Senate
25 March 1943

16th Parliament · 1st Session

  1. Senate
  2. 16th Parliament
  3. 1943

The President (Senator theHon. J. Cunningham) took the chair at 2.30 p.m., and read prayers.

page 2341

SYDNEY DAILY TELEGRAPH

Senator LAMP:
TASMANIA

– by leave - I desire to make a personal explanation with regard to a statement published to-day in the Sydney Daily Telegraph. It is becoming a characteristic of that newspaper either to exaggerate out of all proportion matters concerning-, Parliament, or to publish information that is entirely wrong. In to-day’s issue of that journal the following sentence appears : -

A demand by Senator Lamp (Tasmania) that the Prime Minister be asked to withdraw his remarks was not accepted by caucus.

That statement is entirely incorrect. I did not make any such request, as all of my colleagues will readily admit, and I take this opportunity to inform the people accordingly.

page 2341

QUESTION

FLAX

Senator HERBERT HAYS:
TASMANIA

– Has the attention of the Minister representing the Minister for Commerce and Agriculture been directed to the statement published in the Burnie Advocate, in its issue of the 22nd March, with reference to compensation to be paid to flax-growers? That newspaper remarked that, commenting on the decision of the Government to compensate growers whose crop had failed at the rate of £5 an acre, and to compensate those whose flax had been harvested at the rate of £3 10s. an acre, growers had said that this would enable them to plant next season’s flax crop with greater confidence than they had had in planting previous crops. If such a statement has been made by the Minister for Commerce and Agriculture, will the decision of the Government be conveyed to those honorable senators who have frequently referred in the Senate to the position of the flax-growers, so that they will be able to impart information on the matter to those who desire it?

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

– My attention has been drawn to the statement in the Tasmanian press; but I am in no way responsible for it. The Government has not yet reached a decision with regard to compensation of any kind to flaxgrowers in Tasmania or elsewhere.

page 2341

QUESTION

EXCESS PROFITS

Senator KEANE:
Minister for Trade and Customs · VICTORIA · ALP

– Yesterday, Sena tor Large asked me for a statement of the grounds on which the Supreme Court of New SouthWales had upheld the appeal of Mr. Samuel Rosenwax, trading cs ‘”’ City Tailors “, Sydney, against the. decision of a stipendiary magistrate at the Central Police Court, who sentenced Rosenwax to six months’ /11/prisonment I was further asked to intimate whether it was the intention of the Commonwealth to appeal against the Supreme Court’s decision and, if not, what steps were being taken to deal with traders who offered to sell made-up articles of clothing at excessive profit margins. .

I am now in a position to state that Rosenwax offered to make and sell a suit for a coloured seaman for £16 16s. The matter was reported to the Deputy Prices Commissioner in Sydney, and an officer of the Prices Branch examined the costs of making the suit for which Bosen- wax had quoted £16 16s. As a result of the intervention of the Prices Branch, the price was reduced to £10 10s., and Rosenwax readily agreed to make and sell the suit at that price. Inasmuch as the price of £10 10s. was determined by . the Prices Branch, it could not bo contended that the actual sale was made at a price in excess of the maximum permitted under the National Security (Prices) Regulations. There, was, however, a wide margin between the price fixed for the sale of the suit and the pi-ice. quoted by Rosenwax, and few. people will contend that Rosenwax would not have profiteered in the ordinary sense of the term on a very liberal scale if he had sold the suit at £16 16s. An “ offer to sell “ at a price exceeding the maximum price is an offence under the National Security (Prices) Regulations, and the price quoted was so much at variance with the cost, plus the gross profit margin allowed, that the Prices Commissioner recommended that Rosenwax be prosecuted for offering to sell at an excessive price.

The magistrate took a serious- view of the matter and sentenced Rosenwax to six months’ imprisonment. On appealing to the Supreme Court, it was found that there was a technical defect in the regulations dealing with the type of transaction on which the case rested. Under Prices Order 666, paragraph 12 a, the Prices Commissioner fixed the maximum price “ as regards goods’ of any particular quality held by a trader for sale by retail ‘’. It was with respect to the words “ held by a trader for sale “ that the Full Court of the Supreme Court upset the decision of the magistrate. The Supreme Court took the view that the suit was not “ held for sale “ by Rosenwax when he made the offer. At that time Rosenwax had only tho material, and he offered to sell a finished article. Therefore, at the time of the offer, no maximum price was fixed. It will be seen that the failure to sustain the charge against Rosenwax was due, in the first place, to the prompt action taken by the Prices Branch in preventing Rosenwax from profiteering, and, in the second place, to a minor technical defect in the Prices. Order. The court suggested that the regulations were being used for a purpose for which they were never intended. That, however, is a point which it is rather difficult 1 to follow. An offer to sell any commodity at an excessive price is an offence. The public should, as far as possible, be protected against the intention on the part of the trader to profiteer as well as the actual fact of profiteering. In this case the words “ held for sale “ seem’ to have been the only barrier against dealing effectively with Rosenwax’^ intention to profiteer. I am informed that the Prices Commissioner will amend his order to clarify the position.

The case did not deal with the actual sale of a suit, but- only with the offer to sell. Investigations arc now proceeding into transactions of a’ similar kind with other trader,?, and other complaints have been made against the trader concerned in this case. There is no barrier to the prosecution of traders who have made sales at excessive price3. The legal advisers of the Common-wealth have advised against appealing on the particular case in question, but they do not see any difficulties in the way of the normal action against traders for making sales of suits or other made-up garments at excessive prices. Honorable senators may be assured that no consideration will be given to traders suspected of chafing excessive prices for any made-up articles, such as suits.

page 2343

AUSTRALIAN ARMY

Leave

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

. -by leave - On the 23rd March, and again yesterday, SenatorWilson stated that the Senate had been advised that militiamen had been granted 28 days’ leave, whereas members of the Australian Imperial Force could only have 21 days’ leave, owing to the exigencies of the service. I desire to inform the honorable senator that the position regarding leave for the Australian Military Forces is briefly as follows: -

  1. All leave granted is subject to operational requirements.
  2. Leave is granted to all members of the Australian Military Forces, both Australian Imperial Force and Citizen Military Forces, serving in Australia and the Territories on the basis of two days a month, exclusive of travelling time. The 28 days referred to would thus be an accumulation of 12 months’ leave on this basis, plus travelling time.
  3. Personnel recently returned from the Middle East were granted 21 days’ special disembarkation leave, exclusive of travelling time. This leave is in addition to the normal two days’ leave a month which will be credited to these troops.
  4. In the case of certain units which returned from active service in New Guinea, special leave of 14 days was granted in ‘acknowledgment of the arduous nature of the campaign. That special leave of 14 days was additional to the normally accruing leave of two days a month which has been credited to these troops.

page 2343

COMMONWEALTH ELECTORAL (WAR-TIME) BILL 1943

Second Reading

Debate resumed fromthe 24th March (vide page 2275), on motion by Senator Collings) -

That the bill be now read a second time.

Motion (by Senator McLeay) put -

That the debute be now adjourned.

The Senate divided. (The President - Senator the Hon. J. Cunningham.)

AYES: 17

NOES: 15

Majority . . . . 2

AYES

NOES

Question so resolved in the affirmative.

Motion (by Senatorcollings) proposed -

That the resumption of the debate be an order of the day fora later hour of the day.

Senator McLEAY:
Leader of the Opposition · South Australia

– I move -

That the words “a later hour of the day “ be left out with a view to insert in lieu thereof the words “ Thursday, the 29th April next”.

The Senate received this bill which is of far-reaching importance at about a quarter to eleven o’clock last night. In the early hours of this morning I had an opportunity to read it through. I do not propose to discuss the merits of the bill at this stage, but I take this opportunity to say that in June, 1940, the Menzies Government introduced legislation to enable all members of the forces who had served outside Australia to have a vote when they returned, provided they were over the age of 21.

Senator Collings:

– I rise to order. I ask for your ruling, Mr. President. I moved, “That theresumption of the debate be made an order of the day for a later hour of the day “. The Leader of the Opposition (Senator McLeay) then moved an amendment to provide that the debate be resumed on Thursday, the 29th April. I submit that the honorable senator is not in order in discussing anything except the proposal to adjourn the debate to the date he has mentioned.

The PRESIDENT:

– The Leader of the Opposition will not be in order in dealing with any matter except the adjournment of the debate to the date mentioned in his amendment.

Senator McLEAY:

– I bow to your ruling, Mr. President. I was merely about to emphasize the importance of this measure.

Senator COLLINGS:
QUEENSLAND · FLP; ALP from 1937

– I object very strongly to the amendment. We should remember that we are here as members of a deliberative assembly to conduct the business of Parliament. Of course, the Leader of the Opposition (Senator McLeay) knows, as all of us do, that the Opposition has the numbers in this chamber to enforce the procedure set out in the amendment ; but I suggest that because of the proceedings at a party meeting to which the honorable senator

The PRESIDENT:

– Order ! The Minister is entitled to discuss only the amendment.

Senator COLLINGS:
ALP

– I was about to add that because of the proceedings at that party meeting this amendment is moved for the one purpose of showing that the Opposition is capable of taking the business of the Senate out of the hands of the Government.

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- There is a vital reason why the Opposition should not persist with the amendment. The Leader of the Opposition (Senator McLeay) should know that the Minister for the Interior (Senator Collings) will be required to undertake a tremendous task occupying several months, in order to give effect to this legislation. In view of what happened in this chamber in respect of another matter, I do not think that any honorable senator opposite objects to the bill. Honorable senators opposite will place themselves in a very queer position with the soldiers of Australia if they persist with the amendment. I ask them to think over that aspect.

Question put -

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

The Senate divided. (The President - Senator the Hon. J. Cunningham.)

AYES: 17

NOES: 15

Majority . . . . 2

AYES

NOES

Question so resolved in the affirmative.

Question put -

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

The Senate divided. (The President - Senator the Hon. J. Cunningham.)

AYES: 17

NOES: 15

Majority . . . . 2

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Original question, as amended, resolved in the affirmative.

page 2345

WAR-TIME (COMPANY) TAX ASSESSMENT BILL 1943

Second Reading

Debate resumed from the 24th March (vide page 2276), on motion by Senator Keane -

That the billbe nowreada second time.

Senator SPICER:
Victoria

.- This is one of those bills, introduced last night, which at first blush honorable senators might have thought was a mere formality that can be quite readily disposed of in the dying hours of this period of the session without consideration or criticism. I venture to suggest that, had it not been for the fact that yesterday afternoon I received a telegram with reference to the bill, it would have become law last night, anda grave injustice would have been done to a large section of the Australian community. The bill is concerned with the amendment of certain provisions of the War-time (Company) Tax Assessment Act. Under that act provision was made for the taxation of profits over a certain fixed percentage, and for the purpose of arriving at that percentage provisions were made in the act, first of all defining taxable profit - giving it a very technical and strict definition - and also defining the capital employed in the business for the purposes of the calculation. Under the original act the Commissioner took the view that there was included in the taxable profit of a. company the interest which it derived from inscribed stock which is subject to the provisions of the Commonwealth Debt, Conversion Act and the Commonwealth Inscribed. Stock Act. In other words, the Commissioner contended that the act contemplated that the interest from that stock would be subject to war-time profits tax, and, as the act included the interest, it of course included in the calculation of capital the capital sum which was invested in the inscribed stock. That was the form in which this scheme was put into operation. Honorable senators will recollect that the interest from a very large part of the inscribed stock in this country is subject to special rates of income tax, and is not to be subjected to higher rates than are prescribed in those acts. Apparently the view was taken that the war-time company tax was not an income tax. A case in relation to this matter was taken to the Taxation Board of Review, which held, that the war-time company tax was an. income tax. Therefore, having regard to the provisions of the Commonwealth Debt Conversion Act and the Commonwealth Inscribed Stock Act, the taxpayer must get a rebate of that portion of the tax which was attributable to the inscribed stock which he held. That was necessary because once the war-time company tax is treated as an income tax, to impose that tax upon the interest derived from those bonds would be a repudiation of the bargain which was entered into and which is preserved by the provisions of those acts. We now have the position that, under the act as it is at present drawn, the interest upon the bonds is included for the purpose of the calculation of the profit, and the capital’ invested in the bonds is included for the purpose of the calculation of the capital. Yet, in accordance with the decision of the Board of Review, the tax attributable to the interest derived from bonds of this kind must be rebated to the company. Obviously, that is an anomaly that must be rectified. The proposal, as I understand it, is, in effect, to eliminate the interest for the purpose of calculating the profit, and the capital for the purpose of the calculation of the capital employed in the business. At first sight, this seems to be a very reasonable measure, and I confess that when I heard the Minister’s second-reading speech last night, I found it a little difficult to understand why objection was being taken to it; but I have had presented to me figures which are quite beyond dispute, and which I consider indicate that there is something radically wrong with this proposal. Perhaps I can illustrate the argument best by referring to the specific cases which have been brought to my notice. I am prepared to furnish the Minister with the names of the companies concerned and with the figures which I shall quote. In the case of one company the tax which would have been payable in accordance with the existing legislation and in accordance with the view of the Commissioner of Taxation as to the meaning of the act - that is, before the decision of the Board of Review was made - would have been £7,576. However, if the method now proposed by the Commissioner to eliminate the anomaly created by the decision of the Board of Review be adopted, this company will pay £13,761. In other words its tax will be nearly twice as much as this Parliament intended to impose when it passed the original legislation. The case is even a little worse than that, because the interest which the company derived from this particular class of investment amounted to only £6,137. In other words, far from honouring the guarantee contained in the Commonwealth Debt Conversion Act and the Commonwealth Inscribed Stock Act in relation to these bonds, namely, that they shall not be subject to tax at a higher rate than that prescribed in the act, the effect of this measure will be to take the whole of the interest in tax. The second case to which I shall ‘refer is even worse. The tax payable by the company concerned, assessed by the Taxation Department prior to the decision of the Board of Review was £36,891, whereas if this an Darently inoffensive amending legislation be passed the company will become liable to pay tax amounting to £S2,422 - an additional £45,000 despite the fact that, the company’s entire income from these bonds amounts to only £30,000. In other words, under this legislation, which supposedly makes no alteration whatever in the incidence of tax, the Taxation Department will take the whole of the interest and 50 per cent. more. The additional tax will amount to

Senator Spicer 150 per cent, of the total interest derived by the company from this class of investment, despite the fact that that interest is subject to the special protection provided by the two acts to which I have referred. These figures cannot be controverted. An examina-tion of the proposal reveals the reason for the anomaly: By excluding the two items to which I have referred, the average rate of profit and the capital upon which the average rate of profit is based are altered. On the other hand, if they are included the 4 per cent, interest which is derived from the inscribed stock, and perhaps 8 per cent, of profit derived from some other source, will be taken into account. By averaging these figures the rate of profit of the company will be determined, and should it exceed 5 per cent., tax will have to be paid. If we exclude from the calculation, part of what is the company’s capital, the effect may very well be to increase the rate of profit to a higher figure than the company really earned, having regard to the whole of its investments and the whole of its income. There is an easy way in which this difficulty can he overcome.

Senator Keane:

– The offer that I made to the honorable senator in our conversation earlier to-day is withdrawn.

Senator SPICER:

– I have merely been placing before honorable senators the case as it has been put to me. I propose now to make a suggestion as to how the difficulty may be overcome - a suggestion which I ‘ understood the Minister for Trade and Customs (Senator Keane) was prepared to accept.

Senator Keane:

– Not now.

Senator SPICER:

– The suggestion is that for the purposes of section 20 of the Commonwealth Debt Conversion Act and of section 52 b of the Commonwealth Inscribed Stock Act, the War-time Profits Tax Act should be deemed to be not an income tax act. That would secure a return to the position which existed when the legislation was passed in its original form, and would ensure that this heavy additional tax would not be imposed upon these companies. What I have said in connexion with this matter has been said very largely to reinforce the view which I hold very strongly and which I have expressed in this chamber on many occasions, that measures of this kind should not be brought before Parliament in the dying hours of a sitting. I know that it is not always the fault of the Minister concerned because Ministers have to satisfy the wishes of their departments; but it is not right that important bills should be introduced hurriedly, .more or less as formal measures, and. perhaps passed without comment. This bill passed through the House of Representatives without this important flaw being discovered and I confess quite frankly, that I should not have noticed it had my attention not been drawn to it by telegrams. As I have said the matter can be rectified easily in the manner suggested. I had understood that it was the Minister’s intention to agree to that proposal.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I understood from the second-reading speech of the Minister (Senator Keane) that the Governmentdid not desire to be in a more favorable position than that in which it would have been placed, had the original assessment by the Commissioner of Taxation been upheld by the Taxation Board of Review. The passage of this bill would have the effect of levying a tax which the Government: never expected to collect, because, admittedly, it introduced this measure only for the purpose of returning to the original position. The Taxation Board of Review has given a decision which I admit has reduced the revenue that ought to come to the country. This bill, if passed, would have an amazing effect. Many cases could be cited to show that an increased tax will be levied, although the loans were regarded as sacrosanct.” I hate to think that, at a time like this, any government should be accused of a breach of faith, but, if this bill bc passed in its present form the Government will have repudiated an undertaking given with regard to a conversion loan. It appears to mc that the position, has been somewhat misapprehended, either in the drafting of thi3 bill or in the consideration of the matter by the officials responsible for it. I do not believe that the Government intended to bring a Gout the results- which will be achieved if this: measure be passed. I realize that it is a highly technical bill that bristles with difficulties, and its effect would probably have escaped notice, had. not attention been drawn to it by this morning’s Sydney press. The subject of income taxation is becoming so complex that one has to consider every sentence of a. bill of this kind before reaching a conclusion as to its effect. Very few lay men understand the intricacies of the war-time taxation of companies. The Minister should do an act of common justice by preventing the harm that would be done by the passage of the measure in its present form. I shall not vote for the bill as it stands.

Senator COURTICE:
Queensland

– This bill is based on the relationship of the amount of capital invested in, say, inscribed stock to the sum invested in the other business of a company. What Senator Spicer has said may bc true, yet the tax may be a just one. Possibly the previous tax was not levied on a fair basis. I should like to examine the whole incidence of the tax before agreeing that. Senator Spicer is right in saying that because of the increase of the tax in this instance, an injustice is being done’.

Senator LECKIE:
Victoria

.- I do not know whether I have fully understood the significance of the interjection by the Minister (Senator Keane) that an offer made by him has been withdrawn. If he had made an offer, based on recommendations made to bini, to endeavour to remove an injustice, I could understand his saying that when the measure reached the committee stage he would put the full facts of the case before us, and would agree to an amendment which would obviate any injustice. Do I understand that the Minister has withdrawn an offer to remove a manifest injustice? I should be reluctant to think that that was the position. The case presented by Senator Spicer calls for a remedy.

Senator Brown:

– Has that case a general application?

Senator LECKIE:

– Yes. I was astounded to hear the Minister say that his offer had been withdrawn, but I do not imagine that he meant to convey to the Senate that he would do nothing about the matter. Will, he be prepared to accept an amend men’t which would overcome this manifest injustice? Dozens of cases could be cited in support of Senator Spicer’s contention. The Minister must realize that the case presented calls for an answer. I expect him to say that he will agree to a reasonable amendment. Otherwise I shall have no option but to voteagainst the bill.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

New clause 1a.

Motion (by SenatorKeane) agreed to-

That the following new clause be inserted: - “ 1a. This act shall come into operation on the day on which it receives the royal assent.”

Clause 2-

Section three of the War-time (Company) Tax Assessment Act 1940-1942 is amended -

by omitting from paragraph (d) of the definition of “ taxable profit” the word “and” (second occurring); and

by adding at theend of that definition the following word and paragraph: - “ ; and (f) so much of any interest derived from any securities to which section twenty of the Commonwealth Debt Conversion Act 1931 applies or from any loan to which subsection (2.) of section fiftytwo b of the Commonwealth Inscribed Stock Act 1911- 1940 applies, as is included in that taxable income; “.

Senator SPICER:
Victoria

.- I propose to move that clauses 2 and 3 be leftout with a view to inserting a new clause in their stead.

The CHAIRMAN (Senator Brown:
QUEENSLAND

– The honorable senator may vote against the clauses, and, should they not be agreed to, he could then move for the insertion of a new clause.

Senator SPICER:

– If that procedure is to be followed, it may be desirable to say now why I desire clause 2 in its present form excluded from the bill, and another clause inserted in lieu thereof. Should the clause be negatived I shall move -

That the following new clause be inserted: - “2. After section 13 of the War-time (Company) Tax Assessment Act 1940-1942, the following section is inserted: -

J3a. Forthe purposes of section 20 of the

Commonwealth Debt Conversion Act 1931 and sub-section (2.) of section 52b of the Com monwealth Inscribed Stock Act 1911-1940, wartime (company) tax shall be deemed not to be income tax.’”.

I am a little puzzled at the attitude of the Minister (Senator Keane), which is inconsistent with the attitude of the Ministry when the bill was introduced. We were not told then that this bill had been designed to impose upon companies new taxes amounting to thousands of pounds. Two or three times in his speech the Minister said that the bill was introduced only to correct an anomaly. He indicated that it did not adversely affect any company. He said that, for the purpose of war-time company tax, the Government accepted the position in relation to the taxation of interest which existed before the decision given by the Taxation Board of Review, and that the bill was required for the purpose of correcting an anomaly, and in order to get back to the position which existed before the Board of Review gave its decision. The only thing which created any difficulty was the decision of the Board of Review that war-time company tax was income tax. The amendment which I propose to move provides for the insertion in the act of a provision that, for the purpose of these two acts relating to inscribed stock, the war-time company tax shall be treated as not being income tax.

Senator Courtice:

– That does not get over the difficulty.

Senator SPICER:

– It does. It takes us back to the position which existed before the Board of Review gave its decision. The Government was then taxing this interest for war-time company tax purposes on the basis that it was not income tax, but the Board of Review said that it was income tax. It was on the basis that it was not income tax that the Commissioner made his assessments, and it was on that basis that the figures which I have given were worked out.

Senator Arthur:

– Who worked them out?

Senator SPICER:

– There is no doubt about their accuracy. I am willing to hand to the Minister the figures which I have. I am prepared to give to him the names of the companies, as well as the figures, so that the figures may be checked by the Commissioner of Taxation should the Minister so desire. We are asked to accept this bill as one designed to deal with an anomaly, whereas the fact is that it increases the tax payable by one company from £30,000 to £82,000.

Senator Lamp:

– Hear, hear! That is the stuff to give them.

Senator SPICER:

– I expected that interjection, because there is no sense of responsibility on the part of supporters of the Government. They believe that when a company derives from inscribed stock interest amounting to £30,000, the sum of £45,000 can be taken from that company as income tax.

Senator Courtice:

– Not on that investment.

Senator SPICER:

– If that is not repudiation, I do not know what is.

Senator Collings:

– The honorable senator is juggling the figures.

Senator SPICER:

– I am not. It is inescapable.

Senator Collings:

– Thebill merely corrects an anomaly.

Senator SPICER:

– Priorto the decision of the Board of Review, one company, in accordance with the Commissioner’s own assessment, was liable to pay £36,891. The “correction of an anomaly” will make that companyliable to pay £82,000! . There are probably thousands of similar cases. Bonds which have been issued by the Commonwealth since 1931 have, with the exception of the last three loans, been subject to these special conditions. A solemn contract was entered into between theGovernment and the purchasers of those bonds extending over a long period of years. Yet in the face of all that, the Minister has nothing to say. He merely asks the Senate to accept this bill as one which corrects an anomaly. I do not accept it as a bill of that kind, and therefore I suggest that clause 2 should be deleted by the Senate, in order that we may insert a new clause which will put things where they were, or where we thought they were, before the Board of Review gave its decision.

SenatorKEANE (Victoria. - Minister for Trade and Customs) [3.40]. - I had a discussion with Senator Spicer on this matter prior to the meeting of the Senate, and I thought that we had arrived at a satisfactory solution. I have since reconsidered the matter, and have altered my view. As I stated in my speech on the second reading of the bill, the practice which had been adopted by the Commissioner of Taxation in regard to the interest on Commonwealth loans to which the concessional rate of tax applied was to include the interest in the company’s taxable profit and to allow the amount invested in loans as part of the capital employed by the company. The interest was thus taxed, for war-time company tax, at the rate applicable to the whole of the taxable profit without any rebate. This practice has been followed since the introduction of the War-time (Company) Tax Assessment Act, in 1940 until it was upset by the decision of the Taxation Board of Review. When considering the means which should be adopted in removing the anomaly which that decision caused, an amendment of the act along the lines now proposed by the Opposition was considered. It was thought, however, that if an amendment of that nature were introduced the Government’s action might be construed as being a repudiation of the undertaking given in the Commonwealth Debt Conversion Act that the income tax payable on the interest should not exceed the income tax payable thereon at the 1930-31 rates. In order to obviate any such construction being placed on its actions, the Government decided that the better course to pursue would be to provide that the interest should be made exempt from war-time company tax. As a natural corollary to any such exemption it would be necessary to exclude from the capital employed the amount invested in the loans from which the interest was derived. For those reasons the Government is unable to accept the amendment.

Senator McBRIDE:
South Australia

– The reasoning just advanced by the Minister for Trade and Customs (Senator Keane) is the most extraordinary that I have listened to in this chamber.It is most inopportune at present, when the Government, is calling upon the public to subscribe to loans. to proposeunder this bill to reverse completely the undertaking given to bondholders in connexion with the conversion loan of 1930-31. As an inducement to bondholders to convert their holdings, the Government of that day promised that the rate of tax imposed in respect of those bonds would not exceed the rates in operation in the financial year 1930-31. That rate was recognized to be a concessional rate; and the Minister in his second-reading speech on this measure said definitely that that rate was a concessional rate offered to bondholders at that time in order to encourage them voluntarily to convert their holdings. Now, because of circumstances which all of us deplore, the Government finds it necessary to increase the rates of tax generally, but in the process companies with holdings to which the concessional rate applies are to be penalized. If they did not hold those bonds they would be better off under these proposals to the degree pointed out by Senator Spicer. It, is merely specious reasoning for the Minister to say that, the Government makes these proposals in order to obviate any suggestion of repudiation on its part. On the contrary, these proposals repudiate the very basis of the offer that was made to bondholders in 1930-31. I hope that the Government will reconsider the matter. Senator Spicer has given specific instances to show that companies holding such bonds will definitely be penalized under these proposals, and the Minister has not attempted to deny the facts which the honorable senator has given. Unless the Government is prepared to review this provision, and adopt the suggestion made by Senator Spicer, honorable senators on this side shall be obliged to support the amendment.

Senator WILSON:
Western Australia

– This is one of those most complicated bills which it has become the custom to place before us at the close of a period of a session. The Minister for Trade and Customs (Senator Keane), in his second-reading speech, said that the purpose of the bill was to correct an anomaly. Knowing the Minister as I do. I have no doubt that, he was quite sincerein making that statement. It transpires, however, that, he has been wrongly advised. The bill, apparently, will createmost serious anomalies amounting to a complete repudiation of the Government’s undertaking in relation to certain bonds. That is most serious. If this nation is going to repudiate its solemn obligations in respect of Government bonds, and, at the same time, ask the public, as it; must do, to subscribe more money to Commonwealth loans, I think that every Minister will realize the’ seriousness of the situation. I am not sure that Senator Spicer’s amendment is any better. I am speaking only on the vague knowledge I have been able to acquire of the contents of the bill, because it was introduced only last night. None of us has yet been given an opportunity to study it carefully. So far as I can gather, a company claimed that a tax of this kind amounted to repudiation; that bonds which were not to be subject to a rate in excess of a certain rate had by virtue of a certain interpretation become subject to a greater rate. The company which appealed did so on the ground that this tax is an income tax, and, therefore was a ‘repudiation of the Government’s undertaking. On appeal, that contention was upheld. Apparently, it was held that the war-time company tax was an income tax.

Now, at the end of this period of the session, we are asked to pass another bill which may amount to repudiation; and the amendment proposed by Senator Spicer may, possibly, amount to the the same thing. Therefore, I urge the Government to agree to a postponement of this clause in order to give honorable senators a reasonable opportunity to study it, and, at. least, to assure themselves that nothing that they do will amount to a repudiation of a solemn obligation given by the Government to bondholders.

Question put -

That the clause stand as printed.

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

AYES: 15

NOES: 17

Majority 2

AYES

NOES

Question so resolved in the negative.

Clause negatived.

Clause 3 (Ascertainment of capital).

Question put -

That clause stand as printed.

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

AYES: 15

NOES: 17

Majority . . . . 2

AYES

NOES

Question so resolved in the negative.

Clause negatived.

Motion (by Senator Spicer) put -

That the Chairman do report progress and ask leave to sit again.

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

AYES: 17

NOES: 15

Majority . . . . 2

AYES

NOES

Question so resolved in the affirmative.

Progress reported.

page 2351

SUPERANNUATION BILL 1943

Second Reading

Debate resumed from the 24th March, 1943 (vide page 2279), on motion by SenatorKeane -

That the billbe now read a second time.

Senator McLEAY:
Leader of the Opposition · South Australia

– Whilst the Opposition supports this measure, I hope the Government will appreciate the responsibility which rests upon an opposition in a house of. review. It is deplorable that important measures such as this should be rushed through Parliament in the dying hours of this period of the session. I remind honorable senators that recently a bill which subsequently was found to be a tacking measure was passed through the House of Representatives in a few minutes at 5 o’clock in the morning. I appealto the Government to use its intelligence and not to reduce parliamentary procedure to a. joke. We are here to consider legislation on its merits, and we do not propose to allow ourselves to be bludgeoned into passing bills without being able to give due consideration to them.

Senator Collings:

– The Opposition wants until the 29th April to consider a measure which was discussed in this chamber earlier to-day.

Senator McLEAY:

– The Opposition will take full responsibility for the vote ithas recorded in that regard.

Senator Amour:

– The Opposition has refused to give the soldiers a vote.

Senator McLEAY:

– In 1940. the Menzies Government made provision for the enfranchisement of soldiers- who had been overseas and had returned to this country, provided they were over 21 years of age. I have no objection to the braying of the “ A’s “ provided their interjections are reasonable, but I do object to constant heckling, and I appeal to you, Mr. President, to prevent further interjections from honorable senators opposite.

The PRESIDENT (Senator the Hon J Cunningham:
WESTERN AUSTRALIA

– Order! Interjections must cease. The honorable senator may proceed with his speech on this measure.

Senator McLEAY:

– When the Commonwealth Government took over the Williamstown dockyard, 70-odd employees were transferred to the Commonwealth service. These men had been contributors to the Melbourne Harbour Trust Superannuation Fund, and the purpose of this bill is to protect their superannuation rights by bringing them iti to the Commonwealth superannuation scheme. An important point is that contributions already paid by these men to the Melbourne Harbour Trust Superannuation Fund may be transferred to the Commonwealth Superannuation Fund, and future fortnightly payments made to that fund, or, in the case of men who do not wish to transfer the sums that they have already contributed, the money will be refunded to them and they will then start afresh under the Commonwealth scheme. The measure will also give to contributors to the Commonwealth Superannuation Fund an opportunity to fake out additional units of superannuation, in accordance with their salary grades. The Opposition will support the measure.

Question resolved in the affirmative.

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

page 2352

MATERNITY ALLOWANCE BILL 1943

Second Reading

Debate resumed from the 24th March (vide page 22S0), on motion by Senator Keane -

That the bill be now read a second time.

Senator McLEAY:
Leader of the Opposition · South’ Australia

– The Opposition is being worked overtime. I have not had sufficient time to examine the proposals contained in this bill as closely as I should have liked. I have twice read the second-reading speech of the Minister for Trade and Customs (Senator Keane), and I am not happy about the proposal to dispense with the means test. I draw the attention of honorable senators to the following statement by the Minister : -

Under the present arrangement which lias operated since January, 1938, there is an income limit of £247 per annum in tlie case of the birth of the first child, “rising by £13 for each previous surviving child under fourteen years of age in the family until a maximum income limit of £338 is reached, whilst the amount of the allowance is £4 10s. where there are no other children, £5 where there are one or two other children and £7 10s. where there are three or more other children.

This bill contains three important provisions which, I am sure, will be unanimously approved. First, the means test is entirely removed, and in respect of births which occurred on and after the 1st July, 1943, allowances will be paid irrespective of the financial position of the parents.

I should like more information on that aspect of the matter. I am becoming alarmed, when I consider financial statements that are presented to this Parliament from time to time. Obviously, at the end of June next there will be a deficiency of about £300,000,000. It appears to me that this Government has lost all sense of responsibility, as far as the doling out of money is concerned. In my study of bi.113 and in my association with governments in this Parliament, I do not think that we have ever had a government that has indulged in so much political window dressing, in order to buy the votes of its own supporters. We must consider the financial position fairly and squarely and we must cut our suit according to our cloth. It is easy for honorable senators opposite to wave their hands and tell the unthinking section of the people that the present Government has done a wonderful job in having imposed income tax on the wealthy to an amount of 18s. Cd. in the £1. The Government is handing out millions of pounds here and there by means of bank credit. I know of no other country which, having regard to its population and its resources has expended so much money as has been expended in Australia. Early in its career, this Government imposed a substantial increase of the taxes on cigarettes, beer and entertainments. Where the soldiers received an increase of say, ls. or ls. Gd. in one pocket, the Government took 2s. 6d. from another pocket.

In view of the increased cost of living, we must ask ourselves whether Australia is being financed on sound lines. I- realize the difficulty of obtaining accurate figures, but I should like to know the annual cost to the taxpayers of eliminating the means test with respect to the maternity allowance, and making the proposed payments available generally. If we agree to the bill in its present, form the taxpayers will have to provide another £2,000,000 a year. Having regard to the promises made in connexion with deferred pay, considering the large deposits held by the working classes in the savings banks and the millions of pounds invested in life assurance societies, I am afraid that if the war lasts another three or four years, the value of the £1 will be depreciated to such a degree that the position in Australia will become almost intolerable. I appeal to the Government not to continue along the road that it is following at present, handing out a million or two here and a million there, because the general elections are approaching. The present social services in Australia are equal to those obtaining in any other country, and with our tremendous war expenditure the people will indeed be fortunate if these social services can be maintained at the present level. When some of the people are being taxed to the amount of 18s. 6d. in the £1, the question arises whether that section should not come in for some of the benefits being paid out by the Government; but on that point I shall reserve my remarks until the Minister- has supplied the figures for which I have asked, and until the bill reaches the committee stage. In the meantime. -I shall support the second reading. . »->

Senator FOLL:
I endorse the remarks of the Leader of the Opposition (Senator McLeay · Queensland Jr [4.19].

as to the need to keep a ‘watchful eye over the expenditure of this country, because it must be recognized that, despite our productive capacity, there is a limit to the sum which this country can. expend on social services. I commend any movement designed to increase the birth-rate. Had the rate of increase remained at the figure it reached 40 or 50 years ago, the present population of this country would have been 20 per cent, or 30 per cent, greater than it is to-day. Those in charge of our fighting forces, as well as men in administrative positions, know that one of the greatest problems which faces this country is a serious shortage of manpower.

One feature of the bill which appeals to me is the provision for a payment to mothers before and after the birth of a child. Under the system now in operation, a payment is made to the mother after her child is born; but the time when she is in greatest need of assistance, especially if she has other children, is a few weeks before her confinement. The proposal to pay a sum to the mother in advance of the birth of her child, as well as afterwards, will enable her to obtain additional help when she needs it most.

When the maternity allowance was first granted, no means test was applied, the reason given being that the allowance was not to be regarded as a charitable payment, or a dole, but some recognition by the Government of the value it placed upon motherhood. I do not know that the allowance was particularly effective in increasing the population, but that wa3 its purpose. At that time, all sections of the community were entitled to, and actually claimed, the allowance. Under existing conditions, when it is necessary to watch every item of expenditure, the retention of the means test is a matter for consideration ; but’ I should be loath to apply that test at present, in view of the heavy taxes which the people have to pay. The taxes which have been imposed are inequitable.

The PRESIDENT:

– The honorable senator i,s not in order in discussing taxation. I ask him to confine his remarks to the bill.

Senator FOLL:

– If a means test, were applied, the wife of a man who was paying 18s. 6d. in .the £1 tax on his income would not be entitled to the allowance. The present taxes bring all taxpayers to practically the same level-

Senator Keane:

– If this bill be passed,, the allowance will be payable without any means test.

Senator FOLL:

– In view of the heavy taxes which are now payable by all sections of the community, I do not desire that there should bc a means test. In normal times, people with high. incomes might be regarded as not. needing any assistance when a child is born to the family, but under war conditions the whole outlook has been altered. It would bo a pity to introduce a means test at this stage, and I shall not support any amendment which has that objective..

Senator DARCEY:
Tasmania

– I shall support the bill. No greater hardship can be imposed on a woman than to deprive her of proper nourishment for herself arid her child. The proposal contained in the bill will help the mother both before and after the birth of her child, and therefore, I cannot understand how anyone could vote against this measure. From time to time, Opposition senators have referred to the increased cost of living, yet they are not prepared to grant this assistance to an expectant mother. The present Government is blamed for the rise of the cost of living and for the increased prices charged for commodities, but the increase of 12 per cent, of the cost of living is the total increase since the war started, and covers a period before the present Government took office. Instead of money being obtained by the Government from the Commonwealth Bank free of interest, it is being obtained through the private banks, and 3£ per cent, interest has to be paid on it. Honorable senators opposite, however, do not appear to be concerned about that, although one would think that they should be pleased to lower the cost of government. At present, heavy taxes seem to be unavoidable. The Menzies Government appointed a Prices Commissioner to control prices, and paid him about £1,S00 a year. Every time that Professor Copland authorizes increased prices he gives as his reasons increased transport costs, increased insurance rates, and so on, Listening to honorable senators opposite speak, any one would think that Australia is the only country in which the cost of living has increased, but there have been increases of the cost of living in every country engaged in war. Indeed, the people of Australia are better off in this respect than, are the people of any other belligerent nation. If the war can bo financed by using bank credit through the Commonwealth Bank, Senator Foll and his colleagues of the Opposition should be glad. The bill will be a worthy addition to the legislation on the statutebook, and should have the support of every honorable senator.

Senator SPICER:
Victoria

.- I regard, some of the provisions of this bill as the most reckless that the Government has yet introduced. I refer particularly to the provision for removing the means test in respect of the maternity allowance. I could understand such a proposal being made if this country were experiencing great prosperity, or if the Government had a surplus of revenue; but neither of those conditions exists to-day. On the contrary, from the point of view of ability to provide additional social services, Australia is worse off to-day than it has ever been. From the point of view of Government finance, this Government is in a worse position than any other government has ever found itself, yet it selects this time to extend existing provisions in relation to maternity allowances, and to provide that this allowance is to be given to every woman, whether she is or is not in need of it.

Senator Foll:

– They will all need it.

Senator SPICER:

– They will all need it if this Government stays in office very long; but I do not think that we have yet reached that stage. I regard this proposal as most reckless at a time when the Government is hundreds of millions of pounds in deficit; and such recklessness endangers the welfare of those people who really need these social benefits. I remind honorable senators that; at present the Government is appealing to people to subscribe to a loan which is required for war purposes. It is not necessary to stress our need of all the money we can raise, and the necessity for using that money for war purposes. For months the Prime Minister has been preaching throughout the length and breadth of the country the doctrine of austerity. It is useless for the Government to preach such a doctrine unless it practises it. It, is very important that the Government, itself, should practise austerity. Surely, honorable senators can imagine the kind of lead the Government gives to the community if it says to every man and woman in this country that things are so bad that they will have to cut down their standard of living, and, at the same time, it also says that Government finance is sound, and that it has so much money that it can extend social services to people who do not require th em.

Senator Ashley:

– And the Government is imposing taxes in order to provide these additional benefits.

Senator SPICER:

– The taxes are imposed, I hope, for the purpose of assisting to pay for the war. It is useless for the Postmaster-General (Senator Ashley) to say that the Government is imposing taxes in order to pay for the extension of these social services to every person in the community when he knows that the Government is going to be £200,000,000 or £300,000,000 in deficit at the end of the present financial year. Nevertheless, the Government has the nerve to say that it is imposing taxes to cover these benefits. It is doing nothing of the kind.

Senator Ashley:

– It is.

Senator SPICER:

– If the Government is imposing taxes for this purpose it is using money which it should use for war purposes. That means that so much less can be used for the war. Although the amount involved under this bill is only about £1,500,000, I regard this proposal as a disgrace to the Government, and one which no government should have the nerve to bring forward in the circumstances existing to-day. I am as much concerned to provide social services of this kind as is any member of the Labour party; but I shall continue to insist that there benefits can be provided only when they are paid for by the community. 1 believe that they should be dealt with upon a proper basis and in accordance with a complete scheme of social insurance. The proposal to remove the means test can be justified only if every body is required to contribute towards these benefits. If the scheme is to be one in which those who contribute are to benefit, then it would be sound to remove the means test; but when it is proposed merely to finance these benefits from Consolidated Revenue - and the Government proposes to finance them from Consolidated Revenue that does not exist - I shall not be a party to a proposal which, at this time, removes that means test. Recently, the Minister for External Territories (Senator Fraser) read extracts from the Beveridge report. They were very interesting; and I confess that I had no difficulty whatever in accepting what the Minister read from that report. I shall now read another passage from the Beveridgc report which is very relevant to the subject of a means test and the provision of services of this kind out of direct contributions from the participants. Dealing with the nature of social services, the Beveridge report, in paragraph 21, states -

The first view is that benefit in return for contributions, rather than free allowances from the State, is what the people of Britain desire.

I believe it is what the people of Australia desire.

SenatorKeane.- And it is what this bill proposes.

Senator SPICER:

– No. The Beveridge report proceeds -

This desire is shown both by the established popularity of compulsory insurance, and by the phenomenal growth of voluntary insurance against sickness, against death and for endowment, and most recently for hospital treatment. It is shown in another way by the strength of popular objection to any kind of means test. This objection springs not so much from a desire to get everything for nothing, as from resentment at a provision which appears to penalize what people have come to regard as the duty and pleasure of thrift, of putting pennies .away for a rainy day. Management of one’s income is an essential clement of a citizen’s freedom. Payment of a-, substantial part of the cost of benefit as a contribution irrespective of the means of the contributor is the firm Basis of a claim to benefit, irrespective of means.

I should like to see this community adopt the same attitude to these schemes. I should have no objection whatever to a scheme which was not founded on a means test, provided that, under it, every person who was to benefit or could benefit made his contribution to it, but I have the strongest objection to the Government setting aside, without any sense of responsibility at all, £1.500,000 which does not belong to it and which it has not got at the moment, but which it must get somewhere, and proceeding to distribute it, “willy-nilly”, throughout the community, even to people who do not need it. I cannot imagine a time more inopportune than the present in whicli to initiate a policy of that kind. I wish to express my opposition to this part, of the bill.

Senator Herbert Hays:

– What test does the honorable senator suggest should be applied ?

Senator SPICER:

– The existing means test. I am satisfied to leave the means test where it is. My whole complaint is that this of all times is the most inopportune at which to remove it. It was imposed in, I think, 1931 or 1932, at the time of the depression, when this country was supposed to be “ hard up”. If we were “hard up” then, we are far move “ hard up “ to-day. If there was justification for a means test in 1931, there is far more justification for it in 1943, but, unfortunately, the Government has completely got, away from all tests which will keep it tied to some sense of responsibility in floating financial affairs. Having reached the stage when it has a debt of £200,000,000 or £300,000,000, it is only too easy to say: “ Why worry about £1.500,000?’” Unfortunately, all these costs mount up, and although the Government may conduct itself in this way for a short period, the time is coming when the people of this country will have to pay the penalty. I wish to add one more comment which has particular application to maternity allowances. I have always doubted the wisdom of dealing with this matter upon the basis of paying out the allowance in the form of money. We should make a much greater contribution to the welfare of mothers and children if we were prepared to spend the same amount upon the provision of an adequate service for their care and comfort. I doubt very much whether, in some cases, at any rate, a lot of the money which is handed out in this way is likely to be expended for the purpose for which it is intended. I should much prefer to see the Government expend even twice as much in the provision of benefits, if they were provided in kind rather than in cash - in other words, in seeing that the community has available the services which are necessary for the care of mothers and children. The Government should see whether such services could be made available free of cost to those who needed them, at the time when they are required. I believe that money expended in that direction would make a far greater contribution to the maintenance of the birth-rate, than handing out £1 5s. a week for eight weeks - some mothers, it is true, may need it - to hundreds who do not need it and have never asked for it.

Senator BROWN:
Queensland

– Any one listening to Senator Spicer would imagine that the Government had made a fearful mistake during this period of the war. I have said on many occations that the trouble with honorable senators opposite is that they are still obsessed with old-fashioned ideas of finance, so that when a government seeks to spend money, they raise all kinds of bogies and see disaster looming ahead. The Government has done a splendid thing in bringing down this bill, and should be commended by the whole of the community. Of course, those who arc worried by ancient, financial theories and methods will not praise the Government, because they imagine that, when we spend a certain sum of money, we are robbing the war effort and acting contrary to the best interests of the Commonwealth. In fact, Senator Spicer said so. Let me examine the arguments advanced by the honorable senator. He would have us believe that at this juncture, because we are engaged in a war, we should do nothing whatever to do justice to those who really need it, or to bring help to those who need help. In order to bolster up his case, he said that the worst feature of the bill was that it contained no means test. The Minister, in his second-reading speech, said that the bill had three important features, the first of which was that the means test was entirely removed. He added that he was sure that this would be unanimously approved. “We cannot say that it is unanimously approved, because Senator Spicer disapproves of it, but the majority of the people of Australia will approve of it. They know that governments which use means tests are compelled to employ inspectors to go into the homes of people and look closely into their financial affairs, acting altogether in a way which is contrary to the spirit of democracy. I said yesterday that one of the finest features of the Repatriation Bill was that there was no means test for the soldier who was helped by the Government because of the disabilities he suffered ti) rough injuries sustained in the war. There is unanimous approval of that from one end of the Commonwealth to the other, even in the “precincts of this Parliament, where Government and Opposition are in complete agreement that a means test would be entirely wrong if applied to soldiers. As I said yesterday, we have for years looked upon the old-age pension as the right of the pensioner. Honorable senators opposite have condemned that view on many occasions, urging the introduction of some contributory scheme, on the ground that its absence undermines the morale of the old-age pensioner. On the one hand, honorable senators opposite condemn the means test as applied to the soldier, but, on the other-, they approve it- for the old-age pensioners ami the mothers of Australia. Their argument is utterly futile. After all, if these payments be made to the mothers of Australia, without the application of a means test, a saving of labour will be achieved because there will be no need to have men inquiring into the finances of applicants. It is argued by honorable senators opposite that now is not the proper time to introduce legislation such as this; but in my view, war-time is the most appropriate time for any Government to take action to remove inequalities and disabilities which affect society. By introducing legislation such as this we can show that we are bona fide in our desire to establish a new order. The cost involved is estimated at £1,500,000 a year, and the argument that has been advanced by honorable senators opposite is, that that much less will be expended on our war effort; but the fact is that the expenditure of £1,500,000 on maternity allowances will make not one particle of difference to the war effort. I contend with all the strength at my command that Australia is playing its part in this war, and the mere fact that this sum of money is to be diverted to certain channels will not prevent the firing of a single shot against the enemy. I am advancing these ideas in reply to the troglodytic and feudal conceptions of finance held ‘by honorable senators opposite. As this war progresses, there will be a general levelling up of all classes in the community. Income tax is being imposed upon almost all individuals in a varying degree, and in that way equality of sacrifice is assured. Our war-time economy is making possible the introduction of more equitable economic standards throughout the entire community. I concede that as the war progresses the total quantity of services and commodities available to the general public will be reduced, but the effect of our income tax legislation and of measures such as this will be to alter the relationship between the various sections. In war-time, a splendid opportunity is offered to change class relationships and to ensure that full justice is done to all sections of the community. “We are doing that for the soldiers, and we do not cavil for one moment at the additional expense involved in liberalizing our repatriation legislation; but whilst it is right that our soldiers should be treated justly, it is also right that the mothers of this country should have some consideration. This bill proposes to pay to mothers, according to their circumstances, a sum varying from £4 10s. to £7 10s. provided application for such payment be made. It, does not matter whether a mother lives at Potts Point or Surry Hills, she will he entitled to apply for this assistance, I point out that under our repatriation legislation, it does not matter whether a returned soldier, has £100 a year or £10,000 a . year, if he has lost a limb he receives a pension, and rightly so. The same, principle is embodied in this legislation.^ I approach the matter from a different point of view from that adopted by Senator Spicer. Unfortunately, honorable senators opposite are always prone to regard these problems in the light of ordinary financial standards, whereas I deal with them from the social and communal aspect. The opposition endeavours to justify its antagonism to measures of this kind by claiming that members of the Labour party are irresponsible and do not know what they are doing. Frequently we are charged with spending millions of pounds unnecessarily, and, no doubt, upon hearing such statements, even some of our own supporters will flap their ears and to some degree believe them. They may even be convinced that it would be right to send a policeman or an inspector into a home from which application for assistance under this measure is made, in order to ascertain the financial means of the family concerned; hut I am strongly opposed to such practices. Some time ago, a Government supported by honorable -senators opposite brought in a most commendable- measure, and one which I am sorry was not introduced by the Labour party, namely, the Child Endowment Bill. Just imagine a child endowment measure being fathered and mothered by a tory government! I have no hesitation in giving to honorable senators opposite credit for the introduction of that scheme, and I have done so on many occasions on the public platform. In that legislation there is no means test.

Senator Spicer:

– But certain income tax concession deductions were abolished.

Senator BROWN:

– That is the very point I wish to make. Apparently Senator Spicer is following my argument keenly. It is true that under the child endowment scheme certain concessional deductions have been abolished.

Senator Spicer:

– As part of that scheme.

Senator BROWN:

– I admit that that is the best method of attacking the problem. It is a thousand times better than applying a means test and employing men to spy into peoples homes. I hope that such practices have gone forever. In any case, if an individual is drawing more from the community than ho should, it is taken aw.ay from him by means of taxation. This measure is a good one, if for no other reason than that it does not include a means test.

Senator Spicer:

– There is a means test in’ our invalid and old-age pensions legislation which was introduced by a Labour Government.

Senator BROWN:

– Admittedly. I have nothing to hide in that regard. I am merely looking forward to the time when there will be no means test in any of our social service legislation, and when incomes throughout the community will be made much more equal than they are n,ow, by means of the fairest tax which was ever imposed upon a. community, namely the income tax. I trust that by means of that tax we shall be able to bring about such a. change in the relative positions of the rich and poor sections of the community, that a secure foundation for a new order will be laid. Surely that is a fair and reasonable argument. In our conception of the new economics, we should realize the necessity for the elimination from society of all useless labour. Under war-time conditions we have achieved that object to a great degree, because we have found positions for men and women who were formerly employed uselessly. Therefore,* the Government has acted wisely in eliminating the means test with regard to the maternity allowance. I do not agree with Senator Spicer, who, in effect, said that inspectors should be employed to spy on people in their homes. He also remarked that the people are not contributing towards the cost of the maternity allowance. Admittedly there is no direct payment towards it, but income tax and indirect taxes are imposed on the people, and after the 1st April next the great majority of them will be contributing to Consolidated Revenue by means of income tax. The Government should try to simplify the collection of revenue as far as possible by eliminating unnecessary labour.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– Up to the present it has not been particularly successful in that respect.

Senator BROWN:

– Be that as it may, members of this chamber have every right to say what should be done. If we continue to direct attention to matters of this kind the day may yet dawn when governments will act wisely with regard to them. Senator Spicer says that it is desirable to adopt a system under which medical men would be paid to look after the health of the community. 1 fully endorse that view. Such a system has been put into operation in Russia. It is refreshing to find that the ideas of the common people and of the tory section sometimes coincide. After the war it should be possible to make all social measures part of one large scheme. There should be a combination of all social activities in order to eliminate ill health in the community, as far as possible. I understand that in, China doctors are paid according to the standard of the health of the people, and that in certain quarters the heads of the doctors are chopped off when it is thought that there is too much sickness. We have reached a stage in our social organization where we should strive for public health, not by means of the medicine bottle, but by providing the people with healthy surroundings, good housing, and the best of food. I congratulate the Government upon the introduction of this bill, and upon its proposal to eliminate the means test. If it continues upon the lines it has already followed in legislative matters, it will deserve the thanks of the community.

Senator COOPER:
Queensland

– I support the bill and am glad to notice that the Government has to a large degree adopted the recommendation of the Joint Committee on Social Security on this matter. The members of that committee, in taking evidence in various parts of Australia, realized that much room remained for improvement with regard to child welfare measures. This country’s most valuable asset is the natural-born Australian. In the past we have expended many millions of pounds in encouraging migrants from overseas, but immigration schemes have proved much more costly than the present proposal is likely to be. Medical practitioners and hospital matrons and nurses all agree that pre-natal and post-natal care of the mother is of theutmost importance. Although this bill is not so generous as the recommendation of the Joint Committee on Society Security, I am glad to notice that relief from financial anxiety is to be given to mothers by granting an allowance of 25s. a week in respect of each of the four weeks immediately preceding and following the birth of the child. That will be of great benefit, particularly in large families which subsist on the basic wage or on even a lower sum. Senator Brown has pointed out that no means test is applied to applicants for child endowment. If a mother does not wish to accept the allowance she is not bound to do so. But in my opinion, she should have the right to accept it. The proposal to give to a mother some financial assistance at the time when she is bringing a child into the world is a step in the right direction. I shall support the bill.

Senator AMOUR:
New South Wales

– I should not have participated in the debate had it not been for the remarks of Senator Spicer. I am astonished that a man with his training should so bitterly and viciously oppose any improvement of the social legislation of this country. A few days ago, the honorable senator attacked the National Welfare Fund Bill, under which it was proposed to establish a fund from which the maternity allowance and other social benefits would be paid. To-day, he opposes this bill, which provides for the payment of an allowance to a mother to cover expenses incurred by her in connexion with the birthof her child. The honorable senator said that the money wouldbe spent without regard to the needs of the mother ; but I am proud to support a government which has introduced a bill to give effect to a recommendation of the Joint Committee on Social Security. On many occasions I have made representations to the Minister, or to the Deputy Commissioner, in order to secure for a mother a maternity allowance which had been denied to her because ‘of the application of the means test. The existing law provides that a woman whose husband has an income of more than £270 a year shall not be entitled to the allowance in respect of her second child, but it does not make any allowance for the commitments of a family. A man may have an income of £1,000 a year; but unforseen circumstances, such as sickness, may reduce his income below £270. Yet his wife would not be entitled to the maternity allowance in the event of a child being born to the family. The bill provides for the payment of. a maternity allowance ranging from £5 to £7 10s., together with £1 5s. in respect of each of the four weeks immediately before the birth of the child and a similar payment in respect of each of the four weeks immediately after its birth. I regard this bill as a valuable addition to our social legislation. Senator Spicer said that he doubted whether the money would be used for the purpose for which it would he paid.

Senator SPICER:

– I said that it might not always be used for that purpose; in some cases it may not be so used.

Senator AMOUR:

– When the Family Endowment Bill was before the New South Wales Parliament, one honorable member - Mr. Hill - said that the money would be used for the purpose of making prostitutes. Senator Spicer has spoken in a similar strain to-day. I remind him that Mr. Hill went into political oblivion on the next occasion that he appealed to the electors. I regard Senator Spicer as the most un-Australian person to whom I have ever had to listen. He knows nothing of the conditions of the people. He has lived always in a certain groove, and has not associated with the people.

Senator Spicer:

– The honorable senator does not know anything about me.

Senator AMOUR:

– I judge the honorable senator by his utterances. They demonstrate that he has no proper place in an Australian democratic parliament. I sincerely trust -that the electors of Victoria will eliminate him from this Parliament because of his stupid utterances.

Senator WILSON (South Australia) tirely opposed to the means test. I believe that when the country has decided on a policy to assist a mother to meet the expenses incurred in child-birth and in rearing children, the payment should be made regardless of the income of her husband. Moreover, the means test has proved costly to administer, as numbers of inspectors have had to be employed. Its chief effect is to cause disaffection in the community. As I am of the opinion that any payment decided on by the Parliament in respect of any particular matter should be paid to all sections of the community, regardless of their means, I shall support the bill.

Senator CAMERON:
Minister for Aircraft Production · Victoria · ALP

– It should be obvious to honorable senators that, if Australia needs more and healthier children, as it does, the conditions under which children are born and reared must be improved. That statement would, I believe, have the support of any medical practitioner or biologist who had considered it. As living conditions are improved, so are the people themselves improved. We hear a good deal to-day about the morals of the people. We shall never have an ideal state of affairs morally until the people live under ideal conditions. It is certainly impossible to have a high standard of morality under war-time conditions. The purpose of this bill is to improve the conditions under which children shall be born and reared. Any one who has a knowledge of this subject knows that the cost to a prospective mother of all the attention she should have is almost prohibitive so far as she is concerned. In many instances, mothers have to incur debts in order to receive proper treatment for themselves and their children. Senator Brown and Senator Wilson have rightly stressed the justification for abolishing the means test. Every self-respecting man and woman should object to the inquisitorial examination to which applicants for social benefits, particularly young mothers, are subjected. Many have refused to submit to such examination, and, for that reason, have foregone their right to claim benefits. It is true that many officials conduct these examinations sympathetically, hut, at the same time, many believe that they can obtain the good will of their superiors to the degree that they can intimidate and discourage applicants for these benefits, and they act on that principle. For once I find myself in agreement with Senator Spicer when he says that he is in favour of providing free hospital treatment for prospective mothers where they can obtain the best attention and the services of the most, skilful medical practitioners. That would be a step in the right direction. The honorable senator urged that any scheme of this kind should be on a contributory basis. I point out that those who do the useful work of society make possible what is known as Consolidated Revenue. Therefore, under a contributory scheme for the provision of social benefits, the workers would pay both indirectly and directly. They create the wealth of the community which makes ‘Consolidated Revenue possible. If the workers, for example, received the full value of the wealth which they create by their labours, there would be something in Senator Spicer’s argument, but as the workers’ share of the wealth which they create is limited to the cos! of their subsistence, and the balance is appropriated in the form of profits, out of which taxes are paid into Consolidated Revenue, it should be obvious that under a contributory scheme the workers would be obliged to pay twice towards the provision of the benefits, first, indirectly, and, secondly, directly. Senator Spicer also said that in many instances mothers may not use the maternity allowance for the purpose for which it is granted. That may be so; but would it be fair to penalize all mothers simply because every mother did not spend this money as wisely as she should? That argument reminds me of the enormous sums of money which are being spent to-day in luxuries by people who play no useful part in society, and do not. create any real wealth. They are not useful workers in production, and they are not in the front line. One sees these people in the very best of hotels, receiving the very best of meals, and living under conditions which are luxurious compared with those under which prospective mothers and workers generally are obliged to live. That is a glaring instance, not of a few pounds, but hundreds of thousands of pounds, being spent in a manner which is not in the best interests of the country, particularly in time of war. Any one who points the finger of scorn at a few mothers who may not spend their money wisely, and, at the same time, forgets all about the waste of the kind’ I have mentioned, is biased against the claims of prospective mothers under this bill. Senator Spicer referred to the country’s indebtedness. As I have pointed out on previous occasions, the public debt is created for the purpose of protecting the capital of investors. In reality, no debt a t all exists, because money that is loaned to the Government is money which people have in excess of their every-day needs; and it is lent at interest. If we had a system of taxation along the lines indicated by Senator Brown, it would be possible to finance the country not only in time of peace, but also in time of war, without creating any debt or liability at all. But I am perfectly certain that if a hill were introduced for the purpose of financing the war by direct taxes, which would mean increases of income tax for those best able to pay them, we should witness a scene in this chamber similar to that which took place here earlier this afternoon. To honorable senators opposite profits are sacred; we must not place our sacrilegious hands on profits no matter what else we do to the workers in industry or the soldiers in the front line. Senator Foll referred to the increased taxes. We must increase taxes, because we must provide adequately for the workers in production if we are to secure the results we desire, but we must provide adequately for the men in the front line if we are to make it possible for them to achieve victory at a minimum cost of lives. So long as the war lasts, those who are not taxed down to the level of their every-day needs, must be taxed towards that degree, otherwise Ave shall not be able to make our maximum war effort. That is obvious. Any one who approaches this matter on the assumption that the incomes of persons receiving considerably in excess of their every-day needs must be maintained, either does not understand the position, or i3 placing an obstacle in our way in the prosecution of the war to the best of our ability. It seems to me that Senator Spicer and some of his colleagues are concerned more about maintaining and increasing profits than they are about facing the realities of the situation in which we find ourselves to-day. The longer the war lasts the more they will be made to realize, as has happened in Great Britain and the United States of America, that such an attitude cannot be maintained. If they say that sacrifices must be made, all people must be prepared to make sacrifices commensurate with their ability to do so. When they receive considerably in excess of their everyday needs compared with workers in production and in the front-line, they should be prepared to make sacrifices, and be thankful that others are ready and willing to do the work and the fighting which they are not called upon to do.

Senator ARNOLD (New South Wales) [5.311.As the bill appears to have almost unanimous support, I shall not speak on it at any length, but I take the opportunity of supporting the remarks of Senator Cooper, who is a fellow member of the Joint Committee on Social Security. The members of the committee have been most impressed by the necessity of taking steps to give ante-natal care to mothers, and to take care of the child in its early years. No evidence that we have heard in our recent inquiries has impressed us more deeply than that emphasizing the need for more adequate care of the children. We have found that many prospective mothers have not been able to obtain proper medical treatment or adequate service in their ordeal and that the children when born have not received proper nourishment. If we desire to build a strong, healthy and virile nation, it is obvious that we must begin at the first stages of life, and the child that is being brought into the world must have all the assistance that the nation can give it. Whilst there is a major responsibility on the parents, there is also a very grave responsibility on the community, and I have much pleasure in supporting a measure of this nature, which shows that the Government recognizes that fact. I also urge the Government to take further measures to extend child clinics, and kindergartens and other services for children of tender years. We have found a serious lack of provision for children of those ages, and I urge the Government to take immediate steps to remedy that. Like Senator Brown, I detest the type of means test that has been evolved and included in many of our acts. I feel that this measure is designed in the right way. and adopts the simplest plan. The savings that might be made by a means test are so small that it is not worth the worry and inconvenience that it would cause. In this instance, no test should be imposed as to the means of the parents, and all mothers and children alike should receive benefits from the common fund.

Senator LECKIE:
Victoria

.- 1 find in the arguments of honorable senators opposite nothing but magnificent inconsistency. First of all some one puts up an argument that it will increase the birth-rate, I do not know how- it can do anything of the kind. The considerations that govern the birth of children are quite different. Whether or not a £5 baby bonus will be received makes not an atom of difference. I agree that people who need help at such times should get it, but *I do not believe that people who do not need it should get it, and I do not think that at a time like the present, when we have to beg, borrow, or steal every penny that we can get for war purposes, such a large sum should be expended in offering another bribe. I know- that the Government is very anxious to be popular. It is the duty of a Government to be popular.

Senator Cameron:

– And to be just.

Senator LECKIE:

– The Government is not making a start to be so. In the. bill previously considered by the Senate, when a great anomaly arid injustice was pointed out to honorable senators opposite, they refused to join with us in removing it. They disapprove of the means test, and think that all these sums should be handed out by the way of bribes to the community, particularly to those who can rouse .the greatest amount of sympathy. I daresay that Ministers said to themselves that people are always sympathetic to nursing mothers, and that it would be a good idea to cash in on that sympathy by-giving them a little more. One would think that a maternity “ allowance was not - in existence at present. This bill merely extends the present bounty. Honorable senators opposite talk a great deal about a means test.They did not suggest one for old-age pensioners. When we on this side were in office, we proposed a way of getting rid of all means tests. We put forward a national health and pensions insurance scheme to cover old-age and other pensioners and to give every one the right to claim a pension or a bounty, as the case may be, but at that time honorable senators who support the present Government were absolutely opposed to the measure, and eventually by their opposition caused it to he defeated.

Senator Lamp:

– That is not true. The honorable senator knows that the Country party defeated it.

Senator LECKIE:

– By their opposition honorable senators opposite prevented it from being proclaimed. Any one who reads the speeches delivered at that time in either House is forced to the conclusion that every man now supporting the Government was opposed to the national health and pensions insurance scheme.

SenatorFraser. - That is entirely wrong.

Senator LECKIE:

– It is entirely right. Every man whowas sitting in opposition at that time was against the scheme, and eventually it was prevented from taking its place on the statute-book. Now honorable senators opposite are trying to take credit for the fact that soldiers are to get pensions. They say that those are the same as old-age pensions, but are they? The pension is given to the soldier for a disability that has happened to him. while carrying out the duty of saving his country. It is given deliberately in the same way as industrial workers receive benefits for disabilities or accidents under their insurance schemes. No means test is applied there. If a workman is injured, he receives a certain amount of compensation according to the extent of the injury. If he loses his life, his family receives £750 or £800. The money is paid because the worker has been injured during the course of his work. Soldiers are given pensions because they have taken risks and been injured or affected in doing their duty. We apply no means test to a soldier orto a workman. We apply none in the case of child endowment. When we granted child endowment, we took away, in the form of taxation, concessions from those with higher incomes more than we gave them, so that they got no benefit from it. I know that it is popular to advocate a scheme of this kind. Of course, any one who advocates the handing out of an additional £1,000,000 or £2,000,000 is popular with the people. I should not object to this expenditure, if it were necessary, but it is not. It will not assist the birth-rate in any way.

Senator Collings:

– Does the honorable senator not agree that poverty keeps clown the birth-rate?

Senator LECKIE:

– No.

Senator Collings:

– Does he not realize that the reason why the birth-rate in Canberra is higher than anywhere else in Australia is because the people of this city have economic security?

Senator LECKIE:

– I know why the birth-rate is higher in Canberra ; people have nothing else to do.

Senator Collings:

– Very humorous, but entirely shameful.

Senator LECKIE:

– Honorable senators opposite have spoken of spying into the homes of people, but I have seen very little of it, and I do not believe that very much of it occurs. One honorable senator went so far as to say that this measure would lay the foundations of the new order. What new order? The new order that this Government is introducingunder a guise of war-time necessity? All I can say is that if this measure is the best that the Government can bring forward to lay the foundation of the new order, it is a very poor start, indeed. The new order envisaged by honorable senators opposite seems to be a state of society in which every one will take in every body else’s washing ; money will be handed from one section of society to another and then back again. If that is to be the new order, then I do not look forward to it. I should like to see a nation of people of independence and. individuality, and for that reason I wish to see the individuality that we have at present preserved. If the people of this country are to be of one class, thinking one thing and doing one thing, the true manhood and -womanhood of Australia will be destroyed.

Senator LAMP:
Tasmania

.- I support this humanitarian measure, because I believe that it is necessary. For many years, in the town in which I live in Tasmania, I was secretary of an organization which had a substantial membership, and in that capacity I had to deal with many cases involving the application of the means test. I have known of instances in which, in accordance with a means test, the wage-earners, whose incomes have varied by only a few pounds, have been treated on a different basis in regard to social benefits such as the maternity allowance. Such discrimination serves only to create discontent throughout the community generally. The manner in which the standard of living of individuals can be improved by measures such as thu has been demonstrated by the effects of the Child Endowment Act. In the district in which I lived there are several fairly large families. In one family there are six children, in another seven children, and in a third nine children. The improvement of the living conditions of these people with the introduction of the child endowment scheme was apparent to every one. The purpose of this measure is to give to mothers additional comfort, and perhaps extra medical care, during this very trying period. Recently, in Launceston, a young woman gave birth to triplets. Her husband was on £5’ or £5 10s. a week, and it has not been possible for her to obtain proper care for herself and for her children, without State assistance. The benefit of this legislation in such cases will be considerable. This bill is generous, and is long overdue.

Question resolved in the affirmative.

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

page 2364

COMMONWEALTH EMPLOYEES’ FURLOUGH BILL 1943

Bill received from the House of Representatives.

Standing and 1 Sessional Orders suspended.

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

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– I move -

That the bill be now read a second time.

The purpose of this measure is to authorize the granting of long-service leave, commonly referred * to as furlough, to temporary employees of the Commonwealth. Its provisions follow the principles expressed in the Commonwealth Public Service Act applicable to permanent officers and in regulations applicable to permanent officers on the staffs of the Repatriation Department, the War Service Homes Commission, and similar departments. The Commonwealth Public Service Act provides for the granting of long-service leave to permanent officers with twenty years’ continuous service. The underlying principle of this leave is that it is granted for recuperative purposes. It can be regarded as an extended period of recreation leave, as in the year in which furlough is taken the normal recreation leave is not allowed. I refer honorable senators to section 73 of the Commonwealth Public Service Act.

Under that act provision is also made for .payment in lieu of leave to permanent officers on retirement or resignation, and to the dependants of deceased officers, of a sum equivalent to the salary that would have been involved had the furlough been taken prior to retirement, resignation or death. Leave, or pay in lieu, on a pro rata basis is also granted in the cases of permanent officers with less than twenty years’ service who - (a) die; (&) retire after attaining 60 years of age; or (c) are retired on account of ill health, not due to misconduct or causes within their own control, before attaining the age of 60 years. It is expressly provided that temporary service shall not be counted in computing length of service for furlough purposes, although temporary service continuous with permanent service was allowed to appointees prior to thé date on which the present act came into operation namely,’ the 19th July, 1923.

In the Defence Department a limited number of temporary employees who commenced duty prior to 1924 were eligible for furlough under the Civilian Staff Regulations. These rights have been preserved, but the employees who commenced temporary service in the Defence Department since 1924, or at any date in other departments, are not eligible for long-service leave. Usually, temporary employees, other than defence employees, were not retained for exceptionally long periods, but since the last war a practice, has grown up of retaining employees, particularly returned soldiers, for long periods, mostly in positions which are not usually provided as permanent positions in the Public Service. For example, there are staffs of full-time male cleaners who have not positions on the permanent staff, but whose work is permanent in character. Again, in the Australian Capital Territory, many classes of work are of ‘a permanent, nature, for example, the provision of lighting, water, transport services and other facilities, but the workmen engaged thereon have not been permanently appointed as the class of- work is not such as that for which, normally, Public Service offices are created.

Adoption of the present proposals regarding temporary employees will involve an amendment of section 73. of the Public Service Act relating to permanent officers, as the latter, if appointed subsequent to the 19th July, 1923, are not at present credited with prior temporary service for furlough purposes. The effect of the adoption of this amendment -would be th at “some permanent officers with prior temporary service, but not yet twenty years’ permanent service, would at once become eligible for furlough, and others would become eligible at an earlier date by combining temporary and permanent service. The cost, will not be great. Relatively few temporary employees are retained for twenty years. It is estimated that about 150 employees will be immediately eligible, and the liability would be about £20,000. If circumstances necessitate the continued employment of the present temporary staffs a number of other employees will gradually qualify for furlough, as there are approximately’ 750 employees* with service of fifteen, but under twenty, years. On the basis of these employees qualifying, it is estimated that the cost would be about £20,000 annually for the next five years. ‘ With the diminution of temporary staffs the numbers qualifying would be reduced, thus affecting the cost accordingly.

Senator McLEAY:
Leader of the Opposition · South Australia

– I support the second reading of the. bill.

Senator DARCEY:
Tasmania

– The measure will be of great assistance to temporary employees in the Commonwealth Public Service. A case came to my notice recently, in which a man in poor circumstances suffered ill health. He remained at his work as long as he could, but finally had to enter a hospital. After three weeks his pay ceased, because, although he had been in the Service for many years, he was not classified as a permanent employee. Men sometimes join the Public. Service as temporary’ employees late in life, and, although they do exactly the same work as permanent employees, they are . penalized in the manner that I have just described. This measure will fill a need that should have been met years ago, and I have pleasure in supporting the bill.

Question resolved in the affirmative.

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

page 2365

PRIMARY PRODUCERS RELIEF (SUPERPHOSPHATE) 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 tlie bill be now read a second time.

I should like to emphasize the important part played by superphosphate in the development of Australian agriculture and the maintenance of production. It is doubtful whether any other single factor has contributed so largely to increased yields in the major agricultural and pastoral industries. The use of this fertilizer has increased crop production per acre and has also been responsible for greatly increasing the carrying capacity of our native pastures. Australian soils are notoriously deficient in phosphoric acid, and the response to superphosphate is great. On the other hand, we must face the fact that lack of superphosphate would result in a serious downward trend in agricultural production. Unfortunately, due to the exigencies of war, imports of raw rock phosphate for the manufacture of superphosphate cannot be maintained at prewar levels. However, the Government has already instituted a rationing plan which aims at ensuring that the limited supplies are used to the best advantage of the nation. Moreover, the Government is fully alive to the necessity for exploiting any local resources to supplement our diminished imports, and I can assure honorable senators that everything possible is being done in that direction.

The maintenance of Australian production at. the highest possible level consistent with the decreased quantity of superphosphate available is not merely a matter of allotting certain rations of fertilizer to consumers. These rations must, in addition, be made available at a price which the primary producer can afford to pay. In presenting this bill to honorable senators, I draw their attention to two important aspects : First, the bill is intended to afford assistance to primary producers by relieving them of part of the increased cost of superphosphate. Secondly, the bill is necessary in order to enable the Government to recoup manufacturers of superphosphate for financial obligations which they have incurred on its behalf. In 1941-42 the Prices Commissioner granted an increase of 32s. a. ton to all manufacturers of superphosphate. The Government wa3 of the opinion, however, that the primary producer could not be expected to meet the whole of this increase of the price of one of his most essential factors of production. Accordingly, a bounty of 25s. a ton was granted, and the list price of superphosphate was reduced by that amount. The farmer thus received the full benefit of the bounty in the lower price that he paid for his superphosphate. For 1942-43, the Government decided that the price to the farmer should be maintained at 1941-42 levels, and issued instructions accordingly to manufacturers. However, the Prices Commissioner found that whilst manufacturers’ costs showed a further increase over 1941-42 figures, the increase was not uniform for all plants. Consequently, a continuance of the flat rate bounty system, even at an increased rate, would have resulted in some manufacturers being able to meet their increased costs, whilst others could not do so. It is proposed, therefore, that individual manufacturers’ costs will be determined for 1942-43 by the Superphosphate Industry Committee to be set up under the Superphosphate Industry Regulations. The committee will then recommend to the Minister the basis on which manufacturers shall be recouped for their disbursements on behalf of the Commonwealth. The bill provides for the appropriation of funds not exceeding £900,000 in order that manufacturers can be recompensed for losses sustained by them in selling at the price fixed by the Prices Commissioner. The full benefit of the subsidy has already been passed on to the farmer in the price that he has been charged for his supplies of superphosphate in 1942-43.

Sitting suspended from G.6 to S p.m.

Senator McLEAY:
Leader of the Opposition · South Australia

– The object of the bill is to provide relief for the primary producers by stabilizing’ the price of superphosphate. I support it wholeheartedly. Those engaged in rural industries have been experiencing difficulty for a long time in obtaining supplies of superphosphate, whilst the price has increased enormously. As these difficulties have arisen mainly because of the war, it is proper that the Government should assist the producers as it proposes to do under the bill. I shall make another effort to convince the Minister for External Territories (Senator Eraser), who is in charge of the bill, that, whilst assistance in this form is welcomed by the primary producers, the most effective way to help then5! is to guarantee payable prices for their products. Let us examine thi3 proposal, which is estimated to cost £900,000, against the background of the returns which the farmers have received for wheat supplied to the various pools. The price realized on 153,000,000 bushels delivered in 1941, on an average freight of 4-id. a bushel, was only 2s. 7½d. at country sidings for bagged wheat. If the Government made available a further small advance of 6d. a bushel on that wheat, the cost involved would not be more than. £3,750,000; but, I submit, that an advance would be of far greater benefit to the farmer than any assistance in the form of subsidies of the kind proposed under the bill. The farmer would, then receive for bagged wheat for 1941 only 3s. Hd. a bushel. At the same time, the Government has accepted 4s. a bushel as the payable price, and has guaranteed that price to growers who produce less than 1,000 bags. Approximately 70 per cent, of the wheat-farmers in this country are within that category. As an exfarmer myself I have endeavoured to press home this point to the Government on several previous occasions. I recall that superphosphate was first used on a general scale in 1904; and I remember the first deposit being discovered on Yorke Peninsula. The Minister constantly talks about what the farmers received from the No. 1 wheat pool. That pool consisted of only 16,000,000 bushels of old wheat which was in Australia at the outbreak of war. The first real pool established in this country was the No. 2 pool for wheat delivered in 1939 in respect of which the farmers received 3s. Sid. a bushel. I again emphasize that although subsidies of the kind proposed under the bill arc helpful to the farmer, he would much prefer the Government to guarantee him a payable price for his product.

Senator GIBSON:
Victoria

.- The proposal embodied in the bill is quite fair. The system of paying the bounty direct to manufacturers is preferable to paying it direct to users of superphosphate’. I should like the Minister in .charge of the bill (Senator Fraser) to inform us by how much the price of phosphatic rock has increased to the manufacturer since the outbreak of war. Last year the subsidy was paid to the manufacturers a’t the rate, of 25s. a ton,. and that was passed on to the user in the form of a rebate on the list price. Under this measure, it is estimated that the subsidy this year will cost £900,000. At the same time, much less superphosphate is being made available. For instance, in Victoria each user now receives only onequarter of his previous allowance. On that basis I calculate that the bounty under this bill will work out at the rate of about £3 a ton. I should like the Minister to .clear up that point. The necessity of ensuring supplies of superphosphate for pasture improvement cannot be over emphasized. On the basis of the cost of £5 ls. a ton for superphosphate the additional cost to the user works out at 5s. an acre. I point out that manufacturers of superphosphate have already made 1110 st of their deliveries for this year, but they have not yet received ls. from the Government in respect of the bounty. When is it proposed to pay this subsidy to the manufacturers?

Senator UPPILL:
South Australia

.- I support the bill. It is in accordance with recommendations made by the Joint Committee on Rural Industries’. Paragraph 37 of that committee’s report, dated the 29th April, 1942, states - .

The committee is unanimously of opinion that having regard to the national character of the work performed in producing essential food and fodder, the whole of the increase in the price of superphosphate due to war conditions should be borne by the Commonwealth.

The committee is prompted to make this recommendation by the knowledge that since the outbreak of war the cost of “almost every item required by primary producers has risen. This is supported by the following figures supplied by the Commonwealth Statistician showing the movement in the Melbourne wholesale price for a number of items which occurred in the costs of rural production : -

In addition, the cost of agricultural implements also has increased substantially. Honorable senators are aware that there has been a decline in the supplies of superphosphate, and this is having a very serious effect on the production of foodstuffs. It is estimated that the supply for 1943-44 will be equal to that of the supply available this year, namely, 4S0,000 tons. Any advance on that figure will depend on an increase of local production. The uncertainty of ship movements is largely responsible for the decrease of supplies. The Joint Committee on Rural Industries has given particular attention to the possibility of developing local deposits, a number of which exist in South Australia, Victoria and New South “Wales. However, none of these is of high-grade rock. Only last week, the members of the committee inspected the deposit at Mansfield, Victoria, in company with a Commonwealth mining official, officers of the British Phosphate Commission, and representatives of private manufacturers. It is proposed to send 50 tons of rock from that deposit for test treatment to Melbourne. The British Phosphate Commission is of opinion that the deposits in South Australia are the most promising. About 125,000 tons of rock has been obtained from the deposits in that State. The committee is endeavouring to speed up further investigation of those deposits with a view to developing them fully. The British Phosphate Commission has stationed a mining engineer at Angaston to make a thorough investigation of those deposits. I support the bill, because this assistance will be of substantial benefit to the primary producers.

Senator LECKIE:
Victoria

.- I do not oppose the bill, but, at the same time, I am afraid that by giving assistance to primary producers in this form we are starting a complicated system of finance.

Senator Spicer:

– Starting?

Senator LECKIE:

– The practice was really started by previous governments, and this Government is continuing it. I am doubtful whether it is wise to give assistance to primary producers in this way. Of course, to the degree that the scarcity of superphosphate is due to war conditions, the community should accept some measure of responsibility in the matter. However, the increase of the cost of bags and wool-packs, for example, has also been due entirely to the war. Should the Government continue this system of providing bonuses in order to keep down the prices of articles required by the producer it will receive claims for similar assistance from producers of all kinds of commodities. Therefore, I am doubtful whether this system of granting assistance is wise. I agree with the Leader of the Opposition (Senator McLeay) that it would be preferable to guarantee producers at least the cost of production of their commodities.

Senator Gibson:

– That would cost more than £900,000.

Senator LECKIE:

– Exactly. At the same time I know that the bill will give relief to the farming community, and therefore, I shall not argue that point at this stage. I am inclined to think that the responsibility of seeing that every producer receives his costs of production, with his ordinary living costs or profits in addition, should rest ©n the community. I am in doubt about the general principle, but not about this bill, because I feel that the farmers require a good deal of help in their present troubles. I doubt whether a general policy of subsidizing different articles, and having demands upon us to subsidize others, is sound. . The problem would probably be better tackled if, as my leader suggested, we guaranteed the cost of production generally, and not the cost of particular articles. That, however, is a matter of policy, and I would not be dogmatic either way. The question of which is the better policy for the producer calls for a great deal of consideration by the Government and the Senate.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I rather welcome the bill, although it may, as Senator Leckie suggested, be based on a wrong principle. Production is going to suffer by at least 20 per cent, in the heavy rainfall areas of the Commonwealth through the scarcity of superphosphate and the deterioration of the quality of that supplied. It is almost impossible to keep down the price, and if superphosphate is not used the food position in Australia will suffer.

I know of cases in heavy rainfall areas where the lambing will be reduced by 20 per cent, owing to the .lack of supplies of superphosphate for pasture land that has been sown especially for the rearing of fat stock.’ Although this bill may be a stop-gap, it is a step in the’ right direction. Whatever may be the result of the investigations to which Senator McLeay refers, nothing worthwhile has yet eventuated. We hope that the campaign in North Africa will be successful. If it is, supplies may come from there, but our main source of supply will ‘ not be available to the Commonwealth for some time to come. If the pasture lands which have been prepared at great expense to the producer are not improved by superphosphate, our food production will be serious. I notice that the Government has, as announced to-day, very properly been paying close attention to that subject. For the reasons I have given, I support the bill.

Senator DARCEY:
Tasmania

– Those honorable senators who understand the land problem are satisfied that the bill is necessary. Superphosphate is one of the finest fertilizers that it is possible to use on the land. “When the Germans destroyed the works at Nauru Island, from which our principal supply of superphosphate came, they struck a heavy blow at Australian production. The bill bears out what I said previously, that the price of goods depends on what we can produce, and the money available to buy them. The food problem is going to be very acute in Australia in the next few months, and everything that helps to increase production should receive the support of the Senate, tn America also they are talking about an undoubted food shortage, caused by the number of people who have been taken off the land and placed into war production. If, by giving a bounty, as this bill proposes, the output of our primary products is increased, no one in this chamber who takes a proper view of the economic situation can possibly oppose it. It is useless to plow the land and pay for seed when produce tion is cut by 20 per cent through lack of fertilizers to bring the crops to full maturity. Senator A. J. McLachlan has shown the necessity for the bill. I am not a farmer, but I understand the farmers’ troubles. I know that, unless they receive this promised help, production will fall, greatly to the detriment of the people of Australia. I support the bill and trust that it will be carried without a lengthy debate.

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

– in reply - I shall not attempt to answer categorically the statements of the Leader of the Opposition (Senator McLeay) because I know that it is impossible to convince him of what the Government has done to assist the primary producers. The following information, supplied by the Superphosphate Industry Committee may answer the question which Senator Gibson asked during the course of the debate : -

A preliminary investigation by tlie Prices Commissioner in tlie current year indicated that, as a result of the above mentioned conditions - -

That refers to increased costs - manufacturers anticipated that costs would be increased over a range from 3s. lOd. to 25a. 4d. a ton. The wide variation in anticipated costa was one of the principal reasons for the setting up of the Superphosphate Industry Committee to advise on the basis of payment of the subsidy.

I trust that the information which has been given will clarify tho position regarding manufacturers’ increased costs in 1942-43-

It will be appreciated that, as manufacturer!! have been selling at the 1941-42 net figure, which is list price’ less 25s., and have not received the 25s., the 1942-43 subsidy will have to allow for the increase in costs since July, .1941, including rock phosphate.

Question resolved in the affirmative.

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

page 2369

PAPERS

The following papers wore presented : -

Lands Acquisition Act - Land acquired for Commonwealth purposes -

Brisbane, Queensland.

Collingwood, Victoria.

Tamworth, New South Wales.

National Security Act - National Security ( General ) Regulations - Orders -

Prohibiting work on land (3).

Taking possession of land, &c. (27).

Use of land (12).

Senate adjourned at 8.26 p.m.

Cite as: Australia, Senate, Debates, 25 March 1943, viewed 22 October 2017, <http://historichansard.net/senate/1943/19430325_senate_16_174/>.

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