17th Parliament · 3rd Session
The PRESIDENT (Senator the Hon. Gordon Brown) took the chair at 10.30 a.m., and read prayers.
– Will the Minister for the Interior inform the Senate whether there is ‘any truth in the rumour that to-day is his birthday? If so, may I, on behalf of the Opposition, congratulate him on having attained hia present ago, and wish him continued good health and happiness and good work for the rest of hia life.
– As the Acting Leader of the Opposition has asked me a question I presume that under the Standing Orders I am required either to answer it or decline to do so. It is true that to-day happens to be the -anniversary of my natal day, which occurred on the 11th May, 1865. I was present on that occasion and I am very glad to be here on this occasion. I am grateful to Senator Leckie for his kindly remarks.
Trunk Calls: Newcastle District - Shortage: op Equipment.
– On behalf of Senator Arnold, I ask the Postmaster-General if he is in a position to supply an answer te a question asked by Senator Arnold on the 26th April last about the inordinate delays which have occurred in the trunkline service of the Newcastle district?
– .The fact that some telephone trunk lines serving the Newcastle district are carrying heavy loads, with adverse effect on the prompt disposal of traffic, is appreciated by the Postal Department, which has already reviewed the arrangements with the object of augmenting and improving the facilities immediately the circumstances will permit. Since the outbreak of war. great difficulty has been experienced in securing supplies of essential materials and, consequently, it has not been practicable to provide additional circuits to meet the development on many trunkline routes. The position has been accen tuated by the abnormal demands made on the trunk-line system by the armed forces and organizations on the home front which are concerned in ono way or another with the national war effort. The conditions existing in the Newcastle district are common to many other localities in Australia where, due to circumstances entirely beyond its control, the Departmen has not been able to keep pace with the increasing demand for trunk-line facilities. A comprehensive survey has been undertaken, however, and in the early post-war period it is proposed to expend about £18,000,000 in improving and extending the postal and telecommunication services in Australia. The works to he undertaken will include the rearrangement or reconstruction of main trunk-line routes, the . laying of underground cables to replace overloaded aerial lines, and the provision of a large number of additional circuits. Equipment which becomes available before hostilities cease will continue to be allotted to the best advantage consistent with the standard of service already furnished and the activities in each district. In this connexion, some additional circuits will he provided to centres in the Newcastle district where traffic congestion is acute. Between Newcastle and Sydney, which are served by 42 direct channels, some delay is being caused to trunk-line calls during the busier hours of the day. When the war with Germany commenced, there were 27 circuits, fifteen having been added in the interim to meet the development. The plans for improving the trunk-line system between these cities include the provision of additional channels, which will be made available as early as practicable.
– On the 8th May Senator Herbert Hays asked when it would be possible to make available supplies of telephones to overcome the acute shortage in country districts, in respect of which large numbers of applications are awaiting attention. I am now able to supply the following answer: -
Owing to war-time circumstances entirely beyond the control of the Postal Department, great difficulty has been encountered in securing even limited supplies of telephone instruments and other equipment. As a consequence, many applications for telephone facilities in metropolitan areas andcountry districts, which would have been complied with expeditiously in the normal course, have been delayed. The delay to applications for telephone services in country districts has been mainly due to the shortage of instruments and suitable wire. Special endeavours made by the Post Office to secure some stocks from local sources have been successful and the supplies now coming forward are being distributed to the beat possible advantage. As the necessary materials become available the approved outstandingapplications for telephone facilities in country districts in Tasmania and elsewhere will be completed as quickly as the conditions will permit. The inconvenience which has been caused to the applicants concerned is regretted by the Postal Department, which has a full appreciation of the advantages that telephone service affords to residents in rural localities.
SenatorCOLLETT. - Is the Minister for Supply and Shipping aware that in Western Australia there has been an acute shortage for months of bicycle tyres and tubes? If so, what steps are being taken to overcome the shortage?
– The shortage of tyres and tubes is not restricted to any State of the Commonwealth or any country. It has been brought about by the rubber position. Owing to a recent allocation of carbon black, which has the highest priority, the position should be less acute in the near future. Every nation has been affected, because of failure to estimate the increased quantity of carbon black required in the production of synthetic rubber. The use of carbon black for that purpose has practically doubled the demand for the commodity. The difficulty is now being met, and it is anticipated that as the supply of carbon black becomes normal the position will improve.
– Has the Leader of the Senate any statement to make, as promised yesterday, regarding the speeches of the Australian delegates to the United Nations Conference on International Organization at San Francisco?
– The Acting Prime Minister has not been able to obtain copies of all of the speeches made by the Aus tralian delegates, but when they have be en secured they will be given to honorable senators with an explanatory statement.
V-E Day Celebrations
– Did the Minister for the Interior listen to the broadcast on V-E Day of the celebrations in London and in various cities in the United Kingdom, even to the skirl of the bagpipes in Edinburgh and the bells in the only church left in Coventry? If he did not have the advantage of hearing that broadcast, has he noticed in the press speeches and descriptions of the glorious celebrations which have been enjoyed by people in Great Britain and other countries, and has he contrasted them with the celebrations in Canberra, w here our best effort was to play the Last Post, evidently because of the death of all joy and gladness in the Australian Capital City? If he has noticed those things, willbe at our next celebration see that a citizen’s committee is appointed or a cheer-up organization established, that will remove from Canberra the reputation of being the most doleful capital on earth?
– The question is so lengthy, and has so many different facets, that I am afraid my reply will be more or less in the nature of a speech. Conditions in the countries to which the honorable senator has referred are entirely different from those in Australia. I can readily understand the desire of the people of Great Britain to celebrate V-E Day, and I rejoice with them. The nature of the celebrationswhich occurred in different parts of the United Kingdom is not surprising. For years the people of the Old Country have been within sight and sound of the guns of the enemy. They have suffered in a way which very few of us in this country can adequately appreciate. They stood alone, survived the blitz and went ahead with their job. Anything they did to celebrate V-E Day I should be inclined to excuse, even if I did not entirely agree with it.
As to the celebrations in Canberra, to the whole of which I, as chairman of the War Memorial Board, was a consenting party, I submit that the thanksgiving service was one of the most impressive imaginable, and was held amidst surroundings which could not be equalled for their appropriateness in any other part of the world. I have heard no criticism of the proceedings in Canberra on that great day. If it be suggested that we should have gone to lengths which were gone to in other places, I point out first that at a conference of Commonwealth and State Ministers some time ago, it was decided that the celebrations on V-E Day, which was to be regarded as a day of thanksgiving, were to be carried out in Australia under certain conditions. These were that places of amusement and hotels were to be closed for portion of the day on which the news came through, and entirely closed on the day on which the thanksgiving ceremonies occurred. In the Old Country the hotels were not closed ; but had they been kept open in Australia the shortage of liquor would, I am afraid, have resulted in a condition of affairs which would have been entirely uncontrollable, owing to the demand which would have arisen for liquor and the impossibility of supplying it. The State Premiers, in consultation with the Commonwealth Government, took these matters into consideration, and decided that our celebrations should be of the character they were. The war in Europe has ended, but an intensification of the war in the Pacific theatre is only just beginning. We cannot afford the extravagances which were excusable in other countries, seeing that our task of defeating the Japanese has yet to be completed. When the war against the Japanese has been brought to a successful conclusion, the question of another Victory Day will be considered and I hope, so far as I am able to do so, I shall see that whatever we do is done in a way that is consistent with the dignity of Australia’s National Capital.
– Will the Minister for Trade and Customs say whether it is the intention of his department to lift the restrictions on the importation from Great Britain of various goods of which Australia is in short supply? I re fer not to lead-lease goods, about which I understand the Minister cannot do anything at present, but to cutlery, crockery and similar articles which I understand Great Britain is again able to supply. Will the Minister say whether the restrictions and inconveniences to which traders have been subjected will be removed, so that they may deal direct with the manufacturers instead of through a government department?
– The matter to which the honorable senator has referred has been under consideration for some weeks. Already a number of embargoes have been lifted, and the whole matter of restrictions on the importation of goods from the United Kingdom is under review. I hope that within the next week or two I shall be able to announce that the restrictions on the importation of a number of necessary articles have been lifted.
– Has the Minister for Trade and Customs seen a .statement in the press this morning that goods which were disposed of by the War Disposals Commission were sold at prices equivalent to 300 per cent, above the prices that would have been obtained for them had they been submitted to tender in the ordinary way? The report refers specifically to razor blades and winding machinery for barrage balloons. Will the Minister say whether the pricefixing regulations apply to such sales?
– I did read the article referred to by the honorable senator, and. have asked for a report.
Tobacco fob Convalescent Servicemen - Equipment: - -HANDLING of Baggage of Internees.
– Can the Acting Minister for the Army say whether there is any likelihood of the tobacco ration to convalescent and sick service personnel being restored to what it was before the recent reduction as these men suffer a definite hardship if unable to augment the present small allowance?
– I am investigating the position in regard to the supply of tobacco to service personnel suffering from war disabilities.
SenatorFOLL asked the Minister representing the Acting Minister for Defence, upon notice -
Has the Government’s attention been directed to reports from the London Daily
M ail’s correspondent, Mr. J. F. McDonald: - (a) That competent American naval observers have returned from Tarakan, Borneo, shaking their heads dubiously over the Australias’ lack of adequate engineering equipment; (b) that these observers are openly fearful that lives will be sacrificed needlessly unless the right equipment is provided in sufficient quantities; and (c) that these observers are of the opinion that the Australians who landed at Tarakan were behind the times in landing methods?
-The Acting Minister for Defence has supplied the following answer: -
The Government’s attention has been drawn to the reports referred to, which were immediately brought to the notice of General MacArthur who, as CommanderinChief of the South-West Pacific Area, exercises personal and direct command of assault forces under their respective commanders. General MacArthur furnished the following report : -
I am entirely at a loss to account for any criticism of the Tarakan operation. It has been completely successful and has been accomplished without the slightest hitch. The equipment and methods were essentially the same as those used in nearly 40 amphibious landings in all, all of which were victorious. I know nothing of any criticism by Vice-Admiral Barbey and am requesting him to clarify this point. Australian casualties as of the morning of the 8th, are reported as 76 killed in action and 271 wounded in action - light figures in view of the great objectives attained. If there has been any liner operation of this size in the war; I do not know of it. The Australian forces performed as they always have under my command - with splendid efficiency.I have nothing but praise for them and for the operation.
asked the Acting Minister for the Army, upon notice -
– The replies to the honorable senator’s questions are as follow : -
Minister representing the Minister for Commerce and Agriculture, upon notice -
– The Minister for Commerce and Agriculture has supplied the following answers : -
Service in Operational Areas.
Senator BRAND (through Senator
Herbert Hays) asked the Acting Minister for the Army, upon notice -
Is it a fact that several Australian prisoners of war released from European camps have, after two or three weeks’ leave, been drafted to operational areas?
If so, will the Ministergive an undertaking that no ex -prisoners ofwar are sent to operational areas unless they express a wish to be so allotted for duty?
– The answers to the honorable senator’s questions are as follows : -
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
– The Minister for Commerce and Agriculture has supplied the following answers: - ]. .Sturmer apples arc classified in group 2 for advances under the acquisition scheme. 2 and 3. This classification was based on the recommendation* of a conference of representatives of all interests of the apple and pear industry, held in Canberra in July, 1940, at which consideration was given to the grouping of all varieties of apples and pears in accordance with market values for advances under the . acquisition scheme. These recommmendations were adopted by the Commonwealth.
– On the 10th May Senator Herbert Hays asked a question, without notice, concerning supplies of superphosphate. 1 am now in a position to advise the honorable senator that in the near future the Combined Food Board will deal with Australia’s request for substantially increased supplies of phosphate rock. Already the London Fertilizer Committee has agreed to increases, but its decision awaits ratification at Washington. However, there will still remain the problem of securing shipping to import any additional supplies of phosphate rock made available to Australia. As soon as the allocation is made, a distribution will be planned in consultation with the States. It is hoped that the availability of superphosphates will be substantially increased for the year 1945-46, and every effort is being made to attain that objective.
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
– The Minister for Commerce and Agriculture has supplied the following answers: -
asked the Minister for Supply and Shipping, upon notice -
– The answers to the honorable senator’s questions are as follows : -
Launceston and the Furneaux Group and a similar service between Launceston and King I sla nd. The vessels in the services referred to are under requisition to the Commonwealth Government and all earnings including subsidies are credited to the Shipping Control Board.
asked the Minister for Supply and Shipping, upon not ice -
– The answers to the honorable senator’s questions are as follows : -
Criticismin Houseof Representatives.
asked the Minister representing the Minister for Information, upon notice -
– The Minister for Information has supplied the following answer : -
I shall have the whole of the subject-matter of the honorable senator’s questions investigated and will furnish a detailed reply at the earliest possible moment.
S eco nd Re ading.
Debate resumed front the8th May (vide page 1435), on motion by Senator Keane -
That the bill be now read a second time.
– In approaching this measure, we must re- member that the Australian rates of tax on incomes derived from personal exertion arc the highest in the world. The Government preens itself on the fact that it is now giving a measure of relief to our heavily taxed people. But it is a case of the mountain labouring and bringing forth a mouse. The mouse has a very large concessional head, but no body, because, when we examine the measure, we find that very little real relief is to be given. Indeed, bearing in mind that we are the most heavily taxed people in the world, this is a niggardly measure. Our present high rates of tax have had the effect of destroying the incentive of the taxpayer to increased effort, because the major portion of extra earnings is absorbed in tax. In these circumstances, we have the most extraordinary results. The workers, particularly the coal-miners, slaughtermen and waterside workers, refuse to work overtime or in excess of a certain number of days each week because they say that it is not worth their while to increase their earnings. Under this measure the Government pays no regard to that problem. It makes no attempt to give those workers any incentive to increase production or work longer hours. This is the cause of much industrial unrest. The workers say that it is not worth their while to work overtime, or work on more than a certain number of days a week, because too much of the extra remuneration thus earned is absorbed in income tax. The Government has not attempted to meet that position. On the other hand, it has introduced a new principle which, to my mind, is most dangerous. The Leader of the Senate (Senator Keane), who is in charge of the measure, has not been quite candid with us on this matter. He has not given us the information which we require in order to enable us to debate the measure intelligently. We have been told in a casual sort of way that the concessions to be provided under the measure represent a cost to the Government of £2,000,000 annually. These concessions fall into four classes : First, the zoning concessions; secondly, concessions in respect of dependants; .thirdly, concessions in respect of living-away allowances; and, fourthly, concessions in respect of medical and kindred expenses. The cost of these concessions to the Government has not been itemized. We have not been told how much of the cost is represented by each concession. Why are we not given that information? We have been told that the concessions under the proposed zoning system will amount to £1,000,000, or half of the total cost of all concessions. We have not been told the cost to the Government of the concessions to be given in respect of dependants, living-away allowances or medical expenses. Without that information, we cannot accurately assess the value of these concessions.
I shall proceed on the assumption that the zoning concessions will account for half of the total cost of all concessions to be provided under the measure. The Opposition does not object to the other three classes of concessions. Indeed, in respect of some of them, we believe that the Government could be more generous. It could very well allow the total cost of £2,000,000 in respect of those three classes, instead of allowing half of the cost in respect of its undesirable zoning proposal which ha3 no real merit whatever. The concession in respect of medical expenses, which includes expenses incurred by a taxpayer for dental treatment and dental aids, and optical aids, will be only £50. That means that a taxpayer may have an operation, which may cost £100, and despite the fact that he has also incurred expenses in chemists’ bills, or, perhaps, for optical, or hearing, aids for himself, or members of his family, his total concession in respect of such expenditure will be only £50. That is not a very generous concession, because, after all, such expenditure ,is in addition to the taxpayer’s ordinary living expenses. At the very least, the Government should allow an additional concession in respect of such expenditure at the discretion of the Commissioner. The attitude of the Government on this matter seems to be, “ Well, a taxpayer instead of incurring medical expenses in excess of £50, should go into a public hospital where he would not be obliged to pay anything “. That is not the attitude of the people of Australia. For natural reasons, a man will expend any amount of money in the interests of himself, or any of his family, in time of illness. Therefore, I can only describe this concession as niggardly.
The Opposition agrees that a concession should be allowed in respect of living away from home allowances, because in such cases the taxpayer is obliged to maintain two homes. I should like the Minister to indicate the cost of this allowance. We also agree with the concession to be allowed in respect of dependants; but, even in this case, the concession could be more generous. A concession is allowed in respect of a taxpayer’s wife; but I understand that a taxpayer whose wife may be dead is allowed no concession whatever in respect of a daughter, or a housekeeper, to whom he is obliged to pay wages for keeping house for him. I fail to see any merit in the provision covered by clause 12. The only justification given for this provision is that it is a matter of principle. That clause deals with the tax to be paid in respect of dividends derived from companies overseas. Those dividends, of course, are taxed at the source, that is, in the country in which they are earned. If a taxpayer in Australia had some shares in a company operating in Canada he would be taxed in Canada on the dividends. For instance, if such dividends were derived from Canada and amounted to £100, he would pay £35 in tax in Canada, and, up to the present, he would pay tax in Australia on the balance, namely £85, the amounthe actually received in dividends. However, under clause 12 the circumstances of that case are entirely altered should the company derive some small income in Australia. The problem is this: If a company derives a small revenue in Australia, the shareholders have to gO to the trouble of finding out what proportion of the company’s total income that small proportion derived in Australia represents. It is then left to the discretion of the Commissioner of Taxation to obtain information as to the profits of the parent company and the location of that company. One can understand what reception would be given to a small shareholder in Australia who wrote to a parent company overseas asking for details of profits; but, unless he obtains that information, and is able to satisfy the Commissioner of Taxation in that regard, he may be called upon to pay tax on the whole amount of £100 instead of only £S5 h3 at present. I ask, is it worthwhile putting taxpayers to all this trouble for matter of 1 per cent, of 15 per cent.? Here again it seems to me that the Minister has not given all the information we want. I asked what additional revenue would be brought into the Treasury by clause 9 of the bill, but we have not been given that information. In my view it would be a very small sum indeed, whereas shareholders will be put to a great deal of trouble, and in many cases they will be unable to obtain from the parent company the particulars required. I ask the Government to consider the deletion of this clause.
I am glad to learn that the Government lias decided to grant some taxation relief to owners of estates which have been compulsorily acquired. At present, if an estate is compulsorily acquired, and the owner is forced to sell all his live-stock, in the case of sheep income tax for that year is payable on any return exceeding 10s. a head. That tax of course is calculated on the higher rate. After a good deal of pressure, the Government has now decided that these taxpayers have been placed in an anomalous position, and the effect of this measure will be to spread the income derived in this manner over a period of five years so that the rate of tax will not be calculated on’ a false income. I congratulate the Government upon. this decision but there are other cases in which relief is equally justified. Very often, due to a death in a family, or perhaps to changed domestic circumstances, or illness, it becomes necessary to sell a property, together with the livestock upon it. I ask the Government whether the same benefit could not be extended to these cases. At the present time it is most unlikely that a man will sell his property unless he is in financial difficulties or has some other very good reason to take this action, and it is most unfair that he should be charged income tax at a high rate upon the proceeds of the sale. Now that the Government has decided to give relief in the case of compulsory acquisitions, I see no reason why it should not go a little further and extend the same -concession to these other cases. I ask the Government to go into this matter, and I hope that its attitude will not be the same as it was in connexion with another measure which we have just passed through this chamber. The Minister in charge of that measure was not prepared to consider even a minor amendment. If that is to be the attitude of the Government towards all its measures, then it is quite useless for the Opposition to endeavour to improve the legislation which we are asked to pass through this chamber. I trust that the Government will see that there is some merit in the suggestions which are being mad’e by honorable senators on this side of the chamber, and will give consideration to them, especially in view of the fact that large. sums of money are not involved.
I aim sorry to see omitted from this bill any provision for the exemption from tax of income derived by returned soldiers from the letting of their homes which they are unable to repossess. In many cases, these men occupy other premises for which they have to pay a rent considerably in excess of the rental of their own homes. I contend, therefore, that the income which they derive from their own property should be exempt from tax. These men are trying their best to regain possession of their own homes, but are unable to do so. I hope that when the bill reaches the committee stage the Government will rectify this omission and provide some relief for these legitimate cases.
Another direction in which I consider taxation relief should be granted to exservice men and women is in connexion with the money which they have to expend to provide themselves with civilian clothing. It is true that, upon discharge, members of the forces receive a clothing allowance, but this is quite inadequate to provide a complete outfit. Obviously, one suit of clothes and one set of underwear, socks, &c, is not sufficient, with the result that these people have to pay out considerable sums of money to replenish their civilian clothing. I suggest that there should be a taxation deduction of a specified sum for this purpose.
Another expense which confronts returned soldiers upon their re-entry to civilian life is that of restoring deteriorated properties to their former standard of comfort and appearance. There is no provision in this measure to cover cases of that kind, and here again I suggest that money spent on repairs to property necessitated by the prolonged absence of the owner should be. allowed as a concessional deduction. The granting of these two concessions to ex-service men and women would not involve the country in great expense, whereas the individual benefit would be considerable.
I come now to a new principle which is introduced by this measure, namely, the creation of taxation zones. I consider this to be a dangerous innovation in the taxation laws of this or any other country. WhilstI am unable to offer an expert opinion as to the legality of the proposal, as a layman it appears to me that to differentiate between States and parts of States in the imposition of taxes controverts every conception we have of the Constitution. The Government says, “ It may be unconstitutional, but who will contest it ? “. That method of approach is improper. To do something illegal in the hope that the action will never be contested in the High Court sets a very bad example, which encourages the breaking of our laws. Anybody who examines the bill can seethe inferences that may be drawn from the zoning scheme. I shall not repeat many of the inferences that have already been drawn, but anybody looking at the maps that have been distributed can see at a glance that the A and B concessional zones, with one minor exception, embrace electorates that are represented by members of the Government party. That savours very much of the objectionable policy of granting spoils to the victor. That inference may be unjustified, but it has been drawn, and the Government should be very care ful to offer no opportunity for a charge of political favoritism to be made against it.
– Has the honorable senator ever heard of a redistribution bill which was enacted by a government which he supported?
– What has that to do with taxation? Some amazing redistributionbills were enacted by Labour governments in Queensland. I doubt very much whether the cost of living in some of the places where concessions are to be allowed is higher than elsewhere. Is there any reason why Canberra should be excluded from the zoning system ? The cost of living in the Australian Capital Territory is high. Is there any reason why the Mallee and portions of southwestern New South Wales should be excluded? This scheme opens the door to pressure politics, to which the Government has already submitted in some measure. Since this bill has been introduced, the Government has yielded to pressure brought to bear on behalf of Tasmania and has drafted an amendment to be moved in this chamber providing for the inclusion of portion of Tasmania in the zoned area. The Government will be subjected to continual pressure to include new areas in the zones where the £20 and £40 allowances are granted. In many cases the boundaries of the zones will pass through individual properties. The result will ; be that some taxpayers will be entitled to a £40 or £20 allowance in respect of income derived from parts of their properties and to an allowance of only £20 or no allowance at all in respect of income from the remaining parts.
– Are these not difficulties of administration which will be ironed out in each separate case?
– If there should be as much difficulty in administration as the Minister experiences in administering the Department of the Interior, somebody will have a very hard job to perform. How will the ‘Commissioner of Taxation determine what proportion of a man’s income is derived from one side of the dividing line and what proportion from the other?
– The case would be submitted to the Commissioner of Taxation and decided on the facts.
– No system of administration could overcome that difficulty. Many such problems will be involved in administering the measure. The taxpayers concerned will have great difficulty in proving their claims to the satisfaction of the Commissioner. Furthermore, nothing on earth will prevent their neighbours, who are outside the zones although they are working on the same class of land and in the same climatic conditions from complaining of unfair discrimination. This is the most dangerous thing that has been introduced into the taxation system of Australia. The Government should hesitate before enforcing a system which differentiates between individual taxpayers and between States and parts of States. I urge the Government to do away with the /.on ing system. All sorts of pressure will be applied by people living outside the zones to secure inclusion in them. It offers a chance for candidates at elections to promise that the electorates for which they are seeking election will be granted concessions if they vote in a certain way. There will be unscrupulous bidding for votes, which should be deprecated in politics. We shall find that the electors will say to candidates, “ If you see that we are included in one of these zones, we shall vote for yan “.
– There is no guarantee that the electors would vote for a candidate who gave such promises. They would only say that they would give their votes to him.
– Such things do count at election times. Any government in power while this zoning scheme is in operation would be subjected to political pressure. I repeat that it is the most dangerous proposal that has ever been introduced into, this Parliament. I ask the Minister to reconsider the position before i! is too late. In his second-reading speech he casually passed over the reasons for the proposed zoning system, and nothing that he said convinced me, or would convince anybody, of the necessity for such a provision. It savours of preference to electorates represented by members of the Government party, and c,i pressure politics, to which the Government has already yielded by prepar ing an amendment relating to a part of Tasmania. Although the Opposition approves the Government’s first attempt, small though it may be, to relieve the heavy burden of taxation on the people, and although it approves the allowances to be made in respect of dependants, medical expenses and living away from home expenses, it considers that the bill is bad in essence because it includes these zoning provisions. The Opposition wishes the Government, to insert a number of small concessions which I have already mentioned. I hope that the Minister will indicate that he is prepared to accept reasonable amendments, including one relating to the sale of live-stock from properties that have to be sold. I understand that the zoning proposals will involve concessions totalling £1,000,000. That amount could be conceded by some other means. If the Minister will agree not to proceed with the zoning system, honorable senators on this side of the chamber will have no objection to the bill. I hope that the Minister will listen to reason.
Senator McKENNA (Tasmania ) [11.42 J. - -I join with the Acting Leader of the Opposition (Senator Leckie) in welcoming this measure, although my welcome is unqualified. This measure represents the second step that has been taken by this Government recently to afford the people relief from income tax. Less than a year ago measures were taken which gave relief to the people to an amount of £750,000. I recall the pleasure with which members of the Opposition, iii particular, welcomed the legislation which granted relief to industrial proprietors, pastoralists and business men generally by virtue of the deferred maintenance provisions. The relief afforded by the last budget to the people generally in the matter of concessions was insignificant, in comparison with the relief afforded to business interests through the deferred maintenance provisions. The bill now before the Senate will grant additional relief to an amount of approximately £2,000,000. It does not represent a concession to pressure groups, as Senator Leckie has said. He based his statement on only one point, which related not to something that has already been done, but to something that may happen in the future. Nobody in Australia can expect large concessions with the nation still at war. We have to fill a vast gap between revenue on the one hand and expenditure on the other. That gap is being filled in part by means of interest-bearing loans, and it is desirable that it should not be allowed to widen. To-day’s newspapers publish a cable message from New York intimating that the Director of War Mobilization in the United States of America, Mr. Stimson, has stated that Americans will be given no relief from high taxation for a considerable period. The bill before the Senate will provide a substantial reduction of the incidence of income taxation in Australia, and will afford badly needed relief in cases where justice demands that it should be given. I was intrigued to hear the Acting Leader of the Opposition describe the portion of the bill dealing with regional allowances as the most dangerous provision ever inserted in a taxation measure introduced into the Commonwealth Parliament. I was also amazed when he said that it controverted the Constitution, being a breach of the provision that there shall be no discrimination between States and no preference extended to one State or part of a State over another. I join issue with the Acting Leader of the Opposition on that point. If it were merely a question whether his view or mine should prevail, I should be quite prepared to concede to him that he might be right and I might be wrong; but I regret that I find him at variance with high legal luminaries who have graced the High Court of Australia. He is at variance with Mr. Justice Isaacs and Mr. Justice Higgins in the Barger case, with Chief Justice Knox and Mr. Justice Rich in the Cameron case, with the same Chief Justice and Mr. Justice Powers in the James case, and with the present Chief Justice, Sir John Latham, in the Elliott case which was decided in 1935.Sir John Latham was not only a distinguished member of this Parliament, but also a member of the political party with which the Acting Leader of the Opposition is associated, although the party then had another name.
– What are the views of the present Attorney-General?
– They agree entirely with those expressed by Chief Justice Latham in Elliott’s case, but he alone differed from the other members of the High Court in applying the law which they agreed upon to the facts. Whilst I regret all these things, I deplore the fact that I find the right honorable gentleman in conflict with the Lords of the Privy Council in the Moran case decided in 1940.
By reason of the fact that this constitutional issue was raised in the House of Representatives, a good deal of publicity was given to statements such as that the zoning provisions of the bill were intended to torpedo the Constitution. The constitutional provision, which has been attacked and which appears in section 51, states -
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to -
Taxation; but so as not to discriminate between States or parts of States.
There is a complementary provision in section 99 which puts the corollary to that in these words -
The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or. any part thereof over another State or any part thereof.
I draw attention to the fact that preference shall not he given in relation to any law of revenue. Then we reach the posi- tion where the Constitution prohibits taxation discriminating between States or parts of States, or the giving of preference to a State or part of a State over another State or part of a State. Those two things have the same meaning or purport. We cannot discriminate between States without giving preference to one State over another. In the Constitution of the United States of America, upon which ours was largely based, the prohibition against discrimination of that kind was expressed in these words -
All duties, imposts and excises shall be uniform throughout the United States.
Those words were not adopted in Australia, although we had that Constitution before us as a precedent at the time. The Commonwealth Parliament has unlimited power in taxation, subject to there being no discrimination between States and no preference by the Commonwealth in favour of one State over another.
After having given my own view on this matter, I may crystallize the views of the High Court by saying that the prohibition against discrimination means that there shall be no discrimination between States or parts of States regarded as States or parts of States. Let me put the matter in another way. There should be no discrimination because they are States or parts of States. If there is a discrimination that is not based solely on locality, and considerations apart from locality supervene, then what is done does not fall within the prohibitions contained in section 51 (ti) or section 99. In short, the Constitution does not forbid a differentiation between parts of the Commonwealth regarded not as States or parts of States, but as parts of a single country - Australia. Nor do the sections referred to prohibit a discrimination based on natural or business circumstances.
In the case ‘before us, the areas are marked out by three circumstances - those of climatic conditions, isolation and high cost of living. In other words, those three circumstances have marked out the areas; it is not a matter of picking areas to mark out circumstances. I think that that puts the views of the High Court, as I am certain the legal position would be upheld if the Opposition or anybody in Australia had the temerity to attack it.
Burger’s case, decided in 19 OS, related to an excise duty that was imposed upon agricultural implements. H. V. McKay, Massey Harris Proprietary Limited was concerned in this case. The law provided that there should be a remission of excise duties to any manufacturer whose wages conditions complied with certain standards. The majority of the court, including Chief Justice Griffith, Mr. Justice Barton and Mr. Justice O’Connor, held on various grounds that that was an invalid provision. Amongst the grounds was one that it discriminated between States or parts of States. The argument of the judges was that, as wages were to be determined by the Arbitration Court, which bad power to differentiate between localities, there could in this remission be a discrimination between various parts of Australia. The important part of the judgment was not so much that it wa8 decided that the excise on that occasion was invalid, as in the dissenting judgment of Mr. Justice Isaacs and Mr. Justice Higgins. I propose to refer briefly to what Mr. Justice Isaacs had to say in Barger’s case. 1 refer to volume 6, C.L.R. at page 107. Mr. Justice Isaacs said -
The treatment that is forbidden, discrimination or preference, is in relation to the localities considered as parts of States and not as mere Australian localities, or parts oi the Commonwealth considered as a single country.
I ask honorable senators to note this, because it is referred to in many other cases and has the approval of the Privy Council. Mr. Justice Isaacs stated -
The pervading idea is the preference of locality merely because it is locality, and because it is a particular part of a particular State, lt docs not include a differentiation based on other considerations, which are dependent on natural or business circumstances, and may operate with more or less force in different localities.
Again, at page 110, he says this, which also has had approval through all the later judgments -
Discrimination between localities in the widest sense means that, because one man or his property is in one locality, then, regardless of any other circumstances, he or it is to be treated differently from the man or similar property in another locality.
Here locality is not the guiding consideration, but matters of climate, isolation, and high cost of living. That position was reviewed in Cameron’s case, which was decided in 1923, and it wm considered again in the James case in 1928. In the first-mentioned case, Chief Justice Knox and Mr. Justice Rich agreed to what I have just put to the Senate as the dicta of Mr. Justice Isaacs in Barger’s case. Again, in the James case, it was Chief Justice Knox and Mr. Justice Powers who approved the same statement in the dissenting judgment of Mr. Justice Isaacs. Take the case in which Sir John Latham figured as Chief Justice. That is the case of Elliott v. the Commonwealth, or the Transport Workers case. Regulations were made under the set of rules which forbade the engagement of seamen at ports in Australia, the ports being those specified by the Minister. As the Minister specified only certain ports and eliminated others it was held that that constituted a discriminaion between different parts of Australia. The High Court, on this occasion, including Mr. Justice Evatt, with one dissentient, held that there was no discrimination whatsoever, and the regulations were upheld. I refer briefly to the judgment of the Chief Justice Latham, reported in 54 C.L.R., at page673, and with the consent of honorable senators I shall incorporate in Hansard the judgment. It reads -
I agree with the explanation of the latter part of this provision given by Knox C.J. in Cameron and Deputy Federal Commissioner of Taxation. Knox, C.J. referred to Barger’s Case in relation to section 51 (ii) (which with reference to taxation prohibits discrimination between States or parts of States) and approved the following statement of Isaacs J. concerning discrimination between localities in a general sense: “Discrimination between localities in the widest sense means that, because one man or his property is in one locality, then regardless of any other circumstances, he or it is tobe treated differently from the man or similar property in another locality “.
The Constitution in section 51 (ii) does not, however, prohibit “ discrimination between localities in the widest sense “. It prohibits discrimination between localities only in a particular and limited sense - “between States or parts of States “. Thus KnoxC.J., having defined discrimination between localities in the widest sense proceeded to apply the definition to the particular kind of discrimination which was forbidden by the section under consideration. He continued: “I respectfully agree with this definition and add that when the localities selected to furnish the discrimination are States or parts of States the’ discrimination is expressly forbidden by section 51 (ii) of the Constitution”. The point of this observation is to be found, in my opinion, in the rejection of the contention that any form of discrimination between Australian localities (which except in the territories, are in fact all States or parts of States) is prohibited by the Constitution in section 51 (ii). The Chief Justice was expressing his adherence to the view of Isaacs that the prohibition to the Federal Parliament was against differentiating between States and parts of States “ because they were particular States or parts of States “. After referring to section99,Isaacs J. continues: “The treatment that is forbidden, discrimination or preference, is in relation to the localities considered as parts of States, and not as mere Australian localities, or parts of the Commonwealth considered as a single country.” ( Barger’s case.)
InBarger’s case. Griffith G.J. and Barton and O’Connor J.J., had taken a different view, saying that “ the words’ States or parts of States ‘ must be read as synonymous with the parts of the Commonwealth ‘ or ‘ different localities within the Commonwealth’”.
In Cameron’s case, however, Knox C.J. made the statement which I have quoted. Isaacs J., Higgins, . J., and RichJ. also accepted the principle stated by Isaacs J. in Barger’s case. Starke J. did not deal expressly with the precise point which arises in this present case.
In Jamesv. the Commonwealth, Knox C.J. a nd PowersJ, dealing with the section99 of the Constitution, expressly adopted what IsaacsJ. said in Barger’s case and Higgins J. maintained the propositions which he had stated in that case.
His Honour approves that has been said by his predecessors in favour of the dissenting judgment of Mr. Justice Isaacs, and concludes with these words -
These authorities make it, in my opinion, proper to hold that the discrimen which section99 forbids the Commonwealth to select is not merely locality as such, but localities which for the purpose of applying the discrimen are taken as States or parts of States. In the regulations in question the application of the regulations depends upon the selection of ports as ports and not of States or parts of States as such. In my opinion, section99 does not prohibit such differentiation.
That makes it clear that the principle enunciated first by Mr. Justice Isaacs in 1908 has had the approval of a succession of High Court Judges. In this particular case, Senator Gibson has asked me why Mr. Justice Evatt differed from Chief Justice Latham. The head note dealing with the judgment of Mr. Justice Evatt, at page 658 of volume 54 C.L.R. reads-
Section99 forbids laws or regulations which accord preferential treatment to persons or things as a consequence of local situation in any part of the six States, regardless of all other circumstances. The section is not infringed if the preferential treatment is a consequence of a number of circumstances, including the circumstances of locality.
It is clear that both the Chief Justice and Mr. Justice Evatt were in complete accord as to the law as I have enunciated it. to-day, and that they differed in Elliott’s case solely in applying the law to the facts. The latest case puts the matter beyond doubt, if doubt there was - I refer to Moran Proprietary Limited v. the Deputy Commissioner of Taxation. It related to a number of flour tax acts which, it was claimed, provided for a preference to Tasmania. The High Court upheld the validity of that legislation, and the matter went on appeal to the Privy Council. Honorable senators may find the report of the Privy Council in volume 61 O.L.R., at page 388. In passing, I mention that Their Lordships have adopted an excellent practice which- is followed by the Parliamentary Labour party: They do not deliver dissenting judgments. The judgment of the majority is stated by one judge on behalf of all the judges. In the cour.se of that judgment Their Lordships approved expressly what Mr. Justice Isaacs had said in the dissenting judgment in Barger’s case. Honorable senators will agree that not only was the Government justified in justice in doing something for the people in those particular areas, but also that its action is well founded in the law of this country, and will have the approval of the people. The statement that the Government’s action amounted to an attempt to torpedo the Constitution is not only extravagant and absurd, but is also extravagantly absurd. Comments such as we sometimes hear on constitutional matters remind me of my recent introduction in the precincts of this building to the ancient game of bowls; I speedily discovered that I did not know what it. was all about. That is the position, of many of those who venture to criticize the constitutionality of this legislation.
During the discussion of this measure there was a reference to Tasmania. It was said that under pressure a portion of that State was included in a zone to which the concession would apply, and it was suggested that that action had been- dictated by political considerations. I regard that, statement as indicative of a poor outlook. People living in climates which are either very hot or very cold, or in localities far removed from the amenities of the cities, are subjected to many disabilities, including higher living costs, and are deserving of some consideration. The portion of Tasmania to which reference has been made has a cold climate, and is included in the electorates of Darwin and Wilmot, neither of which is represented in this Parliament by a supporter of the Government. Those are the only two districts of Tasmania which have no Labour representation in the House of
Representatives. I applaud the action of the Government in recognizing that cold, as well as heat, is a factor in climatic conditions. I am prepared to concede to the Acting Leader of the Opposition that the inclusion of Tasmania was due to requests initiated by Labour senators. I point out that these regional allowances are not merely concessional rebates, but are allowable deductions from income. That will give substantial relief to persons in areas where it is highly desirable that the population should expand.
I wish to refer also to the action of the Opposition parties, when in office as far back as 192)3, in differentiating between parts of Australia under the special jurisdiction of the Commonwealth Government. Prom 1923 to the present time many acts of Parliament, which provide that residents in the Northern Territory who are engaged in agriculture, fishing and mining, shall be completely free from income tax, have repeatedly been reaffirmed. I applaud that provision, but it ill behoves the Opposition to criticize now a differentiation, based on exactly similar conditions.
– -Residents of th Northern Territory have no real representation in this Parliament. They have a member who can speak, but not vote.
– The honorable senator is in error. Representation in this Parliament is given to the people of the Northern Territory. I am not concerned about proportional representation or electoral boundaries; I am dealing with a principle of income tax, and discrimination between people, and States, and parts of States. When the parties now in Opposition were in office, they established an excellent principle when they recognized that there were in Australia factors which created, great divergencies and injustices - such factor! as climate, soil, and remoteness from the centres of population. I applaud what was done in granting relief .to the people of the Northern Territory, because I realize the need for increasing the population of that portion of the Commonwealth. The present, Government ha» been concerned! to extend the operation of that legislation.
– The Northern Territory is not a State.
– No; it is not a State under the Constitution. Under the jurisdiction of this Parliament, there are scattered territories concerning which the Parliament has seen fit to discriminate, and therefore the discrimination provided for in this bill is not new.
A further criticism by Senator Leckie was that there .would be anomalies wherever these zone lines were drawn. That applies in every instance in which a draftsman puts anything to paper. Unfortunately, as human beings, we have both finite intelligence and a language which is not adequate to express all that we wish to convey. When even the best draftsman draws a line he cannot steer between the different cases that will be met. When a straight line is drawn, there will be borderline cases, but will any honorable senator say that because onetenth of the people in an area are not included, justice is not to be done to the remaining nine-tenths? I had not proposed to speak at length on this bill apart from the constitutional aspects involved. I join with Senator Leckie in applauding the provision, that gives relief to people in respect of living allowances, and also in expressing appreciation of the justice of allowing pastoralists whose properties are resumed to spread the profits on sales of their stock over a period of five years.
Finally, I point out that the Government did not say what Senator Leckie attributed to it, namely, that the provisions relating to zones might be unconstitutional, but were not likely to be challenged. The Government has never said that, and does not adopt that attitude. From the beginning, the Government has known what I have put before the Senate from the legal viewpoint, and as the Treasurer (Mr. Chifley) said when introducing the bill in the House of Representatives, he had had the advice of the Crown Law officers on the zoning provisions of the measure. We can be sure that those officers had before them what I have put to the Senate this morning.
.- I do not propose to speak at length on this subject, because I regard taxation as one of the most complicated matters that come before us. I question whether more than two or three members of either House of the Parliament properly understand taxation matters. I often wonder why the taxation authorities cannot devise some simpler method of assessment, so that the average taxpayer can understand what is demanded of him. At present, under pay-as-you-earn taxation, a taxpayer receives an assessment for a provisional tax for, say, the taxation year 1944-45. That assessment does not state what the rate of tax on his income will be. He merely gets an account showing his salary for the year, plus earnings from property. His earnings by way of salary are not again taxable, because they have already been taxed at the source. The income from these sources is then totalled, and the rate of tax is determined by the total income. The assessment form does not say what that rate is. The taxpayer is merely sent an account for a certain sum of money, and all that he can do is to pay it. He does not understand it himself and he cannot ask any questions. A simpler means of taxing the people should be devised, and I believe that it could be done if the taxation authorities went into the matter thoroughly. At present, there are too many complications for the ordinary taxpayer to understand. For instance, how many taxpayers know the difference between rebates and deductions? Yet the difference is considerable;- in the one case, the taxpayer pays at a higher rate than in the other. An earnest attempt should be made to simplify the whole procedure.
A good deal of discussion has taken place in regard to the proposed zoning system. I shall not go into the matters with which Senator McKenna dealt. He explained them from the point of view of a lawyer. Apparently, the honorable senator has these matters at his fingertips. In my opinion, gross anomalies will follow the introduction of the zoning system. Under it, Whyalla, in South Australia, will be treated differently from Broken Hill, in New South Wales, yet conditions in both places are practically identical. If one of them should be in zone A, the other should be in the same zone. In Queensland, the line will divide similar properties, and treat them differently. For instance, because of a kink in the line, land held by Senator Cooper will be left out of a zone to which a concession will apply. Had a straight line been drawn, he would get the benefit of the concession. There is the further point that the concession which will be granted to certain taxpayers under the zoning system will be so slight as to be hardly worth while. In the Minister’s second-reading speech he said that this system had been devised to encourage decentralization and to grant relief to people living in out-back districts. The most that any taxpayer will gain under the zoning system will be about £8, an amount so small as not to constitute an inducement to settle in remote areas. In my opinion, the zoning system will not get us very far.
– The concession will be worth £1,000,000 to taxpayers.
– Yes, but that amount will be spread over a considerable number of taxpayers. In my opinion, Mildura, which is situated in the Mallee district of Victoria, about 400 miles from Melbourne, should be granted a concession because of high freights and high living costs, especially when places closer to a capital city are to be granted the concession. The zoning system will create so many anomalies and difficulties that it will be difficult to administer. I cannot think that any person will challenge this legislation in the High Court because the cost of doing so would be too great.
I commend the Government for the concession relating to compulsory acquisition of land. When a property is compulsorily acquired great hardship can be inflicted on the owner or the lessee. However, whilst the spreading - of the payment of tax over five years in the case of a compulsory sale is at least some concession, I still maintain that tax in such circumstances is a direct tax on capital. I differ from the view taken by the taxation authorities, who hold that, in any case, a .person is compelled to sell his stock in five years. That is not the case. What the settler does is to bring in his natural increase at the rate of one-fifth each year, and he puts out onefifth of his culls each year. Thus, his stock is static all the time ; and his stock is his capital. The legitimate breeder of sheep, or the legitimate grower of wool, does not buy and sell sheep in the ordinary sense. He is not a dealer. I, myself, have not bought sheep for twenty years. The breeder or wool-grower may buy a ram occasionally, but it cannot be said that he is a buyer and seller of sheep, on whose books the sheep may be valued at £1 a head. In the case of the legitimate settler, however, the sheep may be shown on the books at 4s. a head or £1 a head. In a compulsory sale, he may sell them at 30s., and he is obliged to pay tax on the basis of 26s. a head if they are in his books at the lower value. The period for the payment of such tax should be extended to at least eight years. Up to 1924 the act provided that breeding stock were not trading stock and, therefore, not taxable. That decision given by a lower court was upheld by a higher court. Here, however, we proceed on .the basis that such stock are still income and, therefore, still taxable. To-day, owing toexisting restrictions, a man who is obliged to sell out, say, for instance, on the expiration of his lease, cannot purchase a new property. He must, therefore, invest his money in Government bonds. In any case, the income from the sale lifts him into a higher range of income on which he is obliged to pay tax at a higher rate for the next five years, leaving him with practically no net income foi that period. I ask the Government to consider cases of that kind. In many other cases, people are obliged to sell their stock because their lease expires, and because they are unable to get another property. Those people do nol come within the five-year concession. The whole of their stock is sold in one year, and becomes income in that year, paying tax probably at the rate of 18s. 6d. in the £1. The result is that .practically the whole of the capital of those people is absorbed by tax. Again, a property and stock may have to be sold owing to the death of the owner. In that case also, the proceeds from the sale of the stock become income in that year. I ask the Government to allow the same concession in respect of such cases as is now provided in respect of compulsory resumptions. Such a concession would be of great value to beneficiaries under a will. Another aspect is that we are now suffering a severe drought, and many settlers will not be able to hold their stock. When they are obliged to sell, they are not allowed credit by agents. They are thus obliged to sell their only assets, their stock, as quickly as possible, and the proceeds therefrom become income in the one year. Senator McKenna referred to the concession introduced last year with respect to deferred maintenance. That was a very valuable concession. However, many people do not understand the position with respect to deferred maintenance. The facts should be made more widely known so that people entitled to such concessions can claim benefit under it. For instance, property owners cannot now obtain superphosphate, but the Leader of the Senate (Senator Keane) made it clear at the time that reserves for the purchase of superphosphate came under the heading of deferred maintenance. That fact should be made known generally, so that many farmers can obtain relief in respect of future purchases of phosphate in the future. In the meantime, that money is held by the Government and no interest is paid in respect of it. I again urge the Government to give careful consideration to the claims of taxpayers in the cases I have cited. The graziers of Victoria are very concerned, not only with respect to compulsory resumptions, but also with sales arising from the expiration of leases, or following the death of the owner, or compulsory sales for any other reasons. When people are compelled to sell their assets they should be allowed some concession. I again urge the Government to extend the period for the payment of tax in the case of compulsory resumptions to eight years.
– In view of the circumstances existing in Australia to-day, and the enormous financial obligations to which the nation is committed, the Government is to be congratulated on introducing this measure which gives some relief to those who are in most need of it. I should be only too happy to support a measure affording greater relief to the taxpayers as a whole, particularly to those on lower incomes. However, the relief to be provided under this measure, when considered in conjunction with certain social service benefits soon to be implemented, will bc of great benefit to the great body of taxpayers. Personally, I should like to sec the statutory exemption raised to £300, although, of course, I realize that it is hardly possible for the Government to grant so great a concession in the existing circumstances. The concession which I most appreciate of those to be provided under this bill is that in respect of dependants. It will be generally agreed that taxpayers with dependants are in most need of relief from the present heavy burden of tax, that is what might be called the family group. Young people who are earning good wages are opposed to the payment of income tax, but we know that the family set-up in Australia to-day is not the same as existed in days gone by. Today, many of these young people are better able to pay a tax than taxpayers rearing young families. I note with pleasure that that principle is recognized in this measure.
The Acting Leader of the Opposition (Senator Leckie) objected to the zone concessions. He declared that these concessions were being given for political purposes. I have always believed it to be wrong that allowances granted to workers living in remote areas, or living away from home, should be subject to income tax. I have had considerable experience in this matter because of my association with the Australian Railways Union and my knowledge of the awards of the Arbitration Court. Such allowances are not granted as an increase of wages to a worker, or in order to induce him to work, or live, in particular regions. They are awarded by the court only because the worker cannot escape the higher cost of living in those areas. In the railways services many men; particularly those employed in the ways and works branches, are. absent from home up to periods of three weeks at a time. If they are working within a reasonable distance of their homes they may return home once a week or if further out in an area where transport facilities are not available, they may be away from home for .two weeks. In their absence the wife is called upon to provide the ordinary necessaries of life for her family, and, at the same time, the husband must bear the higher cost of living in the area in which he is employed. These workers perform valuable service to the community, and in doing so suffer the - disabilities to which I have referred. For that reason they are entitled to the special allowances awarded to them by the Arbitration Court. They should not be deprived of the benefit of that allowance to which they are justly entitled. Therefore, the argument advanced by the Acting Leader of the Opposition that the concession in respect of such allowance is being granted for political purposes is absurd. I commend the Government for introducing the principle embodied in the zoning system. I am aware that in some cases these allowances” were not subject to tax, but many of the workers concerned were not aware of that fact, and, consequently, did not obtain any benefit in the past. The matter is now being placed beyond all doubt, so that all entitled to the concession will receive it.
Another substantial concession under this measure is in respect of medical expenses incurred by a taxpayer. Up to the present, doctors’ bills and chemists’ bills were practically the only expenditure in respect of which a concession has been allowed. It is now proposed to liberalize this concession by including dental expenses, and expenditure on optical services and hearing aids, &c. The old system under which only medical expenses and amounts paid to chemists for medicines were allowable as deductions was anomalous. No provision was made for other physical disabilities for which expenses were incurred.
The Acting Leader of the Opposition claimed that Australia was the highest taxed country in the world. What the honorable senator failed to say, however, was that social services in this country have been placed on an exceedingly high level indeed, and when increased benefits come into operation at the beginning of the next financial year, expenditure on social services will be increased still further. Invalid and old-age pensions and child endowment, payments are to be increased.
– Despite war expenditure.
– Yes. I believe that Australia is the only country in the world that is increasing its social services during the war. These services have to be financed, and the principle which this Government has adopted is that the money should be provided by direct taxation. That is the fairest way, because the largest contributions are made by taxpayers who are best able to bear the burden. A reduction of taxation cannot afford any substantial relief to taxpayers in the lower income groups. Therefore, the Government proposes to assist them by increasing invalid and old-age pensions, and child endowment payments to an amount totalling over £10,000,000. It is interesting to note the number of families in this country which are in receipt of child endowment. I have before me figures showing that the number of endowed children is on the increase. In 1941-42 there were 895,558 endowed children in Australia. In the following financial year, that number fell to 891,221, for what reason I do not know. In 1943-44, however, the number of endowed children was 903,577. The figures for the current financial year, of course, are not yet available. The number of endowed families throughout Australia in 1942-43 was as follows : -
The proposed increase of child endowment from 5s. to 7s. 6d. a week, which will cost about £6,000,000 a year, will represent a considerable set-off against income taxation. The following table shows the tax exemptions which apply to married taxpayers with from one to ten children -
I have not gone beyond families of ten children because’ the number is very small indeed. The increase of child endowment payments will be of considerable benefit to these people. It would be impossible to achieve the same result by a reduction of income tax. Children will be able to get a much better start in life. They will have an opportunity to enjoy the benefit of higher education, which is most necessary to-day. Unless a child is fitted in the best possible manner for the battle of life, he or she will have little opportunity of succeeding. In addition, of course, the Government has made available certain concessions in respect of education. That is a most important social service. We must regard the Government’s taxation proposals in a broad manner. The statement by the Minister for Trade and Customs (Senator Keane) in his second-reading speech on this measure, that the bill would provide certain concessions, does not present the whole picture. The Government is to be commended for its attitude towards social services at this difficult time in our history. I recall that in the not fardistant past, when the budget of this country was only a fraction of what it is to-day, anti-Labour governments claimed that it was impossible to extend social services. Yet to-day, in spite of the enormous cost of the war, this Government has shown itself to be alive to the needs of the people by doing its utmost to improve their living conditions. Taking the cue from what has happened during this financial year, I believe that we can look forward with confidence to a continuance of the Government’s policy of granting relief to the people of this country, not only by reducing taxes, but also by further improving social ser vices. Instead of saying that in this measure the Government has not done all that it might have done, we should congratulate it upon taking this step in this time of stress and need. I commend the bill to honorable senators.
Sitting suspended from 1.43 to 2.15 p.m.
– Taxation bills are usually unwelcome measures. In these days they involve so many technicalities that the layman must depend upon the explanations given by departmental experts for any knowledge he requires of various aspects of taxation. I am sure that I echo the views of many people when I say that the average taxpayer heaves a sigh of relief when he has finally completed his taxation return each year and sent it off to the department. There are so many deductions, allowances, rebates and other things to be taken into consideration that the ordinary person has great difficulty in completing his return without expert assistance. This bill is welcome, because it provides for a reduction of income tax. Although the reduction is only small, it will give heart to many people who have been heavily taxed in recent years. It will give them cause to hope that as the expenses of war decrease there will be further substantial reductions of the heavy load of taxation. Duringthe war, almost every bill that has come before Parliament has involved increased taxes and, therefore, it is a pleasure to deal with one which involves a decrease. This measure will remove approximately £2,000,000 from the total tax bill of the people, and those who will benefit are chiefly in thelower wage and salary groups. I am glad that the people in the lower income groups will be the first to obtain relief. The measure also provides for an entirely new departure in taxation principles in that it proposes to establish two zones in the Commonwealth within which special concessions will apply. These zones will include outback areas, where residents enjoy fewer amenities of life than the people living in the cities and the more closely settled country areas. The proposed allowances are not great, involving £40 in zone A and £20 in zone B, but I appreciate the fact that the Government has admitted that the pioneers of the outback areas suffer hardships which are not common to other localities. Now that the principle has been established, I hope that it will be further recognized in the more prosperous times to come by the granting of even greater concessions. More inducements should be offered, particularly to the younger generation, to set up businesses, commence production, and seek employment in remote areas. Residents of those districts have had to live on a very low standard in the past and have undergone many hardships. We should endeavour to attract people from the congested areas of our cities to the great outback areas, where population is badly needed. Other concessions are provided for in this bill, and T hope that they represent only the first step towards a general overhaul of the taxation system, which should be carried out as soon as more settled conditions prevail.
.- I support the bill. I heartily congratulate Senator McKenna on his masterly handling of the legal problems involved in this measure, which left no doubt in our minds as to the legality of concessions which are proposed to be made under the zoning system. I am very pleased that this bill will give some relief where it is most needed. Many of the proposed concessions are not so great as I should like, but I realize that the country has to bear a very great burden of expenditure for war purposes, for the ordinary purposes of government and for the improvement of social services, which the Government has undertaken at a time when no other country has dared to do so. Senator Gibson spoke of the difficulties of completing income tax returns and understanding the intricacies of income tax assessments. I remind the honorable senator that many people faced greater difficulties some years ago, when they had very little or no income at all. In those days, the filling in of forms would have been the least of their worries. This Government is determined that those conditions shall not recur, and in order to achieve that purpose it has enacted some advanced social legislation. This, of course, must mean that taxation must be maintained at a high level. The Acting Leader of the Opposition (Senator Leckie) had a great deal to say about the proposed zoning system, but his arguments on the legal aspect of the subject were answered completely by Senator McKenna. Senator Leckie must admit that there is a great deal of justice behind the Government’s recognition of the difficulties under which the people of the outback live. I do not suggest that the concessions proposed in this measure will compensate those people very greatly for the hardships which they experienced in pioneering the outback. However, like Senator Cooper, I am glad that their difficulties are being recognized at last. I received a letter recently from a woman who lives near Marble Bar. I would not even ask honorable senators opposite to visit Marble Bar in the summer-time, unless it were in preparation for the hereafter. Marble Bar has the reputation of being one of the hottest places in this world. The woman was one of the pioneers of that district. In her letter to me, which referred to the release of refrigerators, she wrote -
I am sure you must be appalled at the awful conditions those people are facing - to say nothing of the terrific heat. Since writing my last letter things have become much worse for our nor’-westers. The outback settlers naturally are the greatest sufferers as they are living practically on bread and meat. Some weeks ago a plane was sent up with a few vegetables, which was nothing less than a farce, some got a cabbage, some a couple of carrots, these were distributed -amongst the people in the port. Those in the outback got nothing. I hear a steamer is going north in a few days, missing Port Hedland, as she had no room to take more cargo. Goodness knows when she will. Tons of cargo - which accumulated while the steamer was in dock for repairs - is waiting to be picked up for the north. My son had a letter from a friend of his who lives in the same district, and, like my son served in the last war. Well, this friend is leaving there after 25 years of hard graft and in that time produced £85.000 worth of wool, besides bringing up a family of six, is now walking ofl” with nothing to try and get a job. The expenses these men have to meet are terrific, what with shearing, cartage, wharfage, freight, &c, to say nothing of the drought and storms they have had to face, and the man who has to meet all these expenses walks off with nothing. We must not forget they pay taxes and insurances as well.
The zoning proposals should be beyond all party political considerations. The people of the outback deserve assistance, no matter what their political affiliations may be. At present, the majority of their representatives in this Parliament are members of the Australian Labour party, but that has not always been so, and that fact should not affect the issue before the Senate. I have travelled very extensively in all States and I have seen a good deal of the outback districts. Any practical method of showing our appreciation of the difficulties that these people have to face by reason of climatic conditions and isolation cannot be over-stressed. One aspect of their life, particularly in the northwestern part of Western Australia is the high cost of the necessaries of life and of educational services for their children. These factors should be taken into consideration by the Government and the Taxation Department. More cognizance should be taken of the heavy expenses incurred by parents living in the outback in the education of their children. Many parents send their children away to boarding schools at the age of eleven or twelve years so that they may be properly educated. This involves great expense,* in addition to breaking family ties. It is expensive to send children to boarding schools, particularly when they have to travel by ship, aeroplane or whatever means of transport is available. These expenses have to come from the returns obtained by the people from their primary products. All of the concessions to be granted are not for the benefit of one section only, but for all sections in the zones. The graziers will benefit, and so will the labourers and shearers who are helping to make the outlying areas productive. We are told that £1,000,000 is involved in the concession to be granted, to those in certain zones and that itdoes not amount to much per capita. That is quite true, but the pop ula.ti ou in the zones is sparse, and the rebate to the individual income earner will be greater than appears on the surface. I hope that at some not too distant date this Parliament will grant further remissions of income tax. If there is to be a choice between high taxes and unemployment I shall endeavour to ensure that taxes shall be maintained at a high level, so that never again will the people have to experience the hard conditions that prevailed in the last depression period. We look back upon that time with great regret, but that is of no use. We should look with hope to the future and adopt a constructive policy. The object of taxation is to secure sufficient revenue to ensure the financial and economic stability of the country and enable it to advance to an era of prosperity.
– I always approach taxation measures with some diffidence because they always seem to me to be complicated and difficult? for the layman to understand. Yet I must admit that the taxation officials are extremely courteous and helpful. One has nothing to fear from them if one’s cards are put on the table. I understand that the imposition of fines or penalties for late income tax returns is a matter within the absolute discretion of the Deputy Commissioners. In many cases where a valid ex.pl ana tion is given it is accepted, but in some instances it is not. I understand that the Deputy Commissioners may inflict whatever penalty they think fit, and there is no appeal from their decision. That is not fair treatment of the taxpayers, and I hope that that matter will be noted by the Minister in charge of the bill (Senator Keane).
We are indebted to Senator McKenna for having outlined the constitutional position with regard to the zoning scheme for which the bill provides. Personally, I have no doubt about its constitutionality, but if may be a dangerous innovation. It is necessary to have boundaries showing zones, and T predict that pressure will be brought to bear for borderline alterations. I listened to Senator McKenna’s speech with interest. He remarked that Labour senators had to be thanked for the extension of the benefit of the zoning system to the division of Darwin and portion of Wilmot. He added that this had been done notwithstanding the fact that both of those divisions were at present represented in this Parliament by members of a party opposed to the Labour party. That is very kind and impartial of those honorable senators who urged the addition, but I point out that the first woman to be a member of the House of Representatives also had something to say about the matter. I refer to the honorable member for Darwin (Dame Enid Lyons), who would be an ornament to any Parliament. I am extremely glad, however, that those portions of Tasmania are to derive the benefit of the scheme.
The principal town in the area included is Queenstown, where settlement was established by force of circumstances in most inhospitable surroundings. Anybody who visits Mount Lyell at any time of the year will endorse fully that remark. The country is so barren and the climatic conditions so hard that it is well nigh impossible to grow vegetables there. Milk vendors have to feed their stock all the year round and even poultrykeepers cannot produce the necessary feed for their fowls in that locality. Senator McKenna has no doubt vivid recollections of having been snowbound on the west coast road a couple of years ago. I am glad the Government has seen fit to extend the benefit of the zoning system to that part of Tasmania, because the portion of Wilmot to be included embraces the lakes country where large hydro-electric works are being undertaken. If we are to differentiate between certain localities and others on the ground of isolation, climatic conditions and high cost of living, the residents in that, area should be included. At the committee stage I shall propose an amendment. Taxation is a stock subject, like the weather, about which most people growl. In the case of the Army it is said, “ Growl you may, but go you must”. The position with regard to taxation may be expressed by a slight, alteration of that axiom. “Growl you may, but pay you must.”. ,
.- Judging by the speeches of honorable senators opposite, they believe that the surest way to prevent unemployment and improve economic conditions is to maintain taxes at a high level. Senator Tangney remarked that, if it came to a choice between high taxation and the whittling away of certain social services, she would favour the maintenance of high taxes. Members of the Opposition do not wish the people to be deprived of social services, or to be unemployed, but, except for the abnormal conditions experienced at present, when thousands of men and women are on government payrolls, if taxes were retained at anything like the present level widespread unemployment would result. One of the best ways to help to get men into employment is to make the burden of taxation lighter than at present.
– “No taxation a t. all would be better still.
– Yes, but the Government must have revenue and a reduction of taxes would offer an inducement to employers to engage more workmen.
I am not opposed to the zoning method. I hope that the principle of making the burden of taxation easier for those who live in the more remote and less hospitable parts of Australia will be firmly established, but the Treasurer (Mr. Chifley) has admitted that the zoning system is far from perfect, whilst another member of the House of Representatives has declared that it is clumsily drawn. Certainly, living in some parts of Australia is much more uncomfortable than in the coastal areas and in the big cities. I am associated with one of the biggest employing industries in western Queensland. Although the mining company to which I refer has expended hundreds of thousands of pounds in providing facilities for housing its employees, and providing them with refrigeration, sewerage, sporting facilities and other amenities, and although the industry has been protected in recent years, difficulty has been experienced in securing employees even at the substantial rate of wages offering. Some of the employees of the company have left for more attractive localities. Eventually, we shall have to draw up a scheme providing that ‘people in certain latitudes and longitudes shall receive certain tax benefits. Senator McKenna said that a government which was formed by the party now in Opposition gave certain tax concessions some years ago to settlers in the Northern Territory, and they have remained. If I remember aright, the Government referred to went further than that and made definite offers of relief in the matter of taxation to those prepared to establish certain kinds of new enterprises in the territory. If we desire a greater decentralization of industry, we shall have to offer more inducements to people to settle in outlying areas. It is only natural that people should settle in districts where living conditions are most comfortable. I hope that this reduction of taxation is the forerunner of legislation to make easier the conditions of people living in outback areas. It is true that the relief which this measure will provide is not large, but I regard it as an instalment of reductions to be made in the future. If we are to get back to a state of economic stability we must reduce taxes. There is danger that governments which are in receipt of large sums of money from the people will budget on the basis of the revenue coming in rather than on the needs of the country. When the Treasury is overflowing there is a great temptation to seek new avenues of expenditure, and to embark on schemes and projects of various kinds, which may amount to handing out largesse to the people. When revenues are buoyant, it is better that governments should return to the taxpayers as much as possible, retaining only what is necessary for essential administrative purposes, and the needs of the community. I regard this bill as a step in the right direction and the forerunner of other reductions of taxation, and therefore I shall support it.
Senator HERBERT HAYS (Tasmania) 2.48]. - I support the bill which is a r&t instalment of what I hope will be progressive reductions of taxation. At present, the Government is in receipt of abnormal revenues because of the greater prosperity of the people, even though that prosperity may be only temporary, but I believe that the time has arrived for a national stock-taking, and a review of governmental expenditure generally. Under existing conditions, the Government is a big employer of labour, but I maintain that the proper function of a government is to govern. Experience has shown that it is in the best interest of a nation that individual effort shall be given every encouragement, and that the people should be as free as possible to expend their money as they think fit. There is a big difference of opinion as to whether expenditure should be mainly in the hands of governments, or of private enterprise. It cannot be denied that Australia has progressed and developed mainly as the result of private enterprise. I believe that the time is not far distant when the people will demand substantial reductions of taxation. During the war they have shown a readiness to contribute to war loans but any one who believes that they will continue to provide money on the same basis after the war will have a rude awakening. Should any government attempt .to maintain the existing heavy burden of taxation, and make no attempt to restore to the people the right to expend their money as they think best, it will soon be displaced by another government. I compliment the Government on these proposals to reduce taxes, and I hope that concurrently with these reductions the pruning, knife will be used, and that greater encouragement will be given to private enterprise and individual effort.
! - in reply - I thank honorable senators for their general support of this measure. During the discussion certain anomalies have been pointed out, arid I undertake to bring them, as well as the suggestions that have been made, to the notice of the Treasurer (Mr. Chifley). Reference was made to the possibility of a member of the fighting forces returning from the war only to find that his home is occupied by some one else, and that whilst he has to pay a higher rent for another property he will be subject to a tax on the income derived from his own property. That matter has already been considered by the Treasurer, who has undertaken to have a special inquiry made with a view to rectifying any anomaly that may exist. The bill will confer on taxpayers benefits totalling ‘about £2,000,000 a year. Of that sum, £150,000 represents relief in respect of a dependent spouse. A similar benefit will be derived by taxpayers with, other dependants. The rebate in respect’ of optical expenses will amount to about £50,000, and taxpayers will benefit by £40,000 in respect of expenditure incurred in providing attendants on incapacitated persons. The rebate in respect of hearing aids will represent a concession of about. £10.000. The zone allowance of £1,000,000 and the livingaway allowance of £600,000 will ‘bring the total to approximately £2,000,000 a year. An early reduction of taxation is the earnest desire of all honorable senators. The Government has already given consideration to the desirability of reducing taxes as early as possible. It ii generally agreed that the time is not yet ripe for big reductions, although in the interim some relief is considered desirable. This bill provides an instalment of that relief. A bill of this nature gives rise to suggestions of various kinds, such as have been made during the second-reading debate. The zoning proposal has been criticized on the grounds that it may be unconstitutional and will lead to pressure being applied to governments on a geographical basis. In this connexion, I point out that the Treasurer, has already stated that he sought the advice of the Crown Law Officers before introducing the zoning system, and was advised by them that it did not offend against the Constitution. The measure is designed to meet a very real anomaly, for the removal of which no more, satisfactory remedy could be found. The measure before us may not be perfect, but it represents a genuine and earnest attempt to meet a very real grievance. Even if it should lead to pressure from interested parties, it is preferable to resist undue pressure than to refuse relief to deserving taxpayers.
There was some criticism of clause 9 by the Acting Leader of the Opposition (Senator Leckie). The purpose of section 72a of the principal act is to enable Australian residents deriving income overseas which consists of dividends t’i be taxed only upon the amount remain ing after the tax had been paid in the country from which the income was received. By an inadvertence, however, the terms of the amendment were found to apply to ex-Australian persons earning income in Australia which is subject to tax in their own” country. These taxpayers would obtain a deduction of the tax paid by them in the country of residence. It is anomalous that that should be so, because the Australian resident does not get any reduction for Australian taxes paid by him. That point is more fully set out in the explanatory memorandum to which I direct the attention of honorable senators.
The Acting Leader of the Opposition also referred to concessions for discharged service personnel on their return to civil life. It can be said without reservation that such persons should have every consideration, but in the opinion of the Government, that consideration should be granted by direct means rather than through income tax legislation. Already, service personnel enjoy substantial income -tax concessions on their pay. and allowances, the value of these concessions has been estimated at approximately £18,000,000 per annum. The Government also - proposes to bring down a measure dealing with the re-establishment of ex-servicemen, and this- will confer considerable benefits upon ex-servicemen during the period they are being reabsorbed in civil life.
Another point raised dealt with the spreading of profits from the sale of live-stock consequent upon compulsory acquisition of land. The relevant provision in the bill is in identical terms with a proposal made by the Leader of the Opposition in the House of Representatives (Mr. Menzies) in the latter part of last year. The Government at that time was unable to accept his suggestion pending complete examination of it by taxation officers in consultation with interested parties. Several alternative schemes were considered, but, eventually, it was decided that the suggestion made by the right honorable gentleman had greater merit than the alternatives, and, accordingly, it was accepted. The Acting Leader of the Opposition (Senator Leckie) said that no tax concession was allowed in respect of a daughterhousekeeper. Such a concession is allowed in section 160 (2) aa of the act which is set out on page 26 of the annotated copy of the bill. I am also reminded that the concession of £50 in respect of medical expenses applies in respect of each member of the family, and not to the taxpayer’s family as a whole. Senator Sampson raised an interesting point with respect to the taxpayer’s right of appeal. All taxpayers have the same right of appeal to the Board of Review with respect to penalties which exceed 10 per cent, per annum as they have with respect to any matter arising under this legislation. Senator Herbert Hays said that in connexion with any review of taxation, or the raising of further loans, the Government should he able to assure the people that it is effecting economies- wherever possible. I can only say that in the service departments a business board is operating all the time, and keeps a check upon expenditure, whilst the Public Service Board, with a view to effecting the requisite reductions of staff, carefully watches various departments as the work of those departments diminishes. I cite my own department as an illustration. The Division of Import Procurement now employs 1,500 persons. That branch was set up three years ago, and it will be required, probably, for another eighteen months. I, as the responsible Minister, maintain a careful surveillance of the staff of that branch in relation to its volume of work. Every other Minister also has been ordered by the Prime Minister (Mr. Curtin) to watch their staffs with a view to effecting adjustments as the work diminishes. This supervision is necessary, in order, first, to ease the shortage of man-power, and, secondly, to give to the individuals whose services are no longer required full opportunity to obtain permanent employment outside.
– - “What about surplus service personnel in Australia?
– I take it that the honorable senator refers to lines of communications personnel. That matter is being carefully watched. The honorable senator will realize that the staffing of the Army is an Army matter, and is supervised, not only by the Minister for the Army, but also by the Defence Committee, the War Commitments Committee and War Cabinet, who have the subject practically under daily review. As to whether changes will be made in the near future, I cannot say.
Generally, this measure is an instalment of tax relief. It breaks new ground by providing concessions in respect of zone allowances and livingawayfromhome allowances. As a union advocate in the Arbitration Court, I am familiar with that aspect. I was always of opinion .that those allowances were inade quate. If we are to people the outback, as Senator Cooper advocates, we must make living conditions in isolated areas more attractive. We can do so by helping residents in those areas as is proposed under this measure, because such people are at a considerable disadvantage compared with people living in more populous centres.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 4 agreed to.
Clause 5 (Disposal of assets of a business).
– I referred to this matter in the course of my second-reading speech, and intimated that I would move certain amendments. However, as the Leader of the Senate (Senator Keane) has given an assurance that- he will again look into the matter to see what relief can be afforded along the lines I indicated, I shall not move an amendment to the clause.
Clause agreed to.
Clauses 6 to S agreed to.
Clause 9 (Income tax paid abroad on ex-Australian .dividends).
– I dealt at some length with this clause, in my second-reading speech. I confess that I am not convinced “by the explanation just given by the Leader of the Senate (Senator Keane). He did not cover the point I have’ emphasized that profits made outside Australia are taxed . at their source. The commissioner . will have difficulty in administering this provision. Shareholders who have already paid tax in another country will have to pay an extra tax on the full amount received in another country, because they are not able to establish the proportion of profits made in Australia to those made outside Australia. Therefore, I appeal to the Government to delete this provision until the matter has been more fully investigated.
– I undertake to bring the representations made by the Acting Leader of the Opposition to the notice of the Treasurer (Mv. Chifley).
Clause agreed to.
Clause 10 agreed to.
Clause 11 (Deduction for residents of isolated areas).
– I propose to vote against this clause, because I think that it is dangerous. First, I should like to refer to some quotations made this morning by Senator McKenna. The honorable senator himself will realize that, in this chamber, the presentation of arguments based on legal decisions is quite different from the presentation of arguments in court, because judges are trained in the law. They also have the law reports before them. Should they note differences in quotation, or the omission of important points by a lawyer in dealing with a particular aspect, they are not impressed by the precedent cited. Senator McKenna, as the only lawyer in this chamber, enjoys an advantage in argument based on legal decisions. However, he should not omit salient points in his quotations. I am not accusing him of unfairness. Dealing with the decision in Barger’s case, he quoted extensively from the dissenting judgment of Mr. Justice Isaacs, and also an opinion expressed by Chief Justice Knox, which he submitted was in agreement with that expressed by Mr. Justice Isaacs. However, he passed rather lightly over the opinion expressed so emphatically by Mr. Justice Evatt in the Elliott case. When Senator McKenna spoke this morning, he did not quote as fully as he might have from the case Elliott v. the Commonwealth. I draw the attention of honorable senators to the following opinion of Mr. Justice Evatt in C.L.R. 54 at page 686 : -
A fundamental proposition of law established by Barger’s case (3) was that the preference forbidden by sec. 99 of the Constitution includes any preference given to persons associated with any locality within the Commonwealth so far as it comprises the aggregation of the geographical areas ofthe six States, such preference necessarily resulting in a preference either to a State or to some part thereof (4).
The dissenting opinion of Isaacs J. was that sec. 99 forbade preferences . “ in relation to the localities considered as parts of States, and not as mere Australian localities, or parts of the Commonwealth considered as a single country” (5).
It may be observed that in such opinion the phrase “ considered as “ is ambiguous. In one sense it may refer to the motive of the Commonwealth legislation or regulation. In another sense it may refer to some stated relation between the favoured localities and the States to which they belong.
On the following page the report continues -
A minor proposition of the majority of the Court in Barger’s case (3) was that sec. 99 was infringed by reason of the conditions of exemption prescribed in the particular statute then under consideration. The majority was of opinion that proof of such infringement was sufficiently shown if manufacturers in different parts of the Commonwealth might receive differential treatment as a result of the application of the conditions already described. On this point both Isaacs and Higgins JJ. dissented, Higgins J. pointing out that, under the conditions of exemption, the case of each manufacturer had to be considered in the light of all the conditions of life and of business, not excluding locality, so that, even if any differential treatment resulted, it was “not based on locality” (4).
In this case of course the proposal is based on locality. On page 688, Mr. Justice Evatt quotes an opinion by Isaacs J., in Barger’s case. It is as follows: - “ The area is merely a convenient label to indicate similar industrial circumstances, irrespective of State boundaries, or State districts. The act applies the one rule to goods made “ in any part of the Commonwealth,” the one standard, reasonableness,or if variation of rule is possible, it is variation of the Court’s idea of justice, and in no way determined by the mere fact of locality. So far from finding in the act partiality for any special localities, I discern the most absolute impartiality, and absence of discrimination of or against any particular locality.”
This opinion was, of course, similar to that expressed by HigginsJ. (2), to which reference is made above. When, therefore, KnoxC.J. (3) agreed with Isaacs J.’s definition ( 1 ) of “ discrimination between localities,” he was certainly not accepting the main argument of Isaacs in Barger’s case (4). Indeed, I find it impossible to believe that Knox. C.J. was prepared to reject the main principle of interpreting sec. 99 as laid down by the majority in Barger’s case (5), particularly as sec. 99 was not directly involved in Cameron’s case (6).
On page 690 the report states -
Accordingly, there was a very solid foundation for the conclusion reached in Barger’s case ( 1 ) by the majority of the court - that sec. 99 forbids all preferences which arise solely as a legal consequence of association with or reference to any locality in “ Australia,” i.e., “one or moreof the States of Australia.” The opposing view of IsaacsJ (2) - that the only preference forbidden by sec. 99 is preference to a State or a part of a
State “ considered as “ such - involves the proposition that sec. 99 is not infringed if (say) a Commonwealth enactment exempts from taxation “ all persons carrying on business or resident at Brisbane.” On Isaacs J.’s view, presumably, such an enactment would not give a preference to a part of Queensland “ considered as “ a part of Queensland. But it is indisputable that such an enactment would give a preference to Brisbane, and, as Brisbane is part of the State of Queensland, the enactment would give a preference to a part of a State over the five remaining States of the Commonwealth. Similar examples may be multiplied indefinitely - e.g., preferences might be given to persons associated with an electoral division, a municipal or shire area, and so forth: in all such cases a careful analysis of the enactment would reveal an infringement of sec. 99. In truth, the extension of the prohibition in sec. 99 to “ part of “ a State, whether it is a large part or only a small part, makes it impossible to apply the view, advanced by Isaacs J. in Barger’s case (2), but rejected by the majority.
I could quote much more from the same case,but I do not wish to delay the committee at this hour. I point out however, that when a lawyer happens to be the only representative of the legal profession in this chamber, he should be sure that all the circumstances of a case which he cites are disclosed to the innocents on this side of the chamber.
– I regret that the Acting Leader of the Opposition (Senator Leckie) was not in the chamber during the whole of my address this morning. He would have heard how I dealt with Mr. Justice Evatt’s decision in the case Elliott v. the Commonwealth. I quoted the head-note only and that note included this expression by Mr. Justice Evatt -
The section is not infringed if the preferential treatment is a consequence of a number of. circumstances, including the circumstance of locality.
Whilst the Acting Leader of the Opposition did not accuse me of being unfair or of suppressing facts, he hinted at it, and warned honorable senators of the danger of accepting from a lawyer brief extracts from a judgment. I warn the committee, too, against accepting from a layman part of a judgment. Although the Acting Leader of the Opposition read part of the judgment of Mr. Justice Evatt, he did not follow it to a logical conclusion. On page 692, we find that His Honour concluded with these words -
The logical result of the above discussion of principle and authority is that, in relation to sec. 99 the following propositions should be accepted: -
the section is not infringed if the preferential treatment is a consequenceof a number of circumstances including the circumstance of locality.
I repeat what I said this morning: The judgment of Mr. Justice Isaacs received the express approval of the Privy Council in a later case in 1940, Moran v. the Commonwealth.
Clause agreed to.
New clause 11a.
– I move -
That, after clause 11, the following new clause be inserted: - “ 11a. After section eighty-one of the Principal Act the following section is inserted: - 81a. Where the income of any taxpayer who has served outside Australia during the present war as a member of the defence force and has been discharged from, or ceased to hold an appointment in, that force, includes rent derived by him from a dwelling house occupied by him immediately prior to Ms becoming a member of the defence force and leased by him while he was serving as such a member to another person, and he has been -
unable to obtain possession of the dwelling house for his own occupation ; and
in occupation of another dwelling house or other living accommodation for which he has paid rent, so much of the rent derived by him as, in the circumstances of the case the Commissioner thinks reasonable shall be an allowable deduction.’ “
I move that amendment notwithstanding what the Minister for Trade and Customs (Senator Keane) said when replying to the second-reading debate. I take this action because of a promise which I made to an organization to which I belong. The Minister, and I think all honorable senators, are well aware of the position, and understand’ why this amendment is being moved. I suggest that if the solicitude which is being expressed for our fighting men by honorable senators opposite is sincere, this committee will agree to the insertion of this proposed new clause in the bill.
– In view of the assurance which I have already given to honorable senators, the Government cannot accept the proposed new clause.
– “Whilst I agree that it is most laudable that we should do everything possible for our ex-servicemen, why should we confine the benefits of this provision to men who have served outside Australia? There are many other men who have served in the Royal Australian Navy and Royal Australian Air Force on the Australian coast. “Why should not those men be included? They have rendered valuable service to thi3 country. I suggest to the honorable senator that he should include all ex-servicemen who have been engaged on active service. The proposed exemption is laudable, and I ask the Minister, when making his investigations, to consider those men who .have not served beyond Australia.
– I should like the investigation to go further than has been proposed by Senator Hays. There is no reason why the exemption should be restricted to members of the fighting services only. I am thinking of working people, such as railway employees, who are transferred from place to place in the course of their employment. These people often establish homes of their own and are subsequently transferred to another locality. They are then obliged to let their homes and rent houses for which they sometimes pay higher rentals than they receive. In any case, even if the rentals they receive are less than they pay, they are still taxed upon the amount of rent derived from their own properties. Something should be done in the interests of these people. If they receive more in rent than they pay, the taxable amount should be the difference between the two amounts instead of the total amount of rent received. I hope that the inquiry will include such cases as I have mentioned.
– I point out that the proposed new clause which I have moved ends with the words “ so much of the rent derived by him as, in the circumstances of the case the .Commissioner thinks reasonable, shall be an allowable deduction”. That would take into consideration the full circumstances of each case, and the Commissioner would have power to allow whatever deduction he thought fit.
.- The comments of Senator Hays and Senator Finlay provide an excellent justification for the Government’s determination to examine this matter thoroughly. The matter is related in some degree to the National Security (Landlord and Tenant) Regulations, which are under my control and in connexion with which I hear of numerous cases of people who have vacated their homes either to go to the war or to go to some occupation connected with the war, and who subsequently are unable to return to their homes. The matter is under review by Cabinet at present. The aspect of the subject which affects servicemen is provided for under other regulations. A soldier or his relatives cannot be evicted from a home, and the whole problem is very complicated.
– We want soldiers to be able to get back into their homes.
– Yes, and we also want to get certain civilians back into their homes. Any amendment of the bill in the manner suggested would not be in the interests of the community, and therefore I oppose the proposed new clause.
.- This is a rather dangerous proposal, because special regulations are in force. I look forward to a time when the National Security Regulations will be no longer operative. However, they will probably continue in force for some time, and in the meantime relief should be given along the lines that have been indicated by other honorable senators. I am in agreement with Senator Finlay that relief should be given if the case is deserving. I have in mind the case of a railways employee who, in view of his approaching retirement, bought a home. As he was not due to retire for a year or more, be let the house, but when he retired he could not obtain possession of it, and is still not in possession. There are many cases of that kind. I hope that the Minister will accept the proposal submitted by Senator Sampson as a temporary measure that can be repealed when the National Security Regulations cease to be operative, or that otherwise he will make a powerful appeal to the Treasurer (Mr. Chifley) to remove the evils which exist. I do not believe that such cases should be based entirely on the needs of ex-servicemen, but the great majority of cases involved are those of ex-servicemen and therefore Senator Sampson is justified in submitting his amendment on behalf of exsoldiers. I assume that the proposed new clause will not be agreed to, because the Minister has expressed opposition to it, but I know that he will have the matter thoroughly investigated.
– Have we the Minister’s assurance that, in his investigations, he will take into consideration cases such as were mentioned by Senator Finl ay?
– That aspect of the matter is at present under consideration by Cabinet.
Question put -
That the proposed new clause (Senator
Sampson’s amendment) be inserted.
The committee divided. (The Chairman - Senator Courtice.)
Majority . . . .7
Question so resolved in the negative.
Clauses 12 to18 agreed to.
The Principal Act is amended by adding at the end thereof the following Schedule: -
The Territories of Papua. Norfolk Island, and New Guinea.
– I move -
That in paragraph3 of Part I. after the words “ New Guinea “ the following words be inserted: - “and the Northern Territory”.
The Commonwealth has complete control over the Northern Territory, and, therefore, there are no constitutional difficulties involved in my proposal. The worst climatic conditions in the Northern Territory are in the southern part to the east and west of Alice Springs. That area is the driest and hottest part of the country, and it is virtually a desert. I am convinced that settlers in that region are deserving of consideration.
– I cannot accept the amendment.
Amendment (by Senator Fraser) proposed -
That paragraph 2 ofPart II. of the Second Schedule be left out with a view to insert in lieu thereof the following paragraphs: - “ 2. All that portion of Tasmania lying south and west of a line commencing on the west coast at the southwest corner of the County of Wellington and thence generally easterly and southerly by the boundaries dividing the counties of Wellington Devon and Westmorland from the counties of Russell Lincoln and Cumberland to the point on the River Shannon where the hydro-electric transmission line from Waddamana to Launceston crosses that river thence in a straight line in a general southwesterly direction to the trigonometrical station known as Fishers Sugar Loaf thence by a straight line in a general southwesterly direction to the point where the Lyell Highway crosses theDee River thenceby a straight line in a general southwesterly direction to the confluence of the Derwent and Florentine Rivers thence by a straight line in a general southerly direction passing through the trigonometrical station on South East Cape to the southern coastline.
All the islands forming part of Australia lying adjacent to the coastline of either of the portions of Australia described in paragraphs 1 and 2 of this Part.”
– I protest against this amendment. It affords the first example we have had of pressure politics. I do not question the right of the portion of Tasmania referred to in the amendment to be included in. the areas which will receive the benefit of the zoning system. . That part of Tasmania is, no doubt, entitled to treatment similar to that of other areas in Australia where there are similar disabilities, but once we give preference to particular areas there will be continuous pressure from all parts of the Commonwealth for other areas to be included. Having entered my protest, I shall let the matter rest there.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 20 agreed to.
Title agreed to.
Bill reported with an amendment; report adopted.
Bill read a third time.
– In conformity with the sessional order that, unless otherwise ordered, the motion for adjournment shall be put on Fridays at 3.45 p.m.,I formally put the question -
That the Senate do now adjourn.
Question resolved in the negative.
Debate resumed from the 8th May (vide page 1437), on motion by Senator Keane -
That the bill be now read a second time.
– As this is largely a machinery measureI shall not debate it. It would be unwise to oppose it, and the Opposition will not delay its passage.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Motion (by Senator Keane) agreed to-
That the Senate, at its rising, adjourn toa date and hour to be fixed by the President, but not earlier than Wednesday, the 30th May, which time of meeting shall be notified to each senator by telegram or letter.
Senate adjourned at 3.53 p.m.
Cite as: Australia, Senate, Debates, 11 May 1945, viewed 22 October 2017, <http://historichansard.net/senate/1945/19450511_senate_17_182/>.