Sec answer to No. 1.

page 233

QUESTION

PRICES OF PRIMARY PRODUCTS

Senator AYLETT:
TASMANIA

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

  1. Is it a fact that the prices of many primary products have been pegged since the outbreak of war, but that costs of production have been continuallyrising? 2.If so, will the Government give an assurance to primary producers that they will receive the same consideration in respect of reasonable returns for their products as is given to other sections of war industry, and that whatever sacrifices may be necessary will be spread equitably over all sections of the community?
Senator McBRIDE:
UAP

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

  1. Prices in Australia ofall commodities, including primary products, are subject to control.The export prices of primary products are determined chiefly by the rates of payment included in contracts of sale to the United Kingdom. Export prices are also influenced to some extent by the demand of markets other than the United Kingdom. Detailed investigations have not been made into the costs of production of primary products.
  2. It is the policy of the Government to give equal consideration to allsections of the community.

page 233

QUESTION

FLAX PRODUCTION COMMITTEE

Senator AYLETT:

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

  1. Who are the personnel of the Flax Production Committee?
  2. Will the Government give consideration to appointing representatives of flax-growers to the above committee?
Senator McBRIDE:
UAP

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

  1. The personnel of the Flax Production Committee comprises Mr. J. A. Stevenson, chairman, Department of Supply and Development; Dr. A. E. V. Richardson, deputy chief executive officer, Council for Scientific and Industrial Research; Mr. I. H. Boas, chief of division, Division of Forest Products, Council for Scientific and Industrial Research’; Mr. R. Bruce Hogg and Mr. E. H.Kinnear, jun., as persons experienced in the production of fibre from straw. The committee is an expert body and docs not represent particular interests.
  2. The main functions of the Flax Production Committee are to collect the straw and process it, leaving the actual production side to the States. The committeee maintains the closest contact with State Departmentsof Agriculture in the three States concerned, which in turn are directly in touch with growers. The committee is essentially a manufacturing body, and it is not, therefore, considered necessary to provide for direct representation of producers on it.

page 233

QUESTION

NARRANDERA FLYING SCHOOL

Senator ARMSTRONG:
NEW SOUTH WALES

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

  1. Has the Minister seen the report in the Sydney Morning Herald of the 8th November last to the effect that the site for the No. 8 Elementary Flying School at Narrandera may be abandoned?
  2. Is this report correct? 3.What information is available to the department now that was not available when the Narrandera site was first selected?
  3. How much money has been spent in the preparation ofthe Narrandera site?
Senator FOLL:
Minister for the Interior · QUEENSLAND · UAP

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

  1. Yes.
  2. No.
  3. None.

page 233

QUESTION

PETROL RATIONING

Senator GIBSON:
VICTORIA

asked the Minister for Supply and Development, upon notice -

Can the Minister inform the Senate what the saving in petrol amounts to since the rationing system came into operation?

Senator McBRIDE:
UAP

– The Commonwealth Liquid Fuel Control Board is now reviewing the results of the petrolrationing scheme, and its report will be considered by the Government early in the new year.

page 233

QUESTION

CARTRIDGE GAUGING MACHINES

Senator BRAND:
VICTORIA

asked the Minister for Supply and Development, upon notice -

  1. What was the price paid to the Wing, Gauge and Instrument Company, of16 Bakerstreet, North Richmond, Victoria, for eight cartridge gauging machines for use at the Small Arms Factory, Footscray?
  2. What was the price paid for two similar machines imported prior to the declaration of war, and installed at the factory?
  3. What system has the department for policing the production cost ofthese machines, and speeding up their manufacture so that the totalcost is kept to the absolute minimum ?
  4. Were quotes obtained, elsewhere before an -agreementwasmade with the above firm for twelvemachines?
  5. Is itafact that; inaddition to the cheque representing. 4 per cent on the total cost ofeach machine, the manager of the above firm receives £14a weekas wages from the department ? 6.Whatwagesperweekdoes his partner, a registered bookmaker, receive? How is this money earned?
  6. Is thereaGermanwithNazi sympathies employed by this firm ?
Senator McBRIDE:
SOUTH AUSTRALIA · UAP

– The answers to thehonorable senator’s questions are as follows : -

  1. Twenty-one (21) machines were ordered from the Wing Gauge and Instrument CompanyinMarch,1940,onacostplusbasis..The order was subsequently reduced to twelve (12) machines. . These have not yet beencompleted and therefore the finalcosts havenot been ascerta ined,but itis estimated that these machineswillcostabout £1,050 each.
  2. The machines ordered from Germany cost £827 landed inAustralia duty free. If protective tariff were, applicable the cost would be. higher than the local cost. 3.Inviewofthegreaturgencyfor these machines constant pressure was applied to the manufacturer, hence extra costs for overtime, Sunday work, &c.The costs of production are supervised by astaff of accountants under the DirectorofFinance.
  3. As the cartridgemachines are of highly intricate nature (oftype not even madein England) it was impracticable to observe the’ customary practice of inviting public tenders. The machines so far delivered are in fact better constructeda ndmore accuratethan, those obtainedfromGermany There are 300 parts in. a machine.
  4. At thetimethe contract was entered into it wasarrangedthateach partner should be paid £14 aweekfor the reason that both were mechanicsdevoting their wholetime (including . overtime) to the business. It is considered that each of these partners would earn as a tradesman not less than £14 a week in wages’ andovertime, and it is a fact that, owing to the urgency of the requirement, the partners were requested to work day and night and through week-ends in order to get out the machines. During the currency of the contract one of the partners withdrew from the firm and was replaced by another referred to in the next following reply.
  5. Whether or not the incoming partner is a registered bookmaker appears to be irrelevant. Repeated inquiries have been made about the services rendered to the partnership by this partner arid assurances have been repeatedly given that his services are worth the amount whichhe receives. He is mainly employed in supervising the carrying out of sub-contracts and arranging for the supplies of material required by the partnership.

An allowance of 4 per cent, on cost by way of profit is very much’ below the customary rates charged by contractors for this class of work. 7.Close investigation has shown that there isno German with Nazi sympathies employed by the firm.

page 234

INTERNATIONAL SITUATION

Ministerial Statement

Senator COLLETT:
Minister without portfolio administering War Service Homes · Minister in charge of War Service Homes · UAP

– by leave - read a copy of a statement which was delivered in the House of Representatives by the Minister for External Affairs (Sir FrederickStewart (vide page 251).

page 234

ESTIMATES AND BUDGET PAPERS 1940-41

Debate resumed from the 21st November, 1940 (vide page 60), on motion by Senator McBride -

That the papers be printed.

Senator COLLINGS:
QueenslandLeader of the Opposition

– Even with the amount of time which has been at. the disposal of honorable senators since the budget papers were presented to the chamber, the task of absorbing their contents and implications has been enormousIsuggest to the Minister for Supply and Development (Senator McBride) that before the debate proceeds much further, he should have explanatory notes prepared to assist honorable senators to approach the subject with all the seriousness that it warrants. Australia’s task, admittedly,is tremendous, and honorable senators representing the Labour party have never failed to recognize the great responsibility that the international situation has placed upon the Government. In acknowledging that fact, we realize that there is need for dispatch in dealing with the budget, which is the most important that this Parliament has ever been called upon to consider. That statement, however, does not imply that proper consideration should not be given to every essential detail. The Minister should understand that every honorable senator on this side of the chamber desires and asks for the opportunity fully to debate the subject.

Tlie budget, by which the Treasurer (Mr. Fadden) proposes to raise the tremendous sum of £270,000,000, is the biggest in the history of the Common.wealth. On a per capita basis, it represents an. annual expenditure of £29, or over . lOS. a week. Clearly, then, it merits the most serious consideration, particularly as tlie Commonwealth Government is not the only taxing authority in Australia. On top of ‘the colossal amount which is to be raised, the States also superimpose their taxation. We are accustomed to the oft-repeated gibe that any form of taxation, however modest it may be. is unpopular, and I am sure that honorable senators will hear many references to the magnitude of the Treasurer’s task. In point of fact, however, it is not the Treasurer who prepares the budget speech. As in numerous matters of administration, departmental officials do the real work. Although Ministers look wise in the chamber, they play a very minor part. What actually happens is that departmental officials confer and collaborate; the Commonwealth Bank Board and the associated private, profit-making banks also collaborate.

Senator CAMERON:
VICTORIA

– Conspire !

Senator COLLINGS:

– I used a kinder word. The Loan Council also collaborates or conspires, according to the point of view,_and dien internal and external interests also collaborate. For example, a. member of the British Government, Mr. Oliver Lyttleton, and the High Commissioner for the United Kingdom in Australia, Sir Geoffrey Whiskard, have made inspired suggestions and utterances calculated to influence taxpayers of the Commonwealth, to whom they are in no way responsible, as to the necessity for the adoption of a deflationary policy. In my opinion, such a policy is as outofdate as we our Victorian grandfathers. After this complicated process, the Treasurer gets to work, the Estimates are drawn up, and the budget speech is prepared and, in due course, presented to Parliament. I submit emphatically that the policy of spending less is an exploded fallacy. We cannot win through to victory, either in time of war or in time of peace, by endeavouring to starve ourselves into a successful effort, nor can we abolish unemployment by creating more of it. The Treasurer is either incapable of regarding the matter from that point of view, or is not allowed to do so. There i3 only one pool from which all the taxes necessary for the war effort and for domestic requirements can be obtained. We cannot get any more from it than is put into it. The content of the pool is expressed in’ figures representing the total sum expended upon production. If we expend less there will be less production, industries will languish, unemployment will increase, and the national income will contract. In clipping into the pool by means of loans, taxation and the use of national credit, we should not take out more than can be replaced.

Senator McLEAY:
UAP

– Particularly, national credit!

Senator COLLINGS:

– However sceptical honorable- senators opposite may be, the inexorable march of events will force us to swallow increasing doses of national credit, m order to save this country from bankruptcy. At an empire fete in Sydney on Saturday last, the Attorney-General (Mr. Hughes), when making an appeal for funds for Bed Cross work, said: “ We are here to spend money, and spend we must”. Therefore, I hope that we shall not hear from responsible Ministers much more about a “ spend. less “ policy.

Has the Government given serious consideration to the inevitable repercussions of this budget ? I do not refer to political repercussions; these are so ominous, at the moment, that a Minister was put up this afternoon to read a document whichcontained nothing we had not already read in the press, for the sole purpose of occupying, half an hour while the Government was waiting to hear the nature of an amendment to the budget to be moved in the House of Representatives by the Leader of tlie Opposition.

Senator Collett:

– That is quite wrong.

Senator COLLINGS:

– If I am wrong in that regard1, I shall still pursue my path of error; despite the honorable senator’s denial. Will the Leader of the Senate (Senator McLeay) state whether the Government has considered the fact that, after this budget becomes operative, there will be no further possibility of selling wai* savings certificates, that nobody will offer free loans to the Government in order to carry on the war and that nobody will offerloans even atinterest? I hope thatthe Government has taken that matter into consideration.

In planningthe budget, it is essential that three ideasshould be kept in view. Theobjectshouldbetosecure the utmost speed in allformsof defence production, a minimumofeconomic, personal and social lossand a maximum of defence expansion, withsound economic development. . The view of the Opposition is that the war mustbe accepted as the supreme challenge, but notas the only one. The Opposition willhot in any way seek to impede the Government in its effort to secure every penny required for carrying on the defenceofthis country. To win the war and to leave the nation disrupted, as thisbudget would do, and planless at the close of the war, would, in my opinion, be a national catastrophe second onlyin its injurious effects to the war itself.’ The war cannot go on for ever. When it ends, the task of this nation will be primarily the absorption into peacetime industry of themen returning from the fighting zone. But the budget contains not a line showing that the Government is aware of this responsibility, or, being aware of it, is prepared to plan now for future needs. If any failure has been experiencedin the acceleration of our contribution to the Empire’s defence effort, it is due to the fact that this Government has not foreseen the need to employ every man who now desires employment.Not only must employment be provided for every available unit in thecommunitywho is able and willing to work, but also all of our national resources must be exploited to the full, orto the extent to whichmanpower is available. If we fail in that regard, Australia will not make its maximum contribution to the Empire’s war effort. Until we do that it is useless to seekto impose upon the people a maximum -financial contribution.

I have no desire to detract from the remarkable war effort now being made by Australia, nor am I attempting to take any credit from the Government for the work that it has already done ; but the Opposition has repeatedly declared that the effort of the Government is a belated one. At least twelve months of valuable time; in which the necessary acceleration could have been achieved,has been lost. In support of my contention that we must plan for post-war needs I shall read what was said by. Sir Harry Brown, Commonwealth Co-ordinator-General of Works, at the beginning of this month -

There was, he said, need for a “ changed system of living “ in order to obtain the maximum war effort, to abolish unemployment, and to give thepeople the sort of living they were entitled to. Great adjustments would obviously have to be made in our ‘social life, and these would probably concern finance. Relief works were merely palliatives, and poor ones, for unemployment and were no real substitute for long-range planning. The problems of the Commonwealth, if they were to be solved, he said; would have to be solved by an allin effort, and not by any single authority.

He was referring not only to an allin war effort, but also to present planning for future needs.

Senator Dein:

– He may have been referring to an all-in government.

SenatorCOLLINGS - If there is one thing that justifies all that members of this Opposition have said about its determination not to join a national government, it is this budget. If one of my responsibilities as a member of a national cabinet would be to go into the homes of the working classes of this country, and tell the people that I was party to reducing the wages of the poorer sections, I am extremely glad that I was not a member of such a government. I am, in fact, glad that I refused to have anything to do with that proposal. I should be a traitor to the class that sent me to fight for it in this Parliament, if I were prepared to do anything of that kind. Because I am not prepared to do it, I shall make suggestions this afternoon which I hope the Government will consider, even at this late hour. I ask it to take the incidence of the proposed taxation from the backs of those who are least able to bear it. It should not be applied in the dastardly cruel way proposed by the Government, but should be placed upon the shoulders of the Government’s wealthy friends. In the past six years, at least £36,000,000 of tax re- missions has been presented to those who provide the Government’s election funds and instruct it as to the policy to be followed in this Parliament. The Government could have raised that money and placed it in reserve for defence purposes, if ithad not been short-sighted and politically biased.

Senator McBride:

– Has the honorable senator examined the New Zealand budget?

SenatorCOLLINGS. - The Labour Government in New Zealand has introduced in that dominion a greater standard of comfort for the working class, and a higher standard of living generally, than is found to-day in any other part of the world.

SenatorAllanMacDonald. - And a higher rate of taxation.

SenatorCOLLINGS- Of course, the taxes are high. In New Zealand there is only one taxing authority, but great constitutional difficulties have to be overcome before Australia will be able to remove the disability of six State Parliaments as well as the Commonwealth Parliament clipping their hands into the same pool for taxation purposes. We need one taxing authority, and that should be the national Parliament. In New Zealand, the prosperity of the whole of the people has been promoted to a remarkable degree, as the result of the experiments being made there by a Labour Government.

Senator McBride:

– What nonsense!

SenatorCOLLINGS.- In New Zealand the income tax exemption is £200.

Senator McBride:

– But whatis the rate of tax?

SenatorCOLLINGS.- The national balance-sheet should not be produced on a commercial accountancy basis. Private businessesare entirely different from government undertakings. Of course, those who produced this budget know exactlywhat the people need. It is usual to budget for a surplus, but we should not take out of the common pool an amount so large that the refilling of it will be impossible. Whatever happens, the man in charge of a privately owned concern must see that it shows a profit, whereas the chief aim of the Government should be the rendering of service to the community. There is no need for a national budget to follow the same lines as a balance-sheet prepared by the ordinary business accountant. I see in this budget the hand of the professional accountant. A nation’s budget should provide for the needs of the nation and the requirements of its citizens. Sound government has regard to the finances of the nation, the government of the nation, and the welfare of the . people of the nation. Honorable senators opposite will probably agree with the first two of thoseobjectives, but not the third.

Senator McBride:

– We entirely agree with ail of them.

SenatorCOLLINGS. - The welfare of the people cannot be served by a budget such as the one before us: The underlying principle of taxation should be equality of sacrifice. Before a government imposes taxes, it should be sure that those taxes will not press unfairly on any section of the community. It seems to me that that should be a fairly easy task. Before the tax-gatherer is sent out to collect taxes, the Government should decide on a point in the scale of incomes below which no tax should be imposed in any circumstances whatever.

Senator Herbert Hays:

– Does the honorable senator refer to both State and Commonwealth taxes ?

SenatorCOLLINGS. - My suggestion has no limitation. Somewhere in the scale of individual incomes there should be a rate below which no tax is payable.

Senator McBride:

– The Government has set that standard.

SenatorCOLLINGS. - There is no evidence of it in the budget. Taxation should stop when to continue it would be to. lower the standard of life, health and happiness, because by so doing the morale of the nation would be impaired. I have heard workers whose standard of comfort is so low that they are forced to live in mean houses, in mean streets, and are obliged to resort to mean devices to keep up appearances, say, “ What does it matter who wins the war? We have nothing to lose, because our standard is already so low that we cannot be worse off than we are “.

Senator Herbert Hays:

– No Australian says that.

SenatorCOLLINGS. - I have heard hundreds of Australians say it. I deprecate such statements, because I believe that even though their standard as to actual food may not be reduced, a life of servitude under Nazi rule would be worse thanactual poverty. Those who govern this country cannot afford to proceed with any taxation proposal which will destroy themorale of the people, for should it be destroyed there is no certainty as to what will happen when the testing time comes. Honorable senators know what has happened in many countries during recent years.

Thisbudget takes no cognizance whatever ofthe need to improve our scale of social services; We cannot afford to neglect thesethings, Nor can we afford to; allow the dependants of our soldiers to goas poorly requited as they are. We cannot anylongerafford todeny the claims ofthe invalid and old-age pensioners to more, than £1a week, because £1to-daydoesnot buy the same quantity of goods : aswhen the system of pensions was instituted.

Senator Dein:

– That is not correct. The honorablesenator should compare the figures for1925 with those for to-day.

Senator COLLINGS:

– I invite the honorablesena tor who has interjected to. accompany menext Thursday to any office at which pensions are paid - in his own town preferably - and to ask some grey,bent-backed old man who attends there unwillingly to draw his pension whether he is really satisfied that he is getting a square deal and is able to purchase for £1 as much as he could buy with that sum twenty years ago. In spite of the fraud that is being perpetrated on the people by the appointment of the Commonwealth Prices Commissioner

Senator McBride:

– The honorable senator is entirely wrong.

Senator COLLINGS:

– The Minister cannot escape his personal responsibility for the plight of these unfortunate pensioners. Honorable senators who approve the Government’s policy probably salve their consciences by saying that, although the field of taxation is being extended, the load on the wealthy section of the community is being made much heavier. If honorable senators can sleep peacefully in their beds, regardless of the consternation which the presentation of this budget has caused, in countless homes in this country, I can only say that their consciences are easily satisfied. 1 repeat whatIhave said on other occasions, that it is not what is taken from a man that matters but what he has left when the tax-gatherer passes on. I have some figures here relating to the effect of the most recent budget introduced into the United Kingdom. It is difficult to obtain corresponding figures for Australia. In his book, Unser Kampf, Mr. Richard Acland, a member of the British House of Commons,states that11/2 per cent, of the people of the United Kingdom draw 25 per cent, of the national income, 81/2 per cent, of the people draw 25 per cent, ofthat income whilst the remaining 90 per cent, of the people appropriate the other half of the national income. That is to say, for every three persons who receive £8 6s.8d. aday and. every seventeen persons who receive £1 9s. 3d. a day there are180 persons each receiving only 5s. 63/4d. a day.

Senator Collett:

– Relative figures for Australia are obtainable..

Senator COLLINGS:

– Mr. Richard Acland’s book also states -

Some say that the rich are going to pay for the war. With income tax up to 17s.6d. in the £1 there’s no more need to talk about inequality - there won’t be any rich men at the end of this war. Will there not?

Already all our pundits of national finance are tentatively preparing the ground for the news that there must be a reduction in working class standards of living. No doubt the most essential skilled workers in arms industries will be able to keep their wage rates more or less abreast of rising prices. But it it quite certain that the average workers and the pensioners will not.

It is uncertain whether the sacrifices demanded of these people will be as great on the basis of a mathematical proportion of their income as the sacrifices of the rich, but it is not quite good enough to work out sacrifices on the basis of a mathematical proportion. The rich man whose income tax increases so as to reduce his income by 25 per cent, is sacrificing far less than the poor man whose purchasing power is reduced by 10 per cent. Sacrifice is a physical, not a financial affair. There is no physical pain connected with the writing of a cheque to the Chancellor for the very largest amount. The sacrifice only begins when a man cannot purchase what he could have purchased if he had not paid the tax. From this point of view a man whose income before the war was £100.000 would sacrifice almost nothing if his taxation rose to £95,000, or 19s. in the £1. In every human essential one can live just as good a life on £5,000 as on £10,000. One’s house may be smaller, but every one sleeps in a separate room. One’s staff may be smaller, but there is still some one else tolight the fire. One’s car may be smaller, but it still goes. One’s sons may not go- to a public school - but why should they if they cannot win the open scholarships? In comparison with this,’ a mere 5 per cent, reduction in the purchasing power of a working family 13 immediately reflected in the most definite physical priva-tion and pain. This is the more true since the considerable number of charges such as rent and insurance are fixed and a 5 per cent, reduction in the total income means therefore perhaps a 15 per cent, reduction in the sum available for food.

That illustration stands for Australia as well as Great Britain. I believe in income taxation, and in the principle that the higher incomes should be taxed heavily. But. I believe also that the lower incomes should not be taxed at all and that the middle incomes should be taxed only moderately. I may think that the levy on my income is excessive, but I shall pay my instalments willingly. I believe in the income tax, and if I have income I am willing to pay the tax. I shall not be obliged to discharge anybody because I do not employ anybody,, but the average man on £1,000 a year, who is spending his entire income, or very nearly all of it, will be obliged to retrench. He will have to say to his wife, “ We cannot employ a gardener any longer”; or “ We cannot keep two maids in the future; one will have to be dismissed”. If he has only one maid, then possibly he will be forced to dispense with her services. He may have to say, “ We must withdraw Mary from college because we cannot continue to keep her at that expensive establishment; she must return home to help you with the house “. Things of that kind will happen right down the scale of incomes, and surely honorable senators opposite can see what will be the repercussions. There will be a substantial reduction of spending power, and it is spending power alone that matters - spending power in the hands of the poorer sections of the community, not the surplus in the hands of the rich. The people on the lower incomes, not the wealthy nor well-to-do, keep the wheels of industry moving. Our industries rely on the purchasing power of the men on £5, £7 and £10 a week, who spend, every penny of their salaries because they must do so to keep their household going. Those are the people who keep the shops, factories, and emporiums busy, and the effect of this budget will be to reduce their spending power. The result will be that shop assistants will be sacked, factory hands retrenched, and so on. The Government should realize that the war cannot be effectively fought in that way, and that a proper contribution to the national war effort cannot be secured ,by harshmeasures of this character.

The Eight Honorable W. M. Hughes said in Sydney recently -

So shrewd has the campaign been planned that not one of us can hope to escape.

No good Australian will attempt to escape, but surely, in travelling down the scale of incomes, a point must be readied when common decency demands that an individual shall be left alone. In all the years I have worked in and out of Parliament, I have met representative crosssections of Australians, and I am sure: that not one would complain, or be unwilling to accept his share of the burden in- this time of national need, provided we can convince him that the allocation is fair and just in its incidence, and that it observes the cardinal principle of equality of sacrifice. Because this budget proposes to do neither of these things, I am not prepared to defend it either outside Parliament or in this chamber. All we are asking is that the well-to-do sections of the community be made to contribute from their superfluity of this world’s goods, whereas, apparently,, the Government’s intention is to- ask the poorer classes to contribute to the nation’s needs out of their insufficiency. That is a simple proposition which we can all understand, and it does not need any further elucidation or explanation.

A notable figure at Sydney University, Professor H. D. Black, said recently, “ This war is no emergency for some people, .but a golden opportunity - a matter of business a little better than usual “. That is quite true, and the Government is taking no effective steps to prevent it, as I intend to show directly.

As I said in the course of my opening remarks, despite the protests of the Opposition, this Government and its predecessors have been guilty of making large remissions of taxes to the wealthy sections: of the community on every possible occasion. Now, in order to make up the; leeway caused, by those unnecessary remissions and for other reasons, this injustice is being perpetrated. The reduction of the general exemption to £150 per annum will press most unfairly on the ‘ lower incomes. It is difficult to obtain relevant Australian figures, <but let us examine the taxation proposals in order to find out exactly how they will ‘work out. Under the old income tax scale, a man with a wife and two children, in receipt of £400 per annum, paid nothing, because his taxable income was’ nil; but under the new proposals, his taxable income will be £200 and he will pay £10, provided I am right in estimating his liability at about ls. in the £1. The man with a wife and two children, on. a salary of £350 per annum, will have a taxable income of £100, and will contribute £5. If his income be £300 he will be exempt, as he should be. I repeat that these people live in mean streets, in mean houses, and have to resort to every mean device under .the sun in order to live.

Senator McBRIDE:
UAP

– They ‘ would not thank the honorable senator for his description.

Senator COLLINGS:

– I shall risk that.

Under the old income tax scale, a man with a wife and one child, in receipt of £350 per annum, had no taxable income and paid nothing, but under the new proposals, his taxable income will be £150 and he will contribute £7 10s. For the same man on an income of £300, the taxable income will be £50, and his contribution will be £2 10s.; should his income he only £250 he .will pay nothing. Under the old scale, a man with a wife and no child in receipt of £300 paid no tax, but under the new proposals he will pay £5. For the man with a wife and no children an income of £250 a year will be subject to to tax of £2 10s., and an income of £200 or les3 will ! be exempt altogether. That exemption of incomes of £4 a week or less is no doubt considered to be a charitable gesture. Had I the power, my reprisals to these taxation proposals would be drastic. By act of Parliament I would provide that, for the duration of the war and twelve months thereafter, anyone who attempted to justify the existence of this budget should be paid only what the arbitration court prescribed as the basic wage. In a vain attempt to justify its iniquitous proposals, the Government claims magnanimity because it has decided to let the man in receipt of only £4 a week, with a wife and no children, off without paying income tax, paying no regard whatever to the possible existence of other family responsibilities. It is obvious that were the exemption higher the imposts would be much less severe, on the men with the lowest incomes, particularly married men.

The Bight Honorable W. M. Hughes is reputed to have coined the slogan - I do not know how much effect it has had - “ Populate or Perish “. I ask honorable senators how many men will be willing to marry and help to populate this country when they are .burdened with a .budget of this kind. It only needs a glance at the Government’s proposals to see that all they accomplish is ,a blow at the poorer section of the community, who will become still poorer, while, at the same time, people on the top of the scale will be let off as lightly as the Government thinks it can get away with. All honorable senators know that that is true.

I strongly urge that the exemption be raised. If the Government is not prepared to do that, I have another proposition : If the proposed graduated reduction of the exemption were not enforced until a higher income level were reached, say £400, or if £1 reduction for £2 of excess income were imposed at the point where the exemption ceased to apply, I have no doubt that the Government would find that the burden would be considerably eased. However, I understand the Government’s attitude on this matter, is “the budget or nothing; take it or leave it “. Apparently the Prime Minister is not prepared to accept any suggestion or compromise.

Senator McBride:

– Does the pres3 always report the honorable Senator correctly ?

Senator COLLINGS:

– The press very rarely reports me at all, but when it does, nine times of out ten it misrepresents what I have said. The reason for that is that I represent in this Parliament a class of people whose policy is anathema to the vested interests which support this Government, and I am proud of it. A wellknown English statesman is reported to have said in effect : “ Lampoon me, or misrepresent me if you like, but for Heaven’s sake don’t ignore me “. I remain impervious to what the press does.

In the financial year 1936-7, there were 232,000 personal exertion income taxpayers, 26,000 property income taxpayers, and 43,000 payers of both property income tax and personal exertion income tax. The 1933 census revealed that there were 346,000 breadwinners on £260 per annum and over. Those figures are very interesting; only 60,906 people paid tax on income from personal exertion, and their payments were equivalent to that of a single man on a salary range of £250-£2S4 per annum; 41,917 persons paid tax on incomes equivalent to that of a single man on £2S4-£317 per annum ; 46,551 persons paid tax on incomes equivalent to that of a single man on £317-£384 per annum, and the remaining 73,000 people paid tax on incomes of over £384. In an endeavour to obtain statistics that would compare with similar figures in the United Kingdom, I obtained the following information: - On incomes of £1 to £500, 84 per cent, of the total number of taxpayers, received 62 per cent, of the national income; on incomes of £501 to £1,000, 11 per cent, of the total number of taxpayers received 16 per cent, of the national income; on incomes of £1,000 and over, 5 per cent, of the total taxpayers received 22 per cent, of the national income. That means that 95 per cent, of the people receive 78 per cent, of the national income, while 5 per cent, of the people receive 22 per cent, of the national income. On a basis of equality the 5 per cent, of taxpayers should receive only 4 per cent, of the national income. “We have to consider not only the direct taxation with which I am now dealing, but also the various other devices, such as the sales tax and customs and excise duties, which are employed to extract money from the pockets of the people. What section of the community will be most affected by the increase of the sales tax to 10 per cent, or 15 per cent.?

Senator Dein:

– The great bulk of commodities are exempt altogether. The honorable senator knows that.

Senator COLLINGS:

– If I understand the Government’s proposals correctly, it is hoped to obtain an additional £3,500,000 from the sales tax this year.

Senator McBride:

– But most goods are exempt.

Senator COLLINGS:

– Of bourse they are. What I want to know isi do honorable senators not know that in business every item of expenditure and overhead cost is taken into consideration? Do they not know that sales tax is taken into consideration, and that very often profit is added to the sales tax as well as to the original cost? In the last analysis, all taxation filters down to , the people who have the least to spend, because they are obliged to spend all of their income. I am not suggesting that the Government should exempt the individual who wishes to buy a wireless set, although 1 see no reason why any persons should be denied the pleasure of wireless sets if I and other honorable senators are able to have them. Of course a radio is not a necessity, and people can live without it. So far as honorable senators opposite are concerned, these people should be satisfied with corduroy pants instead of tweed, and flannelette underclothing instead of silk. If that is the Government’s policy, let it proceed with it. But, provided the people do not revolt in the meantime, it will not be long before they . are reduced to the standard of the loincloth and a few grains of rice. Honorable senators opposite should not sneer when I plead for a fair deal for the people who will have to pay the bulk of these increases of tax. Every woman would like to have an electrolux in her home. I leave aside for the moment the fact that, due to the exorbitant sales tax on this article, every woman who desires to do so cannot afford to purchase an electrolux. However, it is obvious that every married worker will resent a state of affairs which compels his wife to slave about the house with a millet broom, while the wives of welltodo gentlemen supply their servants with an electrolux. When honorable senators opposite realize the implication of that statement they will be better able to appreciate my attitude on this matter.

The Labour party urges the Government to utilize national credit to a greater degree for the purpose of financing our war effort. It is necessary that we should’ stabilize our thoughts on such matters. Senator. Darcey complains - and, I think, rightly -that he has difficulty in getting honorablesenators opposite to understand whathe is talking about when he deals with the utilization of national credit.

Senator McBride:

– Do all honorable senators on that side understand Senator Darcey ?

SenatorCOLLINGS. - I shall merely state wheremy party stands on this matter. In doing so I shall not attempt tosteal Senator Darcey’s thunder. I hope that, so long as I remain a member of the Senate, that honorable senator will not modify his advocacy of the utilization of national credit, but will continue to tell his story with undiminished vigour, because the day will come when honorable senators opposite, and the class they represent, will accept, asthey always do, as a preventive of revolution, the proposals of the Labour party in thismatter. Every country in the worldhas financed its government, and itswars, on exactly the same conventional basis as that on which thisbudget is founded for the purpose of financing Australia to-day. That fact cannotbe denied. Not even Alberta,about which I heard an honorable senator sneer the other night, has ever implemented the financial policy advocated by the Labour party in this Parliament.

Senator McBride:

– And, of course, they are all wrong, whilst the honorable senator alone is right.

SenatorCOLLINGS. - If what I say he not correct, the reverse must be true - the world is all right,whilst thefinancial reform which I and others advocate is all wrong. Let us examine that proposition. The condition of aff airs in the world to-day should make every one of us righteously ashamed. In spite of - perhaps because of - conventional methods offinance we are constantly harassed with wars, and the threat of wars. Honorable senators Opposite seek to perpetuate those methods of our forefatherswhich have obviously landed the world in the tragic position in which it now finds itself. I do not want honorable senators opposite toagree that the remedy we propose is correct. Nor do I want them to admit that Senator Darcey, Senator Collings or the Opposition is right. But they must admit that, obviously, conventional methods of finance have failed, and that the time has arrived when we should take the risk of trying unconventionalmethods. The trouble with honorable senators opposite is that they are bound by the fetish of the status quo; their minds are ossified by convention. Their attitude reminds me of the story told of a convention of negroes at which, after one of the delegates had so much to say about the necessity for maintaining the status quo, a brotherdelegate who had listened to him aghast, arose and said, “ Mr. President, what are de status quo?” And the president replied, “ Don’t you know what statusquo am? Dat is the mess we am all in “. Honorable senators oppositeare in amess, and they will never extricate themselves from it because their minds are not receptive to new ideas. The Government says that itcan finance our war effort in three ways: First, by raising public loans.In this way it expects to obtain £50,000,000. Secondly, by taxation; and by this means it hopes to obtain £31,000,000 of which £21,000,000 will represent direct taxation, and the balance indirect taxation. And, thirdly, the Government says that it will utilize credit expansion. At long last the Government has become converted to the idea of credit expansion ; but now, of course, it says that we cannot go very far in that direction.

Senator McBride:

– The Government has utilizedcreditexpansion foryears.

SenatorCOLLINGS- The honorable senator is prepared to make that admission now. The reason is obvious; I need only ask how the Governmentis financing the wheat industry. In December, 1938, eight months before war was declared, Australian trading banks held £38,000,000 of government paper. On the 30th April of this year the same banks held £84,000,000 of government paper, half of which was in treasurybills. Four months later, onthe 31st August, after loans and revenue had been brought in, thetrading banks held £78,000.000 ofgovernment paper. If that money were held by the Commonwealth Bank, and was not traded off to the associated banks and used by them for the purpose of building up a damning superstructure of credit, as a means of extracting from the people of this country millions of pounds annually in interest, we should not have reached our present position in which it becomes apparent that after we repay our original debt, we shall still owe in interest an amount equal to the principal. How has that national credit been raised? In whose hands is it to-day? We on this side know, of course, that, after all, the Commonwealth Bank, in obedience to its masters, is simply issuing national credit in a way which enables the private banks to build up this tremendous superstructure of credit, in respect of which they will take interest toll of the community from now until doomsday. [Extension of time granted.’)

When I made a reference earlier in my remarks to the price-fixing fraud perpetrated by this Government, I was met by an indignant interjection from an honorable senator opposite. I do not retract one thing that is implied in that statement. Every honorable senator opposite is responsible for this budget, because he is a member of the party which framed it. He knows perfectly well that the cost of every article of human consumption has increased since the declaration of war.

Senator Spicer:

– That is not true.

Senator COLLINGS:

– I should like the honorable senator to name one article whose price has not increased.

Senator Spicer:

– Sugar.

Senator - COLLINGS.- That is not true ; the prices of sugar products, because of the sales tax, have increased considerably.

Senator McBride:

– The honorable senator is side-stepping the question.

Senator COLLINGS:

– Only the other day when I purchased a confection in a chemist’s shop, the shopkeeper said to me, “ Senator, 1 am sorry to say that the price has gone up from 3s. to 3s. 4d.” I paid the extra 4d., because I can afford to do so. Honorable senators opposite cannot say that prices of all commodities used for human consumption have not increased. It is not their fault that the retail price of sugar has not gone up, because this Government has done nothing to control the- price of retail sugar. Nobody has asked that the price be increased. However, the prices of sugar products have increased, and (honorable senators opposite are aware pf that fact. Let us consider the price of tea. Senator Fraser asked a question on th,is subject, but his inquiry was side-stepped. 1, myself, do not purchase household goo-la, but I know of many people who make such purchases. I know that many people can afford to pay the increases of prices. I can certainly do so while -I am in. receipt of my present salary of £1,0C0 a year as a senator. But do not let us try to deceive our- selves, or attempt to bluff the taxpayers that the cost of living has not increased. I have no criticism to offer of the Prices Commissioner personally. His job has been created as a cunning device to enable the Government to come forth with the silly statement that the cost of living has increased by only 1.9 per cent. Such a statement is childish. I do not drink beer, nor do I smoke; but I know of tens of thousands of working men who regard a glass of beer, or a pipe, as an essential in their daily life. The Government now proposes to increase still further the cost of such commodities. The Prices Commissioner, with a great display of heroism, says to the licensed victuallers and tobacco vendors, “ Do not raise your prices until Tuesday next, because I am going to get you together, and have a talk with you.” But what do we find ? A conference is held, and we read in the press next morning that the prices of beer and tobacco have been increased. It is useless to say that such increases do not add to the cost of living of the worker. Only the other day I read in the journal of the Clothing Trades Employees Association that the prices of clothing and’ garments, and such articles as socks, pyjamas, sheets, blankets and pillow slips, &c, have risen by 12£ per cent. Recently, I also read a moving appeal made on behalf of authorities controlling public hospitals in Sydney. Honorable senators opposite must have read that appeal. All of these people cannot be telling untruths. Surely I am not the only person who is incapable of absorbing the facts. In that appeal it was stated that the cost of every’ item required ‘ by the hospitals had increased. It was said that -sheeting and -blankets needed by the hospitals now cost more than before the war. Honorable senators opposite ‘ know the reason for this state of affairs. ;The price of woollen yarns has increased by 20 -per cent. The Adelaide Advertiser, of the 16th of this month, reported -that the prices pf these articles had increased, - and commenting upon this fact the Minister for -Trade -and Customs (Mr. Harrison) said that an inquiry into the costs and prices of woollen yarns .had disclosed increased costs of spinning. “Whilst I am not denying increased costs of production, I contend that honorable senators opposite cannot truthfully declare that the cost of living has not risen during recent months. The Government cannot have it both ways. Either costs have not increased, in which case there is no excuse for the rise of prices, or costs have increased and there is -an excuse for the- rise. But do not attempt to hoodwink me by asserting that no increase has occurred. All the efforts Of the Prices Commissioner have resulted merely in the stabilization of profits. “The Labour party has already exposed that. The Government approaches manufacturers ‘engaged on defence - contracts and asks them for a list showing the costs of the raw materials required, and detailed accounts of ‘their overhead expenses. When the Government is satisfied with the’ statements tendered, it adds up the costs and allows the Contractors a profit of 5 per cent. The thing is as plain as it could be. Although prices are mounting rapidly, the Government contends that the poor have no reason to complain, and stoutly affirms that the welltodo are being penalized.

I ‘come now to the -unexploited or the inadequately exploited -field of taxation. What action has the Government taken to tax wealthy companies? At ‘present they are being” taxed in such a way that the Government is collecting- only a fraction of the-amount ‘th’at it -should receive. Do Ministers contend that there is a scintilla of justification for allowing any section of the community to ‘make- excess profits in ‘war-time? -Every company should be taxed to the extent of 20s. in the £l-on all excess profits attributable to war-time conditions. If the Ministry is not prepared to . go so far as that, it should take at least 75 per cent, of the excess profits. From many sources the : Government is meeting with criticism for its failure to adjust the scales evenly between the Workers and the wealthy trading concerns. In a recent issue of the Bulletin appeared the following com- ment : -

The Federal Government will- be shirking its duty if it does not introduce- some form of excess profits tax based on average . earnings before war broke out.

If the Government did that, equality of sacrifice -might be achieved. The Brisbane Courier-Mail, which is a conservative organ, a member of the syndicated press and a consistent advocate of the Government’s -policy, jointed this statement -

The Federal Government will meet with considerable Criticism if, in the bill now before Parliament, it intends to proceed with the proposed tax on all profits of companies over 8 per cent. In its present form the tax -will not reach some of Australia’s biggest and wealthiest companies.

The article added that the Government will not catch the big companies in its net, and what is : more, it is well aware that they -will escape. While declining to tax ‘bonus shares, watered 1 stock and secret reserves, the Government has sprung this budget >-on the community with an explanation that it represents an attempt to distribute the burden ‘ fairly over- all sections. Obviously that is not being done. The West Australian, of the 1.2th November, printed this comment -

By provisions almost staggering in ‘their simplicity the United Kingdom has defined a standard pre-war period, the ‘average profits of which ‘are accepted as normal-profits of any undertaking, and everything a.bove that normal rate is claimed by excess profits taxation. The first step in this direction was taken “ before the Outbreak of -war, and shortly after the outbreak 00 per- cent, of - any excess profit of companies above the normal pre-war rate was claimed by the Treasury. “Soon after the present Government took office the CO per cent, was raised to- 100 per cent, of the excess profits made by companies engaged directly in war production.

Every day, the ^financial columns of the newspapers contain details of the profits made -by ‘ large companies. Although profits -are increasing, it issignificant that ‘dividends are not being raised. Surplus moneys are concealed in secret reserves, because the companies dare not reveal to the public the true figures. Tooth and Company Limited, brewers, recently declared a gross profit of nearly £2,000,000, and a net profit of £870,299, which is £14,590 greater than last year’s return. After placing £15,000 into reserve, allowing £75,000 for depreciation of its properties, and carrying forward £73,863, the company paid a dividend of 12 per cent. Instead of taxing the worker in receipt of £3 a week, the Government should take a slice of those colossal profits.

Senator McBride:

– That is one of the companies that the Government proposes to tax.

Senator COLLINGS:

– To what extent does the Government propose to tax them? I venture to prophesy that it will impose a modest tax upon a” portion of their profits; Of course, I do not blame the Ministry for adopting such a policy, because it has to obey the dictates of its masters. Ministers are being squeezed by those who control this Government’s policy, and who, furthermore, will attempt to control the policy of a Labour government if they are given an opportunity to do so. But the Labour party, when it assumes office, will ensure that the expression “equality of sacrifice “ is given a practical application. I am not criticizing unduly these wealthy companies, because I -.realize that -many of them render a national service. My contention is that they constitute an inadequately exploited field of profit, from which the Government could derive substantial revenues.

The Myer Emporium (South Australia) Limited, in its trading last year, made a net profit of £130,779 compared with £124,007 during the previous year; paid a dividend of 9 per cent, on ordinary capital, and 7 per cent, on “ A “ and “ B “ preference shares; allowed £20,000 for depreciation of property; placed £30,000 in general reserve, and carried forward £42,718. “Washington H. Soul Pattinson and Company Limited, “ chain “ chemists in New South Wales, for the year ended tlie 31st July, 1940, made a profit of £69,000. Last year its profit amounted to £70,047. Last March, it issued bonus shares to the amount of £126,000, allotting two shares for every five held.- -It paid -a dividend of -22.3 per cent, compared with 15 per cent, on its old capital ; the “final- distribution of 13.3 per cent, on the -new capital was equal to 18.6 per cent, on the old capital. If I were to read a list of the shareholders in these .companies, nearly every honorable senator opposite would hang his head in shame, because these enterprises are closely linked with this Parliament. Many honorable senators and members of the House of Representatives are their delegates in this legislature. They know that perfectly well: Last night, I listened to an outburst by Senator Johnston concerning the journal published by the Australian Broadcasting Commission. Did any honorable senator imagine that he was speaking “ off his own bat “ ? They would be childishly innocent if they did not know that he was merely singing the tune that “vested newspaper interests demand shall be’ sung in this Senate.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Does tho honorable senator suggest that the companies which he mentioned will escape the incidence of the increased tax?

Senator COLLINGS:

– No. But while the Government refuses to exempt the lower-paid workers I shall .do my utmost to ensure that wealthy .companies bear their fair share of the burden. Wealthy concerns-, that a-re making, substantial profits include-: Electrolytic Zinc Company ‘ of Australasia Limited,. Broken Hill Proprietary Company Limited, Howard Smith Limited, Colonial Sugar Refining Company Limited, Australian Consolidated Industries Limited, Carlton - and United Breweries Limited, Elder Smith and Company Limited, -Woolworths Limited, Pennys, G. J. Coles and Company Limited, Engineering Company of Australia, Hume Pipe Company (Australia) Limited, Mick Simmons Limited, General Motors-Holden’s Limited, David Jones Limited, Horderns, Farmer and Company Limited, Sydney Snow Proprietary Limited, and great insurance companies. As I stated previously, I am not criticizing these companies. The Broken Hill Proprietary Company Limited, for example, has served Australia well, and no honorable senator -has ever heard me -decry monopolies, merely because they were monopolies, if -they were rendering a national service. But they should not render that service in return for exorbitant profits, as they. «re doing. With its taxation bucket, ,the Government should dip to the depths lOt this financial well. Unfortunately; the ‘ budget makes no provision for that.– I do not assert that it is not necessary to raise £270,000,000 in order to meet Commonwealth expenditure during the current financial year ;* but 1 contend that the burden should be fairly distributed. The companies which I mentioned are the pillars of the Government’s temple. They send honorable senators opposite here to represent them and to defend them against the attacks of the Opposition.

Lest I should be accused of offering only destructive criticism, I propose to make several constructive suggestions for raising revenue. First, the Government might consider the imposition of a fiat rate of 20s. in the £1, on all profits exceeding, say, 5 per cent. Regulations issued under the National Security Act already allow that percentage to firms working on defence contracts. In my opinion, every penny profit over and above that percentage should be seized by the Government. No hardship would be caused to the wealthy companies. . The big shareholders would still be able to run their -motor cars.

Senator McBride:

– Is that the honorable senator’s proposal for raising additional revenue?

Senator COLLINGS:

– It is one of my proposals.

Senator McBride:

– Which one does the. Leader of the Opposition want the Government to adopt?

Senator COLLINGS:

– I shall outline for the consideration of Ministers ‘a number of proposals and tlie’ Government may then make its choice. -If my first proposal does not meet with the approval of the Government,’! suggest the imposition of a flat ‘rate of 10s. in the £1 on -all undistributed profits between nil and 5 -per cent. The Government’s bucket, no matter how deeply it is- dipped into that well, would not reach the bottom.

Senator McBride:

– I do not under- ‘ stand the honorable senator’s proposal.

Senator COLLINGS:

– It is simple enough. Many companies have large, un- distributed profits. That money has not been put- into circulation. The Government should take it.

Senator McBride:

– The Government is already taking a bite out of that source.

Senator COLLINGS:

– A bite is not.. . sufficient; the Government should be taking a mouthful. But Ministers -appear to be very nervous when taking. even a bite. My third suggestion involves the imposition of a steeply graded tax which will bring in all the “ little fellows “ as well as the “ big fellows “, but which will fall in particular severity upon companies with American shareholders who require dollar exchange for ‘ the payment of their dividends.

Senator McBride:

– That is a wonderful idea! I should like to know how the honorable senator proposes to-.make such . a plan work !

Senator COLLINGS:

– If a company is paying dividends to shareholders overseas, they should be compelled, in future, to collect their money in Australian currency and not expect to be paid abroad in sterling. The Australian pound note is good enough for Australians ; therefore, let . foreign shareholders collect their dividends in Australian’ currency. Though realizing that -I- am under- no compulsion to make these constructive proposals, I am endeavouring to help -members of the Government, in their mental darkness, to see the -light. -I should also prohibit the entry into Australia of all non-essential goods, and articles which could be manufactured within the Commonwealth. Un- ‘ -fortunately, the Government is not prepared to tell the well-to-do that- they can no longer have imported luxuries, such as expensive foreign cigars and wines.

Senator McBride:

– The Leader of the Opposition is quite wrong in making that statement.

Senator COLLINGS:

– Throughout my parliamentary career, I ‘have differed from the political opinions of the Minister, and I expect that I shall continue to do so. The admission of these goods from non-sterling countries is now prohibited, but they are still coming in from sterling countries.

My view of the budget is that it is badly planned. If Ave had the necessary power in this chamber, I .should suggest that the Government be given an opportunity to re-plan it, keeping always in mind the fact that the Opposition, both in this chamber and in the House of Representatives, is .just as strong numerically as the Ministry and its supporters. It is > impossible for the Government to continue in its own sweet way, . always demanding the right to call the tune. If -it does not yield something to the classes -that will suffer under this budget even more in the future than in the past, it must take full responsibility for what will happen in this’ country when the people fully appreciate the implications of the present financial proposals.

Senator Foll:

– We do not intend to be blackmailed.

Senator COLLINGS:

– I quite understand that. The Minister who interjects does not often try to put anything across mc. I prepared my speech before I was aware of the reaction to the budget of newspapers such as the Sydney Sun. Sydney Daily Telegraph and the Sydney Morning Herald; therefore, I am not taking my cue from “them. In their views of the budget, we hear vested interests squealing because they know that the spending power of the community will be reduced. I arn not interested in the profits of vested interests, but in the effect of the budget upon the people who will be called upon to bear the greatest share of the sacrifices to be made.

Debate (on motion by Senator James McLachlan) adjourned.

page 247

SPECIAL ADJOURNMENT

Motion (by Senator McLeay) agreed to-

That the Senate, at its rising, adjourn till Wednesday next, at 3 p.m.

page 247

ADJOURNMENT

Period ok Adjournment - Magnesium Industry - Canberra-: Price of Tea - Censorship of Broadcast Addresses.

Motion (by Senator McLeay) proposed -

That- the Senate do now adjourn.

Senator CLOTHIER:
Western Australia

– I protest strongly against the decision to adjourn the Senate until Wednesday next. Such proposals are too frequently submitted to the Senate. Those of us who come from Western Australia will be compelled to. remain in Canberra until next Wednesday, but senators from New South. (Wales and Victoria will be- able to return to their homes. Western Australian senators are placed in an unfair position, as are those from Queensland,. South Australia and Tasmania.

Senator AYLETT:
Tasmania

– Much has been said by honorable senators on various occasions about the difficulty experienced by them in obtaining information from Ministers. I am now anxious to know why I cannot gel the information that I have sought regarding the development of industries in Australia. My question regarding the establishment of the magnesium industry has been completely evaded by the responsible Minister. I asked how much magnesium is required in this- country, and he refused to give me that information. I also inquired as to the price the Government is paying for magnesium imported from abroad, and the Minister- also refused to answer. He evaded my question as to the source from - which magnesium is being obtained by saying merely that it is produced in the British Empire. The people of Tasmania are interested in the development of the magnesium industry, since magnesium is a commodity of which Australia is much in need at the present time. It appears that this metal is also urgently required in Great Britain. The exMinister for Commerce (Mr. Archie Cameron) received advice” from Great Britain that the authorities there would consider taking the whole of Australia’s surplus production of magnesium. I want to know why the Government has, from time to time, definitely refused to give the information sought regarding this matter, and why the local industry has not been encouraged.

The Government should have given the company which proposes to establish the industry in Tasmania the assistance to which it is justly entitled. At one stage, the Ministry questioned the advice tendered by the experts of the company, but Ipoint out that the Government has its own experts who could have been called upon to check the advice tendered. The Government also claimed that it asked the company to make a definite offer as to the quality and quantity of magnesium that it could supply, and the date when production would commence. It was stated, in reply to my question, that that offer was not made. As a matter of fact, an offer wasmade to the Government regarding the quality and quantity of the commodity that could be produced and the approximate price that would be required. The Government was asked to accept that information as a basis of negotiation. Several conferences have taken place between representatives of the Government and of the company, but on each occasion the Government has shelved the matter. Apparently, it does not wish to establish this industry in Tasmania. The company has offered to produce magnesium atabout ls. 3d. per lb., whereas the price in Great Britain to-day is about ls.11d. perlb. sterling or about 2s. 41/2d. Australian. Reports show that Great Britain offers an ample market for all magnesium that could be produced in Australia. The production of this commodity in our own country would help “Australia to preserve its overseas credit, and such an opportunity should be eagerly availed of by the Government. The company, despite the rebuffs received from the Government, is still endeavouring to establish the industry, with the assistance of the Government of Tasmania. I hope that the Commonwealth Government will change its attitude to the company. Magnesium is used extensively in the manufacture of armaments, and its production in Australia would not only assist in our finance programme, but would also help to preserve our overseas credits. At the same time, it would assist in absorbing some of the unskilled labourers whom the Government claims to be unable to place in its war industries. The encouragement ofthis company would also stimulate industry in Tasmania, which, up to the present time, has obtained no benefit from the defence programme. Perhaps theGovernment would prefer to see the industry established at Newcastle.

Senator LECKIE:
Assistant Minister · Victoria · UAP

– Yesterday Senator Fraser, in commenting on a reply to a question regarding theprice of tea in Canberra, stated that Bushell’s tea is sold in other parts of the Commonwealth at 2s. 3d. and 2s. 4d. per lb., but in Canberra the price is 2s. 10d. per lb. He implied also that this tea is sold inWestern Australia at a maximum price of 2s. 4d. per lb. Inquiries by the Deputy Prices Commissioner, Perth, to-day disclose that the price of this tea in the metropolitan area of Perth is 2s. Sd. per lb. and in the majority of country districts in Western Australia, 2s.9d..per lb. The price in Canberra is 2s. 9d. per lb. It appears that the information supplied to Senator Fraser was not quite correct.

Senator BROWN:
Queensland

– The branch of the Australian Labour party at Kingaroy broadcasts educational addresses once a month through certain B-class stations, and these programmes have to besubmitted to the censor. I understand that ten clayselapse before information is received intimating that the matter has been passed by him. I am also informed that drafts submitted by other persons are approved within 24 hours of their submission. I ask the Postmaster-General (Senator McLeay) to explain this differentiation of treatment In some cases, the delay of ten days causes the matter which has been submitted to bc out of date before it is broadcast.

Senator McLEAY:
Postmaster-General · South Australia · UAP

– in reply - The Government has been challenged in the House of Representatives and the practice-is that until the issue is decided the Senate shall not proceed with business. In the circumstances I am unable at this stage to reply to the honorable senator’s representation.

Question resolved in the affirmative.

page 248

PAPER

The following paper was presented : -

Tariff Board- Report and Recommendation - Tobacco and Tobacco Manufactures

Senate adjourned at 5.21 p.m.

Cite as: Australia, Senate, Debates, 28 November 1940, viewed 22 October 2017, <http://historichansard.net/senate/1940/19401128_senate_16_165/>.

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