Senate
11 March 1943

16th Parliament · 1st Session



The President (Senator the Eon. J. Cunningham) took the chair at 3 p.m., and read prayers.

page 1502

QUESTION

REPATRIATION

Civilian Shits von Discharged SOLDIERS.

Senator LAMP:
TASMANIA

– Will the Minister representing the Minister for the Army inform the Senate whether instructions have been issued, as promised, that discharged returned soldiers will be supplied with a civilian suit? If so, can the Minister state why effect has not been given to that promise?

Senator FRASER:
Minister for External Territories · WESTERN AUSTRALIA · ALP

– The position at present is that, on discharge, a suit is issued to all members of the forces who have served on full-time duty, and who are in necessitous circumstances. “ Necessitous circumstances “ for this purpose is interpreted to relate to cases in which a soldier when discharged has leSS than £20 in his pay-book. The matter of the issue of a suit to all members on discharge, together with the quality of the suit provided, is now being considered by the appropriate authority.

page 1502

QUESTION

BUILDERS’ LABOURERS

Senator FOLL:
QUEENSLAND

– Is the Minister for the Interior aware that a statement appeared in the press this morning stating that a strike is likely to occur amongst members of the Builders Labourers Union engaged in certain important works being carried out by the Allied “Works Council? If that is the position, can the Minister give any information to the Senate as to how the matter now stands?

Senator COLLINGS:
Minister for the Interior · QUEENSLAND · ALP

– I have read the press report referred to, and I am happy to be able to say that as the result of negotiations instituted this morning,, no such difficulty is likely to occur.

page 1502

ORDER OF BUSINESS

Motion (by Senator Collings) put -

That the sessional order giving precedence to general business after 8 p.m. on Thursdays be suspended until Friday, the 26th March, 1943.

The PRESIDENT:

– There being an absolute majority of the members of the Senate present, and no dissentient voice, I declare the question resolved in the affirmative.

page 1502

QUESTION

BLUE PEAS

Senator HERBERT HAYS:
TASMANIA

– In reply to a question regarding blue peas of the 1941-42 season, which I addressed yesterday to the Minister representing the Minister for Commerce and Agriculture, lie replied that a similar question had been asked in the House of Representatives, and that the Attorney-General had advised that he would make a statement on the matter at an early date. Will the Minister representing the AttorneyGeneral cause a similar statement to be inside in the Senate simultaneously with that made in the House of Representatives?

Senator ASHLEY:
Minister for Information · NEW SOUTH WALES · ALP

– I shall consult the Attorney-General, and ascertain whether the honorable senator’s request can be acceded to.

page 1503

INCOME TAX ASSESSMENT BILL 1943

Senator AMOUR:
NEW SOUTH WALES

– In view of the fact, that, under the income tax assessment legislation now before the Senate, the collection of instalments of increased income tax will commence on the 1st April, is the Leader of the Senate aware that a large number of members of the Commonwealth Public Service whose pay is . made up to the 30th March will not receive their money until the 2nd April, thus causing the measure to operate unjustly in their case, and in the case of persons in receipt of a weekly wage ?

The PRESIDENT:

– The honorable senator is anticipating a debate that will take place on the bill. Should he seek information such as he now desires when the measure is under consideration, the Minister in charge of the measure may then reply to his question.-

page 1503

QUESTION

NEWSPAPER ADVERTISEMENTS

Senator LATHAM:
WESTERN AUSTRALIA

asked the Leader of the Senate, upon notice -

  1. ls it a fact that an advertisement appeared in the West Australian and other newspapers, dated Wednesday, 3rd March, 1943, headed “A Saboteur at Work”, and showing u picture depicting a woman writing a letter as follows: - “ I enclose herewith my cheque for carpets, furniture and furnishings supplied by you.

Yours truly,

Mary Quisling ?”

  1. If so-

    1. Does he .believe such advertisements help to finance the war? (/>) Is not this advertisement unfair to newly married people who are about to make a home for themselves?
    2. Did such advertisement appear in all the capital city newspapers?
Senator COLLINGS:

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

  1. Yes.

(») Yes. (‘0 The message is directed to those who are spending needlessly when every available shilling is required for the war effort. It does not concern thos* who know their expenditure to be unavoidable as reference to the text of the advertisement will disclose.

  1. Yes.

page 1503

QUESTION

SHORTAGE OF PRUNES

Senator ARNOLD:
NEW SOUTH WALES

asked the Minister representing the Minister for Supply and Shipping, upon notice -

  1. ls it a fact that prunes are essential in the diet of babies and young children and that they are at present unavailable?
  2. If so. will the Minister see that an adequate supply of this season’s crop is reserved and made available for this purpose?
Senator FRASER:
ALP

– The Minister for Supply and Shipping has supplied the foi lowing answers : -

  1. Prunes are nor. essential in the diet of babies and young children, but they do constitute a very desirable addition to their food. It is a fact that they are at present in very short supply.
  2. Until the 1943 crop is harvested it is not practicable to proceed with its allocation, but it is hoped that it will be possible to make available approximately 300 tons for this purpose. The method of distributing the allocation is at present under consideration.

page 1503

QUESTION

AIR TRAVEL FOR SERVICE PERSONNEL

Senator LAMP:

asked the Minister representing the Minister for Civ.il Aviation, upon noti.ee -

  1. Is it a. fact that the National Security Regulations provide for priorities for air travel only for those travelling for the security or defence of the Commonwealth and the efficient prosecution of the war?
  2. If so, will the Minister provide a central office or make suitable arrangements whereby members of the fighting services oan obtain priority bookings when travelling on leave?
  3. Will he give special consideration to those members of the services who are residents of Tasmania and who may arrive in Melbourne on Saturdays - so as to save three days’ wasted leave?
Senator CAMERON:
Minister for Aircraft Production · VICTORIA · ALP

– The Minister far Civil Aviation has supplied the following answers : -

  1. Yes.
  2. Any person, whether a member of the fighting services or not, is allowed to travel on the airways between Melbourne and Tasmania when seats are available. Priority bookings cannot be arranged for service personnel when travelling on leave to Tasmania or to any other State of the Commonwealth. There are not sufficient aircraft available to enable such an arrangement to be made.
  3. Consideration has been given to this request and to others of a similar nature. In this respect the last paragraph of No. 2 above applies.

page 1504

QUESTION

ROYAL AUSTRALIAN” AIR FORCE

Mustering of Observers as Pilots.

Senator BROWN:
QUEENSLAND

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

  1. What number of qualified observers have made application to become pilots 1
  2. Will the Minister consider favorably the request of observers, who have done a certain number of flying hours, to be remustered as pilots 1
Senator CAMERON:
ALP

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

  1. Fourteen observers have applied for training as pilots.
  2. Approval was recently given for a limited number of aircrew personnel in musterings other than that of pilot to bc given the opportunity to train as pilots.

page 1504

QUESTION

NEWNES SHALE OIL DEPOSITS

Senator DARCEY:
TASMANIA

asked the Minister representing the Minister for Supply and Shipping, upon notice -

  1. Has the United States Board of Economic Warfare recommended an expenditure of over £5,000,000 on the Newnes shale oil scheme?
  2. If so, and before the Government commits itself to this expenditure, will it inquire into the patent retort invented by Mr. A. W. Dye, of Sydney, who claims a 40 per cent, efficiency result over the figures given by Dr. W. D. McFadyen.
Senator FRASER:
ALP

– The Minister for Supply and Shipping has supplied the following answers: -

  1. Representatives of the United States Board of Economic Warfare have recommended an expenditure of £4,500,000.
  2. Mr. Dye’s retort has been investigated by Commonwealth technical officers who are of the opinion that it has some merit when applied to small-scale projects, but it would not be suitable for a large-scale undertaking like that at Glen Davis.

page 1504

COMMONWEALTH BANK BILL 1943.

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator Fraser) read a first time.

Second Reading

Senator FRASER:
Minister for External Territories · Western Australia · ALP

.- I move-

That the bill be now read a second time.

In presenting the budget, the Treasurer (Mr. Chifley) stated that the Government would introduce a bill for the establishment of a mortgage bank department of the Commonwealth Bank at an early date. Accordingly, a bill to give effect to that promise was introduced by the Treasurer in September last. By an arrangement between the Prime Minister (Mr. Curtin) and the Leader of the Opposition in the House of Representatives (Mr. Fadden), a special committee, representative of both Houses, was formed to consider the provisions of the bill and report upon it. The committee’s report was tabled on the 12th February last, and its recommendations were incorporated in a new bill, which, after the withdrawal of the bill introduced in September, was submitted to the Parliament.

The establishment of a mortgage bank department has been approved by all political parties. Such a department has long been considered necessary in order to provide long-term loans to rural producers at reasonable rates of interest, and at the same time to give to borrowers protection in difficult times against pressure for repayment of short-term loans, or loans payable on demand. It is hoped that the activities of the new mortgage bank department will in some measure, relieve the financial position of primary producers. For obvious reasons, the operations of the mortgage bank department will have to be severely restricted at the present time compared with the contribution which it could have made had it been established when it was first recommended by a royal commission in 1937. But even though the initial operations of the department must necessarily be on a limited scale, the Government believes that the measure will contribute to a solution of the problems of rural finance, and will exert an important influence in that rural producers will be assured that their mortgage finance requirements will be provided at a reasonably low rate of interest. The Government is also of the opinion that the mortgage bank department, if established, can prove a powerful instrument in postwar reconstruction. It has therefore decided to proceed with the establishment of the department so that its organization, which necessarily will take some time to set up, may be well established when hostilities cease and the task of reconstruction has to be undertaken. Already the Government has taken action to reduce interest rates over the whole range of finance, and wherever possible, maximum interest rates have been fixed and the rates deflected downwards. The Government believes that by means of mortgage bank policy, it can do much to influence a reasonably low fixed rate of interest for money on mortgage to rural producers, and at the same time set a standard for long-term fixed loans of this nature, which it is hoped will induce other institutions and private lenders to reduce their rates.

I am not able to give to honorable senators a reliable estimate of the amount of rural indebtedness in Australia, but the amount of loans and advances to rural producers is probably about £400,000,000. That sum does not allow for indebtedness on account of implements and farming supplies generally, the amount of which must be considerable. In arriving at the amount of £400,000,000 allowance has been made for about £80,000,000 of loans by State government instrumentalities, about £140,000,000 by banks on overdraft, and another £80,000,000 by pastoral, insurance and trustee companies, whilst private mortgages, for which no figures are available, have been estimated at another £100,000,000. These figures give some idea of the scope that exists for long-term lending in rural industries, and show how impossible it would be for a mortgage bank department to undertake the raising immediately of sufficient funds for any rapid taking over of mortgage debts. It will be realized, therefore, that the extension of mortgage bank facilities must be a matter of slow growth.

Turning now to the Government’s proposals in the bill, it will be seen that the mortgage bank will be a department of the Commonwealth Bank and be under the control of the bank board. In order that the mortgage bank department shall function effectively, it is essential that it shall have experienced, efficient and economical management, and that it obtains funds at the best available rate so that it can in turn lend at reasonable rates of interest. The Government believes that in the Commonwealth Bank it has an established institution, capable of carrying out the functions of the mortgage bank department. The board’s personnel includes men well acquainted with rural problems. The bank has a widespread system of branches and agencies and many of its officers have already had experience of the class of loan which the mortgage bank department is intended to make. However, the new mortgage bank department will be kept quite distinct from the central bank functions of the Commonwealth Bank. The bill proposes to establish an entirely separate department to provide appropriate longterm lending facilities. Strict safeguards have been framed to prevent the assets of the general bank from being used in the business of the mortgage bank department except to a very limited degree. The general bank may make advances to the department subject to the amount outstanding at any one time not exceeding £1,000,000. A special provision in the bill prevents the funds of the general bank, and of the savings bank also, from being used in the business of the mortgage bank department except as provided.

The capital of the proposed department, which is not to exceed £4,000,000, will be obtained from -

  1. the transfer of £1,000,000 from the special reserve held in the Note Issue Department, being part of the premium received on the sale of gold ;
  2. one-quarter of the annual profits of the General Bank Department of . the Commonwealth Bank. This would be in the region of £100,000 per annum; and
  3. the sum of £150,000 per annum from the profits of the Note Issue Department of the Commonwealth Bank.

I impress upon honorable senators that the provision of only £4,000,000 of nominal capital need not in any way limit the amount of loans that the mortgage bank department may ultimately make to rural producers. Loans will be limited not by the amount of capital, but by the amount of available funds. In order to furnish additional funds for the purposes of the mortgage bank department, it is proposed that -

  1. the Commonwealth Bank may make advances subject to the amount outstanding at any time not exceeding £1,000,000;
  2. ) the Commonwealth Savings Bank may make advances from its investible funds as the board may determine; and
  3. the Treasurer may raise loans and lend such moneys to the mortgage bank department at the effective rate of interest payable by the Commonwealth on such loans.

The mortgage bank department may lend only to persons engaged in farming, agricultural, horticultural, pastoral or grazing operations or in such other forms of primary production as the bank thinks fit. The loans shall be made upon the security of a mortgage on an estate or interest in land as follows : -

  1. an estate in fee simple;
  2. any estate or interest in land held under any State act relating to Crown lands; or
  3. any estate or interest in land held from the Crown or the Administration in any territory being part of the Commonwealth.

A loan made by the mortgage bank department shall be upon first mortgage only. Except to the degree that money loaned is used to pay off an existing loan, the money shall be used only for the purpose for which it was loaned, that is, for use in connexion with primary production carried on by the borrower. “Where a borrower misapplies money loaned to him by the mortgage bank department, provision is made for the money loaned to become due and payable on demand. By this means it is hoped to prevent the misuse of any moneys made available through the department. The mortgagor will also be required to obtain the department’s consent in writing before further mortgaging or charging his estate or interest in the property mortgaged.

This is not a proposal for the rehabilitation of primary producers who are in financial difficulties. That is an entirely separate subject and not one for adjustment by a mortgage bank, which, of necessity, is an institution for the lending of money on proper security and which must be conducted on sound lines if it is to be successful.

The objective of the bill is to provide long-term loans to primary producers, and it is proposed that loans shall be made for periods of from 5 to 41 years and that the department shall fix the terms and conditions of such loans. Provision is made for the repayment of loans by half-yearly instalments, the minimum half-yearly instalment being one-half of 1 per cent., and to enable a borrower to repay his loan in full prior to maturity, or to pay to the department from time to time any sums in excess of repayments provided for in the mortgage, which sums may be applied in reduction of a loan. Loans through the mortgage bank department are not intended to provide working capital, because it is considered that ample provision already exists for short-term advances. Thebill provides that loans shall not exceed 70 per cent. of the value of the property or £5,000, whichever is the less.

It is not practicable to fix for all time the rate of interest at which money may be advanced by the department, and, consequently, rates will be left to the department to determine. The Government hopes, however, that it will be possible for the department to make loans at about 4 per centum per annum and suitable amortization payments. This rate is based on the present interest rate for long-term government securities plus a. small percentage to cover the costs of administration of the department. Such a rate would be an improvement on the average rate at present charged by lenders on first class mortgages; and it is anticipated that the lower rate charged by the mortgage bank department will have a general tendency to reduce the mortgage interest charges made by other institutions and. private lenders.

As the mortgage bank department will not be run primarily for profit, it is not anticipated that any appreciable amount of profit will be earned. Provision is made in the bill for all profits to be credited to a Mortgage Bank Department Reserve Fund. Moneys in this fund will be available only for the purposes of the department.

As the Commonwealth Bank will incur certain overhead expenses in the management of the mortgage bank department, and, possibly, receive moneys that may be properly allotted to that department, the bill provides for an allocation of such portion of the general receipts and expenditure of the department as the board considers is referable to the department.

Provision is also made for investment of any surplus funds, although it is expected that investible surplus funds will be very small at any one time. In fact, the probability is that the department will usually have some advance on daily balance from the general bank.

As it will inevitably take the Commonwealth Bank some time to complete the organization of the department, it is proposed that the bill, if passed, will come into operation only when proclaimed.

In view of the many amendments that have been made in the Commonwealth Bank Act from time to time, and the consequent difficulties in connexion with the numbering of sections, as will be noticed by the section numbers in this bill, steps have been taken for the renumbering of the sections of the act.

Debate (on motion by Senator McLeay) adjourned.

page 1507

INCOME TAX ASSESSMENT BILL 1943

Second Reading

Debate resumed from the 10th March (vide page 1447), on motion by Senator Fraser. -

That the bill be now read a second time.

Senator FRASER:
Minister for External Territories · Western Australia · ALP

in reply - I appreciate the manner in which the bill has been received by the Senate. I do not think that there is any great necessity for me to go into the details of the criticisms made during the debate, beyond saying that they have been well answered from this side of the chamber already. I should, however, like to make a few observations regarding the amendments which the Leader of the Opposition (Senator McLeay) foreshadowed. The main points mentioned were the taxing of the deferred pay of soldiers, and the possible retention by the Treasury of over-payments of tax. The method of taxation followed in the bill does not express a new policy inaugurated by the Government. When the Fadden Government was in office, it adopted this system of collecting tax from wage and salary earners. On the 1st January, 1941, it began to collect taxes from them by weekly instalments, so that this is nothing new, and I fail to see why arguments against it should at this late stage be used as a sort of spearhead of the attack on the Government’s financial proposals. The fact remains that the Fadden Government first differentiated between wage and salary earners a”d professional and other classes. The only point raised against the Government’s proposal is that those earning wages and salaries will possibly have credit balances at the Treasury at the end of the year, whereas other classes of taxpayers will pay only the exact amounts that they owe. I remind Senator McBride that many of the latter, who include the primary producers, probably meet their commitments to the Taxation Department long before the wage or salary earners have paid their full amounts. There will, therefore, also he credits at the end of the year at the Treasury for many who do not belong to that section of the community which consists of wage and salary earners. The arguments against that part of the bill last night were consistently mixed up, particularly on. the Opposition side, with the word “inflation”, although in the same breath those honorable senators talked a great deal about their desire to help the Government. Senator Clothier uttered a pearl of wisdom when he said that all this talk by the Opposition of inflation, and the horrors that would follow from it, was doing more damage to the war effort than anything else. It is certainly not helping the Government, and in that connexion I should like to emphasize what it is that the Government really seeks to do. Senator Leckie last night said that the credit which the salary and wage earning taxpayers would be likely to build up at the Treasury would be what he described as a “ Kathleen Mavourneen “. That is an entirely wrong conception of the situation. What the Government is endeavouring to do is to safeguard the interests of people who in ordinary circumstances would not be employed in the categories of work which they are following to-day. Thousands of men who had already retired from active participation in industry, and tens of thousands of women, are working who would not in ordinary times be employed. Most of the women are either young married women, or older married women without children, or women with very small families. Tens of thousands of them are participating in the war effort, and the movement is still gaining momentum. We want all these people in our war industries. That is a task which the Government has set itself out to accomplish. I put it to honorable senators opposite that, on the one hand, they are damaging the financial stability of the Commonwealth by bandying the word “ inflation “ about, whilst on the other the Government is attempting to take control of all that spare money which in normal times would not be available to the spending public, but is now being paid to all these people who are assisting the Government. The Government’s intention is to protect them. It will help them to build up credits with the Taxation Depart.ment, and in the following year he Commissioner of Taxation will ;ive them a refund. Our object is o make everything safe for them i,v taking the surplus cash off the market. Honorable senators opposite know that the Government is attempting to do far more than the preceding Government did to protect the country from inflationary tendencies by the pegging of prices. Honorable senators opposite are not assisting the war effort by endeavouring to make political capital out of these things. What will happen when finally we have achieved victory and our soldiers sailors and airmen return from service overseas? Those individuals in the categories I have mentioned will be displaced from industry. In many instances married soldiers will be called upon to pay taxes in respect of incomes earned by their wives prior to their return. There are many men in industry to-day whose ages are well above 60 years, and when hostilities cease, they will no longer be employed, because they will be unable to give to their employers the degree of profit required. How many of these men will make provision voluntarily to meet their taxation commitments when they leave employment? It is possible that some will, but a great majority of them will not, and unless some steps be taken, the revenue will suffer. Under this measure, credits will be built up to meet such a contingency, and interest at the rate of 2 per cent, will be added. When such credits have reached a certain figure, the Commissioner of Taxation may grant a refund.

Senator McBRIDE:
SOUTH AUSTRALIA · UAP

– It is discrimination of the worst kind.

Senator FRASER:

– I take it that Senator McBride is a supporter of the “ pay-as-you-go “ system ?

Senator McBride:

– I did not say that.

Senator FRASER:

-The introduction of a “ pay-as-you-go “ system was also earnestly advocated by Senator J. B. Hayes, who said, in effect, that we should pay our taxes just as we pay our butcher’s and baker’s bills. Whilst I agree that in instances where employment is continuous and salaries are reasonably stable, a. “ pay-as-you-go “ system could be applied with success, it would be quite impracticable in regard to other taxpayers such as primary producers, who do not know what their earnings will be from week to week.

Senator J B Hayes:

– These people could make contributions on a quarterly basis if necessary.

Senator FRASER:

– That might be possible. I understand that a scheme involving quarterly payments operated in Great Britain during the last war. I am not sure of the exact nature of the scheme, but I recall that I paid income tax on a quarterly basis. The building up of credits as is proposed in this measure will also serve a very useful purpose by taking off the market a certain amount of spending power. Despite the rationing of commodities and the rationalization of many industries, there is still a large amount of surplus purchasing power, and a reduction of it by this means may serve to curb unnecessary spending, and to some degree, reduce black marketing. In normal circumstances no hardship will be caused. The aged worker to whom I have referred will probably go on to the old-age pension. Certainly he will not be retained in industry.

Senator Leckie:

– Will he have built up a post-war credit?

Senator FRASER:

– Possibly. In many instances such individuals will have built up a credit sufficiently large to meet their tax commitments when they cease to be employed. I was astounded at the statements made by the Leader of the Opposition. Even Senator Spicer admitted quite frankly in reply to an interjection from this side of the chamber that in some cases income tax amounting to 18s. 6d. in the £1 was not sufficient. That statement is in direct conflict with the views expressed by the Leader of the Opposition who said that these people were rendering a fine service and that the tax upon them should be more moderate so that after the war they could give employment to more people than they would be able to do under these proposals. Thus on the one hand we have the Leader of the Opposition advocating a reduction of the tax on high incomes, and on the other, Senator Spicer advocating an increase of the tax on those incomes. Presumably Senator McLeay favours further impositions upon the lower income groups. The honorable senator has indicated that he will move an amendment in connexion with the taxing of soldiers’ deferred pay. In all fairness I should like to point out that although admittedly the service rendered by a soldier cannot be measured in monetary terms, substantial increases of soldiers’ pay and dependants’ allowances have been granted by this Government.

Senator McBride:

– What about the 2s. 6d. in the fi that the Government has taken away from the soldiers.

Senator FRASER:

– I remind the honorable senator that for two years whilst our troops were serving in the Middle East honorable senators on this side of the chamber who were then in Opposition, constantly urged an increase of soldiers’ pay and dependants’ allowances. Finally, under pressure from the Labour party the then Government did grant certain small increases. Incidentally, the cost of living had risen by 7 per cent, during that period. It was a Labour Government that put soldiers’ pay and dependants’ allowances upon a reasonable basis. Let us examine for a moment just what concessions have been granted to our fighting forces under the taxation proposals sponsored by this Government. The following figures are of interest : -

Actually, the Government has made concessions amounting to £18,00.0,000.

Referring to a proposed amendment circulated by the Leader of the Opposition, I point out that provision has been made in the Income Tax Assessment Act, since its inception in 1915,. for taxation to be assessed on 5 per cent. of any lumpsum payment received on retirement or termination of employment. Deferred pay was granted to members of the Australian Imperial Force in the last war, and, by a departmental ruling, was exempted from taxation at that time on the ground that, as the Australian Imperial Force pay was exempted as earned, the deferred pay, which was earned concurrently, was also exempt. In 1924, the then Commissioner of Taxation considered the liability for taxation of deferred pay of the Defence Forces which was accumulating during the peace-time services of the forces, and was paid in a lump sum on retirement. His decision then was to tax 5 per cent. only of the deferred pay, because it was being paid in a lump sum. This interpretation has been followed by the department since 1924. Although deferred pay in the last war, so far as members of the Military Forces were concerned was paid only to the Australian Imperial Force, in the present war deferred pay is being accumulated for both the Citizen Military Forces and the Australian Imperial Force. As the pay of the Australian Imperial Force serving abroad has been exempted from taxation, there is justification for the claim that the exemption should similarly apply to their deferred pay, as was conceded by the Taxation Department in the last war. In the present war, the pay of the Citizen Military Forces in New Guinea and Papua is also exempt from tax, and to avoid administrative complications in attempting to differentiate between deferred pay earned by the forces inside and outside Australia, it is considered that, if any exemption in respect of deferred pay is to be conceded, it should apply generally to all deferred pay. The Government has considered the proposal and is willing to accept the amendment on this basis. The amount of revenue involved is not likely to exceed £200,000. The majority of the Defence Forces are already exempted by reason of the provision of the £250 diminishing statutory exemption, and, even if deferred pay were included as a part of the assessable income of the forces in the year in which it accrues, the majority of the Defence Forces would still be exempt from taxation. This is an added reason why the Government should accept the amendment. Any further explanations of the bill which honorable senators may desire will be furnished at the committee stage.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 5 agreed to.

Clause 6 -

Section twenty-three of the Principal Act is amended. . . .

Senator McLEAY:
Leader of the Opposition · South Australia

– I move -

That the words “ is amended “ be left out, with a view to insert in lieu thereof the words is amended - ( a ) . “

This is merely a drafting amendment. The amendments which I have circulated have been drafted by the SolicitorGeneral’s Department in collaboration with the technical officers of the Taxation Department, and I express my appreciation of the work that they have done. The Income Tax Assessment Bill is always one of the most difficult measures with which draftsmen have to deal.

Amendment agreed to.

Senator McLEAY:
iSouth AustraliaLeader of the Opposition

– I move -

That, at the end of the clause, the following paragraph be added: - “; and (b) by omitting paragraph (t) and inserting in its stead the following paragraph : - (1. ) in the case of a member of the Defence

Force -

payments made by way of dependants’ allowances; and

deferred pay, including interest thereon, payable in respect of his service as a member of that force; and ‘ “.

Section proposed to be amended -

The following income shall be exempt from income turn: - (t) in the case of a. member of the Defence Force, payments made by way of dependants’ allowances: and.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 7 agreed to.

Clause 8 -

Section twenty-six of the Prinicpal Act is amended by omitting . . .

Amendment (by Senator McLeay) agreed to - 1 hat the words “ is amended “be left out with a view to insert in lieu thereof the words: - “ is amended - (a.).”

Senator McLEAY:
South AustraliaLeader of the Opposition

– I move -

That the following words be added to the clause: - “: and (6) by adding at the end of the proviso to paragraph (d) the words’, or in respect of deferred pay, including interest thereon, paid to a person who is or has been a, member of the defence force in respect of his service as a member of that force; ‘”.

This amendment is really the substance of the alterations desired by the Opposition, and I am pleased that the Minister in charge of the bill has intimated that the Government proposes to accept it. From a study of the principal act, it is clear that it was never intended that 5 per cent. of the deferred pay of soldiers should be included as assessable income, but as the law stands I presume that the Commissioner of Taxation has no option but to include it in the assessment. I do not propose to discuss this or any other amendment at length, becauseI know that the Government desires that the bill shall pass through all stages without delay as the taxation authorities, who have already been working day and night on these proposals, wish to put the new provisions into operation on the 1st April. Considerable publicity has been given to the amendments, and it is not necessary to explain them at length.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 9 to 14 agreed to.

Clause 15 -

Section one hundred and sixty of the Principal Act is amended - (a.) by inserting after paragraph (a) of sub-section (2.) the following paragraph: - “(aa) in respect of the daughter of the taxpayer . . .

Provided that if the daughteris wholly engaged in keeping house for the taxpayer during part only of the year of income and is wholly maintained by the taxpayer during that part of the year, the amount shall be such part of what the amount otherwise would be as, in the opinion of the Commissioner is reasonable in the circumstances:

Senator FRASER:
Minister for External Territories · WESTERN AUSTRALIA · ALP

. - I move -

That, in proposed new paragraph(aa.) the words “what the amount otherwise would be” be left out with a view to insert in lieu thereof the words “ One hundred pounds “.

This is a drafting amendment consequent upon the amendment of this clause in the House of Representatives. Originally, the rebate was to be based upon an amount of £100, diminishing as the taxpayer’s income increased, until it disappeared when that income reached £500. In those circumstances, the rebate might, in any particular case, be. based upon, say, £100, £50, £25, or some other amount. If the taxpayer maintained his daughter for only a part of the year, then only a relevant part of £100. £50, £25 or some other amount would be used to calculate the rebate, as the case required. Under the clause as it now stands, these conditions cannot arise, because the rebate will be based upon a flat amount of £100 for a full year. Consequently, if a daughter is maintained for only a part of the year the rebate will be based upon the relevant part of £100.

Amendment agreed to.

Senator McLEAY:
Leader of the Opposition · South Australia

– I move -

That,after proposed new paragraph (aa), the following new paragraph be inserted: - “ (ab). in respect of aperson keeping house for a taxpayer where the taxpayer is a widower or widow and that person is a resident and is wholly engaged in keeping house for the taxpayer and has the care of any of the taxpayer’s children who are under sixteen years of age - an amount of One hundred pounds :

Provided that if that person is wholly engaged in keeping house for the taxpayer and in the care of those children during part only of the year of income the amount shall be such part of One hundred pounds as, in the opinion of the Commissioner, is reasonable in the circumstances:

Provided further that not more than one rebate of tax shall be allowed in respect of this paragraph and that rebate shall not exceed Forty-five pounds;”.

The draftsman pointed out that it was necessary to insert that further proviso, otherwise the taxpayer could claim two allowances, one in respect of the housekeeper, and a second in respect of some other person. As 1 said earlier, I do not propose to speak further to the amendment. It means that a widow, or widower, who employs a housekeeper, part of whose duties is to look after the children of the taxpayer who are under sixteen years of age, will be given a concessional deduction in respect of the housekeeper as though the housekeeper were a blood relation of the taxpayer.

SenatorFRASER (Western Australia - Minister for External Territories) [4.12]. - The Government cannot accept the amendment. It involves an extension of the recognition of the private and domestic obligations of a taxpayer. The question of extending concessional allowances along the lines proposed by the Leader of the Opposition (Senator McLeay), as well as other concessional allowances equally worthy of consideration, has been considered by the Government on more than one occasion, but revenue considerations have precluded the Government from agreeing to any extension. Acceptance of the amendment would inevitably lead to other claims for allowance of similar concessions having an equal appeal, such as, in respect of a sister keeping house for a brother; a taxpayer with an invalid wife who. is unable to keep house, necessitating the employment by the taxpayer of a housekeeper; or a husband who is deserted by his wife. Allowance to a widowed person, and non-allowance in such cases as I have just mentioned, would create an anomaly as between taxpayers. The amendment would involve a substantial surrender of revenue which the Government could not consider at present.

Senator LECKIE:
Victoria

.- The Minister has stated that the amendment, if adopted, would involve a substantial surrender of revenue. Has that loss been estimated?

Senator Fraser:

– It is not only a matter of loss of revenue. There is a danger of the extension of the principle involved in the amendment; and, possibly, there would be no limit to that extension.

Senator LECKIE:

– The Minister said that the amendment would involve loss of revenue. As the amendment relates only to this specific matter, it is useless for the Minister to say that the principle may be extended, and thus result in considerable loss to the Government in other directions. In view of the Minister’s statement, he must have in mind the loss of revenue involved in this instance. Has he any justification for making that statement? If so, what will be the loss?

Senator LATHAM:
Western Australia

– I had hoped that the Government would accept this amendment. I cite, for instance, the case of a man who, because his wife has left him, is obliged to care for a family of young children. He may not be entitled to the concessional deduction of £100 in respect of his spouse, because she is not living with him. Further, a taxpayer’s spouse may be an inmate of a mental hospital, with the result . that the taxpayer is obliged to employ a housekeeper to look after his children. By so doing he incurs a much greater expenditure than the amount allowed by way of concessional deduction in respect of such children. I am not concerned about people who can afford to bear such additional costs, although, in view of the present high rates of taxes, not very many people in fact can afford to do so. The Government should sympathetically consider such oases of hardship. I know many men who are battling along, looking after their children, because they cannot afford to pay a woman to keep house.

Senator Fraser:

– The proposed amendment would not cover the cases mentioned by the honorable senator.

Question put -

That the new paragraph proposed to be inserted (Senator McLeay’s amendment) be inserted.

The committee divided. (The Chairman - Senator Brown.)

AYES: 15

NOES: 13

Majority . . 2

AYES

NOES

Question so resolved in the affirmative.

Clause further verbally amended, and, as amended, agreed to.

Clauses 16 to 19 agreed to.

Clause 20 (Deductions by employer from salaries and wages).

Senator AMOUR:
New South Wales

– Some consideration should be shown, in respect of deductions from salaries, to the members of the Public Service of the Commonwealth. They are a very loyal body of people, who do everything requested of them to assist the Government. Salary earned up to the 31st March will not be payable to them until the 2nd April, and so will become subject to the increased rates, although earned prior to the date on which the new taxes will take effect. I ask the Minister for External Territories (Senator Fraser) to make representations to the Treasurer (Mr. Chifley) that the deductions should not apply to money paid to the public servants of the Commonwealth on the 2nd April next, or, alternatively, that all money earned by them in March should be paid to them on the 31st March, before the new taxes take effect.

Senator FRASER:
Minister for External Territories · WESTERN AUSTRALIA · ALP

– The point which the honorable senator has raised applies not only to public servants, but also to many thousands of people in State and private employment who are paid fortnightly. I shall, however, draw the attention of the Treasurer (Mr. Chifley) to it, as requested by the honorable senator.

Clause agreed to.

Clause 21 agreed to.

Clause 22-

Section two hundred and twenty-oneH of the Principal Act is amended -

by omitting sub-section (2.) and inserting in its stead the following sub-sections : -

Senator McLEAY:
Leader of the Opposition · South Australia

. -I move -

That proposed new sub-section (2.) be left out, with a view to insert in lieu thereof the following new sub-section : - “ (2.) If there is no tax payable by the employee, or if the amount represented by the face value of the stamps so produced is greater than the tax payable by the employee, the Commissioner shall, if so requested by the employee, pay to him -

where there is no tax payable by the employee - an amount equal to the face value of the stamps so produced; or

in any case in which paragraph (a) of this sub-section does not apply, where -

the stamps are produced on or Before the thirty-first day of March of the latest year of tax for which the employee has received a notice of assessment - the amount by which the face value of the stamps exceeds the tax payable by the employee for that year of tax and any preceding year; or

the stamps are produced after the thirty-first day of March of that year of tax -the amount by which the face value of the tax stamps held by the employee on that date, or the amount deducted from his salary or wages to that date and dealt with in pursuance of section two hundred and twenty-onek of this act in respect of which he has not previously received credit, exceeds the tax payable by him for that year of tax and any preceding year:

Provided that where the amount of the excess is less than one pound, the Commissioner shall pay that amount to the employee.”.

This means, as I mentioned in my second-reading speech, that where the payment is in excess of the assessment, the taxpayer has the right to apply for a refund in cash. I have added a proviso that any amount under £1 must be repaid ; but I am assured by the Minister and by officers of the TaxationDepartment that that is already done, because, owing to the shortage of man-power, it is not worth the expense to open ledger accounts for people with credits of under £1. The Government’s proposal to retain excess payments and pay 2 per cent, interest on them to one section of the taxpayers only, discriminates unfairly between taxpayers, and falls heavily on a taxpayer who has heavy medical expenses to meet, and who has the right to claim a deduction up to £50 from his taxable income for medical expenses. Already there are other concessional deductions. The point I wish to make is that the year in which a taxpayer is called upon to meet heavy medical expenses is the very year in which he will overpay his tax and be unable to claim a refund. After all, taxation to-day is not on the pre-war scale ; these rates are excessive. As I said in my second-reading speech, I appreciate the difficulty that confronts the Government in this regard. When victory is won there will be many women in receipt of good wages to-day who will return to their homes and carry on as they did in pre-war days. They will have to meet heavy income tax assessments, and will have little or no income with which to make the payments. If the Government believes that, in the interests of sound finance, some provision should be made for the building up of credits to meet income tax liabilities, the correct thing to do would be to introduce a scheme whereby all taxpayers would contribute according to their ability to pay. I trust that the amendment will be acceptable to honorable senators.

Senator FRASER:
Minister for External Territories · Western Australia · ALP

– The amendment is not acceptable, because it would defeat the objects of the Government, which are, first, to withdraw additional excess spending power in the current financial year; and, secondly, to ensure that individuals who, under war conditions, are either earning income for the first time or are temporarily earning greatly increased incomes, shall make provision for future tax liabilities. The withdrawal of additional excess spending power in the current year is essential because of the great increase of estimated war expenditure. Also, it is necessary that future tax liabilities in respect of overtime earnings, &c, and the earnings of married women should be provided for when such incomes are being earned, so that the hardship which would be caused by a taxpayer being called upon to meet a heavy assessment at a time when his incomes had been reduced or had ceased altogether would be avoided.

Senator McBRIDE:
South Australia

.- If the statement just made by the Minister for External Territories (Senator Fraser) is the only excuse that can be offered for inflicting upon the people of this country one of the most discriminatory impositions that one can imagine, the Government must be in a bad way. We all agree that there is a need for a scheme of post-war credits. In fact, honorable senators on this side of the chamber have been telling the Government that for a long time; but for the Government to attempt to place this unjust imposition on one section of the community, shows just, how callous it has become. In view of the fact that taxes have increased so greatly and, as I stated yesterday, probably will increase further, endeavour should be made to distribute the burden evenly. If the Government has no bettor reason for this proposal than that just given by the Minister, it should be thoroughly ashamed of itself. Discriminatory legislation such as thi? should not be placed upon the statutebook.

Senator SPICER:
Victoria

.- I am amazed at the attitude of the Govern-, ment in regard to this proposal. The Minister for External Territories (Senator Fraser) persists in misunderstanding the objection that the Opposition takes to this clause. This measure will not introduce a system of post-war credits in respect of all salary and wage earners, and it, is not intended to do so. Many salary and wage earners will pay only the amount of tax with which they will be assessed, whereas others, in precisely similar circumstances, but who have been called upon to meet heavy medical expenses or who have elected to pay large life assurance premiums will make substantial overpayments. Such a situation is quite unjustifiable. I should be prepared to support any proposal aimed at establishing an equitable scheme of post-war credits, even in respect of salary and wage earners only.

Senator McBride:

– I should prefer a scheme covering the entire community.

Senator SPICER:

– So should I, but this proposal will not even spread the burden equitably over the particular group of taxpayers to which it applies. I am amazed to find that although the inequities of this proposal have been pointed out clearly to the Government, it still persists with the scheme. I shall support the amendment.

Senator LAMP:
Tasmania

. -I should like to make my position quite clear : I am in favour of the amendment which has been moved by the Leader of the Opposition (Senator McLeay), but 1 shall be compelled by the party of which I am a member to vote against it.

Senator LECKIE:
Victoria

.- It is very refreshing to hear a statement as that just made by Senator Lamp. Surely he is honesty personified. We have always been led to believe that all honorable senators opposite are free men, but apparently that is not so.

The CHAIRMAN (Senator Brown).Order! The honorable senator must deal with the clause before the committee.

Senator LECKIE:

– I was merely giving Senator Lamp a post-war credit, but perhaps he does not deserve it. The Minister for External Territories (Senator Eraser) persists in misunderstanding the Opposition’s attitude to this proposal. Surely he must realize that of all the salary and wage earners who will have to meet their tax commitments by means of weekly instalments, not more than 15 or 20 per cent. will make excess payments. Those who were working for wages last year mostly received high rates of pay, and it is calculated that the tax they will pay this year will be appropriate to the income earned last year. Only 20 per cent. of them, at the most, will be entitled to refunds of excess payments. If that is not discrimination I do not know what is. The clause will not accomplish what the Minister hopes it will. It will not provide for the payment of income tax due from those persons who next year may not earn so much as they did last year, and therefore will not have assets with which to pay their tax. I cannot understand the Government’s objection to the amendment submitted by the Opposition, because the Government’s proposal does not help those whose interests the Government should conserve. To select 20 per cent. of wage-earners who are least able to bear the effect of the Government’s proposal is not fair, and I do not think much of the public spirit shown by the Government in contending that the proposal is fair. Surely the Government has not examined the proposal from all its aspects. If Ministers imagine that, under this bill, post-war credits will be established for the purpose of the payment of future income tax, they are entirely mistaken. What the Government hopes to accomplish I do not know, unless it desires to be able to say that it has submitted this limited proposal in order to save taxpayers from the post-war credit scheme proposed by the Opposition, which would have had general application. Apart from party political considerations, the proposal of the Government is neither tenable nor fair, and on this occasion the Government should, for once, try to be fair. Under this clause the small taxpayer, who can least afford the retention by the Government of excess payments, will be penalized.

Question put -

That the words proposed to be left out (Senator McLeay’s amendment) be left out.

The committee divided. (The Chairman - Senator Brown.)

AYES: 15

NOES: 13

Majority . . . . 2

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 23 to 25 agreed to.

Clause 26-

After Part VII. of the Principal Act the following Part is inserted: - “ Part VIIa. -Registration of Tax. Agents. “251k. - (1.) Registration as a tax agent shall remain in force until cancelled in accordance with this Act. “ (2.) A Board may cancel the registration of any tax agent upon being satisfied that -

any return which has been prepared by or on behalf of the tax agent is false in any material particular; “251l.- “ (2.) A Board may, in its discretion, exempt any person from the operation of this section upon being satisfied - (a.) that the total income derived by that person as a tax agent during the period of twelve months immediately preceding the date of his application for such exemption did not exceed Twenty pounds ; and “

Senator GIBSON:
Victoria

– There is no necessity for this clause. For the first time it is proposed to establish a board of control agents who prepare income tax returns. The registration of tax agents in the cities may be all right, but in country districts this provision will create considerable hardship. Many country taxpayers obtain the assistance of a bank manager, a school teacher or a business man in preparing their taxation returns, but under these provisions any such person, unless he is registered as a tax agent, will become liable to a penalty ranging from £2 to £100. I admit that there is provision for exemptions from registration, but in country districts the only people who will know anything of this legislation will be lawyers. The system of registering tax agents is wrong, and should be rejected before it becomes law. What objection can there be to allowing bank managers, school teachers and business men to assist taxpayers in preparing their returns? Proposed new section 251l provides -

A person, other than a person exempted under this section, shall not demand or receive any fee for or in relation to the preparation of any income tax return or objection, or for or in relation to the transaction of any business on behalf of a taxpayer in income tax matters, unless he is a registered tax agent.

That provision imposes a penalty on the small taxpayer who cannot afford to secure the services of an accountant to prepare his return. The clause should be rejected by the committee.

Senator FRASER:
Minister for External Territories · Western Australia · ALP

. - The substantial effect of the proposed new provisions is that no person, partnership or company shall charge a fee for making up income tax returns, or for transacting any business relating to income tax matters, unless he is registered as a tax agent, or is granted an exemption by a board constituted under Part VIIa of the Income Tax Assessment Act. It is proposed that a board consisting of two government officials not directly attached to the Taxation Department and a third member, who shall be appointed by the Governor-General, shall be set up in each State, and that each board shall be authorized to register as tax agents those persons whom it considers fit and proper persons to prepare income tax returns, lodge objections against assessments and generally deal with income tax matters on behalf of clients. Each application for registration by a board must be accompanied by alodgment-fee of £1. Annual renewal of registration, however, is not proposed, and a tax agent who is registered by a board will remain so registered by the board unless his registration is cancelled. No further fee will be payable by him.

A partnership or a company may be registered as a tax agent if the board is satisfied that a partner or, in the case of a company, an employee nominated by the company, is a fit and proper person to act as a registered tax agent. The partner or employee referred to will be registered as a nominee of the registered tax agent. A partnership or a company may also register as additional nominees any other members of the partnership or employees of the company, as the case may be, who, in the opinion of the board, are competent to act as tax agents. However, the lodgment-fee of £1 must be paid in respect of each person whom it is desired to register as an additional nominee, and all income tax work done by the partnership or the company must be done under the supervision or control of a registered nominee or additional nominee. However, agents’ certificates on returns prepared by partnerships or companies which are registered as tax agents must be signed by a person who is registered as a nominee or an additional nominee of that partnership or company.

The State income tax laws of New South Wales, Queensland, South Australia and Tasmania already require the registration of tax agents for State income tax purposes. In New South Wales, Queensland and Tasmania, tax agents’ boards have been constituted for this purpose, but in South Australia control is vested in the registrar of companies. As it is desired to utilize the services of the members of these boards and gain the benefit of their knowledge and experience, and also in order to avoid duplication of work, it is proposed that these State boards shall act as Commonwealth boards in their respective States. Section 25’Ih, therefore, provides that the GovernorGeneral may make an arrangement with the Governor-in-‘Council of a State for a State hoard to act as a board constituted under the Commonwealth Income Tax Assessment Act. Where such an arrangement is made, the State board will be deemed to be a board constituted under the Commonwealth act, and will have the same powers and functions and be entitled to the same privileges as if it were constituted under the proposed new sections 251c and 251d. Such boards will be required to observe the rules to be followed by the Commonwealth boards in regard to the conduct of meetings, hearing of applications, taking of evidence, &c, excepting that the chairman and acting chairman shall be appointed according to existing State practice. This exception is made because the chairman of a State board may not be appointed in the same manner as the officer appointed under the proposed new section 251d.

Senator McLEAY:
Leader of the Opposition · South Australia

– I think that some confusion has arisen as the result of the first statement made by the Minister for External Territories (Senator Fraser) apparently on the spur of the moment. I understand that no board has operated in Victoria or Western Australia, and that in those States a bank manager, storekeeper, or any handy man in a country district, can prepare a tax return for another taxpayer provided that he does not receive a fee for doing so. The royal commission made its recommendation in respect of this matter in order to prevent innocent taxpayers from being fleeced by unscrupulous agents. If a bank manager, or storekeeper, in a country district, is anxious to register as an agent he can do so on the payment of the fee of £1, provided the board approves of his registration. That fee is not an annual payment. However, if a man in a small country district wishes to charge a small fee for preparing tax returns, he is not obliged to pay any registration fee at all, provided that he does not collect more than £20 in fees in one year. These boards should be established in the interests of the taxpayers.

Senator GIBSON:
Victoria

.- The statement that I made earlier is correct. No provision has yet been made in Victoria for the registration of tax agents; and, if the standard of business morality in that State has been’ sufficiently high to make such registration unnecessary, I cannot see any reason why one of these ‘boards should be set up in that State. In the other States, with the exception of Western Australia, it has long been the practice to register tax agents; but I have yet to learn that any complaint has been made against tax agents in Victoria. Those men have carried out their duties just as effectively and truthfully as agents in the other States. Therefore, it is undesirable to oblige tax agents in Victoria to register. In most cases they are business men. The business men of Victoria observe standards of morality just as high as those which obtain anywhere else. I cannot see anything wrong with the present system in that State. I should be surprised to learn that any complaint lias been made about it.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– As one who has had considerable experience in income tax law, I believe that we should support this clause. Many years ago this matter was examined by a royal commission. Some of us are familiar with the abuses which arose following the last war in connexion with the preparation of various returns, and the insidious methods adopted by some gentlemen who were outside the pale of the law. I have every sympathy with tax agents in country districts ; but it is essential that we should exercise a measure of discipline over such agents. Every man in business to-day is obliged to rely upon specialists to prepare his tax returns. He cannot afford to take the risk of preparing his own returns, first, because he may slip in respect of the law, and, secondly, because he may not claim all the concessions to which he is entitled. It is the duty of tax agents, upon whom a very serious responsibility is placed, to obtain for a client all the benefits to which he is entitled under the law. This provision has also been made in order to give to the department a measure of control over tax agents.

Senator MCBRIDE:

– Does the honorable senator believe in compulsory unionism ?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– No ; this, in effect, is the kind of control that is exercised over all respectable professions in some form or other. These agents have a responsibility not only to their clients, but also to the Crown. Once they are registered, their returns carry a certain amount of weight with the department. Indeed, on the back of every tax return form - and this applies also in Victoria and Western Australia - agents are obliged to supply details of the sources from which they derive the information on which they compile a client’s return. I sympathize with people in country districts because they are being deprived, of the services of persons whom they were formerly able to employ to prepare their tax returns. I have no doubt that the department will treat these matters in the generous spirit that characterizes its dealings with taxpayers except when it is extracting tax. Proposed new section 251 exempts from its provisions persons who do not receive an amount in excess of £20 a year as fees for preparing tax returns. I suggest that in the great majority of cases persons in- country districts who prepare taxation returns do not receive that amount in fees annually. However, I should think that if it would satisfy Senator Gibson, the Government would be’ prepared to increase that amount of £20 to £50.

Senator McBride:

– Does the honorable senator think that for once the Government is right?

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The Government has exercised a degree of reasoning with respect to this provision that has not been exercised by some honorable senators. I shall oppose any proposal which will have the effect of converting this field into a preserve for certain people. At the same time, it is most important that agents who prepare tax returns, and receive fees for doing so, should, in the light of what has happened in the past, be subject to a measure of discipline. Not very many agents in small country districts earn £50 in fees; therefore, the Government might increase the amount of £20 to £50.

Senator SPICER:
Victoria

– Sub-section 2 of proposed new section 251k provides - (2). A board may cancel the registration of any tax agent upon being satisfied- that -

  1. any return which has been prepared by or on behalf of the tax agent is false in any material particular;

I accept the general principle contained in these provisions with regard to the registration of tax agents, but I should like to amend sub-section 2 which gives the board power to cancel the registration, of a tax agent if he happens to preparea return which is false, even although it is false without him knowing it to be so.. It does not matter whether the- inaccuracy in the return has arisen through the fraud’ of the agent, or his negligence, or without his knowledge. Cases may easily arisewhere a tax agent prepares a return which through no fault of his is inaccurate. He. must act on the information supplied tohim by the taxpayer. If the accountant has “ cooked “ the books, the tax .agent is. not an auditor, and it. is not his business to audit them, but he may be deprived of his livelihood by the board because the information supplied to him and passed on by him is false. This is a serious matter. It is not desirable to invest any board with such power. I hope that the.

Government will accept an amendment to prevent injustice being done to tax agents. I move -

That in proposed new section 251k, subsection (2) paragraph (a), after the word “false.” the following words be inserted: - “ to the knowledge of the agent “.

If the agent knowingly prepares a false return, he should, of course, be deprived of registration. The board could easily establish whether he knew of the falsity or not. Even if it were difficult to do so, that should be no reason why we should pass legislation giving a board power to deprive a man of his livelihood when he lias not been guilty of any offence. The Minister may tell me that a similar provision is contained in the State acts, but that is no answer to my objection. Many things slip through Parliament because insufficient attention has been paid to the legislation under consideration. Now that the matter has been raised, 1 suggest that the Government should accept my amendment, in order to ensure that no innocent man shall be deprived of his licence by the board.

Senator FRASER:
Minister for Externa] Territories · Western Australia · ALP

– The Government does not think that the suggested amendment is necessary, because it believes that under subsection 2 of proposed new section 251k the registration of a tax agent would be cancelled only if the board were satisfied that any explanation given by the registered tax agent had not established his ignorance of the falsity, or that the falsity had occurred through his inadvertence. A similar provision has been in existence in the State laws relating to the registration of tax agents for many years, and has not, so far as is known, been found to cause injustice or hardship to any registered tax agent.

Senator Gibson:

– The fact that it has not been necessary to register tax agents in Victoria suggests forcibly that there has been no wrong-doing on their part in that State.

Senator FRASER:

-The department has on the file cases in which agents have been guilty of misdemeanours, even in the State of Victoria. However, in order to place the matter beyond doubt, the Government is prepared to amend the subsection by adding to it the following words : “ unless the tax agent establishes to the satisfaction of the board that he had no knowledge of the falsity, or that the falsity was due to his inadvertence ;”.

Senator Spicer:

– In view of the Minister’s proposal, I ask leave to withdraw my amendment.

Amendment - by leave - withdrawn.

Amendment (by Senator Fraser) agreed to -

That in proposed hew section 251k, subsection (2), pa ru graph (n.), after thu word “‘particular” the following words be inserted: - “, unless the tux agent establishes U> the satisfaction of the board that he had no knowledge of the falsity or that the falsity was due to his inadvertence “.

Senator LECKIE:
Victoria

.- I am inclined to agree with Senator Gibson that this matter has gone either too far or not far enough. I draw the Minister’s attention to the persons who can be appointed as tax agents. No qualification is necessary except that they have to be fit and proper persons. A lawyer or a doctor has to pay certain fees and pass certain examinations, a plumber must go through his apprenticeship, and a member of Parliament has to be qualified before he can be elected, but the loose description of “ a fit and proper person “ is sufficient to enable a. ‘ tax agent to qualify. How is it to be determined whether a. man is a fit and proper person to be a tax agent? Apparently that matter is to be left in the hands of the various State boards, which no doubt will meet, in the capital cities. How can a board sitting in Sydney determine whether or not a man living in Broken Hill is a fit and proper person, unless he goes to the expense of visiting Sydney for an interview? It seems to me that some definite qualification should be specified. This proposal lends an air of respectability to a profession without imposing safeguards to ensure that the profession shall be respectable. An innocent taxpayer seeking assistance in the compilation of his returns will be told that some person is a licensed tax agent. Naturally, he will conclude that the agent is an eminently respectable person with a thorough knowledge of taxation law. Even though a man may be the biggest scoundrel on earth, being approved by flip Government he will be branded as a person of repute. 1 shall not oppose the proposed new section; I am merely drawing attention to a weakness in it. If a profession such as this is to be established, there should be some specific qualifications governing those who are to engage in it.

Senator Collings:

– This bill will not establish a (profession. There are tax agents in Queensland to-day who are ordinary citizens of good character.

Senator LECKIE:

– Surely the public should be given some guarantee that tax agents will possess the requisite qualifications to do their job. If it were specified that a tax agent should be a former officer of tho Taxation Department, or a former officer of the Treasury, we could understand the position, but simply to say that a tax agent must be a fit and proper person, without defining what is a fit and proper person, is wrong. I trust that this matter will be given consideration with a view to specifying what the qualifications of a tax agent should be.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I ask the Government to reconsider the amount of £20 specified in paragraph a, of sub-section 2 of proposed new section 251l. There is substance in Senator Gibson’s suggestion that the amount should be £50. I move -

That, in proposed new section 251l,, subsection 2, paragraph (a) the word “Twenty” lie left out with a view to insert in lieu thereof the word “Fifty”.

Senator COURTICE (Queensland) [5.271. - If the Government agreed to the honorable senator’s amendment, it might be found subsequently that there was an excellent reason for fixing the amount at £20. The honorable senator should be satisfied if the Minister for External Territories (Senator Fraser) undertakes to place the matter before the Treasurer, and I suggest that he should not press his amendment.

Senator Fraser:

– In some States the figure is as low as £10, and £20 is the maximum.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I can readily conceive that in some parts of Victoria, particularly in the western district, from which, reputedly, most of the wealthy people in that State reside, quite a number of individuals earn more than £20 from this source. As this is not a vital matter, I ask the Government to accept the amendment.

Senator Fraser:

– If it will satisfy the honorable senator, I shall ask the Treasurer to consider the matter. There is no need for the amendment.

Senator COLLINGS:
QueenslandMinister for the Interior · ALP

– I ask Senator A. J. McLachlan if he is prepared to accept the assurance given by the Minister for External Territories (Senator Fraser) that his proposal will be referred to the Treasurer (Mr. Chifley) ? If the honorable senator persists with his amendment, of course that assurance will not apply.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I am not prepared to countenance the minatory attitude adopted by the Leader of the Senate (Senator Collings). Honorable senators are entitled to express their own opinions on these matters. I have moved an amendment, and I propose to persist with it, because I consider that there is an element of justice in it. After all, what- would the Treasurer (Mr. Chifley) know about the matter? It is handled by the Commissioner of Taxation as an independent entity. He knows the practice in many country centres, and he is the man who should express an opinion, not the Treasurer. I do not propose to withdraw the amendment.

Question put -

That the word proposed be left out (Senator A. J. McLachlan’s amendment) be left out.

The committee divided. (The Chairman - Senator Brown.)

AYES: 10

NOES: 18

Majority . . . . 8

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause, as amended, agreed to.

Clause 27 agreed to.

Clause 28- (1.) The amendment effected by section six of this Act shall apply to all assessments for the financial year beginning on the first day of July, One thousand nine hundred and forty-one, and all subsequent years. (2.) The amendments effected by sections seven, eight, nine, twelve, thirteen and sixteen of this Act shall apply to all assessments for the financial year beginning on the first day of July, One thousand nine hundred and fortytwo, and all subsequent years.

Amendments (by Senator McLeay) agreed to -

That, in sub-clause (1.), after the words “ effected by “ the following words be inserted: - “paragraph (a) of”.

That in sub-clause (2.), after the words “ effected by “ the following words be inserted: - “paragraph (6) of section six and by”.

Clause, as amended, agreed to.

Title agreed to.

Bill reported with amendments ; report adopted.

Third Beading.

Motion (by Senator Fraser) pro posed -

Thai the bill be now read a third time.

SenatorJAMES McLACHLAN (South Australia) [5.37]. - In his reply to the debate on the second reading of the measure, the Minister (Senator Fraser) said that if there was inflation in this country the Opposition was responsible for it.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– Yes, and I shall supply a few figures to substantiate my contention. It is regrettable that an erroneous statement like that of the Minister should appear in Hansard and be circulated among the people. When the Fadden Government left office in June, 1941, the national credit or unfunded treasury-bills, whichever term honorable senators prefer, had been availed of to the total amount of £1,750,000. On the 30th June, 1942, the unfunded treasury-bills amounted to £78,000,000, and at the end of January, 1943, seven months later, the total was £203,000,000. Judging by the way in which the present Government is now financing the country, by the 30th June next the national credit will have been drawn upon to the amount of £300,000,000.

Question resolved in the affirmative.

Bill read a third time.

page 1521

INCOME TAX BILL 1943

Second Reading

Debate resumed from the 9th March (vide page 1315) on motion by Senator Fraser -

That the bill be now read a second time.

Senator McLEAY:
Leader of the Opposition · South Australia

– I do not propose to speak at length on the second reading of this bill, but I indicate now that, although the Opposition will not oppose the second reading, I shall, in committee, submit a request in respect of clause 2. That clause reads -

This Act shall come into operation on a date to be fixed by Proclamation, not being earlier than the date upon which the National Welfare Fund Act 1943 comes into operation.

I draw attention to section 55 of the Constitution Act, which reads -

Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect. Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only.

As a layman, I do not say that clause 2 is unconstitutional, but even if it comes within the letter of the Constitution, it is contrary to the spirit of the Constitution. As honorable senators know, the Senate may not amend laws imposing taxation, and therefore I enter my most emphatic protest against the procedure which has been adopted in connexion with this bill. The Opposition is in favour of the passing of a bill fixing the rates of tax, because until that has been done it will be impossible for the Government’s proposals to come into operation on the 1st April next. The extraordinary position which arises is that, should the National “Welfare Fund Bill be amended, or more particularly if it be rejected, the measure now before us will not come into operation. I do not know of any other occasion on which a similar position has arisen. I indicate now that in committee Senator Spicer will move that the House of Representatives be requested to delete from clause 2 all the words after the word “ proclamation “.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– The matter to which the Leader of the Opposition (.Senator McLeay) has drawn attention is of more than passing interest. It is true that clause 2 relates only to the commencement of this legislation, but it reads : “ This Act shall come into operation on a date to be fixed by Proclamation, not being” earlier than the date upon which the National “Welfare Fund Act 1943 comes into operation “. There is no such act as the National “Welfare Fund Act 1943, and therefore it seems to me that, in the measure before us, the rights of .the Senate are being invaded. This proposal introduces a principle which has been bitterly contested between the two branches of the legislature in many British communities over many centuries. I have studied the incidence of taxation under the rates imposed by this bill, and whilst the Opposition does not decide these matters, it has the responsibility of drawing the attention of the Government to any inequalities which may arise. Under this measure, the Government, perhaps unconsciously, will impose a more severe burden on some persons in the community than on others. Concessional rebates are allowed on the basis of £100 for a wife, £75 for the first child, and £30 for each additional child. It may be inferred, therefore, that a taxpayer’s income is for taxation purposes reduced by £205 if he has to support a wife and two children. The result of this calculation would appear to place a married man earning £500 a year, and who has a wife and two children to support on the same basis, for the purpose of taxation, as a single man without dependants earning £295 a year. That,, however, is not so. The schedule of proposed taxes shows that a married man with two children will be required to pay £80 18s., whilst the single man escapes with £55. It is true that the wife of the married man receives £13 per annum as child endowment in respect of the second child, but after taking that amount into consideration, there is a difference of £3 2 18s. in favour of the single man. The same disparity is evident when comparing other incomes of married and single taxpayers; the proposed rates of tax are loaded against the married man with children to support. I do not think that that is the intention of the Government. A further example is the tax payable by a taxpayer without dependants who has an income of £500 per annum. His tax under the proposed new scale is £136 14s. A married man with a wife and two children to support will he required to pay £80 18s. After allowing £13- for child endowment, which is payable in respect of one of the children, the married man has £432 2s. left to feed and clothe himself, his wife, and two children, and pay for his children’s education, or only £68 16s. more than the single man who ha3 only himself to support. These anomalies are likely to cause a great deal of heart-burning. It seems to me that we shall have to recast our views concerning the incidence of taxes.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Clause 2 -

This Act shall come into operation on a date to be fixed by Proclamation, not being earlier than the date upon which the National Welfare Fund Act 1943 comes into operation.

Senator SPICER:
Victoria

.- I move -

That the House of Representatives be requested to make the following amendment: - Leave out al] words after “Proclamation “.

In moving this request I direct attention to the fact that the matter with which it deals raises issues of very great importance, far transcending the particular matter which arises under the clause. I do not think that if one went through all the taxation measures which have been passed by this Parliament since 1901 one would find in any of them a clause anything like .this. I say in all seriousness that the clause as it stands is unintelligible. It makes the operation of this provision depend upon the coming into operation of what is described as the National Welfare Fund Act 1943. Although the bill has been presented to this chamber, the fact is that no such act .as a National Welfare Fund Act 1943 exists. No such act is on the statutebook. Therefore, we are asked to make the operation of this measure dependent, on tie coming into operation of a bill which has not yet been considered by the Senate. If this clause has any meaning at all, it must mean that the Government makes this tax bill conditional upon the Senate’s accepting a measure which has not yet been passed by this chamber.

Senator Collings:

– But it will be.

Senator SPICER:

– That is my point. The Senate is not able to amend this bill because it is a taxation measure. The Government has said that it will put “up this measure to the Senate in such a form that the Senate must accept it and also the National Welfare Fund Bill 1943. The Government says - and it is quite serious - that the taxes which it considers to be essential for carrying on the war can be raised only if the Senate accepts another bill which has nothing whatever to do with the war at all.

Senator Collings:

– Nonsense !

Senator SPICER:

– That proposition is absolutely incontrovertible. This bill, which seeks to impose taxes for the .purpose of carrying on the war, is made conditional upon the Parliament accepting a proposition for .social services.

Senator Lamp:

– What is wrong with that?

Senator SPICER:

– There is a lot wrong with it. At the moment I stress the fact that this proposition, put up in its present form, is a very serious invasion of the constitutional privileges of this chamber. It is very doubtful whether the proposition is legal. The Constitution provides, and for a very good reason, that laws imposing taxes shall deal only with the imposition of taxes.

Senator -Collings. - That is all right.

Senator SPICER:

– Does this bill deal only with the imposition of taxes, when its operation is made expressly dependent upon another ! bill which ‘has nothing whatever to do with taxation at ali ? This bill is not to operate unless the Senate agrees to another bill which has nothing to ‘do with the imposition of taxes. I repeat that that proposition is a serious invasion of section 55 of the Constitution. I am not very much concerned about establishing that point at the moment. I am concerned with this fact : That the Government has the audacity to submit a taxation measure to the Senate in such a form that when we consider the National Welfare Fund Bill 194.3 we shall be embarrassed by the provisions of this bill. If this bill be passed, we cannot consider the National Welfare Fund Bill on its merits, because if we pass this measure in its present form we shall then be faced with the proposition that unless we accept the National Welfare Fund Bill in the form in which the Government wants us to accept it, we shall lose this tax bill as well. Does any honorable senator wish to tell me that it is no embarrassment to me as a member of this chamber that my vote on the National Welfare Fund Bill must be given in the circumstances that unless I accept the National Welfare Fund Bill I shall refuse to assist to put into operation the measure now before us, which is necessary to collect taxes amounting to £40,000,000 for the purpose of carrying on the war?

Senator Courtice:

– The honorable senator has agreed to the National Welfare Fund Bill.

Senator SPICER:

– I have not; that bill has not yet been discussed by the Senate. I have the strongest objection when that bill is before the Senate to be faced with the situation, that I can only vote against it by leaving myself open to the charge that I have deprived the Government of taxes amounting to £40,000,000. I shall see, if I can, that that .situation will not arise. There is no need for it to arise. All that the Government has to do is to accept my request to delete those words from the clause. If it does so, I shall have nothing more to say about the matter, because when the other bill conies before the Senate I shall not then be endangering this bill by voting against that measure.- This raises a most important constitutional question, associated with the privileges of the Senate as well as with its obligations to the electors. Honorable senators owe to the electors the duty of considering every bill on its merits.

Senator Collings:

– I hope that the honorable’ senator is doing so.

Senator SPICER:

– I am doing so in relation to this bill, and when the National Welfare Fund Bill is under consideration I am prepared to treat it similarly; but I refuse to be put into a position in which if I oppose the National Welfare Fund Bill I may prevent a measure becoming operative which the Government claims is essential for the purpose of carrying on the war. This issue has been raised many times in Upper Houses of Parliaments throughout the world which have always been keen to ensure that their rights and privileges are not invaded by tacking of this kind. I shall refer only to one passage in May, which, I think, puts the position very plainly. Beginning at the bottom of page 575 of the 13th edition, May says -

In former times, the Commons abused their right to grant supplies without interference from the Lords, by tacking to supply bills provisions which, in a bill that the Lords had no right to amend, must either have been accepted by them unconsidered, or have caused the rejection of a measure necessary for the public service. This practice infringed the privileges of the Lords, no less than their interference in matters of supply infringes the privileges of the Commons; and has been met by the Lords by Standing Order No. 52, and by their resolution of the 9th December, 1702 - “ That the annexing any clause or clauses to a bill of aid or supply, the matter of which is foreign to, and different from the matter of the said bill of aid or supply, is unparliamentary, and tends to the destruction of the constitution of the government “.

I support that opinion because that is the situation with which we are faced. Not merely is it an infringement of the privileges which the Senate enjoys, but it is also, I believe, contrary to the Constitution. If it is not contrary to the letter of the Constitution I suggest that it would be impossible to devise anything more contrary to the spirit of the provisions of the Constitution which deal with the relations between the Houses.

Senator FRASER:
Minister for External Territories · Western Australia · ALP

– The Government will not accept the request.

Senator HERBERT HAYS:
Tasmania

– It can, I think, be truly said that this clause is an innovation such as the Senate has not experienced at least during the last 22 years. It is extraordinary that it should have remained for a Labour Government to introduce a principle which I did not think that any Labour man would ever support. The proper procedure would have been to bring in the bill to provide for the National Welfare Fund, with a message asking Parliament to provide the necessary money. The Government tells us that this measure is to provide money for war purposes, and funds for social services which we are to consider at a later date. What reasons have prompted the Government to introduce legislation to Parliament in this way? We all expected the Minister in charge of the bill to make some attempt to answer Senator Spicer’s criticisms, because this cannot be regarded as anything but a pernicious and dangerous method of introducing legislation. If we agreed to this clause, it would establish a precedent which would be to the detriment of the powers and dignity of this chamber. It is for the Senate in its own interests to take a stand on this matter. I appeal to honorable senators to view the question seriously, because otherwise there is a risk of establishing what has always been recognized as a dangerous and improper practice, known as tacking. It means tacking on to a bill which the Government knows is required for financing the war, and to which we must agree, something which will commit us to voting for another bill which has no connexion, direct or indirect, with the purpose for which .the tax bill purports to be introduced. We were led to believe by the Government that this was a bill to provide funds for war purposes, and that was the kind of bill that we expected, but the Government has introduced into if a clause which the Senate cannot accept without establishing’ a very dangerous precedent. Why did not the Government bring down the National Welfare Fund Bill, and make provision for the necessary financing of the social services with which it deals? There has been no discussion of the provisions of that measure to which the Senate may or may not object, but the Senate should not be tied down by a provision in this bill. Honorable senators are entitled to know why the long-established practice is being departed from in this case. This measure has been introduced ostensibly for war purposes, but tacked on to it there is the proviso that it shall not come into operation until a certain other measure has been passed. The proper method would have been to discuss all the taxation measures and the National Welfare Fund Bill conjointly. I hope that honorable senators will insist upon adherence to the established procedure of this chamber and will not permit a recurrence of this state of affairs, in which, under the pretext of taking certain action, something altogether foreign to that action is being done. Primarily, this is a war measure, but a substantial portion of the revenue that it will raise is to be devoted to social services. Is there any reason why the national welfare scheme should not have been dealt with entirely by a separate measure? This procedure is without precedent, and there must be some reason for its adoption. I shall be interested to hear what the Leader of the Senate (Senator Collings) has to say on the matter.

Sitting suspended from 6.15 to 8 p.m.

Senator FRASER:
Minister for External Territories · Western Australia · ALP

– In his remarks on this bill Senato A. J. McLachlan said that he did not know what the National Welfare Fund Bill contained, but I point out to him that the motion for the second reading of that measure has been moved in this chamber, and that the Leader of the Opposition (Senator McLeay) has secured the adjournment of the debate.

Senator LECKIE:
Victoria

.- The second explanation given by the Minister is just as unsatisfactory as was the first. The only merit in his first explanation was that he did not repeat himself. He simply said that the Government would not accept the request submitted by Senator Spicer, but he has not attempted to answer the strong argument that has been advanced in opposition to the clause. Senator Spicer has said that the National Welfare Fund Bill abrogates the rights of the Senate, and that the committee should be careful about giving up its rights, as it would do in passing the clause now before it. If the Government has faith in both of these measures why should it tack on to this clause a provision that the measure shall come into operation on a date to be fixed by proclamation, not being earlier than the date upon which the National Welfare Fund Act comes into operation ? Does the Government wish to place on the Opposition the onus of having refused means of raising revenue which is necessary for war purposes, because the Government has a pet scheme of its own which it does not define, except that it says that a certain sum is to be paid into a trust fund?

Senator Lamp:

– The honorable senator will not vote against the National Welfare Fund Bill.

Senator LECKIE:

– I wish to consider that measure on its merits, and I desire to give similar consideration to the bill now before us. Honorable senators must have been impressed by the force of the argument used by Senator Spicer. Although honorable senators opposite have had two hours to consult their colleagues who are skilled in legal matters, we get no answer from them. That is not the way to treat the committee, and it is not the way to get bills passed. If there is a good reason why this clause should be agreed to as it stands, why does not the Minister in charge of the measure say so? If he is afraid that the National Welfare Fund Bill may not be passed, it shows that the Government has not faith in it. A clause such as this is unprecedented in the annals of the Senate.

Senator Cameron:

– What has been tacked on to this bill?

Senator LECKIE:

– The measure is not to come into force and the increased taxes cannot be collected until the National Welfare Fund Bill is passed.

The collection of the tax is postponed until some mythical time. Do we understand that the Government does not wish to have its taxation bill passed? It is trying practically to blackmail honorable senators into voting for this measure and for the National Welfare Fund Bill afterwards. We know that under the latter measure a fund is to be established, and is to be used temporarily for war purposes, but afterwards the money is to be expended on some mythical schemes which the Government has in mind. It seems to me that the Minister in charge of the bill is not meeting the committee fairly.

Senator Collings:

– The Government wants this bill passed, and it regrets that the Opposition is stonewalling it.

Senator LECKIE:

– If the Government is willing to withdraw the latter part of the clause which refers to the National Welfare Fund Bill coming into operation, the second reading of the Income Tax Bill will be passed on the voices. This bill would not be affected by such an amendment. We are driven to the conclusion that the Government desires to place on the Opposition the onus of refusing the large amount of tax proposed to be raised. If the Government would withdraw the condition that has been tacked on to the clause, the bill would be agreed to in ten minutes.

Senator CAMERON:
Minister for Aircraft Production · Victoria · ALP

.- The mover and supporters of the request have drawn a good deal on their imagination. Section 55 of the Constitution provides -

Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall have no effect.

The clause under consideration provides that the act shall come into operation on a date to be fixed by proclamation. The two things provided for are the tax and the time when the act shall become law. Those who support the request have no objection to the act becoming law or to the date being fixed by proclamation. The Government merely adds that the date shall not be earlier than that upon which the National Welfare Fund Act comes into operation. The Government has placed the matter plainly before the committee. It desires to make it mandatory that the date shall not be earlier than the date upon which the National Welfare Fund Act comes into operation.

Senator McBride:

– Why ?

Senator CAMERON:

– I could give substantial reasons for the Government’s action. Members of the Opposition, probably, could also advance reasons for it, but they would be based on assumption. The Opposition is drawing on its imagination, and presupposing that all kinds of tilings may happen. The Government is acting within the law, despite the argument advanced to the contrary.

Senator Spicer:

– I did not base my whole argument on the Constitution.

Senator CAMERON:

– I assume that the honorable senator would agree with me that the Government would act within the Constitution if this clause were passed. The honorable senator has directed attention to what has been laid down by May, but we are not bound to follow that authority. Although we frequently consult it with advantage, we have to bear in mind that the procedure advised by May was laid clown under conditions very different from those which obtain to-day. In the light of present circumstances, and under the pressure of war and other forces operating, the Government from time to time accepts authorities if it believes that the procedure advised by them is the best; but, on many occasions, it considers that the procedure laid down by the authorities is not suitable. I mention that merely to point out that we are not bound to follow May. Nothing has been added to this clause that we are not entitled to add to it. Even Senator Spicer admitted that we are entitled to fix the date on which the measure shall be proclaimed. The Government says that that date shall not be earlier than the date on which another measure comes into operation.

Senator Spicer:

– But that other measure has not yet been passed.

Senator CAMERON:

– If that other measure were never passed, this one could be amended at any time. The Opposition to the clause is based on the fear that something sinister is intended. Although the Opposition has the numbers either to accept or to reject anything that is placed before the Senate, honorable senators opposite prefer to embarrass the Government by drawing on their imaginations.

Senator McBride:

– We are eager to help.

Senator CAMERON:

– The Opposition is putting up “ Aunt Sallies “ merely to knock them down. They want the people to believe that the Government is doing something wrong. I submit that the Government is entitled to fix the date e>n which this measure shall come into operation in the manner intended.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

,.- The Minister for Aircraft Production (Senator Cameron) has given away the Government’s case. He does not. seem to appreciate what the Government has attempted to do in adding the words complained of by the Opposition. The usual wording of a clause of this kind is, “ This act shall come into operation on a date to be fixed by proclamation”; but, in this bill, the following words have been added : - “ not being earlier than the date upon which the National Welfare Fund Act 1943 comes into operation “. The National Welfare Fund Act referred to in the clause does not exist. We have before us a case of tacking in one of _ its worst forms. No government should resort to such methods. I agree with Senator Spicer that the rights and privileges ‘of the Senate are at stake. I go further, and say that this provision invades the Constitution itself. No good reason has been given for this extraordinary procedure. The Minister for Aircraft Production says that this clause fixes the date on which the bill shall come into operation; but it does nothing of the kind. The proclamation of the act depends upon a contingency which may never happen. A taxation bill should deal only with taxation; but the Government is trying to make it deal with something else. I submit that clause 2 is illegal, is an invasion of the rights and privileges of the Senate, and is tacking in its worst form. During the seventeen years that I have been a member of the Senate I have never previously seen an attempt of this kind. I shall never vote for a measure which invades the rights’ and privileges of the Senate.

Senator LARGE:
New South Wales

– The Opposition seems to be in a particularly happy position, because it knows that it can hamper and “embarrass the Government by quibbling about such a matter as the dignity of the Senate.

Senator Latham:

– “ Quibbling “ is scarcely the right word to use.

Senator LARGE:

– I maintain that it is a quibble, when we reflect that this country is at war and is struggling for its very existence. If, in order to prosecute the war to our maximum ability, it is necessary to expedite certain legislation, I submit that it is our duty to do so. The Opposition, however, is more concerned about the dignity of the Senate.

Senator McBRIDE:
SOUTH AUSTRALIA · UAP

– Is not the honorable senator concerned about it?

Senator LARGE:

– Yes; but we on this side are prepared temporarily to relax our concern for our dignity in the interests of the war effort. Can we not devote all of our energy to the prosecution of the war and leave such matters as our dignity till the war is over ?

The CHAIRMAN:

– I ask the honorable senator to confine his remarks to the clause before the Chair.

Senator LARGE:

– Honorable senators opposite have contended that the dignity of the Senate is at stake, and I was pointing out that we are justified in temporarily setting such matters aside during the Avar. I remind honorable senators opposite that the dignity of the Senate is not an issue upon which they could appeal with success to the electors, particularly if by maintaining the dignity of the Senate legislation essentia] to the winning of the war was delayed. Honorable senators opposite are skating on thin ice, and I sound a warning note to them.

Senator GIBSON:
Victoria

.- If ever an opposition endeavoured to help a government, the Opposition in this chamber has done so to-night. The Government can have this bill as soon as it likes, and can proclaim it to-morrow if it will withdraw that portion of clause 2 to which objection has been taken. The other measure upon which the proclamation of this bill depends is somewhat nebulous. It is true that its second reading has been moved, but the bill lias not yet been passed. That measure refers in indefinite terms to the health of the people, but what benefits it will confer on the people we do not know. The measure before us should be dealt with on its merits. The legal aspect has been placed clearly before the committee by Senator Spicer and Senator A. J. McLachlan whose views should carry weight with the Government. I urge the Government to agree to the deletion of the words complained of, in which event the Opposition will not delay the passage of the bill.

Senator LATHAM:
Western Australia

– Although honorable senators in this chamber represent the same people as do members of the House of Representatives, the framers of the Constitution placed certain restrictions on the powers of the Senate in respect of measures to impose taxation or appropriate revenue. Bearing that fact in mind the Senate would be within its rights in rejecting the bill on the ground that it was unconstitutionally before the chamber. However, the Opposition is prepared to appeal to the common sense of all honorable senators on the matter. What is the urgency for the bill? Surely, the proper course for the Government to follow is to pass the National Welfare Fund Bill before this measure is passed. I could not imagine an appropriation measure being passed before the estimates on which it was based were passed. But, the Government is reversing the procedure in that fashion on this occasion. Under this bill it is proposed to levy certain taxes in order to raise revenue for the purpose of creating a trust fund of £30,000,000 under the National Welfare Fund Bill. Some honorable senators opposite have said that that bill is already before the Senate, and that we know all about it. That is not the case. It “ is quite possible for the Senate to amend that measure, even to such a degree that members of the House of Representatives may not recognize it as the original measure transmitted to this chamber. That fact must be borne in mind. If the Government has no ulterior motive it will agree to the request. Some reason must exist for this clause, but the Minister in charge of the measure has not attempted to give us that reason, or to disabuse our minds of any misconception about it.

Senator Fraser:

– I am not an optimist.

Senator LATHAM:

– This is the Government’s measure, and, therefore, the Minister in charge of the bill should explain it fully, particularly when we hesitate to agree to it for want of an explanation of a certain clause. So faT as I am concerned the Government, and not the Opposition, will have to accept responsibility for the rejection of the measure if it be rejected, because the Opposition can see nothing wrong with the measure except for this clause which is a violation of section 55 of the Constitution. The Opposition could have asked for a ruling as to whether the measure was constitutionally before the chamber and if its contention were not upheld by Mr. President, it could have carried a motion of dissent and in that way held up the measure for the time being at any rate.

Senator Lamp:

– Honorable senators opposite are not game to reject the measure.

Senator LATHAM:

– Why should we be afraid?

Senator Lamp:

– Honorable senators opposite are afraid of the electors.

Senator LATHAM:

– I am not afraid of the electors. In any case what would it matter should we go down, so long as we go down doing what we believe to be right. More than dignity is involved in this matter. The bill involves the rights of the people; and the people are more powerful than Parliament. We are subject to the people. We should hesitate to set a precedent in this matter of which not only we’ ourselves might have cause to be ashamed ; we must also remember that the State parliaments look for guidance to this Parliament in respect of procedure involving so important a principle as is the case in this instance. Therefore, we should make doubly sure that we do not make a mistake in this matter. I hope that the Minister, even at this late stage, will agree to the request, or, at least, agree to adjourn consideration of the bill until the Senate has dealt with the National Welfare Fund Bill. If that course be followed, no necessity will exist for this clause. If the

Government refuses to follow that course we can only assume that in including this clause it is actuated by some ulterior motive.

Senator Lamp:

– What is the ulterior motive ?

Senator LATHAM:

– No explanation of this clause has been given by the Minister; and to me it seems that no explanation for it can be given. After all, the date on which this measure will come into operation can be fixed by proclamation. I repeat that, if this clause remains as it now stands, this bill can have no force until the National Welfare Fund Bill is passed. The Government should act frankly, and postpone consideration of the measure. I shall not support it so long as the clause remains as it now stands- unless a satisfactory explanation be given for the clause

Senator McBRIDE:
South Australia

– We have had two unusual experiences in this chamber this afternoon. First, the Government introduced a bill which contains a clause of a kind which has never previously been included in any bill in the history of this Parliament. Secondly, in spite of this radical departure from the procedure followed by all previous governments, the Minister for External Territories (Senator Fraser), who is in charge of the bill, has refused to give one word in explanation of that clause. I admit that Ministers in this chamber are very often called upon to handle measures which do not originate in their own departments, and do not have sufficient time to study those particular measures. It is not surprising, therefore, that on such occasions Ministers cannot answer, offhand, questions raised with regard to certain provisions. This measure is unusual; and we are aware that it did not originate in the department of the Minister in charge of it. For that reason the Opposition gave him an opportunity to inform himself during the suspension of the sitting of the reason for this clause as it stands, and for this radical departure from normal procedure. Unfortunately, however, we have not yet- been given one word of explanation for this provision.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– The “ Minister for air “ explained it to us.

Senator McBRIDE:

– He explained nothing to any honorable senator; he simply expressed an opinion as to the constitutionality of the clause. He did not say why the Government had found it necessary to include this provision in the bill whether it be constitutional or not. Ministers owe a duty, not only to the Government, but also to honorable senators as a whole. It is an insult to all honorable senators, when Ministers refuse pointblank to give one word of explanation of a. matter so important as this. I agree with Senator Latham that if the Government stands firm on it, there will be a complete black-out on the clause, and, consequently, the clause will be rejected on a division.

Senator Collings:

– The honorable senator knows, of course, that this clause was agreed to without discussion in the House of Representatives.

Senator McBRIDE:

– It is most improper for the Leader of the Senate (Senator Collings) to refer in that spirit to what happened in the House of Representatives. I hope that he did not make the interjection for the purpose of influencing honorable senators in this matter. His interjection will certainly not influence me in any way whatever. The only thing that will influence me in my decision on this clause will be a complete and frank explanation as to the reason for it. I still hope that, even at this belated stage, the Minister will make such an explanation. I have mentioned on previous occasions that this Government usually takes essential action belatedly. Thus, it will be running true to form if to-night we are obliged to wait a considerable time for the Minister to explain the reason for the clause. If we are forced to draw our own conclusions as to the reason for the clause we may agree with Senator Latham that the Government is actuated by an ulterior motive in the matter.

Senator Collings:

– This simply has to do with the method of drafting the bill. What ulterior motive can be involved in that?

Senate r McBRIDE. - No previous government has adopted this method.

Senator Collings:

– Is it a crime for this Government to follow a new method ?

Senator McBRIDE:

– The Government may do so quite legitimately ; but we wish to ascertain whether the provision is quite properly inserted or whether it is designed to influence honorable senators with regard to the National “Welfare Fund Bill which has not yet been discussed by the Senate.

Senator Collings:

– I have told honorable senators the reason for this clause This is the Government’s method of drafting the bill.

Senator McBRIDE:

– That explanation may mean a complete black-out of this clause so far as I am concerned. I should like a better explanation than that. Obviously, the Government instructed the draftsman to draft the bill in this way. I say without hesitation that had the drafting been left completely to that officer, he would ;not have included the words to which exception has been taken. Obviously they have been included at the direction of the Government itself. As the Government has found it necessary to give this unusual direction, we on this side feel it most necessary, in the interests of the Senate and the people of Australia, that we should know why such a departure has been made on Ibis occasion. I suspect, seeing that the Government refuses to give us any information upon it, that it is really ashamed of its motive for what it has done. If I think along those lines, I can quite readily bring forward reasons why it has done it. We know that the measure itself is not very popular even with the Government, and I readily agree that it is still more unpopular with the followers of the Government. I assume that, because of the intense unpopularity of the bill, the followers of the Government, who have no confidence in the word of their own Government, said to it, “ N ow, if we are going to impose taxation on the lower ranges of income on the scale fixed in this bill, we must have something in reserve “, and the Government said, “ We will give you the National Welfare Fund A.ct “. But the followers of the Government said, “ That is all right, but you said on many occasions that you would never be capable of bringing a bill such as this before Parliament”. Consequently, they wanted some protection from the Government, in which they had no confidence, and they asked it to include this condition as an assurance that, if the National Welfare Fund Bill - which is not yet an act, although the Government assumes that it will be - is not passed, these taxes will not be imposed upon the people. I put these few thoughts forward in the hope that, knowing what we believe to be the motive behind this clause, the Minister for External Territories and the Leader of the Senate will deny my statements, and tell the committee the real purpose which the Government had in mind when it worded the clause in this way.

Senator SPICER:
Victoria

.- I have listened with interest, and some disappointment, to the display from the Government benches in relation to this matter. We are entirely without any explanation of why this extraordinary procedure has been followed. In the absence of an explanation we can only draw inferences. It is not very difficult to draw them. I wish to emphasize the fact that, if this clause is amended in the way that I suggest, the date upon which this measure is to come into operation will be in the unfettered discretion of the Government. But that is not good enough for the Government. It will not serve the Government’s purpose. The Government wants also to be in a position, when this bill comes into operation, to be able to say to its supporters, “ We have at the same time brought into operation the National Welfare Fund Act”. What is the effect of putting this restraint - because that is what it is - upon the absolute discretion that I am prepared to give to the Government? I shall suggest the reason. The Government, I believe, wanted to render the Opposition unable to oppose or amend the National Welfare Fund Bill without jeopardizing this bill.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Is not that a clear case of tacking?

Senator SPICER:

– It is the clearest case of tacking that any one could imagine.

Senator Collings:

– I wonder how the honorable senator worked that out?

Senator SPICER:

– It is not at all difficult. It is perfectly obvious to anybody who looks at this proposition, and the very fact that the Government resists my motion goes to confirm what I say. It has been suggested, in the course of this debate by interjection from the other side, that “We also want the National Welfare Fund Bill”.. Of course honorable senators opposite want it; but they also want to embarrass the Senate in its consideration of that bill. When a bill is introduced into the Senate, I am entitled to consider it on its merits.

Senator Cameron:

– Nobody denies the honorable senator that right.

Senator SPICER:

– The Government is denying me the right to consider the National Welfare Fund Bill on its merits. If I accept this bill in its present form, I cannot vote against the National Welfare Fund Bill without destroying this bill also.

Senator Collings:

– Oh, no !

Senator SPICER:

– It is beyond argument.

Senator Collings:

– It is, if the honorenable senator has a suspicious mind.

Senator SPICER:

– But that is exactly what this bill provides, and what the Government meant it to provide. The Government cannot possibly justify this proposition.

Senator Lamp:

– Why not vote against it, and get on with the job?

Senator SPICER:

– I am going to vote against it, and, so far as I am able, I shall insist that the bill shall not be passed in its present form. I hope that the committee will support me in that resolve. This is no technicality, but a real issue, and a big principle is involved. I insist that, when the National Welfare Fund Bill is brought before me for my consideration, I shall not be embarrassed by the Leader of the Senate standing in his place and saying, “ If you do not pass this bill, do you realize that the Government will lose £40,000,000 of taxes?”

Senator Collings:

– I do not think that even that would embarrass the honorable senator.

Senator SPICER:

– I can assure the Minister that it will embarrass honorable senators to be put in that position. It is not right that they should be, and they are not going to be. I suggest that a strong case has been made against the clause, and nothing has been said to justify it.

Senator Lamp:

– It shows how hide* bound the honorable senator is.

Senator SPICER:

– It shows how entirely the Government is bereft of any argument or excuse to support its proposition. It is a sorry picture in the middle of a war, when “ the Japs are in the war “ as we were often reminded by the Leader of the Senate ((Senator Collings) yesterday, to find the Government insisting that the money required for war purposes shall be raised only subject to the condition that a social security plan is accepted. In other words, when it becomes a question of whether war policy is to take precedence over political policy, political policy must take first place. It wins every time. A bill of this description, essential for the purpose of carrying on the war, is made subject to the condition that we shall first of all accept the political policy of the Labour party.

Question put -

That the House of Representatives be requested to make the following amendment: - “ Leave out all words after ‘ Proclamation ‘ “ (Senator Spicer’s amendment).

The committee divided. (The Chairman - Senator Brown.)

AYES: 15

NOES: 13

Majority . .2

excess of Five thousand pounds derived by a company a super-tax at the rate of twelve pence for every pound of that excess: Provided that this section shall not apply -

(c) to so much of that part of the taxable income of a life assurance company which has been derived from its life assurance business as bears the same proportion to such part of the taxable income as the amount of the profits divided for the same year of income among the life assurance policy holders of the company bears to the total profits of the company’s life assurance business for the same year of income.

AYES

NOES

Senator FRASER:
Minister for External Territories · Western Australia · ALP

– I move -

That the House of Representatives be requested to amend the clause as follows: - Leave out paragraph (c) and insert in lieu thereof, the following paragraph: - “(c) to the mutual income, as defined in sub-section 1a of section one hundred and sixty c of the Income Tax Assessment Act 1930-1943, of a life, assurance company.”

Under the uniform income tax plan, which was adopted last year, special provisions relating to life assurance companies were incorporated in the legislation, their object being to ensure that the burden of uniform income tax on the life assurance companies would remain substantially the same as that imposed by the Commonwealth and the several States prior to the inauguration of the plan. As part of the arrangement, purely mutual life assurance companies were taxed at a rate of 5s. in the £1 compared with 6s. in the £1 payable by other companies. Similarly, partly mutual life assurance companies were taxed on their mutual income at os. and on their non-mutual income at 6s. in the £1. In the case of partly mutual companies, a formula was devised to determine the respective amounts of mutual and non-mutual income. The mutual income was the amount ascertained by apportioning the taxable income of the company on the basis of profits divided amongst the life assurance policy-holders and profits distributed to the shareholders. Through inadvertence, clause 6 of the bill now before this chamber does not continue the principle adopted last year. The basis of apportionment of taxable income in clause 6 is profits divided amongst policyholders compared with total profits of the company. The Government recognizes that, under war-time conditions, this basis operates inequitably against the companies as they are obliged to retain a very substantial proportion of their profits to meet contingencies that may be expected inevitably to arise. The Government realizes that under present conditions, the only fair method of determining the mutual income of partly mutual life assurance companies is to compare the profits divided amongst policy-holders with the profits distributed to shareholders.

The request that I have made and with which I trust honorable senators will agree will, if adopted, have the effect of continuing the principle which was adopted last year under the uniform tax plan. The principle that applied for normal income tax is also adopted for super-tax purposes. A purely mutual life assurance company is free from supertax, and a partly mutual company is also free from that tax on its mutual income. The request embodies nothing more than a drafting correction of the bill.

Senator McLEAY:
Leader of the Opposition · South Australia

– As this request merely incorporates in this measure a principle adopted under the uniform tax scheme last year, I shall support it.

Request agreed to.

Clause agreed to, subject to a request.

Clause 7 agreed to.

First and Second Schedules agreed to.

Third Schedule (Rates of tax in respect of taxable income derived partly from personal exertion and partly from property).

Senator LECKIE:
Victoria

.- I draw attention to what appears to be an unfair provision in the third schedule. Recently there came to my notice the case of a mining company in Western Australia, the profits of which are obtained mainly from gold-mining, but also from investments in other companies. When the shareholders received their dividend cheques, they were informed that portion of the dividends had been derived from the operations of the company, and the remainder from investments, but the taxation authorities refused to accept that position, and treated the full sum as income from property. I ask the Minister for External Territories (Senator Fraser) to have this matter investigated, and if the position be as I have stated, to take steps to ensure that this injustice will not be perpetuated. That procedure may be quite legitimate, under the legislation as it now stands, but I am sure that that was not the intention of Parliament when passing it.

Senator Fraser:

– If the honorable senator will give me the name of the company I shall look into the matter.

Senator LECKIE:

– I shall do that.

Third Schedule agreed to.

Fourth, Fifth and Sixth Schedules agreed to.

Seventh Schedule -

Rates of Tax Payableby a Company.

Subject to the last preceding Schedule, for every pound of the taxable income of a company the rate of tax shall be -

in the case of a life assurance company, other than a mutual life assurance company -

in respect of so much of that part of the taxable income which has been derived from its life assurance business as bears the same proportion to such part of the taxable income as the amount of the profits divided for the same year of income among the life assurance policy holders of the company bears to the total profits of the company’s life assurance business for the same year of income - sixty pence; and .

Senator FRASER:
Minister for External Territories · Western Australia · ALP

– I move -

That the House of Representatives be requested to amend the bill as follows: - Seventh schedule, leave out clause (1) of subparagraph (iii) of paragraph (a), and insert in lieu thereof the following clause: - “(1) in respect of the mutual income of the company as defined in sub-section (1a) of section one hundred and sixtyc of the Income Tax Assessment Act 1936-1943 - sixty pence; and”.

This request is consequential upon the request already agreed to in connexion with clause 6 of the bill.

Request agreed to.

Seventh Schedule agreed to, subject to a request.

Title agreed to.

Bill reported with requests; report adopted.

page 1533

NATIONAL WELFARE FUND BILL 1943

Second Reading

Debate resumed from the 10th March (vide page 1404), on motion by Senator Fraser -

That the bill be now read a second time.

Senator McBRIDE:
South Australia

– In view of the fact that the Government was unable to agree to a request made earlier to-day on a clause of the Income Tax Bill 1943 for the purpose of removing an embarrassment which we suffer, I ask leave to continue my remarks on this measure at a later date.

Leave granted; debate adjourned.

page 1533

HOUR OF MEETING

Motion (‘by Senator Collings) agreed to-

That the Senate, at its rising, adjourn to to-morrow,at 9.30 a.m.

page 1533

ADJOURNMENT

Queensland University : Medical Students -Censorship of Films

Motion (by Senator Collings) proposed -

That the Senate do now adjourn.

Senator COOPER:
Queensland

– I wish to bring to the notice of the Senate a matter which is causing grave concern to certain interests in Queensland, namely the small quota of medical students that has been allocated to the University of Queensland. The number asked for was 60, but the number allocated by the University Committee is only 40. The number allocated to the Sydney University is 180, which on a population basis, should have meant an allocation of 72 to the Queensland University. This matter is causing concern, not only to those individuals who naturally are proud of the Queensland University and wish to see as many medical students as possible educated there,but also to the Minister in charge of hospitals and medical services in that State, who f ears that if the supply of medical sudents be curtailed in this way sufficient trained medical man will not be forthcoming from the university to carry out the social service plan which it is expected will be introduced at an early date. Will the Leader of the Senate (Senator Collings) ascertain whether a greater quota can be given to Queensland . than the 40 now allocated?

Senator Collings:

– That matter is now being being inquired into.

Senator BROWN:
Queensland

– As honorable senators are aware, I have on occasions spoken of the need for propaganda, in order to overcome the complacency of many people who are not fully aware of the horrors that may be imposed on Australia as the result of war. It is incumbent upon us at all times to arouse the people to a realization of the horrors of war. I draw attention to the fact that the Films Appeal Censor has again deferred his decision on the Soviet film Moscow Strikes Back, from which over 300 feet of film has been cut. Ordinarily, when an appeal is made, a decision is reached in two or three days, but the appeal with’ respect to this film has been held up for many days. It is essential that representations be’ made to the censor who has this matter in hand, and that a prompt decision be reached. The delay that has occurred is grossly unfair to Mr. Blecheisen, the importer of the film. Many people argue that it is undesirable to exhibit films giving graphic descriptions of the horrors of war. I do not contend that Moscow Strikes Back should be shown before children, since it undoubtedly gives a realistic portrayal of the horrors of war in European and other war zones. The proposed cuts from the film depict scenes of Nazi brutality, and include close-ups of heaps of civilian dead, frozen and naked corpses of Russian children, the body of a young woman who was tortured to death, a mother and baby lying dead in the snow, and a gallows from which hang murdered villagers. I am strongly in favour of the film being shown in its entirety, and there should be no great difficulty in preventing it from being seen by children. The complete film has been displayed in Great Britain and the United States of America, and I see no reason why it should be kept back from the people of Australia. I hope that some action will be taken to cause the censor to whom an appeal has been made to give a prompt decision in the matter.

Question resolved in the affirmative.

page 1534

PAPERS

The following papers were pre sented : -

Audit Act - Regulations - Statutory Rules 1943, No. 32.

Lands Acquisition Act - Land acquired for Commonwealth purposes -

Bankstown, New South Wales.

Grawler, South Australia.

Oaklands, New South Wales.

Redfern, New South Wales.

Woolloomooloo, New South Wales.

National Security Act -

National Security (General) Regulations - Orders - Taking possession of land, Ac, (76).

Regulations - Statutory Rules 1043, Nos. 44, 45, 46, 47, 48, 49, 50, 51, 52.

Supply and Development Acts - Regulations -Statutory Rules 1943, No. 43.

Trade Marks Act- Regulations- Statutory Rules 1943, No. 36.

Senate adjourned at 9.20 p.m.

Cite as: Australia, Senate, Debates, 11 March 1943, viewed 22 October 2017, <http://historichansard.net/senate/1943/19430311_senate_16_174/>.