The President (Senator the Hon. Gordon Brown) took the chair at 10.30 a.m., and read prayers.
page 2833
QUESTION
SHIPPING
Queensland, Western Australian and Tasmanian Services
Senator COOPER: QUEENSLAND
– Has the Minister for Supply and Shipping read in the Brisbane Telegraph of the 19th May a statement by Mr. J. Elliott, Queensland representative of H. Jones and Company Proprietary Limited, that the shipping position between Brisbane and the south of Tasmania is worse now than at any time during the war, and that unless the authorities do something there is every likelihood of almost a jam famine in Queensland ? Will the Minister order an investigation into Mr. Elliott’s complaint and take appropriate action to rectify the position?
Senator ASHLEY: Minister for Supply and Shipping · NEW SOUTH WALES · ALP
– I have not read the report in the Brisbane Telegraph to which the honorable senator has referred, but I shall have inquiries made to ascertain if the position is as stated by him, and shall furnish an answer to his questions as early as possible.
Senator ALLAN” MacDONALD: WESTERN AUSTRALIA
– In view of the conflicting figures published from time to time in press reports of the cargo tonnages in eastern ports awaiting shipment to Fremantle and other Western Australian ports, will the Minister for Supply and Shipping ascertain the correct figures in this respect? All of us are aware of the shortage of shipping. Recently, for instance, motor bodies had to be railed from Adelaide to Perth.
Senator ASHLEY:
– I shall endeavour to obtain the figures sought as soon as possible. However, I point out that there is always an accumulation of cargoes at every port. It is not possible to despatch cargoes immediately they reach the wharfs, because steps must be taken to provide each vessel with a suitable and
page 2833
QUESTION
TO
economical cargo. Delay is also caused in assembling cargoes for particular destinations. The information sought, by the honorable senator is rather comprehensive and will take considerable time to prepare. However, I shall endeavour to ascertain the figures as early as possible.
Senator HERBERT HAYS: TASMANIA
– With reference to the withdrawal of Taroona from the Bass Strait service for overhaul, does the Minister for Supply and Shipping realize that there is an acute shortage of shipping in the Tasmanian service? Can he say when the repairs to this vessel will be completed and when it will again be placed in service ?
Senator ASHLEY: ALP
– I think that because of the statements which I am constantly making with regard to the shortage of shipping throughout Australia every one must realize the difficulty. I shall make inquiries with regard to the overhaul of Taroona and ascertain when it will again be placed in commission.
page 2833
QUESTION
PRICES CONTROL
Meals
Senator TANGNEY: WESTERN AUSTRALIA
– Has the attention of the Minister for Trade and Customs been drawn to an article in yesterday’s Sydney Daily Telegraph in which it is claimed that four Sydney hotels have gained a moral victory over the Government, which has not prosecuted them for overcharging for meals, notwithstanding that they were visited by officials of the Prices Branch in March and April last? Has any action been taken against those restaurants which have openly defied the Government’s ruling by charging excessive prices for meals, to which I drew attention in this chamber last November ?
Senator COURTICE: Minister for Trade and Customs · QUEENSLAND · ALP
– The matter raised by the honorable senator is receiving the closest consideration by the Prices Commissioner. Although many people may gain immoral victories over the Government I do not think it can be said that any one has gained a moral victory over it in matters of this kind. I feel sure that before long the whole matter will be satisfactorily adjusted.
page 2834
QUESTION
HOSPITAL ACCOMMODATION AND SERVICES
Senator BEERWORTH: SOUTH AUSTRALIA
– In view of the almost entire absence of hospital accommodation on the 1,100 miles of railway between Port Augusta and Kalgoorlie - except for that associated with the medical services supplied by the Inland Mission - will the Minister for Health have inquiries made regarding present resources with a view to providing- more adequate safeguards for railway employees and outback residents?
Senator McKENNA: Minister for Health · TASMANIA · ALP
– I shall be glad to make the inquiries suggested by the honorable senator, but until the Commonwealth develops its own medical services it would not be possible for the Commonwealth to intervene directly in the matter. However, I shall ascertain what the deficiencies are, and if I can direct any activity that will remedy the position indicated by the honorable senator I shall do so.
Senator ALLAN” MacDONALD:
– In view of the many and diversified representations that have been made by the States to the Minister for Health in regard to hospital accommodation, the shortage of nursing staff and other trained hospital personnel, is he in a position to advise the Senate of what steps his department has taken to solve the problems associated with these matters? I should like to know also where the Minister proposes to get the increased hospital staffs, medical officers, &c, to implement the Commonwealth medical and hospital scheme ?
Senator McKENNA:
– Hospital services are not at present the responsibility or obligation of the Commonwealth. Early this week, I conferred with the State Ministers for Health regarding these matters. The conference agreed that the Commonwealth should, by legislation, seek power to control and direct hospitals throughout Australia. The causes of the shortage of nurses were examined and I explained to the Ministers what the Commonwealth was doing. Through the Minister for Immigration we have been in touch with Great Britain, and although that country itself is deficient in nurses to the extent of approximately 30,000, the British authorities are prepared to make 200 trained nurses available within the next few months, and a. further 115 soon afterwards. The Minister for Immigration has also taken up with the British authorities the question of releasing medical orderlies and trained personnel amongst the Poles who are within the category of displaced persons and are in the United Kingdom itself. There again the services of these people are badly needed in Great Britain, but the British Government has undertaken to make 100. available. The Minister for Immigration has also been in touch with the British authorities regarding trained personnel amongst displaced persons in the British occupied zone of Europe, and it appears that there are many trained or partly trained individuals who would be eminently suitable for this country. Apart from the fact that they would make desirable immigrants, many of them would be in a position to relieve trained nurses now working in institutions such as tuberculosis hospitals, mental hospitals and benevolent homes, where a high percentage of trained personnel is not required. If these people be brought to Australia they will be granted certificates of exemption for two years on condition that they give their services in institutions nominated by the Minister.
Senator Allan MacDonald:
– A certificate of exemption from what?
Senator McKENNA: TASMANIA · ALP
– A certificate of exemption from the application of the immigration laws. If they do not keep to the work that they are directed to undertake they will immediately become prohibited immigrants and may be removed from the country. It is contemplated that, if they comply with the direction and are otherwise desirable, they will be allowed to remain here permanently. The conference of Ministers for Health also requested that the Commonwealth take action to provide for training, registration, and, if possible, uniform pay and conditions for the nursing profession in Australia. It is recognized that lack of uniformity in regard to these factors militates against the entry into the profession of many young women. The whole situation needs to be put on a uniform basis in order to prevent competition between institution and institution, between State and State, and between department and department for the services of trained persons who are already in short supply. Power to do this sort of thing is, I believe, implicit in the new powers that were conferred upon the Commonwealth ut the recent referendum.
Senator TANGNEY:
– Has any thought been given to bringing to Australia not only trained personnel but also young girls who are willing and capable of being trained as nurses? Such girls would grow up and become accustomed t<> conditions in our hospitals, and would eventually find their niche in the Australian nursing profession.
Senator McKENNA:
-Thought has been, given to this matter. Amongst displaced persons in Europe are many partially trained nurses and other desirable people. In particular, we have been advised that Baits, of whom there are over 80,000 amongst displaced persons in Europe, would be especially suitable as immigrants. They are a very fine type of people, and I am sure that they would be a valuable acquisition to Australia, not only from the nursing viewpoint, but also from the general aspect. The Minister for Immigration has this matter under consideration. When he goes abroad next month he will concentrate his attention upon it.
Senator LAMP: TASMANIA
– Has anything been done in relation to the scheme mooted by the Indian Government for the training of Indian women as nurses in Australia?
Senator McKENNA:
– I have no knowledge of that matter at present. Of course, such an arrangement would necessarily be initiated by the State Governments. It would come under the. control of the Minister for Immigration. I am not now able to inform the honorable senator with any degree of accuracy of what has happened.
Senator. ALLAN MacDONALD.With reference to the statement by the Minister regarding the conference in Melbourne between himself and State Ministers for Health, at which it was decided that the Commonwealth should legislate for the organization of hospital work, is the honorable gentleman at liberty to indicate whether the decision of the conference was unanimous?
Senator McKENNA:
– The transcript of proceedings at the conference is not yet available, as the conference took place only on Monday and Tuesday last. Certain resolutions were unanimous. In one instance, four Ministers were in favour of a resolution and two were opposed to it. In relation to other resolutions, I cannot claim specifically that there was unanimity, but they were voted for by a number of Ministers, whilst others recorded the fact that they offered no objection but did not vote. A very large number of matters was dealt with at the conference. The details of the resolutions and the voting in respect of each of them are not in my mind at present, but a record of the proceedings will be printed and tabled in the Senate soon.
page 2835
QUESTION
CABBAGE MOTH
Senator ASHLEY: ALP
– On the 1st May, Senator Lamp addressed a question to me, upon notice, requesting that I ask the Treasurer to make a special grant to the Council for Scientific and Industrial Research for work designed to eliminate the cabbage moth.
I am now in a position to inform the honorable senator that the problem of the cabbage moth is already being investigated by the Division of Economic Entomology of the Council for Scientific and Industrial Research. I understand that the control of the pest by dusts and sprays has been the subjectof large-scale field trials for the last five years, and the superiority of DDT over the insecticides previously used has been established. Spray schedules have been worked out, and the results are due for publication, and have already been published in part. The control of the cabbage moth by parasites is one of the projects on which the Biological Control Section of the division is concentrating at present. This investigation, however, is only in its first year. The pest is also receiving attention from State entomologists.
page 2835
QUESTION
SOIL EROSION
Senator AYLETT: TASMANIA
– Can the Minister representing the Minister for Commerce and Agriculture say whether any Commonwealthwide plan has been devised in conjunction with the State governments for the prevention of soil erosion, which is particularly noticeable in times of drought ?
SenatorCOURTICE: - I cannot say offhand what arrangements are being made to deal with soil erosion, but I know that this subject is constantly under consideration by various governments. I shall bring the honorable senator’s question to the notice of the Minister for Commerce and Agriculture.
page 2836
QUESTION
SOAP
Senator SHEEHAN: VICTORIA
asked the Minister for Trade and Customs, upon notice -
Is it afact that consequent upon the recent increaseof the price of tallowpermission has been granted by the Prices Branch for an increase of the price of soap?
What was the date of application for such increase and the date upon which it was granted ?
Were any steps taken by appropriate authorities to ascertain the quantities of manufactured soap held by (a) manufacturers, (b)wholesale distributors, (c) retailers; if not, why not?
By how much was the retail sellingprice of toilet and household soap increased?
SenatorCOURTICE.- The answers to the honorable senator’s questions are as follows: -
Yes.
Application for an increase of the price of soap was made on the 4th February, 1944, and reviewed on various dates until the 9th May, 1947, when approval was given. Price increase operated from 19th May, 1947.
No. This task would take many weeks andis not usually undertaken unless there are grounds for believing that abnormal stocks are held. Conversely, when prices are reduced no record is taken of stocks in the hands of traders that were purchased at higher prices. 4, Toilet - nil. Household - advertised lines range from½d. for 9 oz. to1d. for 30 oz. - others½d. per 8 oz.
page 2836
QUESTION
FLAX
Senator GIBSON: VICTORIA
asked the Minister for Supply and Shipping, upon notice -
In view of the statement of the Chairman of the Flax Production Committee that Britain pays two-thirds of Australia’s loss on all trading and capital losses on flax production, will the Minister inform the Senate of the total cost to Great Britain to date of - (1) capital losses, (2) material losses?
Senator ASHLEY: ALP
– A similar question was raised in this chamber by Senator Aylett last year, and my reply is recorded in Hansard of the 31st July, 1946. In amplification of that reply, I have to state -
That the British Government’s share of the trading losses incurred in the production of flax in Australia to the 30th June, 1946, was £367,054.
The British Government’s share of the capital losses will not be known until the actual total capital losses have been determined by (a) Actual realization in the case of the mills at which operations have been abandoned and (b) by valuation as assessed by the DirectorGeneral of Works in the case of mills which at present are being continued under Commonwealth control. Some of the mills referred to in (a) have already been disposed ofthrough the Commonwealth Disposals Commission, and the sale of the rest of these mills should be completed within the next three months. The valuations now being made by the DirectorGeneral of Works of the assets at continuing mills should also be completed within the same period. It is estimated that the British Government’s share of the capital losses will be to the order of £300,000.
page 2836
QUESTION
PETROL TAX
Senator AYLETT:
asked the Minister for Supply and Shipping, upon notice -
What amount of petrol tax, or what percentage per gallon of such tax, was paid to each State prior to the 1939-45 war?
What percentage of increase has been given to the States from the petrol tax, and when was it given?
Is it a fact that the Federal Government decides exactly upon what roads the petrol tax must be expended?
Is it a fact that the approval of the Federal Government must be obtained before any portion of such moneys can be spent on any particular country road by State or municipal governing bodies?
Senator ASHLEY: ALP
– The answers to the honorable senator’s questions are as follows : -
Amounts paid to States in accordance with the provisions of the Federal Aid Roads Act 1931, the Federal Aid Roads Act 1936 and the
Federal Aid Roads and Works Act 1037 to the 30th June, 1939, were as follows: -
{: type="1" start="2"}
0. Under the provisions of the Federal Aid Roads Act 1931, .States were .granted the equivalent of 2-Jd. per gallon of customs duty mi imported petrol and lid. per gallon of excise duty on locally refined products. The Federal Aid Roads and Works Act 1937 included provision for the increase in the grant from the 1st July, 1937 to the equivalent of 3d. per gallon of customs duty, and 2d. per gallon of excise duty on locally refined products other than benzol, in respect of which the 'amount remained at lid. per gallon. 3 and 4. The Commonwealth Aid Roads and Works Bil] recently under discussion in the House of Representatives contains provision for amounts made available to the States by the Commonwealth to be expended by the States in accordance 'with the policy laid down by the Minister for Transport, to whom a statement of proposed allocations for roads is to be submitted prior to the 30th .June in each year.
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page 2837
{:#debate-9}
### SERVICES TRUST FUNDS BILL 1947
Bill received from the House of Representatives.
Standing and Sessional Orders suspended.
Bill (on motion by **Senator COURTICE)** read a first time.
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#### Second Reading
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##### Senator COURTICE: QueenslandMinister for Trade and Customs · ALP
-- I move -
>That the bill be now read a second time.
The bill provides for the establishment of trust funds to he known as Services Canteens Trust Fund, the Royal Australian Navy Relief Trust Fund, the Australian Military Forces Relief Trust Fund, the Australian Military Forces Relief Trust Fund, and the Royal Australian Air Force "Welfare Trust Fund. The money to be paid into these trusts has been derived partly from profits -of canteen trading during "World "War II., and partly from surplus mess and amenities funds of the services. It will also include funds from the existing Royal Australian Navy Relief Fund and Royal Australian Air Force "Welfare Trust Fund, a substantial part of which was accumulated prior to World "War II.
All the funds to be established under this bill will be used for the benefit of service men and women, ex-service men and women and their dependants. The Services Canteens Trust Fund will have transferred to it the amount of approximately £4,500,000 and this will be for the benefit of personnel of the Army, Navy and Air Force who served during World "War II. Of this amount, £2,500,000 is being set aside for the children of deceased, or incapacitated, servicemen or of eligible servicemen who are in needy circumstances, and it will be used for their education and general welfare. The Navy, Army and Air Force Funds of £60,000 each will be for the benefit of servicemen, ex-servicemen and their dependants who served outside the period of the 1939-45 war.
The trustees of the Services Canteens Trust Fund to be appointed by the Governor-General under the provisions of the bill will be - Chairman, Brigadier A. S. Blackburn, V.C., barrister, served in 1914-18 and 1939-45 war, ex-president of Legacy and present president of South Australian branch of the Returned Sailors, Soldiers and Airmen's Imperial League of Australia; representative of Naval Board (not yet nominated) ; representative of the Military Board,
Adjutant-General, Major-General W. M. Anderson ; representative of the Air Board;' Air-Marshal G. Jones; businessman, **Mr. S.** B. Holder, formerly PaymasterinChief, Australian Military Forces, with rank of. brigadier; representative of ex-servicemen, nominated by the Returned Sailors, Soldiers and Airmen's Imperial League of Australia, **Mr. J.** A. K. Wicks, formerly of 2nd/29th Battalion, Malaya ; representative of Australian Legion of Ex-servicemen and Women, **Mr. B.** J. McDonald, LL.B., served as bombadier, 7th Australian Field Regiment; representative of ExNaval Men's Association, **Mr. J.** R. Dalziel, served as P.O. Sea, Royal Australian Navy; representative of Air Force Association, **Mr. M.** E. L. Jones, served as sergeant, Royal Australian Air Force; ex-servicewoman, Miss Clare Stevenson, formerly group officer, Women's Auxiliary Australian Air Force; and a representative of the Commonwealth Council of Disabled Soldiers, which includes Blinded, Limbless, Totally and Permanently Incapacitated, Tubercular, and Partially Blinded Soldiers Associations (not yet nominated).
The volume of trading of the canteens service was considerable, but it was necessary to provide for a margin of profit in order to ensure that the canteens service should pay its way. On account of the large volume of business and tremendous turnover it was inevitable that substantial profits should accrue. The object of the businessmen who managed the canteens services was to ensure that prices should not be higher than those charged for goods from civilian sources of supply, and, at the same time, care had to be exercised to avoid any considerable quantities of canteen stocks finding their way to civilian consumers through prices being unduly low.
The success of the canteens service was such that a tribute is due to the men who managed it so efficiently. Supplies of good quality were available to the troops at reasonable prices in every theatre of operations, including Egypt, Libya, Greece, Palestine and the United King-dom, as well as in all the widespread locations of the Pacific area and at numerous centres around and across the continent of Australia. Price fixation was one of the most difficult tasks of the canteens management. Honorable senators will appreciate that with such extensive trading a small margin of profit would accumulate substantial funds. On the other hand, a small margin of loss would have accumulated a substantial deficit. Not only were canteen goods supplied to the troops at reasonable prices, but the members of the forces had the advantage of obtaining a priority for items which were in short supply from civilian sources.
The number of people who will be eligible to apply for benefits from the principal fund will, of course, be very considerable. The total number of enlistments for the three services during World War II. was as follows : -
It will be seen that the eligible personnel, apart from dependants, will be over 1,000,000 compared with a total enlistment of 425,377 for World War I. Members of the services who have contributed to these funds by making purchases from canteens will have the satisfaction of knowing that the profits will be devoted to a worthy cause. No cause has a greater appeal to servicemen than the welfare of the widows and orphaned children of their deceased comrades and the relief of those surviving comrades who are suffering disablement or ill-health from the effects of the war and from other causes, or who, having escaped these consequences, have fallen on hard times.
Debate (on motion by **Senator Collett)** adjourned.
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page 2838
{:#debate-10}
### SOCIAL SERVICES LEGISLATION DECLARATORY BILL 1947
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#### Second Reading
Debate resumed from the 15th May *(vide* page 2394), on motion by **Senator McKenna** -
>That the bill be now read a second time.
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##### Senator McLEAY: Leader of the Opposition · South Australia
-- This measure is complementary to the Social Services Consolidation Bill which we passed yesterday, and, as the Minister for Social Services **(Senator McKenna)** explained, it is more or less a validating bill designed to tie up legal loose ends. I support the bill.
Question resolved in the affirmative.
Bill read a second time andreported from committee without amendment or debate.
Standing and Sessional Orders suspended.
Report adopted.
Bill read a third time.
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page 2839
{:#debate-11}
### INCOME TAX ASSESSMENT BILL 1947
{:#subdebate-11-0}
#### Second Reading
Debate resumed from the 15th May *(vide* page 2410), on motion by **Senator Ashley** -
>That the bill be now read a second time.
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##### Senator McLEAY: Leader of the Opposition · South Australia
-- The Opposition supports this bill, and whilst I shall not speak at length upon it,I should like to place on record the fact that although during the last election campaign, Labour party leaders virtually called the Leader of the Opposition **(Mr. Menzies)** a criminal for having suggested that a substantial reduction of taxes could be effected, we find now that the Government has decided to make such reductions, and these of course will be welcomed by a large section of the community. However, I believe that further attention should be given as soon as possible to the war-time company tax. That measure, I believe, should be repealed, and the company taxation generally reduced. The Government's policy of encouraging the development of the Northern Territory by granting certain tax exemptions to Northern Territory residents has produced beneficial results, and I believe that if company taxes were reduced considerably, not only would the flow of capital to this country from overseas be accelerated, but local companies also would expand their activities with consequent benefit to the country as a whole.
A worth while reduction of company taxes would result in such an influx of capital and people to this country that the final result would not be reduced revenue from these taxes but increased revenue.
I notice that some relief is being given to the lower income earning groups in connexion with the social services contribution. I have pointed out before that in this country a large percentage of the people earn less than £400 a year. With the present high cost of living and high taxes, these people are placed in a difficult financial position. Although the limit at which liability to the social services contribution begins has been raised, I draw attention to the fact that a taxpayer with a dependent wife actually starts to contribute to the social services fund when his income is less than the basic wage. If would appear, therefore, that there is still a heavy burden upon people in that category.
I regret that the Government has not yet been able to reduce substantially the sales tax on certain items. On several occasions I have drawn attention to the great difficulties that are being experienced by young married couples because not only have building costs practically doubled since before the war, but also the price of household furniture and effects has increased, in some cases by 200 per cent. or 300 per cent. The rate of sales tax levied upon these goods is 10 per cent., and this represents a heavy added burden upon those people who are anxious to set up their own homes.
I am pleased that the Government has, despite what was said during the election campaign, decided to reduce substantially the tax on personal exertion and property income, and I trust that further tax reductions in the directions that I have suggested will be made as soon as possible.
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##### Senator AYLETT: Tasmania
-- This is a most welcome bill in many respects. It will confer substantial benefits not only upon industrial workers, but also upon companies, primary producers, and, in fact, the community in general. The announcement made by Labour leaders at the last elections was that whilst no definite promise of tax reductions could be made. the position would be kept constantly under review, ' and as soon as financial circumstances permitted, reductions would be effected. Honorable senators opposite and their supporters outside the Parliament constantly repeat the charge that Australia is the heaviest taxed country in the world. This charge has been featured in big headlines in many of our daily newspapers within recent months, and even within recent weeks, but tables showing the difference between Australian taxes and those of New Zealand and the United Kingdom have exposed this fallacy. They, indicate clearly that in regard to the lower and medium incomes at least, Australia, is one of the lowest taxed countries. Particularly is this so when one considers the social services benefits that are now available in this country. I shall give an illustration of that, and. I point out that this was before the last income tax reduction. Recently I spoke to a man who complained as honorable senators opposite do about high taxes. His income tax assessment was £56, and he had a wife and six or seven children. He said that the tax. was extortionate. After getting some details of his income, I found that, taking into consideration his child endowment payments, he was actually getting si profit of £65 from the Government. He was paying £56 in income tax, and drawing £121 in child endowment. Therefore, instead of paying to the Government, he was actually drawing a substantial dividend from it. That such cases are by no means uncommon is evidenced by the present tax scales. Generally speaking, a married man on £500 a year, who has a large family, is making a substantial profit out of what may be called his tax investment. The charge that Australia is the highest taxed nation in the world, therefore, is without foundation. With confidence we can announce to the world, that taking into consideration social service benefits, Australia is the lowest taxed country in the British Empire, if not in the world, at least in regard to the lower and medium income groups.
This Government is frequently accused By its opponents of passing class legislation. This is not true, least of all in connexion with taxation measures. We find that tax concessions have been granted to all classes; in the: community. For instance, calls on. shares are exempt from taxes, and certain tax concessions apply to men producing gold, silver and other metals. Farmers, too, enjoy substantial concessions - far exceeding anything ever devised by even the Australian Country party. The Australian Country party was associated with a coalition government for many years, and it then had every opportunity to reduce the burden of taxes carried by the primary producers. Nevertheless, nothing of that sort was done until, the Labour party came into power. Amongst the exemptions now granted to men on the land are those in respect of expenditure on projects for combating soil erosion, such as the construction of banks for waterways, the planting of- windbreaks, terracing, and the prevention of gullying. This is a very important provision. We. all know that much of our rich land is being laid waste by erosion. In dry weather, particularly during long periods of drought, the top soil blows away, and, when heavy rains fall, it is washed away to the sea. Unless we combat this menace, half of our land will become desert. Even to-day, many farms which were once highly productive are almost worthless. An anti-Labour coalition was in power for a quarter of. a century before the Labour party took office, but, although it professed to be the champion of the men on< the land, it took no action to preserve the soil for them. The Labour party realizes the seriousness of the situation and it is encouraging farmers to prevent erosion. Tax exemptions are allowed to primary producers for expenses incurred in the construction of dams, earth banks, bore wells, underground tanks and irrigation channels. These exemptions have .been needed ever since farmers have been established on Australian soil. Primary producers also benefit from the general tax reductions and concessions- and from the Government's progressive social service schemes.
Much misleading propaganda has been directed against the Government's tax and social service legislation. The campaign was particularly violent during the election campaign last year, and it has been renewed during the last few weeks. Attacks on the Government which have appeared in the newspapers have been sponsored by members of the Opposition and their colleagues. They are not " game " to come out into the open, so they write letters and articles which are published in the newspapers over the signatures of other people. Statements made in these articles are contrary to the facts. It is not surprising that the newspapers have commenced a barrage of propaganda with the object of having parliamentary broadcasts discontinued. The reason is that the broadcasting of parliamentary debates provides the Government and its supporters with their only chance to refute the untruthful statements published in the press as the result of the imagination of the Opposition parties. Ridiculous, statements on the subject of taxes are published daily. The Opposition cries out for a reduction of taxes in order to bring about increased production. Let us examine its claims. First. I refer to the case of a man, having a wife and two children, who earns £500 a year. He is not required to pay any income tax. How, then, could the Government reduce his taxes in order to provide him with an incentive to produce more goods? The only contribution that he is required to make to public funds is an amount of £30 a year for social services. He will obtain from that outlay an even greater return, both directly and indirectly. No insurance company or combination of insurance companies could provide him with similar benefits. . The workers are the real producers of national wealth. Under the new scale of taxation which will operate from the 1st July, a man who works in a factory or on a farm, if he has dependants, will have to earn more than twice as much as the basic wage before he will become liable to income tax.
Secondly, I refer to the position of manufacturers. The Opposition claims that, if the Government reduced their tax burden, they would have an incentive to produce more goods. It ignores the fact that manfacturers have machines standing idle in their factories, particularly in textile mills, because they cannot obtain the labour that they need. Under present rates of taxation, the owners of these machines would do anything in their power to increase production if they could' -only secure the workers to operate their factories. Some employers .have even asked me to interview the Minister for Immigration with a view to bringing workers from other countries. They do not need any incentive to produce. The Opposition's claims are fallacious. If only the employers could engage sufficient labour, they would increase production immediately. Primary producers are in much the same position. Some of them may be reducing their output, but they have a very good reason for doing so. They worked long hours every day during the "war, and they consider that they are not obliged to do so for the rest of their lives. It is physically impossible for these people to produce more when they cannot get labour. Repetition of the old fallacy by the Opposition and newspaper editors of reducing taxation by increasing production shows clearly that they have no appreciation of the fundamental nature of this problem. They do not realize the economic position of the country and the plight of the men whom they are criticizing for their failure to increase production. If factories and farms could secure additional labour they would produce more, and that additional production would have nothing whatever ;to do with the rate of taxation. Honorable senators opposite overlook the fact that throughout the war period the real workers of this country, the people employed on farms and in industry, worked to the point of exhaustion, and I certainly do not advocate urging them now to greater efforts because that would probably have the effect of ruining their health and throwing them on the national social services for support. Honorable senators of the Opposition and their press supporters will have to resort to fresh propaganda to encourage people to produce more. "We are getting the maximum production possible with the labour available in Australia to-day. As I have pointed out previously the only way to overcome the shortage of labour would be to charter some of the ships which were so freely available for war purposes to transport people in want on the other side of the world to this country, where there is full and plenty.
**Senator COOPER** (Queensland) to the honorable senator, and no doubt he considers that he has made out a case for the continuance of high taxes and that they are not having a detrimental effect on the economy of this country. He overlooks the fact that men who would otherwise be only too anxious to work overtime and thus increase their income are not prepared to do so, because they know that most of their increased earnings would be taken by the Commissioner of Taxation. The honorable senator is obviously not in close touch with the working people of this country, because he says he has never heard the remark' so frequently passed by individuals that they are not prepared to hand over an extra clay's pay to **Mr. Chifley.** Furthermore, he must be completely out of touch with manufacturing interests in this country because he is not aware that the directors of many large institutions have stated that it is of no use their seeking to improve output because the bulk of their increased earnings would be taken from them in taxes. I welcome the introduction of this bill because it evidences a realization on the part of the Government that taxation can be reduced. That, after all, is the real purpose of this bill. However, I maintain, that the delay in implementing the reduced scales of taxation has, and is continuing to have, an adverse effect on the production of this country. The tax reductions provided by this measure do not take effect until the 1st July, next, and the people who will benefit most from those concessions will be employees, but after listening to the second-reading speech of the Minister for Supply and Shipping **(Senator Ashley),** I am not sure that the proposed reductions will be of any benefit to small business men, primary producers and men working on their own account. Their assessments in respect of the 1946-47 income year will not be issued until next year, and they will be based on the present rate of tax; therefore part of the community will not receive any substantial benefit until approximately April, 1949. If I am wrong in this assumption I should like the Minister to correct me when he is replying. However, if my view is correct, I suggest that this large body of taxpayers should receive a reduction of their assess- ments proportionate to the rate of tax reductions proposed tq be provided by this bill. Had the recommendations made by the Leader of the Australian Country party in the House of Representatives **(Mr. Fadden),** some months prior to the elections in September last been adopted, the community would have already benefited by a substantial reduction. It is obvious that the Treasurer did not take into account twelve months ago certain economic factors which have since developed and which were forecast by **Mr. Fadden.** He pointed out that there was in the community a large pool of spending power and that in the ensuing twelve months a great number of ex-servicemen would be discharged and would be seeking civilian employment, so that they would be paying tax on their income and indirectly through sales tax and other impositions. That has actually happened, and the reductions proposed by this bill would have been granted had the Opposition parties' policy been accepted by the electors. The reductions that are to be made under this bill are being granted months after the position justified them.
Revenue returns for the first nine months of this year bear out that contention. Revenue has far exceeded expectations and expenditure is less than the estimate for 1946-47. Customs and excise revenue is likely to be £11,000,000 in excess of the estimate, and sales tax; despite reduction, is shown at £31,250,000 for the first ten months of the year, as against an estimate of £31,000,000* for the whole year. The revenue from these sources will be much greater than the estimate; income tax collections from the 1st July, 1946, to the 31st March, 1947, were substantially above the estimate; and the yield from sales tax will probably exceed the estimate by £5,000,000. In the circumstances, the heavy taxes which have been collected during the last twelve months have not been justified; the rates should have been reduced a year ago. I admit that in war-time it is necessary to curtail the production of civilian goods in order that materials for war purposes may be made, and also to finance the war effort. No one objects to paying high taxes if they are necessary for the preservation of the nation, but Australia, as one of the Allied nations, emerged victoriously from the war and has been at peace for about eighteen months. In times of peace a reverse policy must be pursued; civilian goods must be produced in large quantities., and therefore every encouragement should be given to those who produce them. The continuance of high taxes has militated against that objective. Surplus spending power in the hands of the community should be absorbed by providing essential requirements.
Although the bill forecasts relief from tuxes, the yield for 1946-47 will not be greatly different from that of 1945-46. The Treasurer lias in hand approximately £34,000,000 and so he proposes to reduce taxes from the 1st July next; but when lie does so, he will merely be handing back to the taxpayers money extracted unnecessarily from them during 1946-47. Had the policy advocated by the Opposition in September, 1946, been followed, the people would already have had £35,000,000 returned to them since the 1st July last, and other reductions might have been possible. fu war-time, government departments get the habit of spending money lavishly. Ti. is admitted that war-time expenditure nl ways reveals extravagant, even wasteful, spending. Heavy expenditure cannot then, be avoided, because no risks can be taken when it is necessary to obtain goods and materials quickly for defence purposes. In war-time, cost is not the deciding factor, but when peace returns, government administration should revert to a. saner basis, of which economy should be the key-note.
The present would be an opportune time to re-establish, the Public Accounts Committee. The first appointment of ji public accounts committee was made in. 1915, and the committee continued until .1932. Its activities, together with the check imposed by the AuditorGeneral ensured that departmental expenditure was constantly under review. The need for such a body is greater to-day than ever. Although the report of the Auditor-General is of great value, it necessarily is presented to the Parliament sifter the expenditure has been incurred, and therefore it cannot prevent, although it may reveal, waste and extravagance. The time to control extravagance is before money is expended, rather than nine months after the end of the year in which payments are made. I understand that committees similar to the Public Accounts Committee are functioning to-day in Great Britain, South Africa, Canada, New Zealand and Eire. When the committee was established in 1915 the .expenditure of the Commonwealth was only about £20,000,000 a year; to-day, we are accustomed to the presentation of budgets providing for an expenditure of over £400.000,000 a year. For the protection of the taxpayers against wasteful expenditure I urge that tho Public Accounts Committee be reestablished.
The present system, under which persons in receipt of superannuation benefits, are taxed on the amounts received is unfair. I was therefore glad to hear the Minister for Social Services **(Senator McKenna),** when introducing the Social Services Consolidation Bill, say that this matter was receiving attention. 1 emphasize that Commonwealth public servants are compulsory subscribers to the Public Service Superannuation Fund; they are compelled to subscribe to tho fund according to their salary and to continue their payments during the whole of their official life. Throughout the community there are other superannuation schemes, some of which operate on a voluntary basis, but under all of them deductions are made from the salary or wages of members during their working life. When contributors reach the retiring age and draw from the funds to which they have contributed they have to pay taxes on any amounts received in excess of the statutory exemption at the rate which applies to income from property. These persons also contribute to the National Welfare Fund. Thus, whilst they have already, to a large degree, paid for the benefit they are receiving, they are also compelled to contribute to a fund to provide benefits for other sections of the community, but cannot themselves participate in those benefits because of the means test. Tn view of the long period for which they contributed towards their superannuation benefits, and as they are now on in years it is unfair to ask them to pay for social services. When contributing towards superannuation they calculated that they would receive sufficient benefit to meet their wants when they retired at the age of 60, or 65, years. However, their purpose has been largely defeated by the increases of the cost of living, with the result that in many cases the superannuation benefit is not sufficient to keep them in reasonable comfort. Persons in this class should be exempt entirely from income tax, and, in addition, should be eligible to receive benefits financed from the National Welfare Fund. When a person has no other income, superannuation benefit should not be taken into account in determining eligibility for age pension.. There are many thousands of persons within that category. In contributing towards their superannuation, these people not only exercised considerable thrift, but, as a consequence, were alao obliged to live more, frugally than many other people enjoying the same income who were not obliged, to make any superannuation contribution. Yet, upon retirement, they are entitled to receive only the superannuation payments which they have, contributed.
In the past, I have often censured the Government for ignoring reasonable amendments submitted by the Opposition. On this occasion, however, I shall, to some degree, retract that statement, because I find incorporated in this measure an amendment which I proposed when a similar measure was before the. Senate in April, 1946. I am glad that on this occasion **Senator Aylett** and. I. are in entire agreement on the: subjectmatter of that amendment, but when **Senator Aylett** claims credit to- the Government for this provision, I remind him that on the 5th April, 1946, I proposed an amendment that expenditure incurred in the control, or prevention, of soil erosion be. allowed as a deduction in respect of income- tax. At that time, that amendment was not acceptable- to the Government. I commend the Government for having, decided, after a delay of twelve months, to allow that deduction. I also commend the Government for allowing as deductions' in respect o£ income tax. expenditure incurred in the- construction of dams-; earth tanks, irrigation channels and other facilities for the conservation of water. Clause 12 provides that deductions shall also be- allowed in respect of expenditure incurred on simi-lar structural improvements, or the sinking of bores, or for the purpose of conserving, or conveying, water for use in the carrying on of primary production. I should like to know whether expenditure incurred on piping used for conveying water from a bore head, dam', or other source, to provide a more readily available supply for stock is embraced in that provision. Often water from earth tanks at. 'a bore head is piped some miles, to provide a supply in a dry paddock, this being the most economical method. ] should like the Minister in charge of the bill to clarify that, point, because such expenditure is unavoidable on many pastoral properties.
I also commend the Government for extending for a further period of five years the exemption from income tax now enjoyed by primary producers in the Northern Territory. That is a very wise decision, and should do much to encourage the development of that part of Australia where conditions are such that settlers must, be offered special inducements to set up their homes in that area. We shall reap the benefit of that, decision, particularly when we are able to undertake closer, settlement in the Northern Territory. However, I again, emphasize the claims of settlers in the north-west of Western. Australia, the north of South Australia and the north-west of. Queensland bordering on the Northern Territory for similar treatment. Those areas, particularly the north of South Australia, do not offer sound propositions from a pastoral point of view and present difficulties equally as great as those existing in the Northern Territory. Conditions of living also are just as severe in those areas as in the Northern Territory. I admit that the Government has offered some concession to residents in those areas under the income tax' zoning system; but they are just as much entitled to complete exemption from income tax as are residents in the Northern Territory, and' the Government should not find it difficult to meet their claims in that respect. I shall deal with other provisions in the bill at the- committee stage.
{: #subdebate-11-0-s2 .speaker-JXE}
##### Senator NASH: Western Australia
-- This measure fully justifies the attitude adopted by the Prime: Minister **(Mr. Chifley)** at the last general elections when he declined to promise reduc-' tiona of tax, but,, at the same time, gave an undertaking that the Government, would review taxes from time to time and effect reductions whenever possible. It. is. interesting to note that since 1942 reductions of tax made by the Government exceed £100,000,000, as follows : Income tax rates £59,000,000, concessions in respect of income tax £15,300,000, sales tax exemptions and deductions £24,850,000, customs and excise exemptions and reductions £4,000,000, estate duty exemptions and reductions £100,000, and gift duty exemptions and reductions, £50,000, making a total of £103,300,000. Thus the Government has done a very good job already in reducing the tax burden, particularly when we remember its immense commitments in respect of war expenditure and the costs involved in the rehabilitation of ex-service personnel. On previous occasions I have dealt in detail with those concessions. What I .appreciate most in respect of this measure is that it. implements the Government's policy of giving the major benefits of tax reductions and concessions to taxpayers with domestic responsibilities. Honorable senators opposite urge that greater reductions should be made in respect of the higher ranges of income. Taxpayers with- domestic responsibilities are most deserving of consideration. I believe, therefore, that in regard to remissions of taxation the Government is on the right lines.. One frequently hears- the charge that, this country is the highest, taxed intha world,, but let us examine comparative taxation rates in this country, New Zealand and the United Kingdom. An Australian taxpayer receiving; £300 a year, and without dependants, pays £5 ils. in- tax. In the United Kingdom, be would pay £36 15s., and in New Zealand £14 7s. 6d. . In this country, a taxpayer on £400 a year,, with a. dependent wife, pay's £7 in income tax, whereas in the ' United Kingdom he would pay £42 15s. and in New Zealand £14 7s. 6d. In the case, of a taxpayer' with, a wife, and one child,, on an income of £600- a year, in this, country the tax payable is £12 ls. ; in the United Kingdom it is £90; 15s., and in New Zealand £38 16s. 3d; An Aus tralian taxpayer on the same income, but bavin? a dependent wife and two children - slightly more than the average family in this country - pays £3 18s. in ' tax, whereas in the United Kingdom, his commitment would be £66 15s., and in New Zealand £30 3s. 9d. These figures show quite clearly ' the fallacy of the claim that Australia is the highest taxed country in the world.
**Senator Cooper** referred to the old complaint that one has heard so often in this country - it is largely propaganda - that a' worker who earns overtime payments is working mainly for " Chifley ". It is alleged that income tax rates are so high that there is no incentive to work, and that it is better for a worker to earn just a -few days' pay, and pay less tax. Not long ago I placed before the Senate a set of figures that I had obtained from a most reliable source, showing that- taxes imposed on overtime earnings in this country are not' nearly so high as moist people believe. In fact, in most cases it is clear that although overtime earnings may carry a taxpayer on to a higher rate of tax, when the additional income is averaged over the year the increase of tax is not very great. '
{: .speaker-KAY}
##### Senator Gibson:
-- Overtime earnings are just like increased wages.
{: .speaker-JXE}
##### Senator NASH:
-- Of course. What counts is not the actual overtime earnings,, but - the income earned over the period of twelve months. Therefore, although a worker may suffer a substantial deduction from his overtime earnings, for income tax purposes, probably when he receives his assessment at the end of the year he will find that he has a refund to collect.
It ia pleasing indeed that the Government has given favorable consideration to increasing concessional rebates for dependants. The rebate in respect of a spouse,, female relative or housekeeper is to be increased from £100- to £150. Similarly, for the first child under sixteen years, of age, or for- a student' child or invalid child over that age, it is to be increased from £75 to £100,. and- in the case of other children under sixteen years of age, from £30 to £50. New concessions for primary producers are also welcome.
These indicate a real effort on the part of the Government to deal with the problem of soil erosion, and show that the Government's legislative plans are for the improvement of existing conditions, particularly in relation to social services, primary production, and health. This Governmentis ever on the forward march.
Another feature, of the Government's taxation policy that I commend is the assistance that is given to the gold-mining industry. This industry, particularly in Western Australia, should be given all possible help, not only by the Commonwealth Government, but also by the State Government. I do not believe that we have been devoting sufficient attention to the encouragement of gold-mining, the potentialities of which in Western Australia are still enormous. During the war, man-power in the gold-mining industry was reduced by 25 per cent. I ask leave to continue my remarks at a later stage.
Leave granted, debate adjourned.
Senate adjourned at 12.23 p.m.
Cite as:Australia, Senate, Debates, 23 May 1947, viewed 22 October 2017, <http://historichansard.net/senate/1947/19470523_senate_18_192/>.