18th Parliament · 2nd Session
The President (Senator tie Hon. Gordon Brown) took the chair at 3 p.m., and read prayers.
– About a fortnight ago I asked the Minister for Shipping and Fuel a question about the supply of substitute fuel for auxiliary power plants during emergencies when normal power supplies are cut off from factories in the various States. Has any further consideration been given to the matter?
– Further consideration has been given to the use of substitute fuel for power plants. A conference was held in Canberra last Monday to discuss the subject, and it was decided then that fuel would be provided, if possible, whenever interruptions of normal power supplies threatened to cause unemployment or stoppage of work of an essential nature. It was also decided that the operators of auxiliary power plants must register the installations with the appropriate State Liquid Fuel Board for the purpose of obtaining supplies^ of substitute fuel, and that anybody wishing to install auxiliary plant must first ascertain from the Liquid Fuel Board of his State whether fuel can be made available for it.
– I ask you, Mr President, a question about a subject of which you may 1have some knowledge. Has the honorable member for Reid in the House of Representatives (Mr. Lang) joined the Liberal party? Did this occur during May, .1948, when Liberal party publicity officers took a sound recording outfit to Mr. Lung’s home at Auburn to enable him to record a series of broadcasts financed by the Institute of Public Affairs and by the Liberal party! Are you. aware, Mr. President, that the lenders of the Opposition parties in this Parliament offered their new recruit, Mr. Lang, a portion of the time allotted for their use in the programmes of “A” class broadcasting stations during the referendum campaign, and that all of the advertisements in the newspaper Century, with the exception of one advertisement for the Broken Hill Proprietary Company Limited, were subsidized from Liberal party funds? Are you also aware that Mr. Lang has voted consistently with the Opposition in the House of Representatives, on as many as twenty occasions? In view of those facts, will you co-operate with Mr. Speaker and direct the honorable member for Reid in the House of Representatives to sit on the Liberal party benches or the Australian Country party cross benches where he belongs?
– It is not usual for honorable senators to direct questions to me in my capacity as President of the Senate. I do not know what the questions that the honorable senator has asked have to do with me. I know of Mr. Lang, but I do not know anything about the subjects of the questions and, in fact, I consider that the matter is one for consideration by the Speaker of the House of Representatives.
(Senator RANKIN. - Is the Minister representing the Minister for Commerce and Agriculture in a position to inform the Senate when it will be possible for the Australian public to obtain supplies of rice without restriction?
– I shall bring the honorable senator’s question to the notice of the Minister for Commerce and Agriculture and obtain a reply as soon as possible.
– Has the Minister representing the Minister for Information read the following report which appeared in the Melbourne Herald on the 1st February, concerning Mr. Winston Churchill’s memoirs, Their Finest Hour: -
Churchill’s PROMISE ‘ to Curtin.
An explicit assurance that Britain would sacrifice her position in the Middle East and send all her forces .to protect Australia in Mw. event of n Japanese invasion was given by Mr. Churchill in a letter to Prime Minister Curtin on August U, 1940.
As Mr. Curtin did not become Prime Minister of Australia until October, 1941, will the Minister ascertain whether the alleged memoirs of Mr. Churchill, as published in the Melbourne Herald, have actually been furnished by Mr. Churchill, or are a concoction by the Herald or some other person?
– I shall certainly bring the honorable senator’s question to the notice of the Minister for Information, and endeavour to have this matter elucidated. It is an extraordinary state of affairs indeed if Mr. Churchill himself has made the mistake of claiming that Mr. Curtin was Prime Minister of the Commonwealth more than twelve months before he actually assumed that office. In the public interest, an explanation should be afforded, and I shall ask the Minister for Information for it.
– Has the attention of the Minister representing the Minister for Commerce and Agriculture been drawn to a statement published in the Adelaide Advertiser of the 2nd March that parcels of wool worth from 48d. to 50d. per lb. brought only 6d. and 7£d. per lb. at auction because they contained about 40 per cent, of Californian burr, which cannot be removed by normal scouring process? If so, will the Minister ascertain whether anything can be done by the Australian Government to assist in the total destruction of this noxious weed?
– I shall have the honorable senator’s question directed to my colleague, the Minister for Commerce and Agriculture, and endeavour to obtain a reply as soon as possible.
– Can the Minister for Shipping and Fuel inform the Senate what progress is being made in the scheme to transfer Commonwealth departments from Melbourne to Canberra? Will the head-quarters of the new broadcasting control board be in Canberra?
– All members of the Senate must appreciate the practical difficulties in the way of providing office and residential accommodation for Commonwealth departments and staffs transferred to Canberra. That difficulty is particularly acute at the moment. The present Government’s policy is to transfer Commonwealth departments and instrumentalities to Canberra as soon as possible, and to that end everything possible is being done to provide office space and residential accommodation. The Leader of the Opposition specifically mentioned the transfer of the Australian Broadcasting Board to Canberra, and I shall refer his inquiry to the PostmasterGeneral, under whose administration the board functions.
– Can the Minister for Trade and Customs say whether the importation of American books, including works of fiction and treatises on cookery and other subjects, is prohibited in order to conserve dollars? If so, will the Minister take effective action to prevent certain Australian importing firms, particularly certain New South Wales concerns, from circumventing the regulations by importing American books?
– The matter mentioned by the honorable senator has been carefully examined by officials of the Department of Trade and Customs and also by the Government. Limitations have had to be imposed on the importation of American fiction, but special provision has been made to facilitate the importation of technical works. Concerning treatises on cookery, which the honorable senator specifically mentioned, I point out that several good Australian works are available, and I shall inquire into the allegation that American cookery books are being freely imported. A thorough survey of Australia’s needs of printed matter has been made by the Government and by the trade, and I can assure the honorable senator that no unnecessary limitations have been placed upon the importation of technical works and other essential matter.
– Is the Minister for Shipping and Fuel aware that people in rural areas are experiencing great difficulty in obtaining steel products such as galvanized iron, wire, wire netting and piping? If so, is it possible to review the present basis of allocation, and to substitute for the present system of distributing those products according to population, a system of distribution based on the number of sheep, cattle and other stock in the area.
– The demand for steel products has increased greatly, not only in rural areas but also in other areas. Steel products are also badly needed for the defence of this country. Undoubtedly, the reason for the sudden increase is the greater prosperity of the community. In saying that, I am not suggesting that the present Government is wholly responsible for that state of affairs. One difficulty associated with the present shortage is that the production of manufactured steel is not as good as it might be. Shortage of labour represents one of the principal difficulties, and special representations have been made by the Minister for Immigration to divert displaced persons who are brought to this country as immigrants to the steel industry in order to stimulate production. I point out that before the recent war primary producers were unable to purchase steel products simply because they were not receiving sufficient from the sale of their produce to enable them to do so.
– I draw the attention of the Minister for Shipping and Fuel to the catastrophe that has overtaken the town of Gladstone in central Queensland. “Will the Minister take steps to ensure that all available Commonwealth resources shall be placed at the disposal of the local authorities, in order to alleviate the distress that the cyclone has caused in the stricken town?
– Wherever possible the present Government has always assisted, both financially and physically, in the relief of distress following any calamity that has occurred in Australia. Normally that assistance is provided following representations by the State authorities, which are in the best position to estimate the amount of damage that ha* been caused and the extent of the financial assistance required. I presume that a request for assistance will be made by the Premier of Queensland in this instance. Sympathetic consideration will be given to any request received.
– Some time ago I drew the attention of the PostmasterGeneral to the inadequate provision that is made for the shelter of persons using trunk-line telephones not only in Melbourne but also in many country districts. Owing to the big demand that is made on trunk-line telephones it is frequently necessary for people to wait for considerable periods before their call is connected. Will the Minister inform the Senate whether it is the intention of his department to expedite the provision of adequate accommodation for people waiting for trunk-line telephone connexions?
– The policy of the Postmaster-General’s Department iito provide wherever possible the accommodation to which reference has been made. This has already been done in many country centres, and work in connexion with the provision of further facilities is being continued. With a view to obviating the delay that is experienced in securing trunk-line telephone connexions at present, it is proposed to increase the number of trunkline channels wherever possible. The department aims ultimately to be able to provide facilities whereby trunk-line telephone calls may be made on demand.
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follows: - 1. (a) Yes. The International Harvester Company of Australia was permitted to import certain models of McCormick-Deering tractors into Australia. The company was also permitted to import certain component parts for the manufacture of other models in Australia. (b) No. Tractors completely or substantially manufactured in America are marked “ Made in U.S.A. “. Tractorsin which only a minority of imported component parts is used are marked “ Made in Australia “.
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
In view of the Cabinet decision to develop the whaling industry in Australian coastal waters as a Commonwealth Government enterprise -
Will the Government give consideration to establishing a unit of this industry in southernTasmanian waters?
Will the Government give effect to the proposals made by the previous Minister for Repatriation and member for Franklin, Mr. Frost, with regard to this industry?
Has the Government explored the possibility of obtaining suitable chaser vessels and equipment as reparations from Japan?
– The Minister for Commerce and Agriculture has supplied the following answers: -
– by leave - I desire to inform the Senate that the Prime Minister (Mr. Chifley) is acting as Minister for External Affairs and the Minister for Health (Senator McKenna) is acting as Attorney-General during the absence abroad of the Minister for External Affairs (Dr. Evatt).
Debate resumed from the 2nd March (vide page 795), on motion by Senator Ashley -
That the bill be now read a second time.
– The reduction of income tax proposedunder this measure has been made possible owing to the fact that revenue during the current financial year has considerably exceeded the estimate. The Treasurer’s estimate of revenue for 1948-49 was £493,000,000, but his recent financial statement has disclosed that, although only eight months of the financial year have passed, it is expected that the estimate will be greatly exceeded. For that reason, the bill that we are now discussing and other complementary measures have been introduced to provide for a reduction of direct taxes as well as entertainments tax and other taxes of that kind. During the past eight months, the Treasury has benefited not only from current revenue from all sources beyond the original estimate, but also from substantial collections of previously uncollected taxes. In the light of the exceptionally buoyant state of the revenue, one would naturally come to the conclusion that production in Australia had reached a level considerably above that of the previous year. However, an analysis of the Commonwealth’s high income discloses that it is attributable, not to increased production, but to the very high prices that we have received for our exportable goods, chiefly primary products. The total value of our exports during the first six months of the current financial yearwas approximately £266,000,000. That amount was made1 up principally” of the following items : -
The total for those commodities was considerably higher than the value of our exports of the same items during the corresponding period of 1947-48. Naturally, the increased value of our exports has added largely to our overseas credits, and the volume of our imports has increased considerably as a consequence. For the first six months of 1948-49, the total value of our imports’ was £200,000,000. Thus we had a favorable trade balance of £66,000,000 for that period. Customs and excise duties are payable on our imports, and’ those two items of revenue alone have exceeded the estimates’ because we have been able to draw upon our swollen overseas credits in order to purchase goods in other countries.
There is no guarantee that present high prices for our exportable products will last. In that connexion we can draw a lesson from events that occurred in Australia only a relatively short time ago. Many honorable senators were members of this Parliament during the ‘thirties, when the price of wool gradually fell until it reached the depressed level of 8d. per lb. During that period, our overseas income was reduced by over £50,000,000 in one year alone. Australia immediately felt the effect of that reduction and had to curtail its imports drastically. That caused an immediate reduction of Commonwealth revenue from, customs and excise duties. When prices for our exportable surpluses are high, our overseas balances are increased, we are able to purchase goods from other countries in increased quantities, and the customs and excise duties payable upon those goods swell the Government’s revenue from indirect taxes. Thus, the buoyancy of the Commonwealth’s revenue during the first half of 1948-49- can be attributed; to the good prices that wehave received for our exports. As 1 proceed, I shall also show how big incomes in Australia- have greatly assisted the Treasurer to maintain the buoyancy of our finances. The Treasurer also sounded a note of warning about the high, prices now ruling for our primary products. He said -
Within Australia, there has been a large and widespread rise in- incomes during the past two years. The primary industries have had two good seasons, and prices, especially for wool and wheat, have been high. There has also been a notable inflow of capital seeking, permanent investment here.
At the same time, costs- and prices have been ‘ rising at an increasing rate.
As the Treasurer points out, there is a grave danger that the continued rise of prices will have a detrimental effect upon our industries. He went on to say -
In part this follows from the release of price and cost influences which were held back during the war and early post-war years by controls and offsetting measures such as subsidies, but which had sooner or later to beallowed to pass into the economic system. More significantly, however, it reflects the continuing lack of balance between total demand and the: supply of goods.
That is very true. At last apparently, the right honorable gentleman is alive to the fact that high prices and. buoyant revenues do not necessarily mean that the economy of this country is healthy. To a- substantial degree, our revenues depend upon high prices for our exportable goods. I fully endorse the Treasurer’s warning. The Opposition has constantly been bringing to the notice of the Government the necessity for increased production. The real wealth of any country is production. The high prices that we are receiving for our products- on overseas markets to-day represent only passing wealth and an unstable prosperity. Prosperity is stable only if the production of a country is either equal to, or perhaps a little in excess of, consumption. That tends to. keep prices down. .When production cannot cope with demand, there is a rising spiral of inflation. The Treasurer, further, said -
It is true that local production has increased - though not as fast as necessary in certain basic industries and other fields - and that the volume of imports has risen. No possible rate of increase in supply, however, could have kept pace with the rise of nearly- 50 per cent, which has taken place in national income during tho past two years. The level of overall demand for goods, and for labour and capital plant to produce goods, remains excessive.
Honorable senators on this side of the chamber have constantly drawn the attention of the G overnment to the urgent need for more coal. The coal-mining industry is a key industry. It is basic to the production of steel upon which, in turn, many other secondary industries depend. Without sufficient coal it is impossible to bring most of our secondary industries into full production. The Government must share the responsibility for the present inadequate coal supply for industrial and domestic purposes. We have been told often enough by Government supporters that everything possible has been done to increase the production of coal. The coal-miners, it is true, have been given their own industrial authority, and, in addition, all possible amenities have been provided for them. Further, the industry itself has been mechanized to a substantial degree. However, in spite of all these things, we find, according to the report of the Joint Coal Board, that in 1948, production losses had increased by- approximately 500,000 tons over the 1947 figure. In 1947, production reached 11,681,000 tons. On a percentage basis the quantity of coal lost through lost working hours represented 1,671,000 tons. To the 11th December, 1948, I understand, the production loss was 2;252,000 tons. It is all very well for the Prime Minister to make pious utterances about the need to produce more coal; but what has the Government done to improve production? The lot- of the miners has been improved considerably and coal-mining facilities too have been modernized. Why then has there not been an increase of production?’ No doubt should members of the Opposition claim that the fault lay in the fact that the miners’ federation is. riddled with communistic elements^ we would be accused of raising the old bogy of communism. However, that is not a bogy; it is a fact. The Government has not attacked the problem as it should have done. Undoubtedly there is a pronounced Communist element in the coal mining industry; which is one of the nation’s key industries. Yesterday I asked a question of the Minister for Shipping and Fuel in the following terms : -
I ask the Minister for Shipping and Fuel whether, as stated by Mr. E. L. Miller in Sydney yesterday, between 25,000 and 30,000 tons, of finest slack coal is stored underground at Hartley Main Colliery awaiting removal 7
I shall not read the remaining portion of the question, which related to the responsibility of the Joint Coal Board for the delay that has occurred in the removal of that coal. I pointed out that the installation of the machinery which was still lying idle was approved by the former Coal Commissioner, Mr. Mighell. Although the Minister furnished a lengthy reply to the question, he omitted all reference to the large quantity of coal that is said to be stored underground.
– I think that the. Leader of the Opposition had better ask. Mr. Miller to inform him of the facts. In any event, I should not advise, him to pursue this matter too far.
– The fact remains: that, according to the reply furnished by the. Minister, approval was given by the then Coal Commissioner, Mr. Mighell, on the 27 th November, 1945, for the reopening of the mine in the following terms : -
This approval is given on the understanding that the Commonwealth Government will not be called upon to pay any subsidy in respect to operations at the mine, nor will it advance any funds towards its development.
The Minister’s reply to my question continues -
Subsequently, during 1948, Mr. Miller approached the Joint Coal. Board for financial assistance amounting to £25,000 for the development of tha colliery. After the examination, the board decided that at that stage it was not interested in the development of the property to produce 1,000 tons a day, which would cost some hundreds of thousands of pounds, because there are many other areas which can be developed more quickly and economically:. The seam at Hartley Main- is. thin, and very heavy expenditure would be required, both underground and because of the location, of the mine for handling and transport facilities-. On the 19th November, 1948, Mr. Miller issued notices of dismissal to a number of employees at, Hartley Main and stated that, he intended to install a Jeffrey loader on the 24th November to load slack coal. The board has made it clear that mechanization must be listed to increase output aud that it will not permit employees to be displaced, for this reason Mr. Miller was advised that permission would not be given for the loader to be installed until the board’s district mining engineer had been advised of Mr. Miller’s complete plan which he himself could finance for the mechanization and development of the colliery. These plans have not yet been received. The board is constantly pressing all colliery proprietors to mechanize their mines and increase output.
Whilst the Minister’s reply covers the first portion of my question, I repeat that he made no reference whatever to the large quantity of slack coal that is stated r.o be stored underground. I emphasize that I asked my question in good faith, and if Mr. Miller’s statement is incorrect, he deserves to be shown up by the Minister. The significant fact is that the Minister avoided answering the main point of my question. In his reply he referred to the paramount necessity of providing more coal for industry. Yet a colliery proprietor has stated that he has from 25,000 to 30,000 tons of slack coal stored underground, and apparently no action has been taken to enable or to compel him to make that coal available for industry.
The Minister for Shipping and Fuel has indicated that tax reductions totalling approximately £36,500,000 annually are to be made from the 1st July, 1949. Another measure introduced by the Government provides for the reduction of entertainments tax which is estimated to amount to £50,000 during the current year and to £135,000 during a complete year. However, taxpayers will benefit to the amount of only £50,000 this year, and most of them will not receive any benefit until the financial year 1949-50. I emphasize that the reduction, which is estimated to amount to £36,500,000, will not be made until the financial year 1.949-50, and that the excess of revenue which has enabled the Government to make that reduction is accruing during the current financial year. It is clear, therefore, that the proposed reductions amount to no more than a refund of portion of the excessive amount of tax collected during the current financial year. According to my recollection this is the third reduction of direct taxes to be made since the general election in 1946. At that time the leaders of the
Opposition parties made definite statements of the amount by which they would reduce taxes if their parties were returned to office. In reply to those statements the Prime Minister (Mr. Chifley) said that it was impossible to make such reductions without reducing the scale of social services contribution tax, which would necessarily involve a curtailment of social services. The statistics released by the Government and the statements made by the Treasurer since that time prove clearly that it would have been possible to reduce the burden of taxes to the degree promised by the leaders of the anti-Labour parties. In fact, the reductions that have actually been made prove that the estimates of the leaders of our parties were quite modest. We must bear in mind that during the last three years the national revenue has been extremely buoyant. Examination of official statistics shows that although taxes are to be reduced by approximately £36,500,000 annually, the Government proposes to withdraw commodity subsidies totalling £25,000,000 a year. That £25,000,000 will go into the coffers of the Treasury and will, in a large measure, offset the reductions of £36,500,000 authorized by this bill. The cost of the commodities, from which subsidies amounting to £25,000,000 are being withdrawn, will rise automatically. As those commodities comprise food and clothing, the cost of living will be increased. Although the taxpayer will, on the one hand, benefit by a slight reduction of taxes, on the other hand he. will have to pay more for his food and clothing and, in the long run, will be little better off as a result of the concessions granted by this bill. The reductions of taxes will benefit most the family man in the lower income range. The Opposition endorses that principle. If honorable senators on this side of the chamber were in office they would have adopted the same policy, or perhaps done a little better for those in the lower income groups, because the family man is the one who is always the hardest hit. He will suffer most because of the withdrawal of these subsidies, because his living costs will be increased, especially in respect of the “ C “ series items. I point out that the items comprised in that series are those on which the cost of living statistics ure based, which, since 1945, have risen by 22.5 per cent. That is a very hig increase. and the peak has not yet been reached. Following the withdrawal of the subsidies there will be further increases of the costs of items in the “ C “ series. 1 1 must be remembered also that increases of costs of commodities other than those in the “O” series index have been even greater.
I shall now deal briefly with the impost of indirect taxation, which is a pernicious system, in that the average taxpayer doe3 not know exactly the amount of tax that he is paying. The more that the individual purchases the more he pays’ by way of indirect taxes. The only relief from indirect taxation for the year 1.948-49 will be the reduction by £50,000 of entertainments tax collections. Ti] the following year, so far as I can see, r.he only relief to be afforded will be the reduction of the entertainments tax COlections by £135,000 for the full year. Indirect taxation affects the family man most, because it is paid by him in the form nf sales tax, petrol tax, customs and excise duties, and many other taxes that the individual members of the community know little or nothing about. They are raxes that are applied, and that is the end of it. An opportunity is provided in this measure to grant extensive relief from the heavy impost of indirect taxation. Speaking from memory, the anticipated proceeds of indirect taxation for the present financial year were estimated to aggregate £175,000,000. That is a very large amount ; in fact, it is nearly as large as the estimated revenue from direct taxation. I point out that sales tax and other indirect taxation is added to the manufacturers’ costs. Subsequently, merchants’ profit margins are calculated on the costs thus arrived at, and passed on to the consumers. It follows that the consumer ultimately bears the burden of high rates of sales tax and excise duty. By way of illustration, if a tax of 20 per cent, were imposed on goods that cost £100 to manufacture, the price to the retailers would be £120. The ordinary retailer’s profit of 30 per cent, would be calculated on £120, instead of £100. It is therefore obvious that the consumer finally bears the burden of the rising spiral of prices of the cost of living.
This measure amends the Income Tax Act. It is more or less a machinery bill to implement the reductions that have been announced by the Treasurer. However, the taxpayer will not receive the benefit of the percentage of reduction of taxes that he has been led to believe that he will receive, because, as I have pointed out previously, at the end of the current financial year he will already have paid income tax in respect of the year 1948-49, a year of buoyant revenue, during which there has been an excess of collections over the estimated revenue. Although this reduction is based on those amounts the taxpayer will not receive a refund because the money will remain in the coffers of the Treasury. He will, of course, obtain the benefit of reduction in the year 1949-50. Therefore, taxpayers will have to wait fully twelve months, that is, until the financial year 1951-52, before they will actually receive the benefit of the reductions proposed under this measure. They will have to wait for that period before they have returned to them the amount by which actual receipt? exceed the estimated revenue during the current financial year. However, by the time that period elapses any benefit now in prospect for taxpayers under this proposal will have been more than absorbed by increases of the cost of living due to the withdrawal of price stabilization subsidies amounting to £25,000,000 annually. By the end of the next financial year the purchasing power of the £l will have substantially decreased. The Opposition offers no objection to the measure because it is designed to implement the reductions which the Treasurer forecast in his financial statement.
– Although the Leader of the Opposition (Senator Cooper) in hi? speech may have given a different impression to his hearers, the measure now before us deals specifically with reductions of income tax. that is, reductions of tax on incomes derived from personal exertion and property. He talked about the coal-mining industry, imports and import duties, and, of course, as was to be expected, he did not fail to mention the Communists. The bill contains no refer.en re whatever to any of those matters.
However, the Leader of the Opposition concluded his lament and his story about what “Brother Fadden “ and “Brother Menzies “ promised in days gone by, by telling us that the Opposition -does not object to the bill. He included in his remarks a little commendation of the Government, which I was glad to hear, when he admitted that the taxation reduction proposals promised by the leaders of the Opposition parties at the last general election were not so generous as the reductions which have actually been effected by the Chifley Government since that time. As such encomiums are rarely voiced by the Opposition, the Government, no doubt, will feel grateful for that commendation.
The Leader of the Opposition contended that no incentive was being given to companies to increase production. How- ever the figures in relation to the profits of companies show that they are being given a very great incentive. A company does not care what number of men it employs, whether it be 100 or 1,000, so long as it makes a profit out of their labour. Excluding the figures in relation to banks and life assurance companies, I find that from L93S-39 to 1947-48, profits before any tax was paid increased from £84,000,000 to £167,000,000, income tax paid increased from £15,000,000 to £67,000,000, the tax on profit increased from £69.000,000 to £100,000,000, dividends paid increased from £27,000,000 to £41,000,000, and undistributed income increased from £42,000,000 to £59,000,000. Those figures show that companies to-day are making much greater profits than they made in 1939. Therefore, the arguments that they have no incentive to produce goes by the board. Under the proposals embodied in this measure further incentive to increase production will be given to the community. The argument of the Leader of the Opposition is also refuted by the facts that to-day production of all classes of commodities has increased considerably compared with figures for 1938-39, and we are producing many commodities not previously produced in this country. It would appear, therefore, that somebody somewhere, despite the howl 3et up by the Leader of the Opposition, has sufficient incentive to produce. As I said earlier, the honorable senator admitted that actual reductions of taxes made by this Government exceed those promised by the leaders of the Opposition parties at the last general elections. I recall that at that time the Leader of the Australian Country party, of which the honorable senator is a member, and the Leader of the Liberal party were at loggerheads as to the methods and amounts by which taxes should be reduced. Indeed, so serious were their differences in that respect that one of them accused the other of “stabbing him in the back “. That is a point which the leaders of the Opposition parties will do well to remember at the forthcoming general elections. They will have to go one better than they did on the last occasion if they hope io be returned to office.
– We shall be all right; we have complete unity.
– The Leader of the Opposition forgets one thing; when the Australian Country party was established one of the main planks of its platform was that it would ease taxation upon- the man on the land by imposing a universal land tax. But that party appears to have forgotten all about that proposal. We never hear a word about that to-day. All that it does is cry about the Communists and what the Labour Government is doing. It forgets all of its principles merely for the sake of engaging in campaigns of abuse against the Government. The honorable senator said that the Government had framed tax reductions that would be equivalent to the saving that it would effect by the discontinuance of subsidies. He declared that the subsidies which had been discontinued had been paid mostly in respect of foodstuffs and clothing, and he blamed their discontinuance for the rise in the cost of living. The fact is that, although subsidies are still paid in respect of some foodstuffs, their prices have risen considerably. The price of bread has increased, in South Australia at any rate, by about Id. per 2-lb. loaf during the last twelve months. That cannot be attributed to the withdrawal of subsidies, because susbidies are still paid upon the production of cereals in the form of subsidies on wheat sacks and superphosphate and other fertilizers. Nevertheless the honorable senator would have us believe that, because some subsidies have been discontinued, the prices of the principal food items have increased. Subsidies were not paid on meat, for instance. Yet when prices control was removed from meat in South Australia, prices increased by 5d. per lb. on the first day and by an additional 7d. per lb. on the second day. Surely the honorable senator does not blame the Government for that. The price of fish almost doubled on the day that prices control was lifted. That increase certainly had no relation to subsidies, because the fishing industry has not been subsidized. Price increases bear more severely upon the ordinary working man than they do upon rich people. Subsidies have no effect upon the costs of many items of clothing used by workers. Woollen goods and cotton goods were the principal commodites subject to subsidy. However, increased prices for such goods cannot be correctly attributed to the discontinuance of subsidies because reserve stocks upon which subsidies were paid have not yet been exhausted. Subsidies were paid upon them while they were still in bond. There must be some other reason for the increases. Although scare headlines have been published in the newspapers declaring that the prices of suits will increase by about £4 each and that other serious rises will occur as the result of the discontinuance of subsidies, the fact is that subsidies cannot be related in any way to the rising cost of living.
The Chifley Government is putting the Labour party’s platform into effect. We believe that only the people who can afford to pay taxes should be taxed. In accordance with that principle, the Government has gradually altered the incidence of taxation by means of successive reductions. As a result, a single man or woman who earns £350 a year now does not pay one penny in income tax, although a social services contribution is levied. The Government has gradually increased the amount of annual income exempt from tax from £200 to £350 and this bill provides for a further easing of the burden. That pro cess has been in accordance with our policy that citizens on the lowest rung of the income ladder should be released, if possible, from the liability to pay tax and that those who have the means to pay tax should pay in accordance with their means. That is why the newspapers accuse the Government of “ soaking “ the rich. The rich are obliged to pay tax at a high rate because we believe that they ought to do so. Rates of tax on the highest ranges of income have been kept at a high level on that account. The Labour Government pursued its ideals as far as was practicable during the war. Incidentally, I remind honorable senators opposite that the Labour party has always had a definite policy for the defence of Australia. It has never believed in a policy of isolation. It took over the reins of government at the worst period of the war and it adhered to its policy that costs of war should be financed as much as possible from the revenues of the country. We knew that the entire cost of the war could not be paid in that way, but we attempted to do so as far as was practicable. Therefore, in war-time, a man with a wife and two children, who earned £250 a year, had to pay £2 18s. annually in income tax. That income is not subject to income tax now. A taxpayer with the same number of dependants, who earned £300 a year, had to pay £17 Ss. in tax during the war. He is not taxed to-day. Had the same man earned £351 a year he would have paid £31 2s. in tax during the war, but next year he will be required to pay only £2 4s. as a social services contribution. Therefore, a taxpayer with a wife and two children, who has an annual income of £351 a year, is £28 1Ss a year better off now than he was during the war, when social services contribution was not levied.
– And he also receives 10s. a week in endowment for one of his children.
– That is so. Even greater reductions have been ‘granted to citizens in the middle income group. Under this bill, a man with a wife and two children, who earns £400 a year, will be better off than he was during the war to the amount of £41 10s. a year. In war-time, he paid income tax amounting to £46 10s. annually. Now he will be required to pay only £5 a year in social services contribution. Of course he will also receive 10s. a week in child endowment.
A comparison of taxes payable in 1938-39 with those payable to-day shows [.hat the Government has done very much to ease the lot of low income earners. In 1938-39, the average rate of Commonwealth and State taxes for all States on an income of £250 was £4 ls. That income will now be exempt from tax. Present rates of tax are considerably below the pre-war rates under the dual tax system. Consider the case of the man earning £400 a year who has a wife and two children. The average rate of tax payable by such a man in 1938-39 was £11. The highest rate payable in any State was £14 7s. Now such a man is required to pay only £5 a year in social services contribution. He is exempt from income tax. Those facts show that the Labour Government has doggedly pursued its objective of taxing only the people who can afford to pay taxes and helping the lower paid workers, whose wives and children enjoy greater advantages in life to-day than they have ever had. That is what the Labour movement is doing through the Chifley Government. The Leader of the Opposition spoke about the coal-miners and the Communists. He also referred to other taxes provided for in measures that we shall be debating shortly. We are not discussing a budget. These tax measures relate to specific reductions of taxes. While Opposition speakers are ranting in this Parliament, the Government is going ahead with its job. In fact, it is doing such a good job, that the Opposition cannot find any valid ground for criticism. So, we are hearing again about the poor old “ commos “. Obviously, honorable senators opposite have failed to find any logical basis of criticism of the Government’s taxation proposal. Naturally, the Government will not be criticized for reducing taxes, because after all, nobody likes to pay large sums of money to a government. The reductions are welcomed by us all. I was pleased that the Leader of the Opposition did not claim that the reductions should have been greater. On the last occasion, the honorable senator did offer that unjustifiablecriticism. Apparently, Labour ideals aregradually gaining ground with him and with his party. As I have pointed out, the proposals now under consideration grant the greatest reductions to people in the lower and middle income groups. It has not been possible to make such substantial remissions before. These things take time. People earning incomes of up to £600 a year constitute approximately 80 per cent, of the taxpayers of the Commonwealth. I contend therefore, that the Government is giving the greatest relief to the greatest number, and taking the most from those who can best afford to pay.
One often reads headlines in the newspapers proclaiming that Australians arc the highest taxed people in the world. Significantly, such assertions are seldom backed by detailed figures. I propose therefore, to compare taxes paid in thi? country with those paid in Great Britain and New Zealand. Such a comparison, ] contend, is fair because the three countries are all part of the British Commonwealth of Nations, and are all suffering from the after effects of war. I do noi suggest of course that war’s aftermath in this country presents such a serious problem as it does in Great Britain. In Australia a man with a wife and two children, earning £300 a year, pays neither income tax nor social services contribution. His counterpart in the United Kingdom pays in income tax and national insurance contribution, which is the equivalent of our social services contribution, a total of £12 lis. In Nev Zealand he pays £22 10s. in income tas and wages tax, which corresponds to our social services contribution. In this country, an income earner in receipt of £400 a year, and in the same family category, pays £5 lis. in social services contribution. In the United Kingdom, his commitment would be £15 lis. and in New Zealand £30 lis. The corresponding figures for a man on £800 a year are £60 in Australia, £120 lis. in the United Kingdom, and £116 2s. 6d. in New Zealand. Clearly, therefore, the family man in this country is on a much better “wicket” than is his counterpart in either of the other countries that I have mentioned.
Another favourite argument of Opposition members in this Parliament and of some of our newspapers, is that overtime earnings are taxed so heavily that any person working overtime is in effect “working for Chifley”. The alleged high taxing of overtime earnings is blamed for the lack of incentive to work overtime. I noticed that the Leader of the Opposition did not repeat that fallacious argument to-day. The phrase “ working for Chifley “ appeared first, I believe, in the Sydney Morning Herald and was quickly taken up by supporters of the Liberal party and the Australian Country party, who spread it all over the country. The claim that the high taxing of overtime earnings robs workers of incentive is made particularly in relation to the coal-mining industry. But what is the position ? Let us take again a man with a wife and two children. I have figures relating to income-earners in other categories which I can cite if honorable senators so desire, but I propose to confine my comparisons to the family man with two children. A man in that category, working a 40-hour week) for a wage of £5 - unfortunately, there are still quite a number of men in this country earning only £5 a week - does not pay any income tax or social services contribution. If he works three hours overtime, he receives an additional lis. 3d., but still does not pay any tax. If he works nine hours overtime, he earns an additional £1 13s. 9d.. of which he pays a social services contribution of 9d. He “till does not pay any income tax. Those figures hardly support the claim that men working overtime are “working for Chifley”. But let us continue np the scale, and consider the position of the man who earns £7 a. week. Normally he pays 1s. Id. a week in social services contribution. If he works three hours overtime he receives an additional 15s. 9d., of which he pays ls. in social services contribution and still no income tax. In other words, he gives a “ bob “ to Chifley and keeps fourteen “ bob “ for himself. If he works nine hours overtime ,he gets an extra £2 7s. 3d. and pays 3s. lOd. in social services contribution but no income tax. We must bear in mind, too, that he receives 10s. a week child endowment for his second child. Is he “ work ing for Chifley “ ? No doubt, somebody will argue that the actual deductions made by the employer are greater than the figures that I have stated, but thai does not alter the liability of the taxpayer over the year. At the end of the year, employees who have been overdeducted will receive refunds. I myself paid so much in tax last year that 1 received a refund of £2. The workman is in exactly the same position. I agree that there is some basis for the complaint that, under the instalment system, taxpayers are not paid interest on their contributions, but by no stretch of the imagination can it be claimed that men working overtime are “working for Chifley”. Take even the man on £600 a year, or nearly £12 a week. Normally his liability in income tax and social services contribution is lis. 4d. a week. If he works three hours overtime at time-and-a-half rates he gets an extra £1 7s. of which he pays an additional 4s. 3d. in tax. If he works nine hours overtime, he gets an extra £4 ls., which is about one-third of his weekly wage, but still his additional tax is only 13s. Id. Therefore, even the man on £12 a week is not “ working for Chifley “ when he works overtime. Traducers of the Labour movement, and of the Chifley Government in particular, always conveniently forget the additional tax concessions that have been granted since Labour assumed office. For instance, a taxpayer may claim a concessional . deduction for a daughterhousekeeper, or a widowed parent. If he is a widower with children, he is entitled to a concessional deduction in respect of a housekeeper. Similar provision has also been made for invalid children over sixteen years of age and children of between sixteen and nineteen years who are undertaking fulltime educational courses. A taxpayer may now claim deductions for dental expenses, optical expenses and hearing aids. An incapacitated person is entitled to a concessional deduction for an attendant. All those things have eased the lot of the working people. In addition, the rebate for medical expenses has been increased from a maximum of £50 for the taxpayer and his family, to a maximum of £50 for the taxpayer himself and each member of his family, including children under 21. Concessions have been granted also in respect of a father as well as a mother, and a dependent invalid brother or sister wholly maintained by a taxpayer. The Government has made provision for tax rebates of from £20 to £30 in respect of funeral expenses. Special concessions have also been made to ex-servicemen, and exemptions are made in respect of the allowances paid to the dependants of ex-servicemen. The present Government has also remitted unpaid income tax, and interest owing upon it, by exservicemen, and the total amount of income tax concessions made to exservicemen, including those which operated from the outbreak of war, is estimated at £18,000,000. Members of the Opposition conveniently forget, those facts when they criticize the present Government for its decision to withdraw commodity subsidies. Special exemptions, have also been made in respect of merchant seamen and primary producers, ft is significant that when the political, party that is. supposed to represent particularly the interests of primary producers was in power it did not make any such concessions. Special exemptions have also been made for losses incurred by primary producers during seven successive seasons. Formerly, the concessions applied only to losses incurred during four successive seasons. Special concessions have also been given to taxpayers in remote areas, and many taxpayers in the State represented by members of the Opposition in this chamber will benefit substantially from those concessions.
– Twenty pounds does not go far.
– It helps, considerably at, times. I have in mind particularly a primary producer who recently informed .me that for many years he had had, to pay £600 annually in interest.. To raise the money he had to- mortgage’ his stock and property, and nearly every year he had to borrow more in order to meet his living expenses. Primary producers, in similar circumstances would, greatly appreciate a rebate of even £20. Of course,, conditions have improved: during the regime of the present Administration.. The individual to whom I referred is. now quite happy,. although, as he expressed it,, he is “ working for Chifley”. However, the amount which he has left after he pays his tax is far greater than was the case during the period when anti-Labour administrations were in office. The present Government has given special encouragement to primary producers in many ways, including substantial taxation concessions. Money expended on improvements to land is subject to special concessions. For instance, capital expenditure incurred in preventing or combating soil erosion on the land, otherwise than by the erection of fences, is not liable to taxation. X remind members of the Opposition that no such, provision was ever made by the Opposition; parties when they were in office. Many of those who formerly settled on the land were obsessed by the desire to obtain as much as possible from the land so as to retire as quickly as they could. No thought was given to posterity. I emphasize that the present Administration has consistently sought to correct that tendency and to encourage land, settlement. Large sums of money have been provided, for experimental work by the Council, for Scientific and Industrial Research concerning problems connected with the land,, and the. Government, as I have already stated, has made generous tax concessions, to primary producers.
– Senator O’Flaherty, should not overlook the fact that a nonLabour administration made available £20,000,000 for rehabilitation.
– It also made available £10,000,000 for homebuilding, but only cine home was erected.
– The £10,000,000 was expended for that purpose, however,, under an agreement between, the Commonwealth and the States.
– Be that as it may,, if the anti-Labour government referred to did accomplish something worth while in- home-building, that is the only creditable achievement to, which it can lay claim. I have pointed out that special provision, is made by the Government to combat soiL erosion^ and. the hill also provides for the remission of taxes, on capital, expenditure incurred in the- construction of dams, earth tanks, underground tanks, irrigation channels or similar structural improvements, or the sinking of bores or wells for the purpose of conserving or conveying water for use in carrying on primary production; and in the construction on the land of levee banks or similar improvements having like uses. The bill also provides for a special allowance to be made in respect of 20 .per cent, depreciation of plant acquired within five years after the 30th June, 1945. That concession applies not only to primary production but also to other industries. Quite a number of manufacturers and industrialists are taking advantage of that provision, which is further evidence of the incentive offered by the Government to increase production.
With regard to the comments made by the Leader of the Opposition on the imposition of sales tax, entertainments tax and other special taxes, I point out that a number of measures have been introduced to deal with those taxes, and I shall reply to his criticism when we are dealing with those measures. I commend the Government for having introduced this measure, and, whilst I trust that even greater reductions will be made in future, I shall always support the principle that those who can afford to pay must be made to pay, while those less f ordinate should not have to pay any more than they can afford.
– I sympathize with members of the Opposition for having to speak on a measure that provides for the reduction of taxes, because they have had practically no experience of responsibility for introducing such measures. When their political parties were in office they did not introduce measures to reduce the effect of taxes on the majority of the people. Indeed, in my recollection, the only reduction of taxes that occurred during the regime of anti-Labour administrations was that which came about automatically as the result of unemployment reducing salaries. Nevertheless, their supporters criticize the Government for having given so much back to the people.
– We criticized the Government because it did not give back sufficient to the people.
– Members of the Opposition criticized the Government because it did not give sufficient back to the section of the people whom they represent. I stress the fact that Labour has more than fulfilled the promises that it made to the people during the last general elections. Before we received the benefit of the prevailing high prices overseas for our primary produce many individuals who are now paying substantial amounts in tax would have been proud to pay tax - and I am thinking not only of the workers but of persons who were in better circumstances. I recall the slogan “ boom and bust “ attributed to the Bruce-Page Government by the press, with which, incidentally, that Government had considerable influence. Criticism has been made that the national income is far higher than the official estimates. In reply, I point out that our sterling balances overseas are <unprecedentedly high.
– That is because of the prevailing high prices of our primary produce.
– And the present Government’s sound administration.
– But that has nothing to do with overseas prices.
– Whilst I do not deny that the prevailing high prices are a major contributing factor, it cannot be denied that the sound financial policy of the Government has contributed substantially to the present satisfactory position. The people of Australia have shown that they are satisfied with the administration of the present Government, but they certainly were not satisfied with the financial policy pursued by previous nonLabour governments. The present administration has surpassed any previous administration.
– It has surpassed them on the downward grade.
– After that remark, I am satisfied that the Leader of the Opposition would say anything.
– The country cannot help being prosperous because money is simply rolling in.
– The policy of the present Government, including particularly its control of expenditure, and the tax remissions, rebates and concessions which it has granted, has contributed substantially to our present prosperous condition. The Leader of the Opposition complained that even greater reductions of taxes had not been made. I point out that since the war ended taxes will have been reduced by £133,000,000 in respect of income derived from personal exertion. The present measure proposes h reduction of £36,500.000. In that time the Government has more than doubled the amount expended annually on social services, and as was pointed out by Senator 0’Flaherty. all available deductions have been made more generous and new deductions arc now permitted, the object being to lessen the incidence of Taxation on those who have dependants or who suffer hardship. Members of the Opposition cannot controvert that fact, but must admit it if they wish to appear to be fair. Rales tax has been reduced bv £28,835,000.
– What is the Government collecting on sales tax annually now?
– Members of the Opposition have complained that indirect taxes have not been substantially reduced. I point out that the revenue derived from duties of customs and excise has been reduced by £4,000,000, estate duty by £100.000; war-time company tax by £3,500,000; and the gold tax, which yielded £550.000 a year, has been completely abolished, ft is idle, therefore, for members of the Opposition to contend that nothing has been done to reduce the burden of indirect taxation. The reason for the buoyancy of the national income is the policy of full employment pursued by the Government. Mr. Brewer, a business man of Western Australia who is at present visiting Canberra, told me in most definite terms that he attributes his present prosperity to the Government’s policy of full employment. Like many others he suffered severely during the depression, and the fact that he is now required to pay substantial amounts in taxes does not unduly perturb him because he realizes that the cause of his present prosperity lies in the financial policy of the Government. The taxation policy of the present Government is designed to spread the wealth of the nation over the community so as to confer reasonable spending power on all without being unduly harsh to any individual.
Members of the Opposition have complained that indirect taxation is unduly high, but I point out, in the first place, that most indirect taxes were imposed by non-Labour . administrations. Whilst I am always prepared to support any move to reduce indirect taxes, when the national economy will permit of reductions being made, I must assert that the proportion of revenue derived from indirect taxes at present is not unduly high. Of each £1 collected in taxes, 10s. 10d. is derived from income tax on personal exertion, and other direct taxes; 6s. from indirect taxes, representing 2e. 2d. from customs duties, 2s. 4d. from excise duties and ls. 6d. from sales tax; and 3s. 2d. from other sources, including the self-balancing items of post office and railway accounts, and ls. Id. from “ other revenue “. Of each £1 of expenditure in the budget for the current financial year, 3s. 7d. will be for social services, which means that that amount will virtually be refunded to the people. Repatriation and reestablishment of war-time forces, which is a recurring expenditure, will account for ls. lid., whilst defence and post-war charges will require an expenditure of 4s. 3d. Public debt charges require 2s. 8d., whilst payments to the States will account for 3s. I claim that the States are obtaining more revenue under the uniform taxation system than ever before under dual taxation. Furthermore, a saving is effected because overlapping of collection charges and expenditure has been obviated. Capital works and services involve an expenditure of ls. 8d. ; post office and railways, ls. 4d. ; departmental, ls. Id.; territories and other expenditure. 6d. Irrespective of the prices that are being received for our commodities overseas, I claim that because such a large proportion of taxation collections are returned to the people, the money is thus kept in circulation and becomes a potential benefit to all citizens by maintaining their spending power. This accounts for the buoyant conditions that are at present being experienced.
Senator O’Flaherty dealt at length with “taxation as applied to personal exertion income. His analysis showed that the incidence of personal exertion income taxation in this country compared favorably with that operating in the United Kingdom and New Zealand. Let us consider the obligations of a person who pays taxes, as distinct from social services contributions. Compared with existing limits, the amounts which will he free of income tax, as distinct from social services contributions, under the new scale, will be as follows: -
Although a taxpayer with a dependent wife aud two children is not called upon to pay social services contributions until his income exceeds £350 per annum, I point out that he receives back by way of child endowment, £26 a year which recoups him up to an income of £600 per annum, irrespective of any other social services that he enjoys. This is just another instalment of the promises that were made by the Prime Minister (Mr. Chifley) on behalf of this Government to reduce taxation whenever the finances permitted. I cannot regard seriously the arguments raised by the Opposition that, because of the present buoyant conditions, raxes ou the higher incomes should be slashed, irrespective of the national economy. In commending this measure to honorable senators I feel proud to be a supporter of the Government responsible for introducing it.
– I am happy to add a few comments to the debate on this measure. No subject produces more differences of opinion among the political parties in the public life of this or any other country than does taxation. I have never been able to satisfy my mind completely about the reason why, year after year, the Liberal and Conservative parties have evinced an identical approach to the matter of taxation remissions. The attitude of the members of those parties when they speak in the legislative halls for the “purpose of furthering the policy of the moneyed powers differs considerably from that evinced by them in social life. Their attitude towards taxation has been consistent right down through the years of responsible government. Although since federation the Australian Labour party has had control of the treasury bench for only a limited number of years, I point out that since its earliest days that party has realized its responsibility to the country. Taxation must be imposed in order that the services of thi? country can be carried on. I point out that we are just as conversant with the necessity for fair taxation legislation as are our opponents. The main difference in our approach to this subject is that whilst the anti-Labour parties, year in and year out, have endeavoured to have placed upon the statute-book legislation which would result in unfair taxation with consequent injustice to the overwhelming section of the community. Labour has had regard to Christian principles when framing legislation to apply to those who have only their labour to sell in order to obtain their requirements of this world’s goods. I admit that, because of the war. taxation has reached heights hitherto unknown in this country. However, we must not lose sight of the fact that about 70 per cent, of the taxpayers of thi? country are living under a system of legislation that provides a court to determine what living costs shall be. The wages determined by the Arbitration Court make no provision for taxation. The duty of that court is to determine how much a worker and his dependants require in order to procure the fewest of the necessaries of life. It if therefore very hard to understand the consistency of attitude of our opponent? over the years in their approach to this subject. During the life of the present Labour Government, and particularly since the general elections of 1946, onslaughts have been made on the Chifley Government’s method of handling finance. Although I shall not refer in detail to what happened in the 1946 general election and to the promises that were ma.de by anti-Labour forces, the promises of the Australian Labour party have been referred to by the Leader of the Australian Country party in the House of Representatives (Mr. Fadden) and the Leader of the Opposition in that House (Mr. Menzies) as a blank cheque. Let us examine the position. Ever since I have been privileged to sit in the Senate I have heard the Opposition clamour on the one hand for as much as possible to be done for the men who offered everything for the safety of this country, whilst on the other hand, they have sought as much assistance as possible for the Mother Country. Both of those claims were right, and no doubt the Opposition will agree that it has received the fullest co-operation in relation to those matters from this Government. However, whether the Opposition likes it or not, the fact is that wars cost money. We must be honest with ourselves. Following a war there devolves on all countries involved, whether they be victor or vanquished, a responsibility to shoulder the obligations to the men who did the fighting. It is difficult to understand, our friends opposite. On the one hand they wail and clamour for reduced taxation, whilst on the other hand they seek for the ex-service personnel everything to which they are entitled. As long as this Government is in office those men and women will be assured of receiving their due, as far as is practicable. If we were to listen to the demands of the Opposition our national income would fall so low that we would be faced with conditions similar to those that existed immediately following World War I. It is hard to reconcile the attitude of the Opposition towards taxation matters in view of its continued clamour for food and financial assistance for Great Britain, and that this time the right and proper thing should be done by the people who offered their lives for their country. These things cannot be done without the money necessary to meet the costs: involved.
It must be remembered that to finance Australia’s part in World War II., an expenditure of £2,790,000,000 was involved. Due to the financial policy of the Australian Labour party, and in a large measure to the efforts of the late Mr. John Curtin, most of that money has remained in this country. That in itself is indicative of the different methods of administration of taxation matters adopted by the Australian Labour party and anti-Labour parties.
The Leader of the Opposition (Senator Cooper) has only recently returned from, abroad. While he was overseas he informed1 his mind’ on many things, and in. the course of his speech he compared conditions operating in this country with those in Great Britain. Although J listened carefully, however, he made no reference to the difference between the methods adopted in Australia for the raising of revenue by taxation, and those practised in Great Britain. Although I do not want to be unfair to’ the honorable senator, my impression is that,, because of his political tendencies, he cast somedoubt on the statements that have been released by the Australian Government from time to time. It is indeed remarkable that although the Leader of the Opposition had an opportunity while in Great Britain to study this contentious subject, he has refrained from comparing the methods of taxation adopted there and in Australia.
By interjection when Senator O’Flaherty was speaking, he said that following World War I. the government, of which he was then a member provided £20,000,000 for purposes of rehabilitation. Possibly the motives which actuated the government then were on all fours with those that prompted, this Government to do very much more for the ex-service personnel, but in a different manner. Because of the continuous Liberal administration during the years immediately following World War I., and because of the application by Liberal governments of public moneys to systems of rehabilitation, particularly land settlement, which was merely a replica of the English feudal land system, that money flowed back, not to the Liberal party, but to financiers and supporters of the Liberal party throughout Australia. Instead of the ex-servicemen enjoying what was intended for them, and what was their right, because of the granting of that money there were to be seen on farms adjoining the river Murray, pigs living in cemented stalls and styes whilst the x-servicemen settlers and their wives were “waltzing Matilda” to the nearest billabong, and consequently the money spent on rehabilitation went back to the very institutions that had financed, and are still financing, the Liberal party.
– I mentioned the £20,000,000 for farmers’ rehabilitation.
– That was the same as under the policy that was already in operation.
– It helped a great, many farmers.
– Yes, but it drove thousands of them to North Terrace and Collins-street to people whose business has been money “ blood-sucking “. These are hard things to say, but the Leader of the Opposition must take notice of what I say, although it hurts both him and me.
– But many of the farmers carried on and became prosperous.
– For every one that was successful, twenty went to the wall. Figures were revealed in this chamber during a debate on a bill which did not deal with taxation. Whilst I shall not digress at the moment, if there is an opportunity later I shall refresh the minds of honorable senators on that subject. I was dealing with the Government’s liabilities as the result of the two world wars. In view of the fact that the details of such expenditure have been made available to the members of the Opposition parties, I can only characterize as a hollow mockery their criticism of the Government’s taxation policy. They must be aware of the- huge expenditure to which the Government is committed in order to honour its obligations to members of our fighting forces who preserved this country for us and future generations. For the current financial year the Government’s expenditure includes the following items: Defence, £60,000,000; war gratuity, £26,000,000 ; re-establishment and repatriation, £30,000,000; war pensions in respect of World War I., £9,000,000; war service homes, £10,000,000; and interest and sinking fund on war loans, £59,000,000. Pensions payable in respect of World War I. include those made available to burnt-out ex-servicemen of that war, and I have no doubt that the Leader of the Opposition and myself and other honorable senators who fought in that conflict will welcome such assistance in our declining years. Realizing the Government’s obligations to ex-service personnel of both world wars, I am amazed at the clamour of the Opposition parties that the Government should reduce taxes in one fell swoop.
– I have never objected to expenditure of that kind.
– Of course not; nevertheless, the honorable senator and his colleagues clamour for wholesale reductions of taxes. The Government is pursuing a very wise policy. It is bearing in mind the possibility of overseas prices for our products collapsing, and the danger of bad seasonal conditions. This is the fifth occasion on which the Government has reduced taxes since the cessation of hostilities in August, 1945. If there is one thing that the average individual growls about more than another it is income tax. He may not mind losing a few “ quid “ at the races and he may not worry about what he spends on beer, but he strenuously objects when the Government, as it were, takes something out of his pocket. However, I am glad to note that the average citizen is increasingly appreciating the wisdom of the Government’s taxation policy of reducing taxes only when and insofar as it can afford to do so having regard to the country’s obligations. At the same time in the Opposition camp there is evidence of conflicting views upon taxation. During the last general election campaign, the right honorable member for Cowper (Sir Earle Page) said that in order to increase production he would reduce taxes in the aggregate by half. We remember, however, that the same gentleman was a prominent member of anti-Labour governments during the period following World War I. Let us see what he said about taxation at that time. In 1920 he said -
I make no complaint of the incidence of taxation, I do not complain of its being, high been use in my view, now is the time when we should tax ourselves with the object of reducing our public debt. tn 1921 the same right honorable gentleman said -
How can taxation be reduced if our indebtedness and interest bill is increased?
At that time the right honorable gentleman preferred not to reduce taxes but to allow thousands of unemployed to remain without jobs and continue to starve.
The policy he enunciated during the depression was not Christian. However, it seems to he on all fours with the clamour which the Opposition parties are making to-day. Apparently, they are prepared to allow the conditions which existed following “World War I. to recur with the result that the sons of those who suffered so much in that period would go through similar experiences. Members of the Opposition parties repeatedly claim that present taxation is crippling industry. Mr. S. Ricketson, chairman of Capel Court Investment Company, an organization which holds investments in no less than 217 companies, mainly in Australia and New Zealand, said on the 22nd March last year -
Some Australians may perhaps overemphasize their own political and industrial troubles, but careful examination of political, financial and economic conditions in all countries will disclose that Australia now is predominantly the best practicable field, the one offering the most attractions for investment of British capital, both directly or indirectly in the stocks of existing stable and expanding companies.
Obviously, there is little ground for the contradictory but oft-repeated statements by our political opponents that the Government’s taxation policy is ruining industry. Mr. Ricketson, in view of the position he holds, should be qualified to express a view on that matter even from the capitalistic point of view; and he is of opinion that Australia offers the best prospects for investment in the world. In 1931 the Opposition parties, aided by the monied power and by means of its majority in this chamber, drove the Scullin Government into the political wilderness because it tried to help the country weather the depression. It made an attempt to save our people from starvation. However, two years later, in 1933, the United Australia party Go- vernment made remissions of income tax which resulted in 700 persons whos, salaries averaged over £5,200 a year, benefiting by £500,000. It will not be forgotten that in 1932-33 that Government, although it had a surplus, reduced pensions and, at the same time, made tax reductions which conferred benefits on big property owners and companies amounting to millions of pounds.
– Did not the Scullin Government reduce pensions in 1931?
– Yes ; and that has been the only cardinal sin committed by a Labour government. Bat that Government was forced to take thai action. I am surprised at the interjection of the Leader of the Opposition because he was a member of the majority party in the Senate at that time, and, therefore, was one of those who brutally insisted that the Scullin Government reduce invalid and old-age pensions. If, to-day. so many years afterwards, he can take pride in that fact, he falls considerably in my estimation.
– The people of Queensland must have taken a different view of my action, because they have returned me to the Senate at every election at which I have stood in the meantime.
– All I can say is that the people of Queensland have, indeed, been charitable. So also has been this Government, because it arranged for the Leader of the Opposition to be * member of a delegation which recently went overseas; but having returned to this country, the honorable senator has failed to compare taxation standards in Australia with those in Great Britain. From his failure to do so one can only conclude that he admits that the position is more favorable in this country. Nor will it be forgotten that although there were thousands of people unemployed in Australia in 1936, 1937 and 1938, the anti-Labour Government at that time made available only £150,000 to be expended on works to provide Christmas relief in 1936, and £100,000 in 1937. whilst it made no funds available for that purpose in 1938. In the last-named year, just before the outbreak of war, that Government would not provide jobs for thousands of our young men who were soon to he called to the colours. The first joh given to those men was to shoulder a rifle. That Government did to them an injury similar to that which antiLabour governments had done to their parents during the depression which occurred between the two world wars. All that it could offer to those men was the dole of 5s., and it gave that grudgingly; or it obliged them to work for rations. Yet those men were prepared to shoulder a gun in the defence of their country when the recent war broke out. In view of the treatment that they received at the bands of anti-Labour governments, that fact speaks volumes for the loyalty of the people of Australia, who, for years, had been obliged to tighten their belts and subsist oil bread and butter or meagre rations. However, in spite of the treatment they had received, when they sawthat their country was in danger, they went forth to fight in its defence. Anti-Labour governments did not give the unemployed anything at all in 1938. Throughout the years of distress, they did not ask the people who were able to pay a little extra to do anything to assist those who had to accept the dole. There was no suggestion of anything of that sort. It was a case of every man for himself, and the devil take the hindmost. Before war broke out, there were many aching hearts, and sorrow and poverty in thousands of homes throughout this fair land. That state of unhappiness was exceeded only during the war, when new fears and worries beset the people.
During the 1946 election campaign the leader of the anti-Labour forces, Mr. Menzies asked for an all-round tax reduction. The aim of the plan was obvious, ft contemplated considerable tax reductions for the citizens who had large incomes,’ but those in the lower income ranges would have received only a slight benefit from it. It would be futile for honorable senators opposite to deny that, because Mr. Menzies announced his scheme in every city in which he spoke during the campaign. The all-round decrease of 20 per cent, that he advocated would have allowed a married man with a wife and two children, who earned £300 a year, a reduction of £2 7s. a year, or lOd. n week, whereas a man with the same number of dependants, but who earned £5,000 a year, would have been allowed a saving of £569 a year. The invidious distinction between the two classes of income earners was obvious. Despite the Opposition’s proposals, the Labour Government was returned to power with the full confidence of the Australian people on the strength of the assurance given by our honest and able Prime Minister that the taxation laws would be administered humanely and that relief would be given when circumstances justified the making of reductions. As I have said, this is the fifth occasion on which the Labour Government has reduced tax rates. As the result of its progressive reductions, many taxpayers pay only half, and others less than half, of the amounts that they paid during the war. In planning tax relief, the Government has always had regard for the needs of taxpayers in the lower and middle income groups. Those of uswho are true Christians and believe in the Golden Rule find great difficulty in understanding the consistent attitude of the Opposition towards the subject of taxation.
The Labour party has always legislated for the benefit of the overwhelming mass of the people who are least able to bear the burden of financial sacrifices. AntiLabour governments were responsible for the inauguration of a judicial system which determined as the basicwage the lowest amount on which a man and his wife and children could live. That minimum income made no provision for taxes, yet for years men were called upon to set aside a portion of that meagre sum in order to satisfy the demands of the State. The sacrifices that they were forced tomake were far greater than any that have ever been demanded of the wealthy sections of the community. By the consistent honesty of its approach to theproblems of taxation, the Labour party has gained the support of the Australian, electors. During, and since, the war, Labour Prime Ministers have given, effect to their promises to legislatein the best interest of the mass of thepeople, in spite of the puffings and objections of the Opposition. Members of theOpposition parties have an ignominious- record. They have always failed Australia when it has needed help most. They should be the last people in public life to :say “Nay” to the taxation proposals of this Government.
.- This measure compares more than favorably with other enlightened legislation that has been introduced by this Government. In fact, I was astounded to learn that, for once, the Leader of the Opposition (Senator Cooper) really had no serious objection to the Government’s proposals. The chief complaint of members of the Opposition in this Parliament regarding the Government’s taxation legislation is that no attempt has been made to lift to any appreciable degree the taxes imposed upon citizens in receipt of the highest rates of income. The Leader of the Opposition declared that the state of prosperity “that we are now enjoying had not been brought about by the administrative acts of this Government. He said that the high prices now obtainable for our products in other countries were simply the result of the good management of the captains of industry. Our present economic situation should not be viewed merely in the light of present conditions; we must bear in mind the events that occurred in earlier years. Everybody who has examined the situation carefully must admit that the efficient organization of production throughout Australia to-day is largely attributable to the actions of the Labour Government. Its record in relation to coal production is a proud one. We have been challenged by honorable senators opposite upon this subject and the Leader of the Opposition has referred to a document relating to Miller and Company and certain coal slack that is hidden away somewhere underground.
– It is only dust.
– That is so. I have seen some of that dust on the waggons of Miller and Company in Melbourne. It is useless for ordinary purposes. The highly efficient organization of coal production in Australia at present is due in the main to the actions of the Government, which realizes that coal is needed in adequate quantities if the financial stability of the nation is to be maintained. No other organization has done more than this Government has done to organize the production and distribution of coal. The State governments could not carry out the task successfully. No other government has ever gone to such lengths as this Government has gone in order to establish an efficient conciliation and arbitration system for the coal industry. It has virtually placed one Minister in charge of that .branch of its activities. The importance of the industry warrants such action. The nation’s financial reserves could be destroyed if coal production ceased for any length of time. Whenever stoppages occur in the industry, of course, the miners or other workers connected with coal production are attacked by the Opposition. It takes only a one-sided view of industrial disputes. We know what the mine-owners did in the past. If they had large stocks of coal at grass now, they would adopt an attitude entirely different . from that which they have maintained recently. The Leader of the Opposition should study the history of coal production in Queensland, the State which he represents, before engaging in wholesale criticism of the workers. There are countless millions of tons of coal in Queensland close to the surface of the ground. Probably there is sufficient readily accessible coal in that State to satisfy Australia’s requirements for the next few centuries. But the LiberalCountry party of Australia has never made any constructive suggestions for winning that coal. Its only concern is to ensure that the coal, when it is mined, shall be owned by private interests which want it merely for the purpose of exploiting the workers and industrialists who depend upon coal.
Senator Critchley spoke about the depression era. I am thankful that Australia now is the most financially sound country in the world. We have credits to the value of £300,000,000 overseas. Since hostilities terminated in World War II., the Government has paid off £135,000,000 of our national debt. That has been a remarkable achievement. All that previous non-Labour governments desired to do was to allow the national debt to increase gradually, without making any attempt to provide adequate making funds, with the result that we incurred huge liabilities for interest payments. The Government is obliged to bear vastly increased costs to-day in the conduct of instrumentalities such as the Post Office. Everybody should know that, as the result of the rapid increase of the cost of living, the cost of administering those undertakings has increased between 50 per cent, and 100 per cent. Wages have almost doubled. The prices of various materials and manufactured commodities required by those Commonwealth instrumentalities have also increased by as much as 100 per cent, or 200 per cent. Dealing with the broad question of finance, we find that this Government has been able not only to meet all its internal commitments, but also to reduce substantially its overseas indebtedness. Prior to the war, Australia had a constant deficit overseas of approximately £50,000,000. Labour’s administration has turned that deficit into a credit balance of £300,000,000. The Leader of the Opposition, who has had long experience in this Parliament, should be more conversant with our overseas financial relations, than I, a recently elected member of this chamber can be. The Government is also expending vast BurnS on immigration. Recently I went on board the immigrant ship Georgie, which brought 2,000 immigrants to this country - the greatest number ever to arrive on one vessel. The Government is spending millions of pounds in its endeavour to attract suitable migrants to this country, but its immigration policy is not designed to benefit only the Labour movement. Its object is to protect the Commonwealth and every citizen of it. In spite of this vast expenditure and the increase of invalid and age pensions, maternity allowances, and many other social services, the Government is able to announce substantial tax reductions. The introduction of this measure is some thing of which any government could be justifiably proud.
In the press of this country one reads constant criticism of the workers. We are told that the workers should increase production; but these complaints of lack of enthusiasm on the part of working people are not borne out by company statistics. I have before me a copy of the
Westralian Mining and Commercial Review, which contains interesting information on company earnings. The journal publishes the opinions of men, who are not from the factory, the field or the workshop, but are captains of industry. They include Mr. Ricketson, chairman of Jason Investment (Australia). What that gentleman has to say is in striking contrast to the gibes that one reads in the daily press about lack of effort on the part of workers. In the financial columns of the Melbourne Herald any day one can read lists of companies which not only are paying greater dividends than ever before, but also are able to place vast sums in reserve for replacement of plant, Ajc. Companies which, in 1945-46 were able to place, say, £80,000 in reserve, last year put £200,000 into their reserve accounts. That is symptomatic of the prosperity that is abroad in this country at present. Further evidence of that prosperity is to be found in the fact that it is almost impossible to book a saloon berth for a trip overseas. Overseas vessels are filled, not by working people who, under Labour’s administration, pay little or no taxes, but by the more fortunate members of the community who complain so loudly about oppressive taxation. They are, of course, the great bulwark of the Liberal party and the Australian Country party. The following is the statement made by the chairman of Jason Investment (Australia) : -
Despite the operation of the 40-hour week since January last, together with increased costs, 80 of the selected 100 companies were able to disclose increased net profits in their latest accounts, whilst 9 showed approximately the same figures, and earnings were lower than the previous year in amount only in 11 cases.
That shows that 80 per cent, of the large investment companies are reaping higher profits to-day than ever before. By whom are those profits being produced? They are being produced by the workers. I do not deny that administrative and executive ability is necessary to guide industry, but the real profit-makers are the workers. The Opposition parties in this Parliament constantly condemn the working people of Australia. I should like some of those critics to visit Melbourne, for instance, and see Australian workers producing an all-Australian motor car. That successful venture was made possible only by the assistance of the Australian Government, which constantly bears in mind the necessity to protect the people of this Commonwealth. The production of motor cars in this country will do much to conserve our limited dollar resources.
The Leader of the Opposition recently had a trip overseas, and I venture the opinion that in all his travels he did not find one country which is better, safer or more progressive than that of which he is a citizen. The honorable senator was a member of the Empire parliamentary delegation, and, as such, enjoyed facilities for investigation which a private citizen would lack. I have no doubt that he made discreet inquiries in many countries, and I challenge him to mention one nation in the world that has made more progress than the Australian people have made under Labour rule. The honorable senator is a member of the Australian Country party, and he knows well that no party has done more to safeguard the interests of primary producers than the Labour party has done. What Commonwealth instrumentality has made it possible for the man on the land to enjoy such a favorable financial position ? It is the Commonwealth Bank which administers the exchange rate between Australia and other countries. Nobody will suggest that the workers in the factories, mills, fields and workshops gain any advantage from a favorable exchange rate; yet the workers, as consumers, contribute substantially to the prosperity of primary producers. For instance, the Australian poultry industry exports 30,000,000 dozen eggs annually. The Australian people are paying more than 3s. a dozen for eggs, but they do not complain, and the Government does not complain. The Government wants the primary producers to have the best possible return for their labours. We should remember, however, that the price of exported eggs is kept up, not so much by the world parity price, as by the 25 per cent, exchange rate. We hear many complaints about sugar supplies in this country, but those who complain usually forget that we are exporting hundreds of thousands of tons of sugar each year. Whenever a hitch occurs in coastal shipments of sugar, resulting in a sugar short- age in some part of the Commonwealth, some sections of the community are loud in their condemnation of the waterside workers, but they seem to forget that more than 300,000 tons of sugar is successfully despatched from our shores each year. That is necessary if the economy of the country is to be safeguarded. Labour looks not only to the year 1949. or perhaps 1950. This Government consists of practical men. It has benefited by the lessons of the past. It has firmly implanted in its mind memories of the sufferings of men and women who, during the depression years, had to exist on a dole of a few shillings a week. I recall seeing on the banks of the Torrens River in Adelaide, men, women and children living in houses made of kerosene thu.
Sitting suspended from 5.58 to 8 p.m.
– Prior to the suspension of the sitting I had mentioned some of the achievements of the present Administration in easing the burden of taxes on the community. I suggest that those who so frequently complain of the alleged inadequacy of the reductions of taxes made by the present Government should review the expenditure of the money raised in taxes. I suggest that they compare the record of Labour in the three years that have elapsed since World War II. with the record of the anti-Labour administrations that occupied the treasury bench for so many years after World War I. I am referring now particularly to the rehabilitation of exservicemen and the reconstruction of industry. I have been reliably informed by people engaged in industry that after World War I. not 100 men who had received rehabilitation training in the State of Victoria were engaged in their trades two years after completion of training. I need hardly remind honorable senators of the scope and extent of the present Government’s reconstruction training scheme, and the liberality of the benefits conferred upon ex-service men and women of World War II. Since the war ended Labour has made provision for the training of 170,000 ex-service men and women. More ex-servicemen received rehabilitation training in the first six months after World War II. than received training during the long period of office of the. non-Labour administrations after World War I. During the first six months after World War I. not 500 individuals received reconstruction training. Furthermore, by payment of substantial subsidies the Government has ensured that reconstruction trainees receive full award rates after six months’ training. Apart from the tens of thousands who have received trade and technical training, many thousands of young men and women have been enabled to qualify for admission to the learned professions. Of those, five young men were awarded Rhodes scholarships in recent months. The present Government has offered every encouragement to young students to continue their studies until they qualify, and it pays substantial living allowances to maintain them during the period of their studies. Students who are married received £5 10s. a week from the Government. I impress upon members of the Opposition that despite the very substantial expenditure involved in the rehabilitation and reconstruction training of our ex-service men and women, the Government has contrived to make substantial reductions of tax.
The Leader of the Opposition complained of the incidence of taxes in this country compared with that overseas. The statistics prepared by the Treasurer (Mr. Chifley) set out very clearly the comparative taxation rates, in the United Kingdom, the United States of America, Canada, South Africa and Australia. That tabulation demonstrates clearly that the people of this country are not being taxed unduly. Apart altogether from its fine record in providing for the rehabilitation of our ex-service men and women, the present Government has done a magnificent job in improving the standard of living of the community generally. To finance its campaign to eradicate the “ white scourge “, tuberculosis, the Government will appropriate a total of £40,000,000. I remind honorable senators that that huge sum has to be provided by the taxpayers of a nation of less than S,000,000 people. Adverting to the reference which I made earlier in my speech to the national debt, I am reminded that on the 30th June, 1914, shortly before the outbreak of World War I., Australia owed Great Britain £624,000,000. Although we now owe that country more than £1,000,000,000, honorable senators should not forget that in the prosperous years which followed World War I. no attempt was made by the anti-Labour governments to liquidate any portion of our national debt. By contrast, this Government has made provision for the repayment of more than £130,000,000 of the national debt. Honorable senators on both sides of the House must admit that the standard of living of our people is higher than it has ever been. Furthermore, that standard is higher than that of any other country. Labour has made every conceivable effort to improve the lot of the workers. As part of its broad plan for improving social conditions, it introduced legislation to pay adequate compensation to those who are injured and also, to provide for the dependants of those who lose their lives in the course of their employment. Of course, the payment of workers’ compensation on an adequate scale is only one of the many humanitarian achievements of the present and preceding Labour administrations. I do not believe that any one of the 130 nations that are represented at the United Nations can claim to possess social conditions comparable with our own. It should always be remembered that Labour has been responsible for the attainment of such a high standard of living in this country.
I realize that complaints are frequently made of the increased cost of commodities and, listening to the complainants, one might imagine that the workers were responsible for that increase. However, every one who knows anything of economics realizes that nearly all internal marketing organizations involve distribution of commodities by private enterprise. At the moment I am not complaining of private enterprise, but those who blame the Government for the increasing cost of living in Australia must realize that we are living in a changing world. The Government has done its utmost to restrict the increases of the cost of living which have taken place, but it was absolutely impossible to prevent some increase from occurring. That being so, the Government has been particularly mindful of married men in the lower income group with two, three or more children. It has made special provision for them in this bill. The merits of the present Government are so apparent that I do not propose to elaborate them any further. I confidently believe that the people of Australia appreciate the policy of the present administration which aims at improving the lot of those who are least able to help themselves. The present Government has provided for the social welfare of all members of the community from the cradle to the grave. It has done its utmost to provide housing accommodation for the community, and its comprehensive scheme of social security provides for the sick and the physically incapacitated. As I have already pointed out, the implementation of .its programme to improve the lot of all sections of the community has involved the expenditure of a record amount of money. In the circumstances, it is all the more commendable that the Government has been able to make such substantial reductions of taxes as are proposed in this measure, which I commend to the Senate.
– in reply- The Leader of the Opposition (Senator Cooper) stressed the buoyancy of the national revenues, and said that the Government had collected an unusually large amount of tax because the Taxation Branch had overtaken much of the arrears in the issue of assessments and the collection of taxes. Whilst that may be so, there is no doubt about the buoyancy of the national revenues. That state of buoyancy has resulted from the two good seasons that we have enjoyed. Unfortunately, the Leader of the Opposition did not seem to appreciate the nation’s good fortune. He seemed quite unenthusiastic, and even gloomy, about the two bountiful seasons that we have experienced. In fact, I almost gained the impression that he would have preferred them to be bad seasons. I do not think that I have ever before heard a member of the Opposition refer so grudgingly to our present prosperity. In the course of his remarks, the honorable senator referred to events in all parts of the world, and made particular mention of the workers of this country. As usual, he had quite a lot to say about the coalminers. In the course of his remark* about the coal-miners, he referred to a question which he asked me in the Senate yesterday concerning Hartley Main colliery, which is owned by a Mr. Miller. I noticed the reference on the front page of yesterday’s Sydney Morning Herald, and knowing how keenly members of the Opposition seize upon press statements that are likely to damage or embarrass the Government, I communicated with the Joint Coal Board and prepared a reply in anticipation of the Leader of the Opposition asking a question on the matter. This afternoon the Leader of the Opposition complained that the reply which I furnished yesterday did not answer all the points that he raised. When I replied to his question yesterday, J pointed out that the acceptance of Mr. Miller’s proposition, which the honorable senator apparently advocated, would have entailed the expenditure of hundreds of thousands of pounds of public money. I also pointed out that the seam in the colliery referred to was very narrow. In addition, the location of the colliery, which is somewhat remote, increases the difficulty and cost of handling the coal produced there. For those and other reasons the Joint Coal Board did not deem it desirable to accede to Mr. Miller’s request to re-open the colliery.
– The Minister for Supply and Fuel (Senator Ashley) did not reply to the first part of my question, which referred to the allegation that from 25,000 to 30,000 tons of slack coal are stored underground.
– Without consulting the Joint Coal Board, I can assure the Leader of the Opposition that there is not 2,500 or 3,000 tons of coal stored there. I happen to know the person concerned.
– Then apparently he is wasting my time and the Minister’s.
– I do not know whether the honorable senator was informed to that effect by the man concerned, or whether he has gained hu information from a newspaper article, but, in any case, he has been misled.
The purpose of this bill is to give effect to the reductions of taxation on which the Government has decided. As other honorable senators on the Government side of the chamber have said, it is remarkable that, since the termination of hostilities, this Government has been able to reduce the taxation impost by £133,000,000. Furthermore, additional reductions will he effected when there 13 an opportunity to do so. That is the announced policy of this Government. During this debate, reference was made to an “ auction “ to decide whether the Australian Labour party or the antiLabour parties could offer the best bait to the electors of Australia with relation to taxation reductions. That matter caused some ill-feeling. I point out, however, that the Prime Minister (Mr. Chifley) was not stampeded and did 1101 join in that “ auction “. He told the people of Australia plainly that reductions of taxation would be made whenever the financial position of this country justified that course. That undertaking has been honoured. It was not a matter of our going out on the hustings and dangling taxation reductions before the people to gain a political advantage. Although the Prime Minister made no promise of any definite reduction of taxes he has honoured the undertaking that I have mentioned.
I remind the Leader of the Opposition that the position of this country to-day is very sound, despite the fact thai tax reductions costing £133,000,000 have been granted. Moreover, Australia’s position abroad has improved considerably. Since 1939 our international reserve fund in London has improved by over £200,000,000. The Opposition has complained because those funds have not been utilized. I point out that the Government decided to leave that money there to provide for a rainy day.
– That is helping the British fund.
– Although there have been many complaints by the Opposition about the allegedly high rates of taxation in this country, I draw attention to the taxation that is imposed on people in other parts of the world.
In my second-reading speech, delivered yesterday, I cited figures in relation to taxation imposed in the United Kingdom. Honorable senators will recollect that the people of the United Kingdom pay an average of £69 a head for taxation, those in the United States of America pay £66, whilst those in Australia pay £46. Those figures refer to sterling. Converted into Australian currency the amounts paid per head of population are: United Kingdom, £86 ; United States of America, £83; and Australia, £58. It will, therefore, be seen that the average amount of tax paid by people in this country is £28 less than that paid in the United Kingdom, and £25 less than that paid in the United States of America. It has been claimed, sneeringly, by honorable senators sitting in opposition that this Government has been able to reduce taxation only because of the buoyancy of the revenue of this country, and because previously unassessed and uncollected tax has flowed into the Treasury. I point out that the main factor that has been responsible for reductions of taxation is the policy of full employment that was initiated by this Government. Furthermore, the Government of which the Leader of the Opposition was a supporter had its opportunity to make adequate provisions for the people of this country in 1936, 1937 and 1938. In 1939, at the outbreak of war there were hundreds of thousands of people unemployed in Australia, but no effort was then made by the antiLabour government to provide employment. It could have proceeded with such reproductive work as water conservation and irrigation schemes, which would have been of enormous value to this country.
– Anti-Labour governments had no vision.
– The only vision that they had was on the platform. Time and time again the members of antiLabour parties made promises to the electors, but after the elections had been held those promises were forgotten. Notwithstanding the operation of the full employment policy, and although there are shortages of labour in almost every industry, the present Labour Government has decided to forge ahead with the Snowy Ki per scheme, which will involve an expenditure of about £200,000,000. Despite the difficulties involved, both labour and materials will be found for this project, and machinery will be brought to Australia to develop the scheme. As honorable senators are aware, governments with which my friend, the Leader of the Opposition, has been associated, have talked about such a scheme for over 50 years without making any constructive move to implement it. Despite the enormous expenditure that was necessary to . finance the recent war, this Government is determined to give practical application to the development of the Snowy River scheme of water conservation and irrigation. Amongst other things, this will provide greater security for this country because ample supplies of electricity will be available for all purposes. As I have already said, that work could have been started in 1936, 1937 or in 1938 when hundreds of thousands of our people were unemployed and the resources of this country were lying idle. Although I may be guilty of repetition I draw the attention of the Senate to the comparatively happy position of the taxpayers of this country to-day compared with their lot in 1941 immediately prior to the introduction of uniform taxation. All honorable senators have been supplied with the relevant ‘taxation scales. As Senator O’Flaherty has done already, I draw attention particularly to the case of a man earning £600 a year with a dependent wife and two children. Although he will be called upon to pay £26 4s. a year tax, he will get £26 back in the form of child endowment. He will make no contribution, but shall be eligible for all social services, whilst earning £12 a week. In 1941 he paid £82 8s. a year as tax in New South Wales.
– But the cost of living was 25 per cent, less than it is now.
– In Victoria he paid £73 6s. a year; in Queensland, £88 16s.; in South Australia, £89 18s; in Western Australia, £87 16s; and in Tasmania, £83 8s. a year. Those figures are very illuminating, particularly when the
Opposition complains of high taxation and resorts to propaganda along that line whenever possible. It also seizes on every opportunity to complain about socialism and communism.
– The members of the Opposition complain of lack of production, although they have never done an honest day’s work in their lives.
– To judge conditions in this country, comparisons are usually made with New Zealand and the United Kingdom. If the Opposition as unable to refer to anything in New Zealand that may tell against the Government it cites figures relative to conditions in Great Britain. Although in Australia a man receiving £600 a year, with a dependent wife and two children, is called upon to pay social services contributions of £26 4s., in effect he pay.’ nothing, because he receives almost thai amount back as child endowment. In New Zealand such a taxpayer pays £65 4s., whilst in the United Kingdom be pays £59 ls. That comparison is very much in favour of Australian taxpayers.
This is merely an instalment of taxation reductions, and further concessions will follow in due course. The people of Australia have nothing to fear by leaving the matter of taxation in the hands of the present Government.
– That is an unfair comparison, because in Great Britain food is subsidized to a degree. Australian butter is cheaper there than in this country.
– No matter what comparison I drew I am sure that the honorable senator would say that it was hardly fair. The people of Great Britain have had a terrific time, and nobody admires them more than do honorable senators on the government side of the chamber. I am convinced that eventually they ‘will recover completely. Fortunately they have a government that will pull them through. I have cited these figures merely to answer the argument that has been advanced by the Opposition about allegedly high taxation in this country. Honorable senators opposite are continually screaming about high taxation in Australia.
– There are other taxes apart from direct taxes.
– Of course there are. I point out that indirect taxation, also, has been reduced. I remind the honorable senator that the indirect taxation field was first explored by a government that he supported. Anti-Labour governments had ample opportunity in the period between the two world wars to abolish sales tax and other indirect taxes, but they made no effort to do so. Consequently, their criticism of such taxes to-day is insincere. I have not the slightest doubt that if the Opposition partieswere in office at present they would retain the sales tax and every other form of indirect tax now in operation because most of the revenue derived from such taxes is contributed, not by the wealthy sections of the community, but by the workers. The first concern of the Opposition parties in their approach to taxation is to safeguard the interests of taxpayers in the higher ranges of income who object to having to contribute towards the cost of providing social services in this country.
– I did not mention the social services contribution.
– The Leader of the Opposition may not have done so, but the press, which speaks for the wealthier sections of the community, continually moans about the social services contribution, and the fact that those sections are obliged to make a greater contribution than is made by persons in the lower ranges of income. I recall the strong objections which the Opposition parties made to the social services contribution legislation under which the Government proposed to pay a proportion of what was previously known as income tax into a special fund to (finance social services. The Government’s record in the provision of social services is, perhaps, its greatest achievement. The establishment and liberalization of social services has benefited not only the recipients of benefits but also the economy of the country as a whole. Whereas the total budget of the Commonwealth prior to the war did not exceed £100,000,000 in any one year this Government is now expending that sum annually in the provision of social services. That money is being continually circulated in the community because the recipients require it to purchase many of the necessaries of life. In that way the business community generally, including small shopkeepers, benefits very greatly from the Government’s social services policy.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from the 2nd March (vide page 796), on motion by Senator Ashley -
That the hill be now read a second time.
– This measure provides for the reduction of the rate of social services contribution as from the 1st July next and is supplementary to the Income Tax Bill which the Senatehas just passed. Clause 2 provides for alterations in fractional calculations and is somewhat difficult to understand, but I have no doubt that such calculations have been carefully worked out by the officers of the Taxation Branch. That clause also provides that the maximum rate of contribution of1s. 6d. in the £1 shall not apply to incomes of persons less favorably placed than a single person with an income of at least £500. The Opposition will not impede the passage of the measure.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from the 2nd March (vide page 797), on motion by Senator Ashley) -
That the bill be now read a second time.
– The bill provides a measure of relief from entertainments tax on payments for admission to games, or sport, in which human beings are the sole participants and are conducted by organizations which do not operate for profit. The legitimate theatre should be encouraged as far as possible in Australia and the entertainments tax in respect of such performances should be lower than that collected in respect of picture shows and similar entertainments. Although horse and dog racing and trotting are immensely popular in this country, our first concern should be to build up Australia’s prestige in the world of amateur sport. We can do that by developing the prowess of individual athletes, both male and female. In passing, I mention that the record of Australia’s representatives at the Olympic Games has brought much prestige to this country. The purpose of the bill is to apply to amateur sports the lower rate applicable to “ live shows “ and to exempt from entertainments tax admission payments not exceeding ls. 3d. for all entertainments which fall within the classes covered by the special rates. I should like the Government to have gone somewhat further under this measure. For instance, it might have provided concessions in respect of sporting fixtures such as the Oldfield-Kippax testimonial cricket match which has just been concluded in Sydney. I urge it to waive entertainments tax completely in respect of that fixture. “Bert Oldfield “ and “ Allan Kippax “ are household sporting names in this country. Those gentlemen have added lustre to our national game of cricket both on and off the field. Realizing the significance of the current year as an election year, we can expect the Government to grant further relief in the entertainments tax field at a later date. I have mentioned the OldfieldKippax testimonial cricket match in the hope that if further concessions are made they will be applied in respect of that and similar sporting fixtures. I am sure that such action would be endorsed by many thousands of Australians who recognize the great work which our leading cricketers have done in the interest of cricket not only in Australia but also in other countries. The Opposition does not oppose the measure.
– I compliment the Government upon introducing this measure because it will provide considerable relief to sporting bodies of the kind mentioned by the Leader of the Opposition (Senator Cooper). The Minister for Supply and Fuel (Senator Ashley), in his secondreading speech, pointed out that the bill provided for relief from entertainments tax on payments for admission to games, or sports, in which human beings are the sole participants and are conducted by organizations which do not operate for profit. The picture show is in a special entertainment category. Whilst the measure does not deal with entertainments tax as a whole, nevertheless it will prove to be of considerable benefit to amateur sporting bodies, such as cricket, football, lacrosse, and cycling organizations. This concession will also prove of great benefit to various football leagues which organize school sports.
– And boy scout functions.
– Yes. I have been active on the administrative side of amateur sports for a considerable period, and I realize the difficulties which confront amateur organizations in accumulating sufficient funds for the provision of assistance to school boys and other promising athletes. At present the greatest amount that can be charged by any of those organizations without incurring entertainments tax is 11½d. If promoters of any sport desired to increase their revenue by adding id. to each admission charge, the patrons had to contribute an additional 3d. in tax. That deterred many sporting organizations from charging more than ll$d. for admittance to their meetings. I hope that, as a result of the exemption for which the bill provides, they will now be able to increase their revenue without increasing their charges to patrons, and will use the extra money to provide better facilities for spectators. Sporting organizations in Victoria in which I am interested will be pleased to use the extra income for the provision of additional amenities. The outer areas of sports grounds do not provide shelter for patrons. The result is that many people have to watch cricket and football matches under very uncomfortable conditions. People who can afford to be members of such bodies as the Melbourne Cricket Club are provided with the comforts of palatial stands, but low wageearners who cannot afford to pay for admittance to anything more expensive than the”outer”muststandintherainor the broiling sun, according to the state of the weather. The exemption from entertainments tax of admission charges up to1s. 3d. willbe of great benefit to the sporting community at large. I point out to the leader of the Opposition that a reduced scale of tax is applicable to charges made for admittance to cricket benefit matches such as those arranged on behalf of Sir Donald Bradman, Mr. Oldfield and Mr. Kippax. I commend the Governmentforintroducingthebill.
– in reply - In answer to the request of the Leader of the Opposition (Senator Cooper) that horse and dog races be included, my impression-
– I said that those sports were popular, but I did not ask that they be included in the provisions of the bill.
– The honorable senator asked that consideration be given to those sports.
SenatorCooper. - No; Iref erred to testimonial cricket matches.
– That point has been clarified by Senator Sheehan. A special scale of tax is applied to charges made at testimonial matches. The Government has gone as far as it can go for the present in regard to the reduction of entertainments tax, and it is to be hoped that the promoters of the sports that will benefit will ensure that the reduction shall be passed on to the public. I hope that those bodies which now charge an admission fee of1s. 3d., including 3d. tax, will revert to a charge of1s.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
Clause 3 (Entertainments tax).
SenatorRANKIN (Queensland) [8.52]. - This clause includes a list of entertainments that will benefit from reduced rates of tax. It includes stage plays, ballet, musical performances, lectures, recitations, music hall and other variety entertainments, circuses and travelling shows. I notice that picture shows have not been included. Probably no other form of entertainment is more popular with the average family. In fact, motion pictures have been called “ the working man’s theatre “. Is there to he no reduction of entertainments tax for picture shows?
– Picture shows could not be described as sports in which human beings are the sole participants. That is the reason why the Government has not included that form of entertainment in the clause.
Clause agreed to.
Clause 4 agreed to.
Title agreed to.
Bill reported without requests; report adopted.
Bill read a third time.
Debate resumed from the 2nd March (vide page798), on motion by Senator Ashley -
That the bill be now read a second time.
SenatorCOOPER (Queensland- Leader of the Opposition) [8.54]. - This is a machinery measure consequential upon the amendment to the Entertainments Tax Act that will be effected by the bill which the Senate has just passed. Following upon the decision to remove entertainments tax from payments of less than1s. for admission to amusement parks, section 16a of the Entertainments
Tax Assessment Act has become unnecessary, and the object of this bill is to delete it.
Question resolved in the affirmative.
Bill read a second time.
SenatorCOOPER (Queensland - Leader of the Opposition) [8.55]. - Clause 4 provides for the repeal of section 16a of the principal act relating to amusement parks. I assume, therefore, that amuse ment park charges will now be free of entertainments tax.
– It seems strange that amusement park charges should be free of tax, whereas picture theatre charges remain subject to tax. Picture theatres provide one of the most popular forms of entertainment in Australia, especially among people in the lower income groups. Their charges should have been exempted from tax.
– At present any charge made at an amusement park is subject to entertainments tax. The bill will aline amusement parks with picture theatres, where charges of less than1s. are not taxable now and will not be taxable in the future.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Motion (by Senator Ashley) agreed to -
That the Senate, atits rising, adjourn to
Wednesday next) at 3 p.m.
The following papers were pre sented: -
Australian ImperialForce Canteens Funds Act - Twenty-eighth AnnualReport by the Trustees, for year 1947-48.
Customs Act - Customs Proclamations - Nos. 741, 740.
Lands Acquisition Act - Land acquired for -
Department of the Interior purposes - Kalgoorlie, Western Australia.
Postal purposes - Muswellbrook, New South Wales.
Senate adjourned at 8.58 p.m.
Cite as: Australia, Senate, Debates, 3 March 1949, viewed 22 October 2017, <http://historichansard.net/senate/1949/19490303_senate_18_201/>.