17th Parliament · 1st Session
The President (Senator the Hon. Gordon Brown) took the chair nl 3 p.m., and road prayers.
– Has lbc Minister for the Interior read the following report which was published in the Sydney Sun yesterday : -
Ancs Springs, Monday. - Thousands of pounds worth of tyres had been for months lying in the open lit Alice Springs exposed to eli? and rain, said Mr. -T. C. Arrowsmith, to-day.
Mr. Arrowsmith, Secretary of the Civil Constructional Corps Workers Committee, said he had been anxious to put this and other evidence of alleged wanton waste before the Director-General of the Allied Works Council, Mr. E. G. Theodore, when he was in Alice Springs recently. . . .
When word of his visit was received, men were paid double time to pump water out of the tyres and stack them in a shed, said Mr. Arrowsmith.
Can the Minister give any further information on the matter? Can he state whether adequate care is being taken of government property at Alice Springs?
– I have read the report referred to, and I know Mr. Arrowsmith. I oan assure the honorable senator that everything possible is being done to protect government property.
SenatorFOLL. - Is it a fact that a large number of motor tyres were allowed to lie for months in the open exposed to the sun and rain, which caused them to deteriorate? If so, will the Minister say what action has been taken to see that the persons responsible have been suitably dealt with?
– I am not prepared to say whether or not the report is correct. In various parts of Australia, I have seen huge dumps of tyres which are of no use except as waste rubber. I do not know whether the press reports refer to such tyres. I am not likely, however, to allow a report of such a nature to puss without instituting an inquiry. Should the inquiry substantially confirm the report, appropriate action will be taken.
– Has the Minister for the Interior read the further statement by Mr. Arrowsmith which was contained in the press report referred to by Senator Foll? Wehave read in the press of a public meeting in the Melbourne Town Hall, and of another gathering in Adelaide, at which protests were lodged against the acute housing shortage. Mr. Arrowsmith is reported to have said : -
Scattered throughout the Northern Territory are thousands of building workers overcrowding jobs, many of which are of an unessential character.
The war effort would not be hampered if one-third of those men were returned south to work on housing schemes. As theWar Service Homes Commission has 3,755 blocks of land on which houses could be erected immediately, will the Government consider the withdrawal of some of the members of the Civil Constructional Corps to enable them to commence the building of houses?
– There is no truth whatever in the suggestion that there has been any misapplication or wastage of labour by the Allied “Works Council.
– Will the Minister representing the Minister for Transport extend to any honorable senators who may be nervous about travelling at night, facilities similar to those granted last week to Senator Crawford?
– I have no knowledge of the facilities extended to the honorable senator mentioned; but I am quite sure that if the services of the honorable senator who has asked the question were ever as valuable to the Government as those rendered by Senator Crawford every facility would be extended to him.
– In view of the promise made last week by the Leader of the Senate that the Government, in making an investigation into the prices of grain for fodder, would make an early decision in relation to the matter, and that the investigation and decision would cover the position of barley-growers whose grain had been classified as feed grade, will the Leader of the Senate now state whether a decision has been reached ? In view of the fact that the sowing season is approaching, will the Minister make a public statement with regard to this matter, to enable farmers to prepare their land for seeding?
– I shall take early steps to have the information asked for supplied to the honorable senator.
– As ChairmanI present the fourth report of the Broadcasting Committee.
Ordered to be printed.
– In order that the public may be better informed as to the conditions under which our troops are fighting, will the Minister representing the Minister for Information state whether suitable premises will’ be obtained in the capital cities for displays of official war photographs? Such pictures could be changed at regular intervals. Will consideration be given to the suggestion, and if the galleries are provided will they be open to the public?
– The suggestion is a very good one. It will be conveyed to the Minister for Information, and I shall advise the honorable senator later as to the Minister’s reply.
– Will the Minister for Trade and Customs give immediate consideration to the request recently made to him for an increase of the price of grapes to the producers? I point out that the vintage is now in full progress, and whatever is to be done should be done quickly.
– The price of grapes has been increased by £1 a ton since representations were made to me by deputation and letter by the honorable senator and others, including grapegrowers. The increase to which the honorable senator has referred is the second increase of £1 since the present Government came into office. The matter has been considered, and no alteration will he made.
– Is the Leader of the Senate in a position to make a statement regarding the report that the employees at the first government-controlled coal mine in New South Wales are now on strike?
– I am not prepared to make a statement. I suggest that some of the questions which are asked in this chamber, and in the other branch of the legislature, are not helpful in the solution of industrial troubles.
– I ask leave to make a brief statement.
– I rise to order. When a Minister asks leave to make a statement, is he not required, under the Standing Orders, to indicate the subjectmatter of the statement?
– In this instance, leave was granted before the Minister indicated the subject-matter of the statement. In future, however, the purport of any statement sought to be made by leave must be indicated.
– Both Senator Arnold and Senator Wilson have raised the question of the control of proprietary medicines, of the group commonly classed as “ patent medicine “. Whilst some of these proprietary compounds are good, it is equally true that there are some which are fraudulent, some of these latter being sold at high prices. Although these facts have been known for many years, State Parliaments, which have power to legislate in this matter, have not seen fit to take any action. It is known to honorable senators that the Commonwealth Government has no constitutional power to take action in this field of legislation, and until the Commonwealth is vested with sufficient powers, no such action will be possible. With regard to Senator Wilson’s contention that the labour engaged in the manufacture of these products could be better utilized in the erection of houses, I hardly think that Senator Wilson means that persons who are now making what he describes as worthless patent medicines should be diverted to build homes for the people. If, however, he means that those persons should be diverted to war work, thus releasing others to build houses, it might well be that such substitution would not be satisfactory, in view of the different training of the personnel involved. I have no doubt that the man-power authorities have carefully considered the most economical use of the personnel engaged in this industry.
– In view of the importance of the national security regulations that are issued from time to time and the difficulty of handling so many of them, will the Leader of the Senate consider supplying bound copies of these regulations to members of the Parliament at least quarterly?
– The honorable senator’s suggestion will be given consideration.
– Would it be possible for the Government to make available to members of Parliament an index to such regulations? The number of regulations issued is so great that, without an index, it is impossible to keep trace of them all.
– It would be possible to make an index of the regulations, but new regulations are issued so frequently that a good deal of work would be involved in keeping the index up to date. Consideration will ho given to the honor- able senator’s suggestion.
Bush- fire Damage - Provision of Fencing Posts.
– Is it a fact that the Allied Works Council undertook to split posts for settlers in the Western District of Victoria whose fences were destroyed in recent bush-fires? If so, is it a fact that the cost of such posts was about three times as great as the normal price, and that employees of the Allied Works Council have since been taken off the job?
– It is a fact that the Allied Works Council, at the earnest request of the Victorian authorities, undertook the work of supplying posts to settlers whose fences were destroyed by recent bush-fires. Their request was made to me, and I immediately authorized the work to he done. Those responsible for the prevention of bush-fires in Victoria have expressed their gratitude for the assistance rendered by the Allied Works Council. I do not know what the posts cost, but I should be willing to believe that, in view of the abnormal conditions under which they were provided, the cost would be greater than in normal times.
– Is it a fact that an officer was sent to South Australia to inquire into the wine industry, and that his report was made available to the wine-makers, hut not to the producers of the grapes ? If so, why ?
– The report mentioned by the honorable senator was not made available to either the growers of the grapes or the wine-makers.
Supplies in Western Australia.
asked the Minister representing the Minister for Munitions, upon notice -
With reference to the allocation of war contracts in Western Australia -
Is it a fact that the Western Australian Wholesale Electrical Traders Association have expressed concern with regard to the supply of electrical equipment for installation in defence projects in Western Australia?
Will the Minister state whether orders for such equipment arc or have been placed with firms in eastern States in preference to firms manufacturing such articles in Western Australia; if so, why is this procedure adopted ?
Will the Minister issue directions that any future orders for such equipment are to be placed with manufacturers in Western Australia ?
– The Minister for Munitions has supplied the following answers : -
SenatorFOLL asked the Postmaster-
General, upon notice -
Has the Government short-wave broadcasting service been re-transferred to the Department of Information from the Australian Broadcasting Commission?
Was the service originally attached to the Department of Information and transferred to the Australian Broadcasting Commission during Senator Ashley’s term a? Minister for Information?
If the answer to question 1 is in the affirmative, what are the circumstances surrounding the decision to again place this service under the control of the Department of Information ?
What effect has this transfer had on the Comptroller of Short-wave Broadcasting or his staff?
– The answers to the honorable senator’s questions are as follows: -
New South Wales Scheme - War Service Homes
asked the Minister representing the Treasurer, upon notice -
– The Treasurer has supplied the following answers: -
asked the Minister representing the Minister in Charge of War Service Homes, upon notice -
Since the creation of the War Service Homes Commission -
How many applications for assistance have been received?
How many applications have been approved: (a) for the erection of houses;
How many returned soldiers are to-day in occupation of houses so acquired?
How many have completed the purchase of their homes?
– The Minister in Charge of War Service Homes has supplied the following answers: -
2.(a) 21,443; (b) 13,007; and (c) 3,057. The figures in No. 2 show the number of homes provided and the difference between totals of Nos. 1 and 2 represents applications in respect of transfers between applicants and also applications withdrawn, declined and those now pending.
Clothing for Discharged Personnel
asked the Minister representing the Minister for the Army, upon notice -
– The Minister for the Army has supplied the following answers : -
asked the Leader of the Senate, upon notice -
– The answers to the honorable senator’s questions are as follows : -
asked the Minister representing the Minister for Munitions, uponnotice -
– The Minister for Munitions has supplied the following answers : -
Notice of Motion No. 2, in the name of Senator Collings for leave to bring in a bill for an act to amend the Referendum (Constitution Alteration) Act 1906-1936, withdrawn.
Motion (by Senator Collings) agreed to -
That leave be given to bring in a bill for an act to amend the Commonwealth Electoral (War-time) Act 1940-43.
Bill presented, and read a first time.
Bill received from the House of Representatives.
Bill received from the House of Repre sentatives and (on motion by Senator Keane) read a first time.
Bill received from the House of Representatives and (on motion by Senator Keane) read a first time.
Debate resumed from the 24th March (vide page 1996), on motion by Senator Wilson -
That Utensils (Miscellaneous) Order issued under National Security (General) Regulations, as appearing in Commonwealth Gazette No.6, of the 12th January, 1944, and tabled in the Senate on the 10th February, 1944, be disallowed.
– When I spoke on this motion on Friday last, I said that Senator Wilson, in his elaboration of the position, had omitted to tell the Senate that an advisory committee of experts, representative of various sections of the trade, had been appointed by the Government. Its function is to advise the controller, Mr. Keysor, to whom Senator Wilson made reference. I also mentioned that Mr. K. Webb, of Malleys, was appointed deputy controller in Sydney, and Mr. K. Luke, production adviser to the controller. Both of these gentlemen serve in an honorary capacity. Surveys which have been made to date have amply justified the creation of the control. I hope that, before I conclude, I shall have completely justified that statement. Inferior articles have been manufactured - I do not say by A. Simpson and Son Limited - and if control had not taken place, the public, in their anxiety to obtain them, would have been paying excessive prices for inferior articles. It has been found that considerable quantities of hollowware and cutlery are being produced of a non-durable and unsatisfactory type, thus wasting man-power and materials, and in some cases doing injury to the health of the Australian people.
– The Minister does not suggest that A. Simpson and Son Limited is responsible, does he?
– I specifically remarked that A. Simpson and Son Limited was not responsible, but I suggest that, without the control, it would have been, in ordinary Australian language, “ an open go “, and the public would have been fleeced by those who produced inferior articles at excessive prices.
– What has this to do with the question raised by Senator Wilson?
– I have pointed out what the results wouldbe had the control been dispensed.
– That has nothing to do with the subject.
– It has a great deal to do with it.
– The honorable senator does not like it.
– Indeed he does not. As I have mentioned, some of the articles produced were likely to prove injurious to the health of the community, as they were made from inferior material, but, notwithstanding their inferior quality, it was found that the goods were being sold at prices far in excess of those charged for goods of a reasonable quality. It has been necessary to stop the production of these lines and encourage the manufacturers to produce more suitable articles. Shortages of materials were soon discovered and arrangements have been made with the material-controlling authorities to allocate increased quantities.
– Has the Minister his right brief there?
– I presume that the honorable senator does not want a reply to that interjection.
– Certainly I do.
– If he does, he will soon get one. In this connexion the supply of material used in the production of utensils used in dairying was found to be dangerously low, and if action had not been taken the whole programme would have been jeopardized. Quantities of tinned plate have also been allocated, together with such materials as galvanized iron for use in the bottoms of kettles. It has been found that knives are being produced for non-essential purposes, such as hunting and bush knives, and the efforts of the manufacturers concerned are being diverted to more essential purposes. The controller has taken effective steps to speed up the production of requirements for the fighting forces, with necessary safeguards to ensure that they are being manufactured in their appropriate priority. Government ‘orders are being allocated in accordance with the respective capabilities of the manufacturers, thus ensuring maximum production and the most economical use of man-power and materials. Inspections have ‘been carried out in many factories in New South Wales, Victoria and South Australia, and this will be extended to other States as opportunities offer. Whilst there has been criticism of the control, it is felt that it mainly arises from lack of appreciation, on the part of some manufacturers, of the objective, and, strange to say, A. Simpson and Son Limited is about the only firm under this -control which has made objection.
– That is not so.
– It is so. However, a* the control functions progressively, manufacturers will find that it operates in their general interests, and will help them to produce items which are most urgently in demand. Also it will afford to them assistance to obtain increased allocations of materials, man-power, and machine tools ; it will assist existing and new firms to produce the most essential and serviceable goods; and it will guide manufacturers in directing their supplies to the localities and States in which they are needed most urgently. A representative of the control, Mr. Wor boys, is at present in the United States of America en route to the United Kingdom. His mission is to stimulate the flow of exports to Australia to the degree that essential requirements are beyond the capacity of the manufacturers in this country. Although primarily he will he concerned with increased supplies of crockery, he will pay attention also to the problems of securing supplies of cutlery and certain hollow-ware ‘ items.
The reasons for this order were, first, to relieve the acute shortages which were reported from South Australia and Western Australia; and, secondly, to obviate reciprocal traffic in identical items between the eastern and western States, in war-time it is imperative that there should be a maximum conservation of transport, and it is an obvious and common-sense policy that so far as possible every State should meet its own requirements. The move for the rescinding of the order was inspired by A. Simpson and Son Limited, of Adelaide, which was required by the controller to confine its distribution to South Australia and, subsequently, Western Australia. I assure honorable senators that as soon as it can be proved to my satisfaction that Western Australian manufacturers are able to meet the requirements of that State, no supplies will be sent from South Australia.
– Is that a promise or a threat?
– It will be in the interests of the war effort. I remind the honorable senator that a previous administration of which he was a member permitted beer and stout to be shipped whilst crates of cotton were left on the Adelaide wharfs. The move for the disallowance of this order had the support of the Premier of South Australia, for the simple reason that there is a state election pending. I do not say that firms are not entitled to produce as much of these commodities as they are able, but the relationship of that production to the war effort in the light of material shortages is a matter for decision by the controlling authorities. Manufacturers in New South Wales and Victoria are not permitted to forward supplies of hollow-ware to the western States, and a similar restriction will he placed upon tinware as soon as it can be established that South Australian and Western Australian manufacturers are in a position to meet the requirements of their own States. In the case of aluminiumware, South Australian firms are permitted to distribute to South Australia and Western Australia, and Victoria and New South Wales factories are compelled to deliver their supplies to Queensland and Tasmania, no distribution whatever being permitted in Victoria and New South Wales. When Mr. C. W. Wood, managing director of the Australian Sheet Metal Works, received the controller’s instructions regarding the restricted distribution of aluminiumware,he visited Melbourne immediately, and after discussing the matter with the control authorities said he was perfectly satisfied with the action taken by the department. There is no doubt that had A. Simpson and Son Limited acted in a like manner it would have received equally satisfactory treatment.
It is considered that the order should not prove any great hardship to A. Simpson and Son Limited, because during the year 1943 no less than 80 per cent. of its production of the items in question was distributed in South Australia and Western Australia. It is emphasized that no restriction has been placed upon production. The restriction applies only in respect of distribution, and as soon as it can be demonstrated that manufacturers in South Australia and Western Australia are able to meet the requirements of their own territories, they will be permitted to export any surplus to the eastern States. It is pointed out that if a manufacturer receives an order from the controller which he considers to be inequitable, the proper course is to appeal to the controller against his decision. The controller is most anxious to work in harmony with the trade, and will make his utmost endeavour to treat all Australian manufac turers fairly, whilst at the same time maintaining a balance between the various States. I have no doubt that the controller has acted with the interests of the general public as his first consideration. I do not wish to imply that A. Simpson and Son Limited has been producing an inferior article. If the order were disallowed, there would be a most serious reaction upon the citizens of Australia, particularly those living in isolated areas. Before such a step could be contemplated seriously it would be necessary to establish that the control was being administered in a generally unfair and unsatisfactory manner.
– That should be easy.
– I ask any honorable senator opposite to place before me a specific case in which undue restrictions have been placed upon A. Simpson and Son Limited.
– A complete embargo was imposed.
– No. As I have pointed out no restriction has been placed upon production, whereas in Western Australia there has been a restriction of production because of the shortage of raw materials. A. Simpson and Son Limited has been permitted to carry on full-scale production, and to distribute its goods in Western Australia, Tasmania and Broken Hill. That permission may be extended to other States, depending upon requirements. I do not suggest that A. Simpson and Son Limited has not played its part, but I consider that the matter is one for decision by the controller and his advisory committee. Many of the controllers appointed during the regime of the previous Administration are still in office; hut, because these appliances have been brought under control and the supply is limited, the honorable senator desires special consideration to be shown to A. Simpson and Son Limited.
– Although the firm should be prosecuted for a breach of the order.
– Quite so. Before the order should be annulled it should be established that the control has been exercised in an unsatisfactory manner.
I ask honorable senators opposite to supply me with instances in which that has occurred, and I undertake to have the circumstances examined. Let honorable senators opposite supply me with concrete cases.
– A concrete case is that of A. Simpson and Son Limited.
SenatorFRASER. - A request has been made for the disallowance of the order in the interests of one firm in Australia, regardless of the consequences. When we were considering a bill last week for an alteration of the Constitution we were told that the Government under war conditions had all the power that it required. The National Security Regulations have been promulgated under an act the introduction of which was sponsored by the parties with which honorable senators opposite are associated, and the present Government has had to take the action regarded as necessary to protect the interests of the people. The controller has been unfairly criticized, but no evidence has been advanced to show that he has used his position unfairly. Despite his association with Metters Limited, he has done nothing to restrict the activities of A. Simpson and Son Limited to the advantage of the firm with which he has been associated. I point out to honorable senators that an embargo was placed on the despatch by Metters Limited of 50,000 articles ready for shipment to South Australia. That was done under the order which honorable senators opposite now say should be disallowed. It would be wrong for the Senate to disallow an order that has been in operation for some time merely because of the pressure brought to hear by A. Simpson and Son Limited, which considers that its interstate trade has been hampered.
– What about the housewives in Queensland who cannot get saucepans and kettles because of this order ?
– In his letter of the 15th March the controller notified A. Simpson and Son Limited that if its production exceeded the requirements of its allotted territories he would be glad to be informed as to the details of its excess production. No reply has been received to that request, and in the absence of a reply the controller can only assume that the capacity of the firm is fully absorbed in servicing the people of the States and the localities allotted to it. The statement presented by Senator Wilson contains remarkable inaccuracies. It has been said that the exports to Queensland of A. Simpson and Son Limited amount to 25 per cent. of the value of its total production.
– I rise to order. That statement is incorrect. I did not say that.
– No point of order has arisen.
– A. Simpson and Son Limited has been guilty of a grave offence, because an official return dated the 4th February rendered to the Department of Supply and Shipping and called for under National Security Regulation No. 71, shows that the firm stated that in 1943 its sales in Queensland were less than 4½ per cent. of the total value of its sales. Moreover, another return relating to the firm’s distribution in February showed that its total contribution to the Queensland market was 72 frying-pans! It has been alleged that the firm had articles already manufactured and crated. I told the honorable senator that if that were true and if shipping space were available for those goods to be transported to Queensland, I would undertake to have the position examined.
– The goods have been crated for three months and the necessary space has been available.
– It is easy for the honorable senator to make the bald statement that space has been available. That statement has been made many times. It is alleged that A. Simpson and Son Limited had articles already manufactured and crated, and had arranged shipping for such supplies urgently required in Queensland. However, inquiries which were made by Commonwealth officials as late as Saturday last indicated that the firm had no supplies whatever packed for the Queensland market. In fact, the only goods it had cased was a quantity of approximately 10 shipping tons intended for Launceston, which is within its permitted distribution zone. However, it has been ascertained that notwithstanding the controller’s order, A. Simpson and Son Limited, during March, 1944, shipped articles of the descriptions involved to the values shown -
Lt will therefore be seen that it is sheer humbug to claim that either that firm or its interstate customers have been inconvenienced by the operation of the order. On the contrary, in flagrant breach of the request received from the controller, the firm has shipped these large quantities of goods. It will therefore be seen how the reckless action of A. Simpson and Son Limited has defeated the objectives of the controller, and caused an unbalancing of stocks with consequent hardships to the citizens of South Australia. I am happy to state that this control, although only in existence for a few months, has won almost universal acceptance and support by the leading manufacturers in Australia. The only exceptions are A. Simpson and Son Limited and a few small firms which have been manufacturing non-durable and deleterious items, such as forks and spoons, the use of which would foe damaging to the health of the users.
In support of the claim of the South Australian firm to continue distribution in the eastern States, Senator Wilson stated that empty shipping space and rail freight is frequently available from South Australia. Admittedly that is occasionally the position, but I shall now show that for every ton of goods shipped from South Australia, another ton must be forwarded from the eastern States in order to balance the supply position. The statistics of the Department of Supply and Shipping show that during the twelve months ended the 31st December, 1943, a total of 3,033,115 pieces of hollow-ware was manufactured in Australia. Of. that quantity, only 442,500. pieces were made in South Australia and Western Australia. That represents slightly more than 14 per cent., which is less than the requirements of Western Australia calculated on a population basis. Inspections which have been made by the department indicate that A. Simpson and ‘Son Limited has been, and is still, holding very large stocks of various types of domestic utensils which are urgently needed by the citizens of Australia. The firm has apparently made very little effort to distribute these goods, notwithstanding the fact that it is known that it holds very substantial orders from customers in its own territory, which still remain unsatisfied. The firm’s reluctance to part with these goods has not been explained. It may be that it suits its own trade interests to do so. On the other hand, it is an indication that the firm is sadly lacking in appreciation of its responsibility to make available urgently needed supplies in the western parts of Australia.
I shall now deal with the publicity which has been given to this matter by the Premier of South Australia in the South Australian press. It is remarkable that the Premier of that State, and responsible officers like Mr. Wainwright, should have acted in such a reckless and irresponsible manner. They have shown no consideration to the citizens of South Australia. It apparently is a matter of little concern to them whether men, women and children in their State are denied the essentials of life; their main object is to protect the business and profits of vested interests. The Premier’s action is all the more remarkable when it is remembered that the main objectives of controls of distribution are to protect the welfare and interest of citizens in the smaller States. There is abundant evidence to prove that no control has been instituted unless the actual necessity for it has arisen. Furthermore, had the controls not been instituted, the supply position in the remote provincial towns and places far distant from large manufacturing ‘centres would have deteriorated into a very dangerous condition indeed. Honorable senators will not be deceived by Mr. Playford’s activities. He endeavours to appear as a stalwart of South Australia, but his true intent is to use a national emergency for his own political ends. In order to achieve his purpose, he is prepared to go even to the length of jeopardizing the whole supply position of Australia, and to sabotage the supply organization which has been built up carefully and painstakingly by the Commonwealth Government. He has even gone to the length of obtaining an opinion from the Crown Solicitor in that State, who has oast doubts upon the validity of various orders issued under the National Security Act.
– The Crown Solicitor of South Australia said that the action of the Commonwealth Government is illegal.
SenatorFRASER. - That may be. The honorable senator himself said last week that the Commonwealth had all the powers necessary to control industry; now he admits that that is not so. These controls are necessary not only to ensure an equitable distribution of these utensils, but also to safeguard the interests of the people. I have here a number of samples of various utensils which have been manufactured by Australian manufacturers and sold at high prices. I do not say that they were made by A. Simpson and Son Limited.
– Then why mention the matter?
– I mention it in order to show the need for control. A. Simpson and Son Limited is the only firm which has taken exception to the regulation, and that firm has broken the law.
– The Government is afraid to prosecute that firm.
– I exhibit to the Senate samples of spoons, forks and knives made by Australian manufacturers.Some of these spoons are priced at 16s. a dozen. Their poor quality is evident by the ease with which I can bend them.
– Who made them?
– They have not been manufactured by government controlled factories. They were manufactured in Sydney by private manufacturers. The fact that articles of such inferior quality as those which I have just shown to honorable senators are manufactured is proof of the necessity to control this trade. Not only are high prices being charged for these inferior articles, but the man-power and material used in their manufacture is wasted. I assure. Senator Wilson that if he can prove to me that A. Simpson and Son Limited has been discriminated against by the controller I shall investigate the matter.
.- The reply just made by the Minister for Health (SenatorFraser) is the most extraordinary I have yet heard given by a Minister in this chamber. In making his reply, he exhibitedmuch heat, but, in fact, he made a very plain, uninteresting, and, in some respects, an inaccurate statement. In order to show why A. Simpson and Son Limited should be controlled, he exhibited articles of inferior quality which he later admitted were not made by that firm. Thus he endeavoured to put out a smoke-screen in order to hide the real issue. The Minister ignored completely the one point at issue, namely, why, in setting up control of this industry, the Government appointed as controller a man who is vitally interested in the trade, and has been the most severe competitor of A. Simpson andSon Limited. Let me read what the controller can do to a rival firm under this order. Under clause 6 (c) he may - require a distributor to produce the books, accounts, and documents relating to his trade or business to such person as is specified in the notice.
– The controller is always under the direction of the Minister.
– Under clause 6 (d) the controller may - require a distributor to furnish at any time in such manner and to such ‘persons as are specified in the notice such estimates or returnsor information relating to the manufacture or distribution of utensils as are specified in the notice.
And under clause 6 (2) the controller - with a view to securing compliance with this order . . . may enter and inspect any premises of a distributor and make copies of or take extracts from the books, accounts and documents of the distributor.
Just imagine the controller being able to do that to a competitor ! Our sole complaint against this order is that when the Government decided to control the industry it failed to seek advice from people who know something about the industry. For instance, the Government could have asked the Associated Chambers of Manufacturers to nominate a panel of suitable men from whom a controller could have been appointed. However, it appointed as controller a man who is absolutely distrusted throughout the trade. They appointed a Mr. Keysor, who is manager of Metters Limited, a direct competitor of A. Simpson and Son Limited. I should like to know why the biggest competitor in the trade should be set over firms like A. Simpson and Son Limited with absolute control over them, and placed in a position to obtain the secrets and methods of manufacture of competitors to be used ‘for his own particular benefit. If that is fair play, I have never heard of fair play. Et is abhorrent to every sense of decency. Last week, the ‘ Minister made a great noise about all the States forming’ one nation, and fighting as one nation; but to-day he is attempting to set one State against another. Today he preaches statesmanship, and tomorrow he preaches parochialism. I do not know this man Keysor, but from inquiries I have made, I learn that manufacturers in the trade regard him as the last man who should be given a job of this kind. They say that he is notorious for being always out to help himself, and will undoubtedly use any information he might obtain as controller for his own benefit. “What is the cause of all this antagonism? It goes back to 193S when a case concerning the trade was before the Arbitration Court. Mr. Keysor asked to be shown through the factory of A. Simpson and Son Limited, but was refused on the ground that a similar courtesy had been refused to the representative of A. Simpson and Son Limited when tlie latter was on a visit to Sydney. A. Simpson and Son Limited refused Mr. Keysor’s request to be allowed- to go through its factory, and, in view of his reputation in the trade, I do not blame it for that. But he has carried this grudge in his mind, and, at the first opportunity which has been given to him by this Government by his appointment as controller under this order, he has endeavoured to “get one back” on A.
Simpson and Son Limited. As controller, he is empowered to g6 through a competitor’s business, and call for formulas and distributing cards, thus being able to find out who are the customers of his competitors. Thus he will be in a position to leave A. Simpson and Son Limited and other competitors waiting on the doorstep when the war is over. When I find a Minister attempting to justify an appointment of this kind, I despair of seeing fair play in Parliament, particularly when the Minister endeavours to cloud the real issue with a heated cry of. patriotism. I am astounded that any responsible Minister would attempt to justify the appointment over these firms of a man who is their most virulent competitor, and whom they have been fighting in the trade for years. I repeat that. this position has arisen simply because the Minister did not consult an unbiased body like the Associated Chamber of Manufactures, and ask it to nominate a panel of men from whom the Government could have selected a controller. I do not know this man Keysor; I only know his reputation, what he has done, and what the other manufacturers think of him. If the facts in this case, as put before the Senate by Senator Wilson and others are proved, I can assure honorable senators that other manufacturers will be shaking in their shoes, because they know exactly what is likely to happen. The Minister for Health said that no embargo has been placed on A. Simpson and Son Limited manufacturing as much as it liked. That is the funniest remark I have ever heard. It means that that firm can manufacture hundreds of thousands of pounds’ worth of goods, and the only restriction placed on it is that it cannot sell them. That is one of the main reasons given by the Minister to justify the order. It does not matter if A. Simpson and Son Limited wastes material or man-power, it can go to the limit, but it has no right to sell the goods. I hesitate to put much reliance on any brief read by a Minister who exhibits such abysmal ignorance of the manner in which manufacturing businesses are conducted. Even if he read it exactly as it is typed, I would fear that he would read it from the wrong angle. This matter goes much deeper than a complaint by A. Simpson and Son Limited or any other firm. It strikes at the root of fair play in business. Had the Government appointed a civil servant who knew nothing about business at all, I would have accepted the appointment, because the man would at least have been impartial and have given every one fair treatment. Even though he did not know much about trade, he would have been able to obtain the necessary statistics, and decide where different articles were needed. He probably would have done the job satisfactorily, but when the Government appoints as controller the most virulent competitor that a firm has, and allows Lim to ride roughshod over all others in the trade, placing him in such a position that he can use hi3 power for the benefit of himself and his own firm, the whole procedure is scandalous, and the appointment should be cancelled. The Minister should be ashamed to support a system that makes such things possible.
– I am most concerned with the effect that the order has upon the already short supply of kitchenware in Queensland. I do not know the firm of A. Simpson and Son Limited of Adelaide, but I am sure that one of the oldest manufacturers in South Australia is most careful what goods it makes, and very jealous of the good name it has won throughout the trade in Australia. The firm has been manufacturing the goods for many years past, and has reached a high standard of efficiency. Tt has been recognized by the Government as an essential industry, because it has been able to carry on during the war years. Queensland traders have been dealing with the firm for many years. I cannot say for how long, but I do know that Gradwell Brothers, of Edward-street, Brisbane, are its agents in Queensland, and I know from my own personal observation that there is a grave shortage of the wares which the firm produces in that State. Anything that can be done to give a better supply to the people of Queensland is well worth doing. The Minister said that no supplies were packed for Queensland. I quote a letter received from Gradwell
Brothers by A. Simpson and Son Limited. On the 17th March, 1944, an article appeared in the Brisbane Courier-Mail relating to the control of the distribution of hollow-ware manufactured by A. Simpson and Son Limited and expressing the indignation caused throughout the trade in Queensland. The letter stated : -
The disclosure of the facts as set out there lias had a staggering effect on all concerned in this State. The gross injustices of such dictatorial action not only as regards yourselves, but also tlie crying needs of the Queensland people have, we have ample and widespread evidence, very deeply stirred those concerned.
We can truthfully say that not in our long experience have we known traders especially to express such indignant protest or to be more incensed.
It is spontaneous and wholehearted, and they gratuitously offer their warm support to any action we may suggest to counter what is felt to be a gross injustice and a callous disregard of Queenslanders’ vital and essential needs when they are labouring under the most difficult and trying conditions by the lack of essential lines, some valuable relief from which was being obtained from you.
As a result of representation made to the War Organization of Industry, we were asked to wait on them, and at the interview we established that this State has relied in a very great measure for its relief from disabilities on the supplies from you, which it iB proposed, at Queensland’s expense, to ban.
Evidently Gradwell Brothers had ‘been supplied with kitchenware by A. Simpson and Son Limited for some years -
We were asked to obtain from you (A. Simpson and Son Limited) the money value of what goods you were prepared to ship here against orders already placed in periods of two, four and six weeks, as a means of supporting this department’s case for supplies to be continued. We suggested this would prove impossible for you, but at their request we wired you as per the copy of our telegram which wo now confirm - “Please accept our thanks for your telegraphed reply. We conveyed this to the department as reading, ‘ Goods shipped this year value approximately four thousand pounds. Twenty tons shiipped recently. Conditions continually changing. Sending all goods can spare ‘ “.
Probably an item of £4,000 for the first three months of the year is not very big, but it assists Queensland, which is so short of these goods.
– It was £4,000 worth in three months.
– Seventy-two fryingpans in the month of March!
– I have quoted figures from the (firm showing .that approximately £4,000 worth of kitchenware had been sent this year to Queensland, irrespective of what had been shipped to other States. A. .Simpson and Son Limited is an old-established firm with an excellent reputation, and would not send inaccurate figures to its Queensland agent. The controller ordered the export of utensils from South Australia to cease. I agree with Senator Leckie that the Government made a grave error, and left itself open to a great deal of criticism, when it appointed as controller a director of a rival firm.
– A- government of which the honorable senator was a member appointed Mr. Essington Lewis Director-General of Munitions.
– That is an entirely different matter. Mr. Essington Lewis was appointed to increase the output of munitions; in this instance, a controller has been appointed to regulate the disposal of goods, who is a member of a firm interested in the industry concerned. No greater mistake could be made by any government than to appoint to an important position such as this, a person who, to say the least of it, cannot be regarded as impartial. Such appointments cannot fail to be subjected to severe criticism. One of the reasons given for the restrictions placed upon the export of these goods from South Australia to the eastern States is the shortage of transport. However, that has been contradicted by the Auditor-General of South Australia, who stated that shipping and railway space were available, and that claim has not been denied by the Minister. If transport facilities for these commodities can be provided, I contend that Queensland, which has a greatly increased population because of its proximity to operational areas, should be given the first consideration. It is an understatement to say that kitchen utensils are scarce in Queensland; they are virtually unobtainable, and the Government should take every possible action to ensure that supplies shall be forwarded as soon as possible. There are in Queensland many returned soldiers and civilians who have been married recently, and have found it almost impossible to set up a home hecause of the lack of kitchen utensils. Only a few months ago I brought to the notice of the Government an auction sale of lost property by the Queensland railway authorities at which a set of five enamel saucepans were sold for £8 6s. That will give some idea of the problem.
– Why did not the honorable senator bring that to the notice of the authorities?
– I brought it to the notice of the Minister for Trade and Customs (Senator Keane) himself, and supplied him with the newspaper cutting from which I quoted. The action by the controller to prevent the transport of hollow-ware from South Australia to Queensland has made the position even worse. Many Queensland firms have large quantities of these goods on order, but they are not coming forward, and 1 urge that the restrictions be lifted immediately. Frequently, mistakes which are made in administration are excused by war conditions; but I contend that this matter should be investigated thoroughly, to ensure that the present state of affairs shall not recur. The matter should not be brushed aside by the bland statement that war conditions preclude this or that being done.
There is one other aspect of this matter to which I shall refer, and that is the manner in which kitchen-ware is di,tributed in Queensland. The Prices Commissioner permits warehouses to charge only a small percentage of profit upon case lots, which means that only the large firms, situated mainly in the cities and large towns, are able to purchase supplies. I contend that provision should be made for the breaking up of these case lots so that they can be distributed to small traders, particularly in country districts. I can assure the Minister that the [present practice constitutes a real disadvantage to people living in outback areas and prevents an equitable distribution throughout the State of the small quantities of these goods that are available.
– Large supplies have been diverted to Queensland.
-That may be so, but I emphasize that the population of Queensland has increased considerably and that there is still a grave shortage of kitchen utensils. If the Minister would undertake to investigate this matter, I assure him that he would be doing a real service to the people of Queensland. A small percentage of extra profit should be allowed on broken case lots so that all the trade in these commodities will not be confined to the big firms.
SenatorMcBRIDE (South Australia) [4.39]. - I am sure that it is not the desire of any honorable senator to interfere with the proper administration of any essential war-time control. Indeed, as a member of a previous government, I have some appreciation of the difficulties which face any administration under the conditions which exist to-day. Consequently, it is not with the object of hampering the Government that I support the motion by Senator Wilson to disallow this order. Indeed, I believe that no action would have been taken had the case under consideration not been so flagrant, cutting as it does across principles which should be observed by governments at all times. The case presented by Senator Wilson was not answered by the Minister (Senator Eraser) ; he did not even attempt to reply to it. Having a poor case, he tried to cloud the issue by displaying great fervour, and whenever he got into difficulties he provided a smoke-screen in order to conceal the weakness of his case. The allegations in respect of the. order did not originate from the Premier of South Australia or from honorable senators on this side of the chamber, but from a public servant who knows no politics, and whose duty is to control and assist industry in South Australia. Mr. Wainwright made this definite statement in a letter to Mr. Walker-
Empty shipping and rail space is available every week from South Australia to Victoria, which fact is persistently ignored by many of those eastern-minded controllers, and also occasionally by the Department of War Organization of Industry.
The Minister did not attempt to refute that statement.
SenatorFraser. - I showed that an investigation had been made.
– The Minister failed miserably in the effort. Mr. Wainwright further said -
The main purpose of some of these controllers is to seize the opportunity for shutting South Australian manufacturers out of the whole of the New South Wales and Queensland markets, which is about four-fifths of the Australian market, and in this case the attempt is to shut South Australia outof all markets but South Australia.
That was the effect of the original order. It will be agreed that the Minister did not attempt to reply to that allegation, but tried to mislead the Senate by sending out a smoke-screen. He had the audacity to bring into the chamber certain exhibits showing that the control which is exercised by the Government in certain directions, and particularly where it applies to New South Wales, is totally ineffective. The Minister talked about waste of material and man-power. He showed that the administration of the present Government is so defective that material and man-power are wasted, and to cap his statement he now says in effect to Queensland : “ We shall not allow the good quality articles from South Australia to go to Queensland, but we shall send to you some of the inferior articles whichwe are exhibiting here from New South Wales”. The Minister raised another smoke-screen when he alleged that members of the Opposition had said, during the debate in this chamber last week, that the Government had full power. I draw attention to the fact that the section of the Constitution which relates to interstate trade was not referred to when the powers of this Parliament with regard to post-war reconstruction were under discussion. The powers which the people will be asked by referendum to confer on this Parliament do not affect section 92 of the Constitution, yet the Minister has suggested to the Senate that members of the Opposition tried to mislead it by saying that, although the Government had full powers, it should not use the powers it already had. The Minister endeavoured to confuse the issue. The fact is that in time of war certain control is necessary, and obviously that restricts to a degree normal trading practices. We have heard a good deal from the Government about its planning for the post-war period,but, if those plans are as illconceived as its plans for the control of production in war-time, the people of this country are faced with a serious prospect. The Government was entitled to organize the nation for war to the best of its ability, and at a certain period the urgency of the matter was great. Therefore, industries essential to the civil life of the community either had to be closed down, or suffer a reduction of output. But that grave position has now passed. In certain directions, war-time requirements have been satisfied. Some workers have been transferred from the production of munitions to the production of civilian goods. In the United States of America, where no request has been made for increased powers for the central authority, certain machinery and manpower are already being diverted from war production to civil production, and in Australia the time is rapidly coming when similar action will be possible here on a considerable scale. The Government should recognize that the people of this country are short of certain goods which under present circumstances should be supplied to them. If this action on the part of the Government is a fair example of its use of power, the order now under consideration should be disallowed, because, instead of improving an already difficult position, it is preventing the supply of goods to places where they are really needed. The Minister endeavoured to create a smokescreen when he said that there was a shortage of these articles in South Australia. I have no doubt that that is so, but I suggest that the shortage in that State is not as great as in Queensland. If South Australia is to be given its full requirements of these goods, obviously the other States will be in short supply unless production is substantially increased.
SenatorNash. - It may be that a better price is obtainable for these goods in Queensland than in South Australia.
– Evidently Senator Nash is as suspicious of the Government’s administration as I am. He should know that there is a Commonwealth Prices Commissioner who, I have no doubt, takes notice of the conditions existing in all States and fixes prices accordingly. I hope that some other Minister will endeavour to answer some of the allegations andcomplaints that have been voiced in this chamber.
– They were all answered.
– The contribution of the Minister for Health did not answer any of the allegations. Unless a better case can be presented for what has been done, I intend to vote for the disallowance of this order.
– There emerges from this discussion considerable evidence of ministerial blundering. The Government professes to believe in the decentralization of industry, but here we have a most flagrant case of an attempt on its part to injure an industry which has been established in one of the less populous States. It behoves those of us who represent those States, which are clamouring to have industries established within their boundaries, to take notice of what has happened in this instance. I do not question the power of the Government to do what it has done. On the contrary, I maintain that it has that power. Nor do I question the propriety of taking action to control the war effort of this country. But I do question the judgment of the Government in this matter. Indeed, I charge the Government with the utmost stupidity in the method it has adopted to implement that control. The facts placed before us by Senator Wilson can lead to only one conclusion, namely, that the controller who has been appointed desires to inflict some injury upon A. Simpson and Son Limited, of South Australia. As Senator Leckie put it, the Government could not have achieved its object more effectively had it set out deliberately to injure that firm. Senator Wilson pointed out that 25 per cent. of the trade of A. Simpson and Son Limited is with the other States. That firm, and the firm from which a highly placed officer was taken to act as controller under this order, share between them most of the Australian trade in these articles. I do not know the man appointed to the position of controller, but the fact that he was a director of a firm which is the chief competitor of A. Simpson and Son
Limited, and has been given power to inquire into the secret workings of a competitor, is a” most stupid blunder.
– The Government of which the honorable senator was a Minister followed the same policy.
– That is not so. However, at the moment I am not concerned with the policy of previous governments. I have never heard of a more flagrant abuse of power than has occurred under this order. It is a sample of the bureaucratic control which is running riot in this country to the detriment of trade and industry,, and will ultimately result in the undoing of any government which supports it. Let us see what has happened. The gentleman who has been appointed to the position of controller desires to survey the work of his firm’s opponents in trade. As Senator Wilson pointed out, he may inquire into the most secret processes of Ids competitors; he may ascertain their working costs, and gain valuable information to use against them. He has prohibited the South Australian firm from taking advantage of the opportunity to trade in Queensland and other eastern States; he has done so notwithstanding that ample transport facilities were available to convey its goods to those States. It is idle for the Minister to say that the South Australian firm ha3 not been prohibited from manufacturing goods. Does the Minister think that a firm manufactures articles merely to look at them? A. Simpson and Son Limited employs about 1,000 persons in its Adelaide factory, and is therefore entitled to consideration. Had that firm been in business in Sydney instead of in Adelaide, this matter would not have arisen. A. Simpson and Son Limited has been in existence about 80 years, and in order to keep its methods up to date it has from time to time sent men oversens to learn of the latest processes. I was glad to hear the Minister repudiate the suggestion that the products of this firm were shoddy; A. Simpson and Son Limited has a reputation for turning out reliable products. Nor did the Minister contradict the statement that ample rail and sea transport was available to enable the product of this firm to be sent to the eastern States. Mr.
Wainwright is not a person prejudiced in favour of A. Simpson and Son Limited and he had nothing to gain by saying that facilities existed to enable the output of its South Australian factory to be sent to the other States. At one stage the Government did permit that firm to send its products to Broken IH11. We can imagine the state of mind of these firms when they find that the man placed in control of their destinies is engaged in the same branch of manufacture as themselves. They cannot be happy about such a position. Is that justice, or what we ought to expect in a British community? The Government is guilty of a grave administrative blunder in making this appointment. I know nothing about the appointee; but what must be the public reaction in South Australia to the appointment of this man, who, as Senator Wilson has pointed out, is vested with dictatorial powers. The business of A. Simpson and Son Limited was mainly export, and, therefore, the action taken against it imperils its very, future. That firm has extended its business from South Australia to each of the other States since its inception over 80 years ago. That trade is now to be taken from it on the excuse that shipping space is not available. But that reason is groundless. The Minister did not, attempt to show that shipping space is not available. The least the Minister might have done was either to agree to some modification of the powers now vested in this controller, or to promise to exercise a’ degree of vigilance over a man possessing such wide powers. This case is a warning which, I ‘ suggest, should be taken to heart by every industry in this country. We have witnessed similar administrative action with respect to the marketing of apples in the various States. For the last two or three years the people of this country have been paying excessively high prices for apples, notwithstanding the fact that the price of apples has been fixed by the Prices Commissioner. At the same time we have witnessed a wastage of apples which is a disgrace to any country. I admit that a similar position existed in the apple industry under previous administrations. The cause for the present position is not difficult to find. Markets have been controlled. But, as Senator McBride has pointed out, we have now reached a stage when the existing restrictions should be eased, and such States as Queensland and Western Australia permitted to obtain their supplies of apples from whatever source they desire. I repeat that the administration of the industry now under consideration is an absolute reflection upon the Government, and an absolute condemnation of the bureaucratic methods which are becoming too pronounced in this country.
– Whom would the honorable senator appoint as controller of this industry?
– I should select an independent man with an independent mind, and a man who is known, at least, for his honesty of purpose. Certainly, I should not appoint a competitor in the trade. Control of exports of any commodities is distinct from control of manufacture, notwithstanding the fact that the Minister attempted to draw a red-herring across the trail in this instance. He said that no embargo has been placed on production, and that action has been taken solely to control the transport of these articles. We fail to see the reason for such action in view of the fact that adequate shipping and rail space is available for the transport of articles of this kind from one State to another. This appointment assumes «. sinister aspect when we bear in mind all the facts which Senator Wilson has recited. Therefore, I trust that the Government will take the earliest opportunity to remedy this matter. Otherwise, there will be litigation, because I do not think that British law will ever permit such a flagrant act of injustice as is constituted by the appointment of this man as controller of this industry.
– I agree with Senator McBride that it would be of the greatest value to the Senate if some Minister would explain exactly the position in this matter. We have had a speech from the Minister for Health (Senator Fraser), but he did not touch upon the issue now before us. He endeavoured to show that it was necessary in the interests of the community to control the manufacture and distribution of these goods. We recognize that, under war conditions, such control is necessary; but the pointwe emphasize is that under this order the man who has been appointed controller of this industry is one of the main competitors in the trade. In addition, the order prescribes -
The Controller may in his absolute discretion remove or suspend a manufacturer from the registry and cancel or suspend his certificate of registration.
On and after the first day of February, 1944, a manufacturer shall not manufacture or produce utensils unless he is the holder of a certificate of registration issued by the Controller under this order.
Those powers are very wide indeed.
– Yes ; but before he destroys the businesses of his competitors he can inspect their books and accounts and lists of customers, and use that information for his own benefit. As has been pointed out, A. Simpson and Son Limited has been in business in South Australia for the last 80 years, and enjoys an unblemished reputation. It has established a trade in every State. If that trade is now taken from it it will have to rebuild it after the war, at which stage we can rest assured that the firm with which the controller is associated will be at a great advantage. We have been told that A. Simpson and Son Limited has not been allowed to export goods to the eastern States. At first, it was allowed to send goods to Western Australia and to supply the South Australian market. After some consideration it was allowed to have the Broken Hill, and Tasmanian trade. The fact that the firm is allowed to export goods to Tasmania absolutely destroys the contention that it is not to be allowed to send goods to Victoria because of the shortage of transport. That excuse has simply been advanced in order to bolster up this order. I understand that regulations and orders issued under the National Security Act ought to have some relation to the war. I doubt whether this order could bo connected with the war in any way. It is quite irregular for the Government, in issuing regulations, to run counter to the provisions of the Constitution, and every honorable senator knows that according to section 92 trade between the States must be absolutely free. This order imposes a very great restraint on trade. The Minister for Health made a sorry exhibition this afternoon by bringing down a few spoons and ‘knives of inferior quality which at first he would have liked the Senate to believe were manufactured by A. Simpson and Son Limited, but he afterwards admitted that they were manufactured in Sydney. These inferior articles did not support arguments in favour of the order, even though the Minister told the Senate that they were being sold at very high prices. I was under the impression that the Prices Commissioner had control of prices in Australia. If those shoddy articles were being sold at exorbitant prices, it was the duty of the Government to ask the Prices Commissioner what he was doing about it, because it would probably be his fault as rauch as that of the makers. Our objection is not to the control of manufacture and distribution of hollow-ware, but to handing over control to a competitor and rival in the trade. Metters Limited, of which the controller is a director, and A. Simpson and Son Limited, of Adelaide, are probably the largest suppliers of this class of goods in Australia; to place the director of one firm in control of the other is unfair and unjust. I do not think that any honorable senator can justify the action that has been taken.
– The reply of the Minister for Health (Senator Fraser) was very unsatisfactory, because it did not answer the points raised by Senator “Wilson. I should like to emphasize one or two points made in the debate, and to put a new point to the Government for its consideration. The Minister for Health overlooked the fact emphasized by Senators Wilson and McBride that the man who made the adverse report on the controller’s order was Mr. Wainwright, the AuditorGeneral of South Australia, who was acting for the Commonwealth, and that Mr. Wainwright is a civil servant of considerable ability. In reply to a letter from
Dr. Walker, representing the Department of Supply and Shipping, he wrote, on the 11th March, that Dr. Walker had “given standard reasons, but analysis showed that they were not valid “. That is a statement made by the Commonwealth’s own officer. He also said that if Mr. Keysor’s reasons for prohibiting export were shortages of transport, including transport to Western Australia, the fact showed that there was empty shipping and empty rail space available almost every week from South Australia to Victoria, and there appeared to be no difficulties in any goods arriving from South Australia going on to New South Wales. I particularly draw the attention of the Leader of the Senate (Senator Keane) to that point. It is also stated that the secretary of A. Simpson and Son Limited, Mr. W. C. Loan, said that one of the developments of the position was that kitchen-ware urgently needed in Queensland could not be despatched. Requirements at such horder towns as Broken Hill, Mildura, Kalgoorlie, Apsley, Horsham and Kaniva were also held up. The decision could not have been made on the question of transport, for those places were better served from Adelaide. That is an important feature to be remembered in connexion with this order. I do not wish to say anything against Mr. Keysor personally, but I agree that the Government made a bad appointment when it placed a trade competitor in such an important position, and on the facts Mr. Keysor made a very bad decision when, in the early stages, he prohibited an Adelaide firm, for transport .reasons, from sending goods to Broken Hill. That was evidence that he was either biased against the firm or failed to appreciate the fact that, having regard to its geographical position’, Broken Hill was better served, in the matter of transport from South Australia than from anywhere else in the Commonwealth, and that what applied to Broken Hill also applied to Horsham, Kaniva and other towns just over the border of Victoria. I understand that, on reflection, Mr. Keysor changed his order, and allowed A. Simpson and Son Limited to supply Broken Hill and Tasmania. That is strong proof that his first order should not have been issued. As the order now remains it is still not very satisfactory, because certain -border towns in Victoria, which have been supplied by A. Simpson and Son Limited for a number of years are no longer allowed to receive goods from it. In my opinion, they are so situated geographically that the firm which has been supplying them for so long ought to be allowed to continue to supply thora.
Reference has been made to the debate on the Constitution Alteration (Post-war Reconstruction and . Democratic Rights) Bill, but the fact remains that the High Court has ruled on a number of occasions that certain regulations issued by the Government have no relation whatever to . the war. Some have been gazetted merely for political reasons. As I have mentioned previously in this chamber, most of them are scrutinized by the Attorney-General. It is becoming very alarming to find what a large percentage have been declared invalid by the High Court and, according to the judges, have nothing to do with the war effort. The Leader of the Senate should ask the Government to consider the legality of this order, seeing that the Solicitor-General of South Australia contends that it is invalid. “When we hear so much about the new order, we are reminded of what has been written about the new despotism, and about the tyrannical treatment of citizens by departmental officials, clothed with certain authority and resident “ as far away as Canberra “. It is a 3hame that, when the legality of regulations, arises, Ministers say openly to the people: “If you are not satisfied, you can test the matter in the High Court “. The taxpayers of Australia are put to considerable expense to test a. case in the High Court, whereas the Government and the civil servants concerned- can. sit back, and use- the same taxpayers’ money to put their own side to the court. The time has- come when the Government should give greater consideration, to the legality of regulations and orders than evidently has been given during the last two or. three years.
I am amazed to find that, although we have an. ex-High Court, judge as Attorney.-General of the Commonwealth, regulations and orders are so badly drawn, that many have already been declared invalid. Mr. Hannan, K.C., Crown Solicitor of South Australia, who is recognized as a very able constitutional lawyer, has publicly given his legal opinion of this order in a letter to the Premier of that State. This is set out in the following article which appeared in the Adelaide News of Tuesday, the 23 st March last: -
Orders banning interstate transport of- commodities produced in South Australia are invalid because the Commonwealth’s defence powers are subject to section 92 of the Constitution (free trade between the States), according to a legal opinion obtained by the Premier (Mr. Playford) from the Crown Solicitor (Mr. Hannan, K.C.).
Mr. Hannan’s opinion was given on the export ban on hollow-ware under the National Security Act.
He said the first question was whether the Utensils (Miscellaneous) Order was valid under tlie National Security (General) Regulations.
The High Court would consider whether any reasonable person could possibly believe Oic* it was essential to the defence of the Commonwealth that the manufacture and distribution of new cups and saucers, knives and forks, tin and enamel pots and pans, Sat., should be controlled as set out in the order, or at all. Recent cases showed the court did not feel bound hy such recitals, but would examine the particular act, regulation, or order for itself. “ My opinion is that the Utensils (Miscellaneous) Order is not in substance a law with respect to the public safety and the defence of the Commonwealth, for if no such order had been made, the public safety and the defence of the Commonwealth could not possibly have been prejudiced or worsened in any way for the lack of it,” Mr. Hannan said. “ There is nothing in the order to- suggest that it is designed to increase the supply of the utensils specified for the use of the defence forces or even for civilians. I am therefore of opinion that the High Court would hold that the order is not a valid exercise of the defence power ‘, and is’ invalid:
Assuming, however,, that the High Court does not accept this view, but holds the order constitutional, the further question remains: Is the direction given by the Controller to A. M. Simpson and Sons Limited (the firm concerned-)- a valid direction-?
My opinion is- that the High. Court would hold that the direction prohibiting the firm from delivering hollow-ware outside South Austrafia’ is’ invalid as being in conflict with section. 92 of. the- Commonwealth Constitution, which declares that trade’ and commerce between the States should be absolutely free.
Assuming the High Court did hold that the Utensils (Miscellaneous) Order is made in genuine exercise of the1 defence power of the
Commonwealth, my opinion is that the High Court would hold the direction given’ under it to be invalid because it interferes with interstate trade, for it is well settled that the defence power ‘ of the Commonwealth is subject to the other provisions of the Constitution, including section 92 “.
That is the only new aspect of this matter which I wish to bring to the notice of the Government. I am certain that any self-respecting firm which sought to establish its legal rights by upsetting this order could do so. We have been sent ‘here to make laws for the peace, order, and good government of this country, and the Attorney-General’s Department should make doubly sure that orders such as this are valid before issuing them. I suggest that the Minister give close attention to this matter. I agree with honorable senators that the appointment of Mr. Keysor was wrong. If the Minister were not so stubborn he would, agree to the disallowance of this order.
Senator HERBERT HAYS (Tasmania) 5. 2-3]. - This order vitally affects South Australia and also it raises the whole question of government interference and meddling with industries, which is causing widespread concern throughout the Commonwealth. It was only natural to expect that in defending the Government’s action honorable senators opposite would have given some substantial reasons relating to war-time conditions for issuing this order, the effect of which might well be to destroy the business of this South Australian firm completely; but they have not done so. The firm has built up a large connexion through distributing firms in all parts of the Commonwealth, and the result of this order may cause irreparable injury to it. It must be remembered that these goods were in short supply all over Australia long before this order was issued. One can imagine action such as this being taken perhaps two years ago, when transport difficulties were acute. To-day, it may have far-reaching and prejudicial effects upon this organization. The Government has appointed to a position of supreme control over the industry a director of a firm actively engaged in that industry, and in keen competition with the South Australian firm which is most injured by this order. I am sure that the case has no parallel throughout all the controls that have been set up in Australia during this war. The obvious course to adopt was to appoint an impartial public servant, preferably an officer of the Department of Trade and Customs, to examine the whole position, and advise the Government whether or not control was necessary. The only real reason that has been given for the issuing of the order is lack of transport, and, in my opinion, it is high time that the Government ceased meddling and interfering with industries such as this.
– That is right; let them have an “ open go “. Never mind the war effort.
– I throw that suggestion back to the Minister for Trade and Customs (Senator Keane). I shall not permit him to twist my words in that way. This business has no relation whatever to the war effort. The Minister knows quite well that there was a definite shortage of this type of goods long before this order was issued. The Government has succeeded only in. disrupting the industry. When the order was first issued, Tasmania, which previously had been receiving fairly regular supplies., was completely cut off from the South Australian manufacturers. The original order has been amended since to include Tasmania, but in the meantime these goods have been practically unobtainable in that State. Why has this industry been singled out for special treatment when the number of employees engaged in it is somewhat limited. The Government could have permitted the industry to continue without restriction, as it has no relation to the war effort. I challenge the Minister for Trade and Customs to show that anything which I have said may be construed as indicating that I wanted “ an open go “ without regard to war requirements. I have said no such thing. No such inference could be fairly drawn from my remarks. The controller is placed in such a position that he can obtain knowledge of the business secrets of a firm which is a rival of that with which he himself is associated. I shall not have it said that I have contended that there should be no control of industry, but I take exception to an act of injustice on the part of the Government. The only justification offered by the Minister for the action that has been taken is his allegation that the Opposition wants a “free go” for everybody, as though there is not a war in progress. Members of the Opposition have shown clearly by their actions that that insinuation is utterly unwarranted.
.- The attitude of the Government to this and other matters appears to be that, because of the war, it is entitled to impose any kind of injustice that it thinks fit on anybody in the community. The Minister (Senator Fraser) sought to justify the wide powers vested in the controller by his statement that inferior articles were being produced in New South “Wales. If that was the complaint of the Government, surely the proper way to deal with it was to take action against the companies that were producing inferior articles, hut instead of doing that the control of the industry was placed in the hands of a director of a company which is a rival in business of the South Australian company, which is recognized on all hands as being above reproach. That company is not concerned at all in the production of inferior articles, because everybody admits that it produces goods of the kind required to meet the needs of the community. I can understand the matter being approached from the point of view of the necessity to suppress an evil which the Minister said existed, but unfortunately, this Government has a passion for control-
– And for bungling.
– Quite so. In this case it does not limit the control to the degree necessary to deal with the evil, but it takes the whole of the activities of the business within the purview of the order. The industry is placed under the control of one of the men who happen to be in charge of one of the companies in question. Such action is unjustified. Far from encouraging the production of the superior article which is manufactured by the firm in South Australia, the controller proceeds to act in such a way as to discourage the production of that article. The Minister says. “ We are not interfering with production by the South Australian firm. We want production ‘” At the same time, however, the Government proceeds to deprive the firm in South Australia of part of the market which it has been supplying. The result, of that action must be to discourage the production of articles of which the Minister says there is1 an urgent need and to encourage the production of some of the inferior articles, samples of which the Minister has exhibited this afternoon. What reason can the Minister have for saying to the firm in South Australia, which is prepared to meet the needs of that State and also provide a surplus for export to other States-
– It has not a surplus for export.
– It seems that the firm was exporting from 20 to 25 per cent, of its production until this order was made; therefore, it would be true in substance to say that it meets the needs of South Australia, and that from 20 to 25 per cent, of its production is available for export to other States.
– That is incorrect.
– If no surplus is available, I am surprised that the controller should allow the firm to send some of its goods to Tasmania. Why should it, not be restricted to the local market? The policy of the Government seems to be that the firm may not export until the local market has been satisfied. There must be a surplus because the firm is allowed to export goods to Western Australia and Tasmania.
– Would the honorable senator agree to 100 per cent, of that firm’s production being distributed in South Australia, with the result that Western Australia and Tasmania would have to go without?
– Of course not. For many years this South Australian firm has supplied goods to other States where there has been a demand for articles of high quality. The Minister has told us that in order to suppress the production of inferior articles in New South Wales it has been found necessary to place the whole of this class of business under control, and to restrict the production of a firm which is supplying articles of superior quality.
– That is only one reason.
– The Minister claims that it is a good reason, but it is not a reason at all. The only other reason mentioned by him was that inferior articles are being sold at excessive prices. I point out that these things are happening in a State in which there is a Labour government, and in which the Commonwealth Prices Commissioner exercises a control over prices. It would appear that where there is complete Labour control by both theState and the Commonwealth abuses such as have arisen in New South Wales may be expected. Ample power is vested in the Government of New South Wales, as well as in the. Commonwealth Government, to prevent the production of inferior articles and to control prices. That, however, does not’ satisfy the Minister; he wants to seize upon this opportunity to obtain control of this industry, as of others, and then to vestthat control in a man who is directly interested in this class of business. To ray mind, that is the worst feature of this order. When this point was mentioned earlier in the debateby Senator A. J. McLachlan, the Leader of the Senate interjected : “ Whom would the honorable senator appoint? “ My answer is that the last person I would appoint is the man who has been appointed. To place in control of an industry a rival of one of the most important manufacturers of these utensils in Australia seems to me to be the worst kind of appointment possible.
– He is only the chairman.
– No; he is the controller. It is true that there is also an advisory committee, but the power rests with the controller. This action has been taken by a Government which seeks to control trusts, combines and monopolies. Can honorable senators imagine anything more likely to lead to the development of monopoly conditions inthis trade inAustralia than to take one of the main operators in the business and to give to him complete control? For that reason, as well as others, I claim that this is a thoroughly had order. At the moment I am not concerned with the legal aspect ; I am dealing with an abuse of power by the Government. It is not sufficient to say that the Government has the power to do these things, because immediately one is led to ask that further question: “Has that power been properly exercised ? “ This is a clear illustration of an abuse of power by the Government. It has so little sense of responsibility that it does not stop to consider whether in the exercise of power it acts properly.
.- The object of this order is clearly set out in the preamble which reads -
Whereas it appears to me, John Albert Beasley, Minister of State for Supply and Shipping, that utensils are articles for the defence of the Commonwealth and the efficient prosecution of the war and to the life of the community and that it is necessary in the interests of the efficient prosecution of the war and for maintaining supplies and services essential to the life of the community to make the following Order: -
The Minister for Health (Senator Fraser) showed that certain inferior utensils had been made in New South Wales. He also said that the main reason for this order was a shortage of materials and the difficulty of distributing the manufactured articles as between the services and civilians. I think that we can agree that those reasons exist. Accordingly, a Controller of Utensils and Appliances was appointed. I am amazed at the attack made on him. I did not know of Mr. Keysor until this debate began, but he deserves every credit for giving to the Government the benefit of his skilled advice. He is one of a number of men who are rendering valuable service in that way. I have never heard anything which would suggest that Mr. Keysor is other than an honest man, and for any honorable senator under cover of parliamentary privilege to say what Senator Leckie said thisafternoon is unfair.
– What Senator Leckie said is nothing to compare about what the Minister for Trade and Customs said about the judiciary a few days ago.
– What I have said about the judiciary I have said outside the Parliament as well as in this chamber, and I shall say it again. Is it suggested that the controller would allow wrongful actions to go unchecked? I remind the Senate that he will have the benefit of the advice of the members of the Advisory Committee, which is constituted as follows: - Knives - Mr. J. McFarlane, of the Diamond Cutlery Company; spoons and forks - Mr. E. Gr. Redwood, of Mytton’s Limited ; dairy utensils and hollow-ware - Mr. A. ‘Chown, of Chown Brothers Limited, Sydney; glassware - Mr. Thomas Ross, of the Crown Crystal Glass Company; tinware - Mr. Ralph Wilson, of Wilson Brothers Limited, Melbourne; crockery and earthenware - Mr. F. Dewsbury, of Fowlers Limited; imported lines - Mr. Worboys, of the Sydney Importing Company. Mr. K. Webb, of Malleys Limited, was appointed Deputy Controller in Sydney, and Mr. K. Luke as Production Adviser to the Controller.
I think that we can agree that there was a shortage of utensils, that action by the Government was necessary, and that some form of control had to be exercised. The form of control is set out in the order which was gazetted on the 12th January last. I repeat that A. Simpson and Son Limited is the only firm which has complained about the order, and I remind the Senate that that firm deliberately refused to co-operate with the department in any way whatsoever. When asked to give particulars of certain excess stocks above its own requirements for the zone in which it was operating, the firm declined to answer the correspondence. Again, when it was asked to arrange for a representative to meet the Minister to discuss certain details, it declined. The order has been operating since the 7 th December, 1943, but it has taken many weeks for this matter to come before the Parliament. En other industries the same form of control is operating. In the cotton industry, for instance, the control is exercised by Mr. Webster with the result that the output has increased by 60 per cent. Mr. Webster has been appointed controller in the cotton industry, and with the assistance of an advisory committee, his control is working well. Without control of this kind, neither this Government nor any of its predecessors could have made headway with their production programmes. Senator McBride, who is an ex-Minister for Supply, is well aware of that fact. He knows that as Minister he was obliged to invoke the assistance of outside experts in matters of this kind. The disturbing feature of this case is that Senator Wilson has made a direct charge that this man has used his position deliberately to injure A. Simpson and Son Limited. That charge has not yet been corroborated. Therefore, I do not place any reliance upon it. I repeat that A. Simpson and Son Limited had ample opportunity to secure redress if it had cause to seek redress, and had it elected to do so; but the fact remains that that firm has not sought . redress in’ any particular. However, the door is still open to it to. approach the Acting Minister for Supply and Shipping, and to lay any complaint it may have before him. I am certain that if grounds exist for any complaint, the Minister will rectify the matter. Not only is this control necessary on general grounds; it is also essential in order to enable us to speed up the supply of these requirements to zones which are dangerously short of them. Senator Cooper has complained, for instance, of the shortage existing in Queensland. Huge diversions of these goods have been made to overcome the shortage in that State, which has arisen from the tremendous influx of additional population. I have yet to learn that the effect of this order has not been good. This control has resulted in speeding up supplies for the Army by ensuring that these articles will be manufactured according to prescribed priorities, whereas previously unnecessary articles were being made. Thus we have been enabled to rectify a position which would otherwise have worsened considerably. Some manufacturers, probably, have not been appreciative of this control. They want to run things in their own way. However, it is obvious that the Government must decide priorities of manufacture in order to make the fullest possible use of the man-power and materials available. That result has been achieved in this industry. A. Simpson and Son Limited was given a zone in which it was able to dispose of the bulk of its manufactured articles. The departmental officers assert that over and above that production that firm produced other articles but refused to disclose that additional production to the department. Let the firm answer that charge. That being so, ground exists for a charge being made against the firm that it has committed a breach of this order. Honorable senators will admit that when so many small firms are obliged to observe similar orders, it is equally right that this company should be obliged to observe this order.
– Why did not the department ask for information from A. Simpson and Son Limited instead of demanding it in the way it did?
– I am officially advised that that information was asked for. In what manner it was asked for I do not know ; but the fact remains that it was not supplied. At the same time, I suggest that departmental officers are invariably most courteous in handling matters of this kind. I have shown that prior to the issue of this order a serious shortage of these utensils existed, and the distribution was inefficient. That position has now been remedied.
– And the northern market has gone to Sydney manufacturers.
– I am advised that exports of A. Simpson and Son Limited to Queensland represented 25 per cent. of the value of its total production. The firm stated that in 1943 its percentage of sales in Queensland was less than 4½ per pent. of the value of its total sales. Its February distribution shows that its contribution to the Queensland market was only 72 frying-pans. That is an official statement. The Acting Minister for Supply and Shipping also declares that it is sheer humbug for A. Simpson and Son Limited to claim that either the firm itself, or its interstate customers, have been inconvenienced by the operation of this order. In flagrant breach of a request by the controller, the firm shipped large quantities of goods. Figures made available by the Department of Supply and Shipping show that during the year ended the 31st December last, 3,000,000 pieces of the articles under consideration were manufactured in Australia, and of that quantity only 14 per cent. was made by all companies operating in South Australia. Therefore, the output in South Australia at that time must have been fairly low. I repeat that this control has enabled the Government to make better use of available man-power in the manufacture of high priority articles. Both the Leader of the Opposition (Senator McLeay) and Senator McBride have been in charge of the Department of Supply, and they know that enormous burdens are being shouldered by the officers of that department. They know that normally controls of this kind are created on the recommendation of the experts in the department who should know exactly the position existing in the industry. I take this opportunity to explain to Senator Herbert Hays that when I asked him, by way of interjection, if he wanted an “ open go “, I simply meant that there was a shortage of materials in this industry, and that any letup in respect of this order would mean an “ open go “ for all manufacturers with subsequent confusion in the trade. I realize that the honorable senator invariably takes a realistic view of the war position.
Sitting suspended from 6 to 8 p.m.
– I suggest that there is no disagreement as to the necessity for the order, but there is some disagreement regarding the gentleman selected as controller, the attack on whom I have already deprecated. After all, this is a form of control which has achieved a great deal of success in other departments and activities Objection to the order has been made by only one State, by one firm in that State, and by three senators who represent that State. I suggest that there is no alternative to control. The firm on whose behalf the complaint has been made was asked by the Department of Supply and Shipping to give certain information, but proved completely non-co-operative. I do not know how the firm was asked, but I know that every honorable senator, and I think the average member of the community, have observed all the regulations which have been issued, onerous as they are at times.
– Does the Minister suggest that the coal-miners have observed the regulations?
– Yes ; 100 per cent. To my mind regulations are not a solution of industrial trouble, and the case cited by the honorable senator is not a parallel.
– But the regulations are laws.
– The honorable senator knows that the coal-miners who did not carry out the law were dealt with.
– By being put into the Army and subsequently released.
– They have not yet been released. The suggestion has been made that a certain number of them may be released from the Army because of the pressing necessity to win coal. The suggestion has been made that the controller showed bias against a certain firm in Adelaide. As a matter of fact, that is not the position at all. The controller, whoever he may be, is bound by the regulations. Mr. Wainwright, the Auditor-General in South Australia, who is also incidentally in the service of the Commonwealth as Deputy Comptroller of War Organization of Industry, has stated that to his knowledge shipping and rail transport were available. The Minister in charge of the Department of Supply and Shipping, and his officers, say that that is not correct, as has been shown by an investigation into the transport position. I do not suggest that -this move is the. result of Mr. Playford’s anxiety to get some political advantage in view of an approaching election in South Australia. There might he something in that contention, but I believe that if the South Australian Government is relying on this matter as a means of securing the support of the people, it will be disappointed, especially when the people of that State learn that, if the Minister does his job the firm concerned will be asked for an explanation of a breach of the order. It was asked to disclose its excess production, and declined to do so. Its excess production could have been absorbed in South Australia,which has not been provided with the utensils needed.
Senator Cooper raised an issue that is not involved in the order, but his inquiry should be answered. The facts are that 50,000 articles have been diverted to Queensland. The Department of Supply and Shipping is persevering in that policy, because the shortage in Queensland is obviously serious and should be rectified, not only in regard to utensils, but also in respect of articles of food required in that State. I know that many people think that Queensland is not allotted sufficient beer. If there is any section of Australia which climatically, and because of the hard work done by its menfolk, should be given some priority in that commodity, it is Queensland. Efforts have been made to ensure that the shortage of over 314,000 gallons per annum below its quota is made up to that State, despite a shortage of manpower and malt. I can understand Senator Cooper taking advantage of the motion to bring under notice the shortage of utensils in his own State, but I suggest to him that that is no reason for disallowing . the order. The Minister for Health produced some samples of inferior ware. Senator Spicer evidently did not understand the Minister’s reason for doing so. It was to show that as the result of the order malpractices such as were exposed here to-day will not be possible. The industry is now controlled. Whether production be in the hands of private Or other interests, control as to quality is essential. The Prices Commissioner fixes the .price of an article on the basis of cost, in addition to a reasonable overhead allowance, but he does not know the quality of the article, and so the Minister illustrated, in the case of the two classes of goods which he produced, how successfully the order has operated.
I have already shown that controls of this nature have been successful. As the result of the work of a similar committee and a similar class of control, the products of the woollen industry have increased by 60 per cent, without any additional man-power - a triumph both for the individuals who are helping the Government, and for our own officers on the committee- Whether in wool, cotton garments, or boots, controls have had to bc instituted, and I have heard no suggestion of wrongdoing on the part of any of the representatives of outside businesses on such committees. I repeat that the debate is unnecessary and that alleged maladministration of the order should have been communicated to the Minister, when immediate action would have been taken. This is one of numerous orders t.Il of which I suggest are necessary as part of the organization of the nation for war. There was a scarcity and irregular distribution of these articles between civilians and the services. After all, while we want the fighting men of our own and other nations properly provided for, we still want civilians to get a fair deal. If Senator Wilson or any other honorable senator has a complaint against particular acts of administration under this order,- he can obtain a remedy hy an interview with the Minister in charge of the department.
– in reply - The Leader of the Senate (Senator Keane) has stated that we on this side of the chamber made no complaints against the order. If he had read my speech he would have noticed that I made very serious complaints against it. In view of his statement, I shall repeat them. First, in a democratic country the order sets up a dictatorship in the matter of utensils. The leading article in. the Advertiser called it a “ dictatorship of tinpots “. The dictator appointed by the Government under the order has power not inferior te that of the Gestapo in Germany. He can go to a firm, and demand production nf its books, papers, secret formulas and lists of customers. Any order which gives such powers to ‘ a dictator in a democratic country is definitely bad. What makes this case so much worse is that the Government has appointed as its controller or dictator a director of a rival firm. The combined effect of the order and the appointment is to give to the dictator power to obtain all the information I have mentioned, including secret processes, and, if he felt so disposed, to use it for the benefit of his own business. It is not a question of whether this director has or has not used the information, or does or does not propose to do so. The point is that the Government has appointed a man as controller under a dictatorial order which would enable him, if he felt so disposed, to use the secret information and lists of customers for his ‘own benefit. I was glad to notice the difference in the attitude adopted by the Leader of the Senate from that of other members of his party, except Senator Courtice. The Minister showed a disposition to correct” what is obviously a bad order and one which has been badly administered. Senator Courtice went even further. Every honorable senator realizes that the honorable senator lias very definite views, and is a man of principle. Dealing with the order, he used these words: “I am not prepared to support the appointment of the Controller of Utensils and Appliances in the circumstances which have been made known to the Senate “. He made it perfectly clear to the Senate that he did not approve the appointment of a rival trader as controller and dictator under this order.
– Is ‘the honorable senator quoting from a statement which I made in the Senate?
– Yes. I am quoting from Hansard.
– I did not make that statement. I made no comment about the appointment.
– The words which I quoted were used by the honorable senator, but, in view of what the honorable senator now says, I shall quote from Hansard.
– The honorable senator is not allowed to do so.
– Then I repeat that the words that I have quoted are recorded in Hansard. I have sufficient, confidence in the honorable senator to know that he is not a man who talks one way and votes another. As he said that he could not support the appointment of the controller in the circumstances which have been made known to the Senate, I know that he - and I trust other honorable senators - will support the motion for the disallowance of the order. Senator Courtice further said, “I hope that the Minister will consider this matter carefully, and, should it prove that trade is being unnecessarily interfered with, look into it”. That trade is being interfered with has been made quite obvious in the course of this debate. It has been proved conclusively that A. Simpson and Son Limited have kitchen utensils packed ready for shipment to the eastern .States; it has been proved that shipping space is available to carry the goods to the eastern States, and it has been proved that there is an urgent demand for these utensils in Queensland and in other States. Also, it has been clearly shown, as Senator Courtice has agreed, that by prohibiting the export of these goods from South Australia, there is interference with interstate trade, which warrants an inquiry into the whole matter. Senator ‘Courtice said -
In my view, the Government should interfere as little as possible in these matters because the repercussions may be serious indeed.
With that sentiment I am in entire agreement. The Minister said that he i lid not deny that the trading activities of this company had been restricted. In view of that admission, action by the Government is demanded to ensure that i he control shall be removed.
Dealing with transport, the Minister said that when, the present Government came into office, beer and stout were being shipped from South Australia to Western Australia whilst important cargo was held up. I remind the Minister that although the Government of which he is a member has prohibited the transport of essential kitchen utensils to Queensland, where there is a serious shortage, not long ago it arranged for increased shipping space for the carriage of beer to Queensland. If there is sufficient shipping space to carry more beer to Queensland, why doe3 the Government try to pretend that there is not sufficient space to carry frying-pans, saucepans and other similar utensils urgently required by Queensland householders? The Minister said that A. Simpson and Son Limited is the only firm which has protested against the order. That was a rather extraordinary statement in view of protests which have been voiced by the representatives in this chamber of nearly every State. Senator Cooper, Senator Courtice and Senator Foll protested on behalf of the people of Queensland, who are being deprived of this essential equipment, and Senator Herbert Hays dealt with the position created in Tasmania by the original order which prohibited the export of these goods from South Australia to that State. Protests have been received also from Victoria and Western Australia. This matter has not been brought forward in the interests of only one firm ; it has been introduced because there has been a public outcry. In view of the fact that supplies of these commodities are already packed in South Australia ready for despatch, it is impossible to justify the action of this dictator in preventing their shipment. It is not so much a matter of the injury which may be caused to A. Simpson and Son Limited, because no doubt that firm will be able to dispose of its goods elsewhere; the matter is one of vital importance to the people of Australia generally because of the Commonwealth-wide shortage of pots, pans, and kitchen utensils generally. I remind honorable senators that recently there was a serious bush fire in Victoria which destroyed several’ hundred homes, yet the people who have suffered as a result of those fires are unable to replace their kitchenware because of this order preventing the export of these goods to Victoria.
The Minister has stated that Mr. Keysor was not really a dictator at all because an advisory committee had been set up to assist him. Whether he has an advisory committee, or half a dozen advisory committees, cannot alter the fact that Mr. Keysor is a dictator. Whatever the committee may advise, the controller’s decision will be final. He can make or break any firm. He can license or delicense any manufacturer for the production of these goods, and by delicensing a manufacturer he can destroy its markets as he has attempted to destroy the markets of A. Simpson and Son Limited by restricting export. Let . us examine for a moment just who are the members of the advisory committee. I may say that the set-up of a committee of this kind is typical of the actions of the Government. Despite the fact that A. Simpson and Son Limited is one of the largest firms engaged in the manufacture of these goods in Australia, there is no South Australian representative on the advisory committee. The committee is composed of Mr. J. McFarlane, of the Diamond Cutlery Company, Sydney, Mr. E. G. Redwood, of Mytton’3 Limited, Victoria, Mr. A. Chown, of Chown Brothers Limited, Sydney, Mr. Thomas R03S, of the Crown Crystal Glass Company, Sydney, Mr. Ralph Wilson, of Wilson Brothers, Melbourne, Mr. F. Dewsbury, of Fowler’s Limited, Sydney, Mr. Worboys, of the Sydney Importing Company, and Mr. K. Webb, of Malleys Limited, Sydney, who is the Deputy Controller in Sydney. That is typical of committees that have been appointed by this centralized Government. One would have expected that committee to have included representatives of all States in which these goods were manufactured, but all its members are from Victoria and New South Wales, and one of the first actions of the controller was to preserve the Victorian and New South Wales markets - the biggest markets of Australia - solely for New South Wales and Victorian manufacturers. It can be seen therefore that the mere existence of an advisory committee is of little consolation.
The Minister stated that each State would have to produce its own requirements. I ask honorable senators if, since federation, they have ever heard such a parish-pump statement. In other words, apparently we are to return to the bad old days, prior to federation, when each State produced its own requirements. I understood that Australia was a nation in which trade, commerce and intercourse between the States was free ; but it is not. We learn now that all States are expected to meet their own requirements. In these circumstances one would imagine that if South Australian manufacturers were to bo limited to the South Australian market, New South Wales manufacturers would be limited to the New South Wales market, but apparently that is not the case, because New South Wales may also supply Queensland and Victoria. South Australia is the one State which under the first, order of the controller was limited to its own markets. It was only after protest by the Auditor-General and the Premier of South Australia that this dictator, realizing how hopeless was his case, agreed as a concession to permit
South Australian manufacturers to sell on the Tasmanian, Western Australian and Broken Hill markets.
– That is a big difference.
– It does not get away from the fact that this firm is still cut off from its main markets. I trust that in future, not only will the field be extended, but also the restrictions will be removed altogether.
To-day the Minister produced inferior samples of kitchenware which he subsequently admitted had been manufactured in New South Wales. I point out that it is quite competent for the Government, without issuing an order such as this, to prevent the manufacture of shoddy goods. In fact, had the Government been doing its job during the last two years, the shoddy articles produced by the Minister in this chamber would not have been made at all. I am sure that all honorable senators were staggered to learn that our man-power and materials were being used in Sydney for the manufacture of such trash under the notice of the Government. Surely, if the Government wishes to prevent the production of these inferior goods it can do so without prohibiting the export of first-class articles from South Australia. If, for example, the Government had diverted the man-power and. materials used in the manufacture of the rubbish which was shown to us to-day, to the factories of A. Simpson and Son Limited so that it could produce greater quantities of its high-grade utensils, it would have been making a valuable contribution to the war effort; but to endeavour to justify this order on the ground that trash is being produced is hardly convincing.
The Minister said also that only the distribution of these goods was controlled and that production was quite free. That is quite true, and it was made quite clear from the examples which the Minister gave. Under this order there is no control of manufacture but merely of distribution from one State to another.
The Leader of the Senate (Senator Keane) claimed that a shortage of material was the main reason for this order, but goods already manufactured, packed and awaiting distribution, cannot be affected in any way by a shortage of materials. If there is insufficient material to manufacture these goods, they will not be manufactured; but why prohibit the export of goods which already have been made, and which are awaiting distribution to States where there is an urgent demand for them? The Leader of the Senate said that he would look into the matter when he knew in what way A. Simpson and Son Limited had been injured in its trade. Surely it is obvious that when a company has built up a trade for about 90 years, and has customers throughout the Commonwealth, it is subjected to most injurious treatment when, by a stroke of the pen, a controller says “ You are not to fulfil the demands of your customers “. The result of the order was that its export trade was transferred to Metters Limited and other Sydney firms. How one could imagine that that is not injurious to A. Simpson andSon Limited is beyond my comprehension. I cannot think of anything more injurious to a company than to be deprived of its markets and have its customers handed over to rival firms.
– Seventy-two fryingpans !
– That is one of the most extraordinary stories ever invented. If it were a fact that A. Simpson and Son Limited had sent only 72 frying-pans to Queensland one might well ask why the Government had gone to the expense of appointing a controller and the necessary staff. As was pointed out by Senator Cooper, tinware to the value of £4,000 has been sent to Queensland by A. Simpson and Son Limited in the last three months.
– Then why complain?
– Because the Government has stopped the trade. The Minister further said that the policy of the Government was to provide trading zones, but of course the cream of the Australian trade was to be given to manufac- turers in New South Wales and Victoria. That meant that the more populous States were to wield “a big stick” over some of the less populous States, and by that process the same States would be able to destroy the trade with other States. This is a glaring example of the manner in which the Government attempts to centralize industry in the eastern States. Even companies that have been established for over 80 years are to have their business taken from them by a controller clothed with dictatorial powers. The Leader of the Senate stated that had this matter not been ventilated in the Senate he would have been pleased to adjust any matters due to maladministration, but that there has been maladministration must be obvious to every honorable senator, and I am sure that the Minister realizes that fact. In introducing this subject I merely drew attention to the facts of the case and the words actually used by Mr. Keysor and Mr. Wainwright. I had hoped that the Minister for Health, particularly in view of the remarks of Senator Courtice, would say that the Government would make an investigation of the controller’s administration, but instead of that he virtually said that the Government was not prepared to do anything in the matter. He proceeded to abuse members of the Opposition, make futile statements, and produce exhibits which had nothing to do with the case. Had the Minister given an undertaking that the administrative mistakes would be corrected, I believe that the Senate would have been satisfied. Senator Courtice, in effect, supported the motion, but the Minister and other honorable senators on the Government side opposed it strongly. This is one of the most monstrous orders ever promulgated. The administration in question and the appointment to the position of controller of a trade competitor of A. Simpson and Sons Limited has staggered the fairminded people of Australia.
Question put -
That Utensils (Miscellaneous) Order issued under National Security (General) Regulations, as appearing in Commonwealth Gazette No.6, of the 12th January, 1944, and tabled in the Senate on the 10th February, 1944, be disallowed.
The Senate divided. (The President - Senator the Hon. Gordon Brown.)
Majority . . . . Nil
– The numbers of “ Ayes “ and “ Noes “ being equal, the question is resolved in the negative.
Debate resumed from the 24th March (vide page 1998), on motion by Senator Keane -
That the bill be now read a second time.
– This measure has been given wide publicity. Et is interesting to know that during the last year, attention has been given in all of the leading countries in the world to the principle of pay-as-you-earn taxation. T am pleased that the Government has had the courage to accept one of the planks of the policy submitted to the people at the last general elections by the former Leader of the Opposition (Mr. Fadden). This principle provides for a most important taxation reform.) and its adoption will prove of great benefit to a large number of taxpayers. The extraordinarily heavy taxes levied in various countries to finance the present war has caused parliaments to devote special attention to the problem that will confront a large section of the people who are now employed in war work and are earning high wages and salaries, but who, on the cessation of hostilities, will no doubt suffer a considerable reduction of income when they return to their ordinary avocations. I refer particularly to that section which includes the wives of members of the fighting services, who are doing special war work. I shall deal briefly with what I regard as the benefits and burdens which this bill imposes. The measure deals with an intricate matter and it is essentially a bill which should be dealt with in detail at the committee stage. The proposed alteration will benefit a large section of employees who, if the principle of pay-as-you-earn taxation were not’ adopted would at the cessation of hostilities find themselves called upon at the end of the financial year to pay a considerable sum in income tax at a time when their income would have been either greatly reduced or would have disappeared. If a person in receipt of £250 a year went out of business, he would, under the present system be confronted at the end of June with an income tax liability of £26. A person who earned £360 per annum would be faced with a liability of £79. Should his income be £400 a year, his liability would be £95, whilst a taxpayer who earned £500 per annum would be liable to pay £136 in income tax. Ordinarily a proportion of the people would not make any provision to meet those taxes. In the case of. a soldier it might mean that he would have to relinquish his deferred pay for two years, in order to meet his tax liability. The change-over to the pay-as-you-earn principle, with provision for a rebate of 75 per cent., would put those taxpayers in a position in which they would be able to meet their commitments. That, I suggest, is an important benefit which these proposals if adopted would confer. Another benefit is the removal of the liability to pay taxes at death. Now that the rates are so high, that liability is causing a good deal of concern to people who have not made provision to meet it. They would derive considerable benefits from the introduction of the pay-as-you-earn principle. Another type of individual who would” benefit includes those who may be f aced with unemployment, probably because of sickness, or whose income falls considerably for any reason. Lt would include primary producers who, because of unfavorable seasonal conditions or low prices, may find themselves unable to meet their tax liability. Out of a reduced income it is always difficult to meet the tax on a higher income in the previous year. The general principle underlying the pay-as-you-earn system is good. The bill before us exempts from tax the pay and allowances of soldiers who have served overseas. The Government proposes to amend the present law to provide a period of three months instead of six months. Anything that we can do to help the soldiers is a step in the right direction; the amendment will have that effect. Another proposal relates to the estates of deceased soldiers. Trustees of such estates will be released from liability in respect of the tax owing on pay and allowances included in the assessments of soldiers. That is to say, on the death of a soldier, his trustees would be relieved of any payment of tax in respect of. pay and allowances included in the assessment. Those are some of the main benefits which this measure will confer on the taxpayers of this country. I shall support the second reading, in the hope that in committee an opportunity will be given to draw attention to some of the objectionable features of the bill. In spite of the fact that the Senate is supposed to be a House of review, members on the Government side are so bound by the decisions of caucus that frequently it is a waste of time to discuss proposals on their merits. I well remember that not long ago Senator Lamp said that, although he was in favour of an amendment which had been moved by an Opposition senator, he would have to vote against it because caucus had so decreed. It is clear that nothing will influence honorable senators supporting the Government to act contrary to the decision of caucus. The main objection to the pay-as-you-earn proposal is the attempt to deceive the people that they are not being asked to pay an increased amount as tax.
– They are not.
– I do not say that a deliberate attempt is being made by the Government to mislead the people, and I hope that we on this side have looked at this matter fairly. It would appear that honorable senators support ing the Government have convinced themselves that taxpayers will not be called upon to pay a 25 per cent. increase of tax above the present rate. I appeal to the Leader of the Senate (Senator Keane) to see what can be done to remove the anomaly that exists in the proposals now before the Senate. On many occasions we on this side have drawn attention to what appears the obvious desire of the Government, namely to make a vicious attack on successful men. The tax payable in Australia on incomes of more than £1,000 a year is higher than in either Great Britain or New Zealand. The maximum tax on incomes in Australia is 18s. 6d. in the £1, but under the proposal of the Government that rate will be increased by 8 per cent. each year for three years. In other words, persons in receipt of incomes above a certain amount from either personal exertion or from property will be taxed at the rate of £1 0s. 6d. in the £1 for a period of three years.
– That will be hard on them.
– It is a vicious attack, and is worse than confiscation. The Government’s “ penny wise and pound foolish “ policy will do this country untold harm. If we take the long view we shall see that it will discourage people from coming to Australia, notwithstanding that one of Australia’s greatest needs is an increased population. A young country like Australia needs people with capital who are prepared to invest it in this country. We should do all that we can to encourage people with capital to come here, either to establish industries or to develop the country, thereby providing employment for the people. A tax of £1 0s. 6d. in the £1 on incomes will frighten from Australia the very persons whom we should encourage.
– Will they go to China?
– Unless the Government alters its policy in some respects people who would make good immigrants will not come here while this Government is in office.
– People did not come here in great numbers when previous governments were in office.
– I am pleased that considerable numbers of men from Great Britain and the United States of America did come to this country and invest their money here, thereby providing employment for our people. It is ridiculous to adopt an attitude of hostility to such people. It may be all very well for the Minister for Aircraft Production (Senator Cameron) to advise the crowd on the Yarra Bank to “ sock the rich and all who have made a success of industry”. Since the present Government assumed office it seems to have had an almost irresistible desire to attack those comparatively few persons in the community who have made a success of their businesses or avocations. A considerable number of them have risen from the ranks of the workers; I use the term to mean employees. Under this bill it is proposed to increase the rates of tax by 25 per cent. The people generally protest against the proposal to increase their tax by 25 per cent. Clause 5 contains a vicious principle which seems to appeal to the Government. The most objectionable legislation that I can imagine is retrospective legislation. I am glad that members now in Opposition were responsible for an amendment of the Acts Interpretation Act to provide that regulations shall not be made retrospective in order to affect the rights of any person. The bill contains a provision relating to the taxing of persons who have come to Australia from Great Britain or the United States of America to assist in Australia’s war effort. Hitherto they have been free from liability to pay income tax. I have no objection to people from other countries who earn good money in Australia being taxed, so long as they are not taxed also in their own country, but one of the objectionable features of the bill is that it is proposed to tax these people retrospectively to the 1st July, 1942.
– Notwithstanding that they came here believing that their incomes would not be taxed.
– Many of these people have entered into commitments, but the Government now says that they are to be taxed retrospectively to the 1st July, 1942. That means that such persons now in this country whose in come is £500 a year will be saddled with a liability of £136 tax in respect of the year ended the 30th June, 1943. In addition, they will be obliged to pay the 25 per cent, increase in respect of income for the year ending the 30th June, 1945, and thereafter they will be taxed at the ordinary rates.
– And they are lucky to be here.
– And we are lucky to have many American and British mechanics in this country. We are doing a great disservice to them in saddling them with taxes of these proportions. The tax on such incomes should commence from the 1st April of this year, and these persons should be allowed the ordinary deductions allowed to the average taxpayer. I ask the Government to give particular consideration to that point.
Another objectionable feature of the measure is the limitation placed on contributions by employers to pension funds in respect of employees. I have read very carefully the second-reading speech of the Leader of the Senate. On this point he cited an exceptional case to show how the existing privilege is being abused. Where abuses are proved, appropriate action should be taken, and discretionary power to take such action should be given to the Commissioner, but under this measure it is proposed to limit an employer’s contribution to superannuation funds to £100 per annum, or 5 ,per cent, of the employee’s salary. Under this provision a large number of employees who join superannuation funds late in life will suffer very severely, and much discontent in industry will be caused. The Government should bear in mind that the establishment and maintenance of industrial peace will be one of the greatest problems confronting this country in the post-war period. Practical business men know that many employers, out of consideration for their employees, have made substantial contributions to superannuation funds, and have guaranteed those funds. I am amazed that action should now be taken, particularly by a Labour Government, to prevent employers from contributing to those funds on a generous scale. That is a retrograde step. I know that discretion- ary power is given to the Commissioner to deal with cases of this kind on their merits. This provision also is to he made retrospective to 1st July, 1943. We should encourage employers to assist employees to make provision for themselves on their retirement. I hope that the Government will carefully consider the case that will be put forward to honorable senators on this side of the chamber for fair treatment of those persons who have already made large contributions to these funds, in circumstances in which it was clear that in doing so they had no intention of escaping tax. Every encouragement should be given to employers to make the fullest provision within their power for their employees. I have discussed this subject with a taxation expert, and I propose to read the following statement which sets out how this provision will work out in practice: -
The restrictions imposed by the bill on taxfree contributions by employers to pensions funds come extraordinarily from a Labour Government.
The whole aim of allowing such contributions to be tax-free wa3 to encourage employers to make proper superannuation provision for their employees.
Incidentally, where such provision has been made, it has obviously saved the Government from paying many old-age pensions that would otherwise have had to be paid.
The tax-free contributions which this bill permits are reduced to a level entirely inadequate, especially in two types of case: -
Where a middle-aged or elderly employee is concerned. If some firm begins a fund for the first time, obviously it has to make specially high contributions - which will often be in excess of the amounts permitted under the bill-in respect of its older employees if those employees, on retirement, are to enjoy the same benefits as younger employees. Similarly, special provision may have to be made where a middle-aged or elderly employee is signed on by a firm operating a scheme.
Where a firm is trying to build up capital provision to ensure that the fund it has operating will continue irrespective of any later change in the firm’s financial position. Obviously no fund can be considered completely safe, from the employees’ point of view, until it has become completely self-supporting. It only reaches that state when sufficient contributions hare been made by the firm concerned to .provide a capital amount, the interest on which is sufficient to meet the firm’s commitments under the scheme.
There have been indications that the provisions of this bill were aimed, in the first instance, at attempts to use the present system of permissible deductions as a tax-escaping device in the interests of a few highly placed officers of individual firms.
Any action taken to prevent such practices should not he permitted to impinge on the operation of legitimate pensions funds covering all employees of an undertaking.
The discretionary power allowed to the Taxation Commissioner under the bill is, according to references made on behalf of the Government in another place, intended to be used only within very narrow limits.
I suggest that in trying to stop one insignificant loophole, the Government is taking action which will impede the operation of various legitimate pensions funds and which - a bad thing for the country as a whole - will also dissuade firms which have not such funds from establishing them in future.
It seems that inadequate thought has been given to the implications of these provisions of the bill, and I earnestly -suggest to the Government that these clauses should be withdrawn and submitted to an all-party committee for report, so that a special bill can be brought down next sittings to deal with any genuine abuses in a fashion which will leave no obstacles to the continued operation of existing funds, and the creation of new ones.
Therefore, the Government should give further consideration to this proposal, because it will affect the welfare of thousands of thrifty employees and, as the expert whom I have just quoted has explained, it will do a serious injustice to a large number of people.
The only other clause to which I wish to draw attention at this stage is clause 14 which deals with the proposed rebate of 75 per cent. Under this provision, that rebate will apply in respect of incomes under £500 for the year ending the 30th June, 1944; and, in the case of incomes in excess df £500, the basis of tax will be that where the income does not exceed the income of the previous year by more than 20 per cent, the rebate of 75 per cent, will be granted. That means that any taxpayer whose income amounted to £500 in 1943 and in 1944 does not increase by more than 20 per cent., will be eligible for the 75 per cent, rebate. However, where the income for 1944 exceeds the income for 1943 by over 20 per cent, the basis provided under this clause will cause a number of anomalies and much hardship. I know that the Commissioner is to be given power to make adjustments in certain cases. Parliament should not place such a responsibility upon the Commissioner, but should itself lay down a fair and equitable basis. In order to illustrate the objectionable features of this provision I quote the following illustrations which are set out by Mr. J. Y. McGrath in a letter to the Sydney Morning Herald: -
The effect of the amending legislation at present before the Senate fixing the additional amount of tax to be paid in respect of the income of the year ended June 30, 1944, on the change-over to the “ pay-as-you-go “ system, appears to be extraordinary in many cases.
If the sum of the taxable income for the year ended June 30, 1943, plus 20 per cent, of that taxable income is less than the taxable income of the year ended June 30, 1944, the tax payable is heavier than if this variation between the taxable income of each of the years was not so great or did not exist. The following few examples indicate that the anomaly is fairly general: -
This certainly is a departure from the “ ability to pay “ system and seems so illogical that one may be pardoned for feeling that perhaps there is something to commend this part of the scheme which is not apparent on the surface.
An enlightening explanation may be obtained while the bill is before the Senate.
If this clause be allowed to stand a great strain will be placed upon the Commissioner, and, at the same time, we shall be laying down an unfair basis. Where the income for 1944 exceeds the income for 1943 by 20 per cent, the rebate is based not on the higher but on the lower income. The basic principle is wrong. Where a man’s income is quite legitimate, and increases from £600 to £900 or £1,200 a year, why should his rebate of tax be based on the lower amount? It is wrong in principle, and I suggest that the Government should have another look at it. If cases arise where the Commissioner of Taxation is satisfied that people are trying to bolster up one year against the other, then he can be given power to make the adjustment. I suggest that if every taxpayer, whose income for 1944 is more than 20 per cent, greater than for 1943, has to submit the matter to the Taxation Commissioner it will be a very wearisome job which will cause a great deal of ill feeling in some cases. When it has a Parliament ready to agree to a basic principle, I suggest that the Government should be able to find a better basis for dealing with such cases. That matter, however, can be further debated in committee. I repeat that I am pleased that the Government has made this important change in the principle of pay-as-you-earn. If it is prepared to accept some of the amendments suggested by the Opposition, I believe that taxpayers will have something for which to be thankful.
.- This bill introduces- a most important alteration in the methods by which income tax is to be assessed in this country in the future. I had the privilege of serving on the committee which considered quite a large number of proposals for the purpose of ascertaining whether some reform in the direction of adopting a system of payasyouearn taxation could be introduced in Australia. With the main body of the committee’s recommendations I found myself in entire agreement, but in the committee itself I resisted the suggestion that’ this altered method should be adopted upon the basis that taxpayers were to be called upon to pay something for the concession. In other words I resisted the suggestion that there should be an additional impost upon taxpayers of 25 per cent, tax in order to change over to a pay-as-you-earn basis. I dissented from that part of the report, and I still resist that part of the proposal. Everything that I have heard and read since the report was presented has confirmed me in my view that this additional impost is entirely unjustified. Two of the alterations which are made by this bill in our method of collecting tax should, I think, be referred to. In the first place, we adopt as the basis for taxation the current year’s income in every case. Instead of basing our income tax upon the previous year’s income, we now say that all individual taxpayers, net companies, will have their tax assessed upon the basis of their current year’s income. Along with that, the Government is able to bring into being a fairly strict payasyouearn basis for people whose incomes are derived from salaries and wages. In other words, just because for the future income tax is to be assessed on current incomes, the deductions which are made from salaries and wages week by week will be deductions on account of the current year’s tax based upon the then current income. That is a reform which I believe to be highly desirable, and which lias been rendered almost necessary by the very high rates of taxes which are collected in t&is country to-day. “We have only to contemplate what will happen when the high incomes that are at present being earned begin to fall, or when many people who are at present earning incomes cease to earn them. I imagine that if we continue under the present system under which taxation is payable this year on the basis of last year’s income, there would in a period of falling incomes be a large number of people who would escape their liabilities altogether. Those who have not made provision and who have no means by which they could pay obviously could not be made to pay, but the more provident members of the community, although their circumstances might be just as difficult, would, if they had the means, be made to pay. It seems to me that if it is a practical proposition - and it is quite practical - to put everybody upon the basis that his tax will be measured by his current income, the reform must be welcomed by everybody.
I wish now to examine that portion of the proposals which requires every taxpayer to pay to the Commissioner not only this year’s tax and next year’s tax but, in addition, an impost of 25 per cent, of the tax that would normally be payable on his 1944 income. I have been amazed at the suggestion which has come from the Government benches, that this does not involve any increase of taxation. I am amazed at it more particularly when I find it stated quite clearly in the bill that in addition to the annual taxation which we are all required to pay, a further tax of 25 per cent, calculated upon 1944 incomes is to be extracted from every taxpayer. I say that that impost is entirely unjustified. It is put in the form that the Treasurer is conferring some marvellous bounty upon us. “We do not hear the Treasurer referring to the fact that he is increasing our taxes by 25 per cent. It is put in a much more pleasant way. “What we are told is that we are being forgiven 75 per cent, of our taxes. I have looked at the matter from every angle, and am unable to see how I am being forgiven anything in the way of tax.
– The honorable senator will be, after his death.
– That does not necessarily follow, but I am prepared to admit that this scheme has some advantages. One is that it makes it perfectly clear to me and every other citizen that, for the future, the payments which we make for tax each year will be payments in respect of tax which is calculated upon current income.
– He will not notice it until after he is dead.
– His executors will notice it, or he may notice it before his death if his income drops, or he ceases to earn, but until that happens there is no monetary advantage to the general taxpayer in this proposition.
– On the contrary, there is a penalty.
– On the contrary, there is a penalty of 25 per cent. I ask every member of the Labour party which year’s tax is being forgiven? That is a simple question, capable of a very simple answer. “We are at present receiving our assessments for the financial year 1944. I do not believe that any of us expect that the Treasurer is going to forgive us any part of what we owe in that respect. Between now and the 30th June, 1945, we shall receive our assessments for the financial year 1945. So far as we know, the Treasurer is not going to forgive us one penny of that. In other words we shall be paying in those two years two years’ taxes at current rates, but for this pretended forgiveness, in addition to the full payment of a full year’s tax for 1944 and 1945, the Treasurer is going to extract from us another 25 per cent. Seeing that the Labour party has apparently completely made up its mind on this subject, which so far as it is concerned is quite beyond argument, I invite every member of it to tell me in which year a portion of the tax is being forgiven. I suggest that no member of the Labour party can give me an answer to that question, because no tax is being forgiven. What is happening is that we are merely altering the accounting period with respect to which our tax is assessed. Whatever basis we adopt we must in each tax year be able to . refer to some accounting period as the basis upon which our tax is going to be assessed. In the past, we have taken as the accounting period for taxation purposes the previous financial year; but we were paying each year the tax imposed by Parliament, not for the previous year at all, but for the current year. The previous year’s income is merely the measure of our liability in the current year. I shall give one or two illustrations to emphasize that point. There is provision in the existing act under which the Commissioner of Taxation may consent to a taxpayer adopting an accounting period other than that specified in the act: The accounting period provided in the act is the period from the 1st July to the 30th June of the financial year preceding the year of tax. It is well known that, instead 01 having their accounting period from the 1st July to the 30th June, quite a number of businesses in this community work on the basis of the calendar year. In other words, their accounting period commences six months before the ordinary accounting period. As I have said, the act contains a provision that, with the consent of the Commissioner of Taxation, a taxpayer may change his accounting period, and I have no doubt that many applications have been made by people who have been working on the calendar year basis, to change over to the financial year basis. Has it ever been suggested that when a taxpayer goes through that process he has to pay six months’ additional tax in order to catch up? Of course not. All that the Commissioner has been concerned about at any time is that every taxpayer shall pay tax in relation to a year’s income. It does not matter to the Commissioner whether that year is a calendar year or a financial year. When a change was made by a taxpayer from the calendar year to the financial year, it would have been absolute nonsense to suggest that he had to pay six months’ additional tax for that privilege, or to put it in the alternative form, that he was being forgiven six months’ tax because there was a period of six months which did not enter into the calculation of the amount of tax that he was to pay. I shall give a second illustration of my argument: I believe that, at one time, it was thought - very optimistically - that the Commonwealth might vacate the income tax field.
– That was a bed-time story.
– Yes, but I have some recollection of talk in my younger days of the Commonwealth vacating the income tax field. When the Commonwealth entered that field for the first time in 1916 - temporarily it was alleged - it commenced to tax the people in that year on the basis of their incomes for 1915.
– Has the High Court not determined otherwise?
– No. The High Court cannot make a determination contrary to the act, and the act states that clearly. Let us suppose that the Commonwealth had decided to vacate the income tax field in 1920. In that year, it would have imposed taxes on incomes for the year 1919, and that would have been the end of the whole business. Surely it would not have been suggested by anybody that taxpayers would still have had to pay tax in respect of their 1920 incomes. The answer to such a suggestion obviously would have been, “ I have paid my 1920 tax. According to the act, my 1920 tax was based, merely for accounting purposes, upon what I earned in 1918-19 “. Obviously, therefore, had the Commonwealth vacated the income tax field in 1920, there would not have been any overriding liability to pay tax to the Commonwealth in respect of 1920 incomes.
– The Commonwealth could not have said that it had forgiven a year’s tax, either.
– It wouldhave been absolute nonsense to suggest such a thing ; yet now we are told that merely because the accounting period is being changed - that is all that is being done - the taxpayer will have to pay an additional impost of 25 per cent.
– Would that be very terrible if it were on a fair basis?
– It has no basis at all. That is the important point. If I could see any principle justifying this 25 per cent. impost, I should be prepared to accept it.
– How did the Government arrive at it?
-So far as I know, by guesswork.
SenatorFraser. - The honorable senator was a member of the committee which considered this matter.
– All I can say is that throughout the proceedings from first to last, I have not heard a logical argument in favour of the claim that 75 per cent. of a year’s tax would be remitted. It is true that I was a member of the committee which investigated this matter. In its report, the committee states in effect, that at the present time, income tax is being collected in advance from salaries and wages. On the 1st April this year, under the existing system, the Taxation Department will commence to collect taxes for 1945. The Government says that it would be most undesirable to discontinue collections as from the 1st April because that could not be done without losing substantial revenue.I agree with that;but the suggestion is that if the pay-as-you-earn system were to be adopted without the 25 per cent. impost, it would be necessary to cease the collections from salaries and wages for a period of three months. In other words, these collections would cease now and would not start again until the 1st July. I do not think that I am doing an injustice to fellow members of the committee when I say that the whole argument in regard to this 25 per cent. has been uponthe deductions from wages and salaries during the three months from the 1st April to the 30th June of this year. Paragraph 84 of the committee’s report stated -
It becomes necessary, therefore, to determine whether the transition should be effected by relieving taxpayers of liability to tax in respect of the income of the year ended the 30th June, 1944, either in whole or in part.
The following paragraph deals with this very question of collections in respect of salaries and wages, and concludes by saying -
The amount of the deductions made in this period will be about £15,000,000. Revenue requirements would not permit either of the refunding of this amount or of the cessation of deductions for one quarter of that year.
The logical development of that argument, of course, is that if 25 per cent. is collected from salary and wage-earners, it must also be taken from other taxpayers. That is the Government’s justification for the 25 per cent. impost, and I suggest that it is no justification at all. In my view there is no obstacle to the continuance of the deductions as they are at present. To-day the Government is collecting taxes in advance from salaries and wages. It is doing that deliberately, and just because the accounting period is to be altered, there is no reason at all in existing circumstances why these deductions should not continue to be made in advance. In other words, the deductions from the 1st April, 1944, to the 31st March, 1945, could be taken as satisfying tax in respect of income earned from the 1st July, 1944, to the 30th June, 1945. If that were done there would be no problem whatever in regard to this £15,000,000, and the salary and wageearners would have been saved the 25 per cent. impost.
– Which the Treasurer says they do not pay.
– That is so; but let us have a look at it. Under this system to which we are asked to agree in this measure, there will be deducted from salaries and wages between the 1st April and the 30th June of this year, an amount of £15,000,000; but, when the whole of the deductions for that period have been made, no salary or wage-earner in this community will have contributed a single penny to next year’s tax. He will have paid 25 per cent. of a year’s tax, but he will not have started to pay next year’s tax. He will start to pay next year’s tax under this scheme by the first payment which he makes in July.
– He will continue to pay as under the present scheme.
– By the 30th June, under my proposal the salary and wageearner will have paid 25 per cent, of next year’s tax.
– He continues to pay the following month.
– That is true but let us examine the position when he ceases to earn. Suppose that on the 30th June, 1945, he ceases to earn. Under my proposals he will have three months’ tax owing to him by the department, because there will have been continuous deductions. He is paying three months in advance, and he will have met the whole of has tax liability by t[he 31st March-
– He would still be paying that under the present .system.
– Yes; but he would not be paying the 25 per cent, impost. Under the present system he is paying his tax in advance, and by the 30th June next he would have paid 25 per cent, of next year’s tax ; but now we say to him, “ We shall take this money from you for three months, and although we have dragged it out of your pay envelopes, at the end of that period you will not have paid a penny towards your 1945 tax “. This is an additional impost which the salary and wage-earner, curiously enough, is required to pay all in one year, whilst other taxpayers get three years in which to make the payment. This 25 per cent, is taken from all individual taxpayers, but there is no corresponding impost on companies, because companies are not brought into the pay-as-you-earn scheme at all. So the salary and wage-earner will be called upon to pay, in the course of the next twelve months, 25 per cent, more tax than a company is required to pay.
– Does the honorable senator argue that there is no lag at all?
– I thought that that point would be raised by some honorable senator. I am not concerned a great deal whether there is a lag or not. First of all I do not know what the honorable senator means by a lag. He may mean something different from what I have in mind. Let us read what the act provides. Section 13 of the Income Tax Assessment Act 1934 states -
Subject to the provisions of this Act income tax shall be levied and paid for each financial year upon the taxable income derived directly or indirectly . during the period of twelve months ending on the 30th day of June preceding the financial year for which the tax is payable.
It is quite clear that the tax is payable for the financial year ; but the basis upon which it is to be assessed happens to be the previous year’s income. I thought that I had shown that fairly clearly. There is no escape from the position that last year’s income is merely the measuring stick for this year’s tax. The act shows that the tax is payable on the preceding year’s income, and the preceding year is referred to as the year preceding the financial year for which the tax is payable.
– The High Court does not agree with the honorable senator.
– I am unaware of any decision of the High Court which is inconsistent with the view that I am now advancing. In two cases the High Court emphasized the fact that liability to tax arises by reason of the passage by Parliament of a tax act and the imposition of a tax. The practice is to pass the tax act in the financial year. We are not told in the year in which we earn income what is to be the rate of tax we are to pay in respect of that income. The Government itself does not know. We ascertain the rate of tax only in the year in which the tax act is passed and the- tax is imposed. When this system was introduced in 1916 we did not give taxpayers twelve months’ notice of its introduction. We did not tell people when earning their 1915 incomes that they would have to pay their 1916 taxes out of them. It was not until those incomes had been completely earned and probably completely expended that Parliament said, “Now, in 1916, we are going to impose a tax “. What if there is a lag? Surely the only matter we are concerned with is that we are altering the basis of assessment. The only justification for an increase of tax is to show that by changing the system the Treasurer will lose revenue. Surely that is the only test.
I do not care whether there is a lag. Call it what we like, the real point is that the Treasurer proposes to make an alteration of the method by which the tax is assessed. He will make a case for increasing the rates, as far as I am concerned, if he can establish to my satisfaction that by making a change in the method of assessment he will lose revenue, but from first to last he has not done that. Nothing has been placed before this Parliament or before the committee to show that if in 1945 we adopt the income of that year as the basis of tax, instead of the 1944 income, there will be any loss of revenue to the Treasurer. If taxpayers under the new system are to pay as much as under the old system, why the additional impost of 25 per cent.? I suggest to members of the Labour party that if they have not considered the matter from that point of view, and have some doubt as to whether there is a lag, they should ask the Treasurer to state his justification for the 25 per cent, impost, to what year it belongs and what tax he will lose. He can give no answer except to talk of a loss of £15,000,000 for the three months to which I have referred. I have said that there need be no loss of revenue, because we can continue the system of deductions exactly as to-day. If we wished we could alter the tax year. We could say that the tax year in respect of salaries and wages should be from the 1st April to 31st March. That, I think, is the suggestion made by the Australasian Council of Trade Unions. The objection to that is that we would have one group of taxpayers with one tax year and another group with another tax year. Some taxpayers have incomes not only from salaries and wages, but also from other sources. I should not recommend that, but I should recommend that the deductions be continued as at present. Admittedly they are made in advance, and we should then be merely continuing the present system. I believe that a salary or wage-earner will be more satisfied with a system which keeps him on the basis of paying in advance but which does not impose on him a 25 per cent, additional tax. Honorable senators on the Government side have been strangely silent on this matter, and I shall be very interested to hear what they have to say with regard to my arguments. I greatly fear that they are already bound by a caucus decision; in other words, that they are beyond conviction. I hope that that is not so. Only six supporters of the Government are in the chamber.
– What did the honorable senator’s legal friend, the honorable member for Warringah (Mr. Spender), say in the House of Representatives ?
– My legal friend does not make any difference to me. I have put my own arguments. If the Minister for the Interior (Senator Collings) has an answer to them I shall be interested to hear it; but I still have to be told by some one what justification there is for this 25 per cent, additional impost. We are told that taxpayers are to he forgiven 75 per cent, of one year’s tax, but that is not so. I want to know - and this is the real test - why a taxpayer should be called upon to pay another 25 per cent, if under the new method the same amount of revenue will be received into the Treasury ?
– Is that the honorable senator’s only complaint against the bill?
– It is my complaint against this portion of the bill. I have a quarrel about the method by which the 25 per cent, is to be calculated, but that is not so serious a matter. At the moment, I am confining my attention .to the 25 per cent, impost. The suggestion that there is to be a 75 per cent, forgiveness is a mere subterfuge, so much humbug. The real fact is that that argument is being used by the Treasurer, who has been fairly free in the expenditure of public funds for useless purposes.
– Does the honorable senator refer to social services?
– Yes, free medicine. This is being used by the Treasurer as a means to extract more revenue from taxpayers, notwithstanding that he has told us that taxes are not to be increased; and it is being done under the guise of giving something to the taxpayers when the truth is that the Treasurer is taking something from them. If the Treasurer can satisfy me that the adoption of this scheme will entail a loss of revenue, I shall say to him, “Let us increase the tax on the new basis “. If we are to have pay-as-you-earn taxation, let us have it; but do not give us a piebald scheme. The Treasurer asks us to accept the pay-as-you-earn principle in respect of next year’s tax; but for three years he proposes to impose on 500,000 taxpayers a liability to pay tax,not in respect of their current incomes, but on their incomes for 1944. In other words, the position will be worse than it is at present because taxpayers are now only one year behind, whereas under the Treasurer’s proposal, three years hence they will still be paying some tax calculated in respect of 1944 income. That illustrates the real character of the subterfuge. If additional revenue is required, the honest thing is to increase the rate in order to make up the loss. I can understand the problem being approached in that way; but I do not like subterfuge; and this is a subterfuge. However, if the Treasurer were to say that he would increase the rates of tax, he could not very well say that he was forgiving something. So long as the tax relates to the year 1944, he can say that, instead of increasing the rate by 25 per cent., he is forgiving 75 per cent. of the tax. He is endeavouring to make the proposal more palatable.
– But it is not going down too well.
– The truth is that the tax on every taxpayer is being increased by 25 per cent.
– Yet the Treasurer regards himself asFather Christmas.
– That is better than Ned Kelly.
– Ned Kelly was comparatively honest; he did not pretend to be anything other than a bushranger. But the Treasurer is posing as Father Christmas, whereas in truth he is a bushranger. He says that he is making a great gift of 75 per cent. of a year’s tax, but when the taxpayer looks at the gift, he finds that the Treasurer has not given him one penny, but has, in fact, collected 25 per cent. more tax from him. For Father Christmas to act in that way is about the lowest form of bushranging imaginable. Taxes imposed for special purposes have a habit of perpetuating themselves. Should this scheme be approved the Treasurer will collect an additional 8 per cent. of the tax for three years should incomes remain where they are to-day. As there is no undertaking in the bill to the contrary I fear that at the end of the third year the Commissioner of Taxation will go to the then Treasurer and say, “ The revenue from taxes will be down this year because we shall not be collecting that 8 per cent. which we have been collecting for three years “. I can imagine the Treasurer of the day saying, “ We cannot allow that to happen. We must keep the rates up because we are spending a lot more than previously on free social services “. There is great danger that the 8 per cent. additional tax, imposed in the first instance for three years, will be continued in perpetuity.
– It is then only equal to what the workers have already paid.
– I appreciate that. Evidently the honorable senator is proud of the fact that he can say to the workers, “ You have to pay 25 per cent. additional tax in twelve months, whereas these other people are being given three years to pay the additional tax “. I should not be proud to make such a claim, because I regard the proposal as thoroughly unsound. I opposed it as a member of the special committee, and I oppose it now.
– Is the honorable senator opposing the bill ?
– No. I accept the principle of pay-as-you-earn taxation, and I accept the proposals in the bill which give effect to that principle. Nevertheless, I oppose that portion of the bill which is quite extraneous to the adoption of that system, and moreover is unnecessary. In other words, I oppose that portion of the bill which provides that inorder to get this comparatively small benefit - the ease of mind which it will give to many in the community - taxpayers will have to pay another 25 per cent. tax in order to make up for something that the Treasurer has not lost. I ask the few members of the Labour party who have shown any interest in this subject to ponder over the arguments that I have placed before them. I believe that those arguments are unanswerable.
– The honorable senator could not convince the other members of the special committee.
– I ask Senator Courtice not to forget that there is such a thing as compromise among members of a committee. I was not, and am not prepared, to compromise in regard to this proposal. I want to know whether the supporters of the Government can see any justification in principle for this 25 per cent, impost. I say that it is not justified, and that the Treasurer should collect either 100 per cent, of the tax or none of it. I could understand an argument in principle which said, “We will not forgive any proportion of the tax; we shall collect the full 100 per cent, tax in respect of 1944 incomes, and we shall collect 100 per cent, of the tax assessed on 1945 incomes as well”. In my opinion that would be unsound, but I could understand it as an argument. The only alternative in principle is to say that there shall be complete forgiveness of the tax on 1944 incomes, because instead of taxing the incomes of that year, it is proposed to tax the 1945 incomes. It has been suggested that this proposal is something like forgiving a debt. It has been said that if a country storekeeper offered to forgive a customer 75 per cent, of his debt, the customer would think that he was doing well. That would be so, but the two things are not comparable. Let me put a parallel case. Let us suppose that a farmer is leasing some land on the basis that he has to pay as rent 10 per cent, of the proceeds from that land received by him in the preceding year. That would be comparable to the method by which we pay income tax to-day. His current year’s rent would be measured by his previous year’s income. But supposing that after that arrangement had been in operation for several years the owner of the land said that he wished to change the basis of the rent, and that, instead of payment being made on the basis of last year’s income, he desired that it should be paid on the basis of this year’s income. Would any one suggest that, in those circumstances, the farmer had to pay two year’s rent in one year? No. He would just change over to the new system. He would have paid his 3944 rent on the basis of his 1943 income, but when the changeover was made in 1945, he would pay his 1945 rent on the basis of his 1945 income. He has not missed a year’s rent at any stage. He has paid his rent for 1944 and also for 1945. All that has happened is that he has altered the basis upon which the rent is calculated. That is a comparable illustration, but the illustration in respect of the storekeeper is not. What the Treasurer is really saying, if we relate the comparison to the storekeeper, is this, “ I will forgive you 75 per cent, of the debt that you owe me, if you will agree to pay me another debt equal to 100 per cent, of the amount you originally owed me. In other words, you will pay 125 per cent. ; and I call that 75 per cent, forgiveness “.
At the committee stage I shall direct attention to other provisions in the measure. My leader has referred to some of them. First, I object to a number of clauses by reason of their retrospective operation. It is all very well for the Minister to tell us that people who have had the benefit of taxfree incomes since 1942 should be obliged to pay tax. The answer to that is that they were told plainly by the Australian legislature that they were not liable to pay tax.
– They had to pay it when they were in the countries from which they came.
– Whether these people have come out here to do developmental work were freed of tax in both countries in the relevant years is beside the point. They were so freed because that was the law, and they were entitled to act on the basis that that was the law. That anomaly having been discovered, I agree that it should be rectified; but I have the strongest objection to going back a couple of years and extracting from these people tax which the Australian legislature itself said they were not liable to pay. Unless a taxing act says that they are liable to pay they are not liable. They have acted on the basis, and were entitled to act on the basis, that they were not liable to pay. It is a vicious principle at any time to tax upon a retrospective basis and such a principle should be resisted on every occasion it is proposed.
But this instance is a particularly bad illustration of that principle.
My leader has referred to the provision with regard to contributions to pension funds. I agree entirely with his remarks on the subject. There is a very grave danger that if the Government becomes over-enthusiastic about catching every tax dodger it will impose grave injustices upon many innocent people; and I am afraid that that will be the effect of some provisions in this measure. Ministers become so incensed because some clever individual has made use of a provision in an act to his own advantage that they set out to catch that individual no matter what happens.
– Those are the bushrangers.
– The Government seeks to catch the bushrangers who manage to get out of paying tax, and, perhaps, it is not a bad idea to set one bushranger to catch another. If the Treasurer were confining the effect of his conduct to the bushrangers, I should not have any complaint.
– That is the intention.
– Whatever the intention may be, it is not the effect of this provision, and that is what the Government should be careful about in a tax measure. It is in some respects all too easy to alter the law in order to catch a tax dodger. That is the simplest thing in the world. The difficult thing is to ensure that in doing so, we do not impose a very grave injustice upon many perfectly honest people. I shall have something to say about these clauses from that point of view at the committee stage.
Another clause deals with the practice that has grown up of people buying shares in private companies which have shown losses over a number of years.
– That is a good way to avoid tax.
– I do not dispute that for a moment, but although this clause has been altered under pressure in the House of Representatives, I still believe that it might very well act unfairly in the case of innocent people. I am not prepared to support a proposition which, while it may be intended to catch the tax dodger, reacts to the detriment of innocent people.
– Neither is the Government.
– I am glad to have that admission, and I shall look forward to a real treat at the committee stage when I shall have the Minister assisting me to put this provision in some form which will not act to the detriment of innocent people. If the Minister approaches the 25 per cent, grab in the same spirit, the bill may leave this chamber a better measure than when it was brought before us. Two million taxpayers will be affected by this measure, and they are entitled to more from members of the Labour party than a mere slavish adherence to a decision of caucus. Those 2,000,000 people are entitled to receive from every member of this chamber an honest, considered, and unfettered judgment on this subject. I believe that if every honorable senator will bring to this matter the consideration that it deserves, and gives an honest judgment, we shall delete that provision, and, in so doing, we shall adopt the pay-as-you-earn principle upon an honest and straightforward basis that will be entirely acceptable to the whole community.
– Senator Spicer has put forward a very challenging and interesting point to which I shall address myself later. At this juncture,- I merely emphasize that the whole of his argument rests upon a fallacious legal foundation, as I intend to demonstrate. Both the Leader of the Opposition (Senator McLeay) and Senator Spicer praised the measure to a considerable degree. They said that it would confer a very great benefit upon the taxpayers of Australia. The only proposal with which they disagreed seriously was the impost, as they alleged, of 25 per cent. I shall endeavour to show that that supposition is entirely wrong. I was glad that the Leader of the Opposition (Senator McLeay) set out to show that this measure will be of very great benefit to taxpayers as a-whole. However, I could not follow his reasoning later when he said that the Government is imposing an increase of 25 per cent, while forgiving 75 per cent. If that does riot constitute a benefit, what was the original benefit of which the honorable senator spoke? However, he was not quite sure on that point. He simply made the bald statement that the 25 per cent, represented an additional tax, and left the matter there. Whilst Senator Spicer on the other hand attempted to justify his argument, the Leader of the Opposition left us in complete doubt as to where the additional 25 per cent, was to be imposed, and how much the Treasurer would collect from that source. He left it to our imagination and attempted to frighten us by saying that that was an extra impost of 25 per cent. I wish to show briefly the reason why the Government has adopted this form of taxation. It is well known that we are approaching a period when incomes generally are likely to fall. It; is no secret that under war conditions our workers, responding to the nation’s call, have worked long hours. We know that they cannot continue to work under such a strain. Consequently, their incomes will soon commence to fall. We propose to meet that position just as it has been met in other parts of the world by adopting a new form of gathering taxes. In other countries where the payasyouearn principle has been applied a period of deferred liability has been acknowledged, and has been dealt with by various means. In Great Britain, from seven to ten months of tax liability has been forgiven, whilst in Canada 50 per cent, of the deferred liability has been forgiven, and in the United States of America 75 per cent, of that liability has been forgiven. Does any honorable senator opposite suggest that the Governments of Great Britain, Canada and the United States of America were “ putting something over “ their taxpayers when they forgave those percentages of tax?
– Those governments did not tell their taxpayers that they would not pay additional tax.
– This Government now tells the Australian taxpayers that df their deferred liability of 100 per cent, it will wipe out 75 per cent. The wage-earners of this country will not be asked to pay one penny additional tax as the result of this change-over.
The honorable senator cannot show me how the Treasurer will collect Id. additional from wage and salary earners if this bill comes into operation, and the amount collected will not be Id. more than if the act continued as it is to-day.
– It seems to me that the honorable senator simply does not understand plain English.
– The point is that the salary and wage earner, immediately he earns a taxable amount, comes into the category of a taxpayer. If, on starting work in 1941 or 1942, he earns sufficient to pay tax, a deduction is taken out of his wages, but, as he is only a new earner of taxable income, after the first two weeks he will apply for an exemption, and, as he had no taxable income in the previous year, the Taxation Commissioner will send him an exemption from taxation for that year. Although he may earn £7 or £8 a week for- the rest of that year he will not pay a penny in taxation. He may earn £300 or £400 in that year on which he will not have paid any taxation. If any honorable senator opposite can tell me that that is untrue, I will withdraw it. I challenge him to say that it is untrue, because that is the way our system operates. If that man, who had an income of £300 or £400 in the first year, and did not pay a penny tax on it, went out of industry in the following year and did not earn a penny, he would have deferred liability to pay for the year in which he had been in industry and earned a taxable amount.
– And he would have nothing to pay it with.
– That is the reason why pay-as-you-earn taxation is introduced - to meet cases where a falling income makes it difficult for the taxpayer to meet his deferred liability. Senator Spicer based his whole argument on the fact that there was no lag in taxation, and that the Income Tax Act laid it down that the basis of collection of taxation was that it was based on the previous year’s income, but was collected in the current year. He assumed from that that the department took only the previous year’s income as a measuring or yard stick, on which to base the taxation for the current year. Am I being unfair to the honorable senator?
– The honorable senator does not dispute that, does he?
– As I am not a legal man, I do not possess an intellect sufficiently agile to find loopholes in the language of an act of Parliament; but the act provides : -
Subject to this act, income tax at the rates declared by the Parliament, shall be levied and paid for the financial year commencing on the first day of July, one thousand nine hundred and thirty-six and for each financial year thereafter, upon the taxable income derived during the year of income by any person . . .
In the definition clause, the “year of income” is stated to mean -
The financial year next preceding the year of tax; while the “ year of tas “ means -
The financial year for which income tax is levied.
Reading that as plain English, it is obvious that the taxation was imposed for the income earned in the year preceding the year on which the assessment has been made. I do not attempt to give a legal opinion. I am giving purely my own reading of the act, and have looked for further confirmation to find the legal interpretation. For that purpose, I take the opinion given by Professor Bailey.
– That is a good facile opinion.
– It is the opinion of the Dean of the Faculty of Law at the Melbourne University.
– And also of the Attorney-General’s chief adviser.
– He occupies a very important position.
– He has also boxed the compass half a dozen times.
– If I were to quote the most reputable authority in the world, the honorable senator would find some method of discounting him. All I say is that Professor Bailey occupies a high position’ as the Dean of the Faculty of Law at the Melbourne University, and is a very reputable man. He says -
Tn its present form the Income Tax Act each year imposes income tax for the current financial year. This is supplemented by the
Income Tax Assessment Act, which (by section 17) prescribes that the tax so imposed shall be levied and paid upon the income derived during the preceding financial year by thetaxpayer. This, I think, means that what isbeing taxed each year is the income earned in the previous year.
There is a fairly general impression that the tax is really on the current year’s incomeas well as for the current year’s Commonwealth revenue. The language of the acts makes any such view untenable. It has always been so. Commonwealth income tax. for instance, was first imposed for the financial year 1915-10. A taxpayer who hart earned income in 1914-15/ but earned none in 1915-10, was liable for a full year’s tax. Indeed, his estate was similarly liable if hf died on the 1st July, 1915.
What made him liable to tax was that he had earned income in the year 1914-15. Nothing else was relevant.
I have often heard it stated in the Senate that we ought not only to take the law as it stands, but also to find the intention behind the law.
– No, that is bad law.
– Be that as it may, I take the opportunity of quoting from the Hansard record of September, 1915. At page 6376, the right honorable member for North Sydney (Mr. Hughes), who is now Deputy Leader of the Opposition in the House of Representatives, and was then AttorneyGeneral, and had introduced the first income tax legislation into this Parliament, said -
It will bc collected for the financial year ending on the 30th June, 1915 - that is the year to which it is to he applied - and the next tax will be collected and applied to the year ending on the 30th June, 1915. There cannot he two taxes collected in one year.
Later, Mr. Joseph Cook said -
Then tlie tax is to be retrospective in character 1
To which Mr. Hughes replied -
All income taxes are retrospective. They must necessarily be so.
Later, he said -
We are financing this year on the income earned last year. That “is a perfectly fair proposal.
I have been giving not my own views, but those of the Deputy Leader of the party to which Senator Spicer ‘belongs. I suppose he owes some loyalty to his leader.
– In recent times it has been a peculiar form of loyalty. I hare pointed out the legal aspect of deferred liability, and the reason why the Government had to take some action. Senator Spicer should have a very vivid impression of what deferred liability means, because he and several other honorable senators opposite will shortly retire from this chamber, I rather regret to say, and their parliamentary allowance of £1,000 a year will be subject to tax which they will have to pay during the next financial year. If they were unfortunate enough to be without other means, they would find it most difficult to meet a taxation assessment of £300.
– They would have to repudiate it.
– I hope not.
– I took the precaution of paying mine in advance.
– I do not know whether Senator McBride is in that happy position. If he is not, he will receive during the next financial year an assessment in respect of the deferred liability that he has incurred up to the end of the 30th June next.
– Plus an additional liability.
– I disagree. I am trying to show the honorable senator that when he retires, he will have to provide next year, under the present system of taxation, a liability of 100 per cent. in respect of his parliamentary allowance of £1,000.
– That is correct.
– As we have some consideration for those retiring senators, they are to be forgiven 75 per cent. of their tax liability. Instead of them having a deferred liability of £300 we shall forgive them 75 per cent. of it.
– I shall call that “ money from home “ when I get it.
– It is a very generous gesture on the part of the Government.
– It is amazing that the honorable senator cannot convince the wage-earner of the Government’s generosity.
– The wage-earner will be convinced when he has experienced the actual administration of payasyouearn taxation.
– That is the most convincing argument of all.
– If this bill does not pass in its present form, the wageearner will continue to pay the same amount from his wages as he has paid during the last 52 weeks.
– His total liability will be 25 per cent. more.
– If thebill does not pass there will be no alteration of the amount that will be deducted from his weekly wage. If the bill does pass, his deductions will not be varied.
– That is a “ beauty “.
– If the honorable senator thinks that he can show me where I am wrong, I shall be interested to listen to him. The point is that if the bill passes, the same amount will betaken out of his wages next week as in preceding weeks. The only difference will be that at the end of June next, his deferred liability will have been met and he will be on the pay-as-you-earn basis. Senator Spicer said that there will be an additional impost of 25 per cent. Where is it?
– The honorable senator would convince himself about anything.
– It is easy to make jocular remarks in an endeavour to divert me from my purpose. I shall not be side-tracked. The wage-earners of this country have a certain amount of money deducted from their earnings each week. If the bill be not passed, they will continue to have the same amounts deducted and they will have to meet a deferred liability of nine months. If the bill be passed, they will continue to have the same amount deducted from their earnings each week and at the end of June they will have paid their tax liability. I challenge honorable senators opposite to show me where I am wrong.
– They cannot.
– All the jeering in the world will not disprove my argument.
That will be the position when wageearners and salary earners come under this legislation. With falling incomes, they would experience great difficulty in meeting that deferred liability. Therefore, the Government wisely adopted legislation that has been introduced in other countries for the purpose of providing against falling incomes. The Government has adopted also a very fair method of dealing with the deferred liability.
– The matter was considered by an all-party committee of this Parliament.
– The proposal was supported in the House of Representatives by Opposition members of that committee. One other matter to which I desire to refer is the point stressed by the Leader of the Opposition and Senator Spicer regarding the provision in respect of superannuation and provident funds. The Leader of the Senate pointed out in his second-reading speech that one public company in Australia recently set aside £50,000 for a benefit fund. He indicated that the persons who would receive the benefits were the managing director who would get £20,000, the general manager who would receive £10,000, and various departmental managers who were to be paid between £1,000 and £4,000. That is a blatant attempt to defraud the Commonwealth of revenue. The Government acted wisely in inserting this provision to prevent such a practice.From the stand-point of legality and also from the stand-point of actual fact, the taxpayers of this country have a deferred liability for the year 1943-44 that has to be met before they can be placed on the payasyouearn basis. The Government has decided to cancel 75 per cent. of that liability. During the next three months, the wage-earner will pay 25 per cent. of that liability and from the 1st July next, he will be placed on the basis of payasyouearn. As for a non-employee, when he ceases to earn or when he dies his estate will benefit to such a degree that in this case the 25 per cent. will be a generous method of assurance.
Debate (on motion by Senator James McLachlan) adjourned.
Motion (by Senator Keane) agreed to-
That the Senate, at its rising, adjourn to to-morrow, at 10.30 a.m.
.- I move -
That the Senate do now adjourn.
On the 15th March, Senator Collett asked for confirmation of the accuracy of certain figures regarding the wages of waterside workers in Sydney which were contained in an answer to a question which he submitted on the 16th March. I regret that, through a typographical error, the rate of wages was shown in the copy supplied to Senator Collett as8s. 8½d. per hour, whereas, in fact, the correct rate is 3s. 8½d. per hour. The necessary correction was made in the proof copy of Hansard; but unfortunately Senator Collett was not furnished with the amended figure.
Question resolved in the affirmative.
The following papers were presented : -
Air Force Act - Regulations - Statutory Rules 1944, No. 50.
Lands Acquisition Act and National Security ( Supplementary ) Regulations - Order - Land acquired for Commonwealth purposes - Katoomba, New South Wales.
National Security Act -
National Security (General) RegulationsOrders -
Prohibited places (3).
Taking possession of land, &c. (49).
Use of land (3).
Order by State Premier - New South
Wales (No. 45).
National Security (Industrial Property) Regulations - Orders - Inventions and designs (84).
National Security (Man Power) Regulations - Orders - Protected undertakings (36).
National Security (Prices) Regulations - Orders-Nos. 1414-1470.
Regulations - Statutory Rules 1944, No. 51.
Senate adjourned at 10.51 p.m.
Cite as: Australia, Senate, Debates, 28 March 1944, viewed 22 October 2017, <http://historichansard.net/senate/1944/19440328_senate_17_178/>.