19th Parliament · 1st Session
The President (Senator the Hon. Gordon Brown) took the chair at 3 p.m., and read prayers.
– Can the Minister for Fuel, Shipping and Transport state what progress the Government has made towards arriving at an agreement with the Western Australian Government concerning the standardisation of railway gauges? If an agreement has been entered into between the Australian Government and theWestern- Australian Government, is the Minister in a position to inform the Senate of the terms of the agreement?
– So far there hasbeen no agreement. Preliminary discussions have taken place, but the whole question will be resolved at a later date. The immediate problems, of course, are man-power and materials. The work being undertaken in South Australia constitutes the only programme that is proceeding, with the exception that it is proposed, as soon as possible, to construct aline from Port Augusta to Leigh Greek.
– I preface a question to the Minister representing the Prime Minister by stating that the island of New Guinea is cut roughly in halves by the 141st degree of longitude, which serves as the boundary, running north and south. There are no physical boundaries such as are known in Europe. Has the Minister seen press statements made by Mohammad Yamin, spokesman for the Indonesian-New Guinea Mission, on his return to Djakarta from Holland, to the effect that he was convinced that the Netherlands Government would soon transfer sovereignty over Dutch New Guinea to Indonesia? In view of Australia’s solemn obligation to the native peoples of New Guinea and Papua, and of the vital importance of those territories to Australia’s defence, will the Minister keep the Parliament fully informed as to any contemplated action which might disturb existing controls and sovereignty over New Guinea ? In view of the importance of acquiring first hand knowledge of Papua and New Guinea, will the Government consider a suggestion previously made by me that Australia should appoint a special representative to Hollandia, Dutch New Guinea?
– The great importance of the matters mentioned by the honorable senator are fully appreciated by the Government. While not speaking officially, I understand that negotiations between the Government of Indonesia and the Government of the Netherlands concerning the East Indies generally are proceeding at the present time in Holland. However, those negotiations are of such delicacy that I do not think the interests of our common good would be well served by debating them before being in possession of all the facts and the relevant circumstances.
– Has the attention of the Minister for Trade and Customs been drawn to a statement by the Prime Minister that if the Canberra branch of the Commonwealth Public Service Clerical Association adopted the annual report of the branch, secretary, Mr. Lind, which contained serious allegations regarding appointments to the Public Service, he would call for specific charges? If the Minister has seen that statement, is he able to say whether the report was adopted by the Canberra branch of that association, and will he indicate what action has been taken to investigate the allegations?
– My knowledge of the subject matter to which the honorable senator has referred has been obtained from reports which I have seen in the newspapers. I understand that the report was adopted by the Canberra branch of the Commonwealth Public Service Clerical Association, but that it was repudiated by the federal executive of that body. The charges - if they may be dignified by such a term - were so wide and general in their nature that I should be astonished if the Government took any notice of them.
– Is the Minister representing the Prime Minister in a position to answer a question relating to temporary officers of the Public Service that I asked on the 24th October, and which has been on the notice-paper for some time ? If he is not in a position to answer it now, will he indicate when I may expect to receive an answer to it?
– I shall endeavour to expedite the provision of an answer to the honorable senator’s question.
– On the 8th November, Senator Robertson asked me, as the Minister representing the Prime Minister, the following questions : -
Will the Minister representing the Prime Minister state whether it is a fact that a Current Affairs bulletin issued hy the Commonwealth Office of Education, Sydney, on the 25th September, contained statements which are contrary to the Australian Government’s policy on the gold output of Australia? If so, will the Prime Minister see that propaganda against gold, such as appears in the article to which I have referred, and which is injurious to the interests of Western Australia, is not repeated 7
The Prime Minister has now supplied the following answers to the honorable senator’s questions : -
The bulletins do not express Australian Government policy on any of the subjects with which they deal. The purpose of the bulletins is to supply Australians with background information on important problems, they are printed and distributed by the Commonwealth Office of Education as an adult education service for Australia, but they are edited by an independent editor who is a senior officer of the staff of the University of Sydney. Every effort is made in those bulletins to avoid any partisan statements. The Director of the Commonwealth Office of Education, Professor P.. C. Mills, who has been consulted on this matter, has expressed the opinion that the bulletin in question is an informative statement on the world gold problem and cannot be regarded as propaganda against gold.
– In view of the congestion caused in proceedings of the Commonwealth Arbitration Court as a result of the submission by trade unions of claims to have the decision of the court in the recent basic wage case made applicable to awards covering their members and the statements made by judges of the court yesterday that the congestion will last for an indefinite period, I ask the Attorney-General whether he will consider the possibility, first, of the Commonwealth Conciliation and Arbitration Act being amended to make provision for the general application of future basic wage decisions to industrial awards, and secondly, of taking appropriate legislative action to ensure the early implementation of such measures?
– The honorable senator’s question raises some rather difficult problems of law. I do not fully understand what he contemplates in the first part of the question, but I gather that he would like basic wage determinations to be made applicable automatically throughout the whole of industry. One of the difficulties of the arbitration system under which the Commonwealth operates is that, owing to constitutional limitations, the basie wage can be awarded only to parties to a dispute in a particular industry. Therefore, it is necessary for the Commonwealth Arbitration Court ultimately to make its award in the form of an award in a dispute that has arisen in a series of industries. The cases must be dealt with separately. From a constitutional viewpoint, it would be difficult to avoid that position. If the honorable senator will place his question upon the notice-paper, I shall consider it further and supply him with a considered reply.
– On the 9th November, Senator Arnold asked a question concerning the making of a statement on the Government’s national health policy. The Minister for Health has furnished the following reply : -
It is not a fact that no clear statement has been made regarding the Government’s health policy. A clear statement has been made by the Minister for Health to Parliament and to the public regarding this matter. Already four definite steps dealing with the provision of life-saving and disease-preventing drugs, milk to school children, increased tuberculosis allowances, and the Government’s policy relating to free medicine and free medical treatment for age, invalid, widow and service pensioners and their dependants have been taken and announced in Parliament. In addition, the Government’s policy on the question of insurance against hospital and medical expenses has been clearely set out.
I have a copy of a report of a speech that was delivered in the House of Representatives by the Minister for Health on the 2nd November, 1950. If the honorable- senator wants the copy, I shall be pleased to give it to him.
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minister has supplied the following answers to the honorable senator’s questions :- -
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minister has supplied the following answers : -
asked the Minister representing the Prime Minister, upon notice -
In view of the minority report attached to the recent report on subsistence payments to prisoners of war which indicated that the responsibility for such payments Jay with the governments” which held our soldiers captive, rather than with the Commonwealth Government, will the Government consider approaching the appropriate foreign governments with a view to obtaining reparations out of which these subsistence payments can be met?
– The question whether the cost of the special sustenance allowance to former prisoners of war should be met from reparations will be examined when peace treaties with the respective captor powers are under consideration.
Motion (by Senator Cooper) agreed to -
That leave be given to bring in a bill for an act to amend the Australian Soldiers’ Repatriation Act 1920-1 D49, and for other purposes.
Debate resumed from” the 21st November (vide page 2655), on motion by Senator Spooner -
That the bill be now read a second time.
– If the Minister for Social Services (Senator Spooner) has no objection, I shall deal with the three measures concerning proposed deductions from wool-growers concurrently.
– I have no objection.
– The Wool Sales Deduction Bill (No. 1) provides’ for a deduction of 20 per cent, from the proceeds of sales of wool in Australia. The Wool Sales Deduction Bill (No. 2) makes provision for deductions in relation to wool that is sold overseas. Appraisement will be made on the value in Australia, and deductions will be calculated on the appraised value. The third measure, the Wool Sales Deduction (Administration) Bill 1950 which is now before the Senate provides for the administration of the first two measures. In effect, the proposed deductions from wool-growers will be compulsory loans raised by a method of taxation. These measures are taxation measures for the purpose of forcing the wool-growers of this country to lend to the Government approximately £103,000,000 during this financial year. In the normal course of events, the woolgrowers would not be required to pay this tax until next year. Prior to the last general election, the Government parties promised the people of Australia that if elected to office they would reduce taxation. At the time, they severely criticized the rates of taxes that had been imposed by the Labour Government, and maintained that there was no necessity for high rates of taxes to be imposed. Despite its promises to the people the Government now proposes to deduct from the wool-growers’ cheques 20 per cent, of the gross proceeds of wool sold in Australia, and 20 per cent, of the appraised value of wool sold overseas other than by auction. The Government has sought to disguise its repudiation ,of its promise to reduce taxation by calling these measures deduction bills.
– They provide for prepayment of tax.
– The deductions will be really forced loans, differing from public loans only inasmuch as interest will not be paid on them. Thi» represents a distinct departure from the usual governmental procedure for raising loans. Perhaps the worst feature of the proposed scheme is that the Government will collect the money in advance. Instead of the wool-growers being able to pay their taxes next year, they will be forced to lend this money to the Government this year to enable the Treasurer (Mr. Fadden-* to balance the budget, notwithstanding that there are adequate funds from other sources which could be utilised for the purposes of government. As I have stated on other occasions, the promises that were made prior to the last general election by the Liberal party and the Australian Country party were completely irresponsible. The Minister for Labour and National Service (Mr. Holt) has admitted that the propaganda that was disseminated on behalf of the Government parties is now reacting against them. That is a tacit admission that the Government is unable to keep its promises. Now these sectional taxation measures have been introduced for the purpose of mulcting the wool-growers of this country by, in effect, imposing a 20 per cent, fine, in the form of a loan, for having sold their wool at a price higher than the Government parties consider that they should have received. In my opinion, the wording of the bills is difficult to understand. Many of their provisions are ambiguous. It is quite evident that the average person will not be able to understand the provisions, and the majority of the wool-growers will be bamboozled also. The Government proposes to tax the wool-growers 20 per cent, on the proceeds of sales in Australia this year. It also proposes to. tax them 20 per cent, of the appraised value in Australia of wool sold overseas. That wool may be sold at a price higher than the appraised value. The woolgrower who sells his wool in Australia will pay 20 per cent, on the gross amount that he receives. But that is not all. If the money is not paid by a certain date, the Commissioner of Taxation may fine the producer a further 10 per cent. The usual procedure is for the grower to send his wool to a selling agent or a broker, who puts it up at auction, and receives the proceeds of the sale. This legislation provides that the agent shall deduct 20 per cent, of the gross proceeds of the sale, but it also provides that if the deduction is not made within the prescribed time the wool-grower may be fined 10 per cent., although he had nothing to do with the arrangements other than to consign his wool to the agent. In some clauses of the bill the wording is delightfully vague. For instance, sub-clause (4.) of clause 19 reads as follows : -
For the purposes of this section, where th period within which an amount is required by this Act to be paid to the Commissioner by a person other than a producer expires on or before the day on which this Act receives the Royal Assent or within seven days after that day, that period shall be deemed to expire on the seventh day after that day.
There is another reference to “ that- day “ in clause 22, which is as follows: -
Where the time within which a person is required to make a payment or do any other act under a provision of this Act expires on or before the day on which this Act receives the Royal Assent or within seven days after that day, and that person has not done that act before that day, that person shall do that act on or before the seventh day after that day.
Penalty : The penalty provided in relation to that provision of this Act.
That is the kind of wording which has been used in the preparation of this bill. I am not a legal draftsman, but I can realize the difficulty the wool-growers will experience in trying to understand what is meant by “that day” in the bill.
There is a provision in this legislation to give the Commissioner of Taxation power to declare a value of wool if he is not satisfied that the price realized for it was a fair price. Apparently, the Government believes that all woolgrowers are “ shysters “, who will try to cheat the revenue. The parties which support the present Government made all sorts of promises to the people before the last election, and particularly to the wool-growers. Now, the Government says that it will not accept the declaration of the wool-growers that their wool fetched the price’ stated. It is estimated that £103,000,000 will be raised under this provision, and it will be used to balance the budget. The Parliament has power to repeal legislation at any time, but if the present Government remains in office, and the Liberal party remains the dominant partner, we may take it for granted that the 20 per cent, impost will remain. If the Australian Country party becomes the dominant partner in the Government, we may expect, seeing that it is at all times ready to place heavy burdens on the primary producers, that the deduction will be raised to 33$ per cent. We now come to the question of what the Labour party would do if it were returned to power.
– It would take the lot.
– If a Labour Government got into power again it would have this legislation repealed. Labour governments have always tried to impose taxation in such a way that the burden will fall upon those best able to pay. So closely was that principle followed during the eight years that the Labour Government was in office from 1941 onwards that, although taxation rates were necessarily high because of the war, no hardship was inflicted. This is a tax on one section of the community, the wool-growers, who, according to the Government, are receiving twice as much for their product this year as they received last year. But what about the big companies in this country that are making three times as much profit this year as they made last year ? We have not heard a word about them from the Minister. I understand that a question was asked in the House of Representatives on that subject and that a promise was given that the matter would be investigated ; but there is to be no investigation of the position of the wool-growers. They are being told arbitrarily, “You are getting twice as much return as you got last year, and we propose to take from you a forced loan of 20 per cent.”. I have given instances in this chamber of companies whose profits have increased threefold, but, apparently, the Government does not intend to call upon them to help it out of its difficulty. Further, the proposed tax is to be levied on the gross income of wool-growers. There is no provision for the deduction of certain expenses before the tax is assessed.
– It is a prepayment of tax.
– The woolgrower is already called upon under the provisional tax system to prepay portion of his tax. That provisional tax is calculated on his income for the previous year, and probably it will have been paid before this proposed deduction is made. That will depend on the period that it allowed to individual wool-growers in which to meet their tax commitments. Therefore, the wool-grower is already prepaying a certain proportion of hia tax; but the Government is not satisfied with that. It says, “ You must also pay 20 per cent, of your gross earnings”. The Attorney-General (Senator Spicer) claims that this is to be a propayment of tax. Or course it is, but, in the ordinary course of events, the wool-grower would be prepaying part of his tax for the current year under the provisional tax system, and would pay the remainder next year. The Government is not satisfied with that. It is insisting that the wool-grower shall also pay another contribution to his ultimate tax commitment in respect of the current year. Next year, he will have to pay provisional tax on his total income for the current year. Therefore, the Government is getting its tax payments in three ways ; but even that is not all. For some time there has been an organization for the marketing of wool overseas, and a tax of 1 per cent, is already levied on wool-growers to meet the costs of that organization. It is true that the fund thus created is used for the benefit of the wool-grower, nevertheless, the woolgrowers’ contribution is, in effect, a tax. The point I make is that, although the wool disposals scheme is still in the air, the wool-grower is compelled to make his contribution to its cost. Obviously, the Government cannot expect to win the confidence of the wool-grower by imposing three taxes on him, and then taking a further 7i per cent, from his income for some future organization. I am certain that no wool-grower in this country, with the exception, perhaps, of some of the large pastoral companies, will favour the marketing scheme. The woolgrowers cannot trust this Government. Honorable senators opposite made many promises m December last and had broken most of them by September. They are trying to hide the true position by calling this proposal a “wool deduction scheme “. When the Attorney-General claims that the wool-growers will be making an. advance payment of tas, he conveniently forgets that wool-growers are already paying provisional tax. Government supporters pose as the friends of the primary producers, particularly the wool-growers, but they are the first to bite the wool-growers. The effect of this measure is to impose a fine of 20 per cent, on wool-growers, and to pay no interest to them on that money.
– Fines are not usually repaid.
– The AttorneyGeneral is quibbling with words. Courts often refund fines, but they do not use the word “ refund “ ; they prefer the term “ remit “. The Attorney-General claims that the 20 per cent, that is to be deducted from the earnings, of woolgrowers under this measure will be refunded to them. My argument is that this is a sectional discriminatory tax on the wool-growers of Australia.
– Nobody believes the honorable senator.
– That is not so. In fact, I have been invited to have a chat with representatives of a rather conservative wool-growers’ organization about the matter. The Attorney-General has said that the prepaid tax will be refunded. I do not know whether he means that the total sum will be refunded, but if he does, he is absolutely incorrect. That money will not be refunded, although, admittedly, there is provision for a refund of any payment that is in excess of a wool-grower’s ultimate tax commitment.
The bill provides that the Commissioner of Taxation shall collect this levy and hold it. I remind honorable senators that recently in this chamber there was a long discussion about the fate of money that had been held in certain accounts. I should like to know whether the Treasurer will put the proceeds of the wool tax in a box in a strongroom until the time for refunds arrives, or pay it into Consolidated Revenue? I am inclined to think that he will pay it into Consolidated Revenue because the Treasurer has said that he needs the money to balance his budget. The Treasurer having received the money, and having used it for the purpose of meeting special commitments during the current financial year, when a refund has to be made to the wool-growers where will the money come from? The Minister for Social Services (Senator Spooner) speaking on another measure which was before the Senate last week said that certain moneys which we claimed were available in a certain fund were in fact not in that fund. What will become of the amounts which the Commissioner of Taxation will pay into consolidated revenue funds from the proceeds of this tax? Obviously when he decides to make a refund to the wool-growers the money will be provided out of next year’s revenue. In the other instance to which I referred a moment ago the amount standing to the credit of the fund was backed by securities. In this instance, there will be no securities to back the funds extracted from the wool-growers. Scrip will be issued to each wool-grower showing that he has paid a certain amount of tax. The Commissioner of Taxation will pay the proceeds of the tax into Consolidated Revenue, and the Treasurer will scribble out a few cheques in favour of those to whom he owes money for one purpose or another, until finally the whole of the tax will be exhausted. The Attorney-General has said that the tax will be refunded to the wool-growers. How can it be refunded to them if in fact it has already been spent? Provision will undoubtedly be made for refunds to be financed out of the proceeds of next year’s collections as obviously this tax is to be a continuing one. By adopting such a method of singling out an important section of the primary producers for special treatment the Government will establish a precedent which may be used by a future Government to levy sectional taxes of all kinds. No suggestion has been made by the Government that it proposes to impose a tax of this kind on other sections of the community, the members of which have made immense profits from secondary industry and other forms of enterprise. I warn the Government that the precedent which it is establishing by the introduction of this bill may be used by some future Government for the purpose of taking over the profits of, say, the banking institutions as a first step towards the nationalization of banking. It may be used by some future Government to justify action against sections of the community which cause it annoyance. Obviously the wool-growers have caused this Government some annoyance.
The Treasurer in his budget speech said that a measure such as this is necessary to meet certain non-continuing payments this year for which he must have additional money. But what is the actual position? The right honorable gentleman has said that this is one of the measures which the Government has decided to adopt to curb inflation. The Government proposes to take money from the wool-growers and thus prevent them from spending it. But the Government itself proposes to spend the money which it will take from them. For what purpose is the money to be used ? According to the Treasurer it will be used to finance the payment of war gratuities - a perfectly legitimate charge on the revenues of the Commonwealth - and to build up a stock-pile of requirements for defence purposes. I point out, however, that the moment the Government enters the market for the purchase of defence requirements, the expenditure of money for that purpose will cause even greater inflation than we have to-day. The Government’s reasoning in relation to this bill is unsound.
– In other words, the honorable senator believes that the Government should not spend the money on defence ?
– My friend, Senator Maher, cannot see the relation between the inflation of which I am speaking and expenditure on a defence project. I am talking not about expending money for defence purposes but about the inflation which the Treasurer says he will curb by taking money from the wool-growers and using it to meet specific commitments of the Government. The moment the Government enters the market to build up its defence stocks, which it could obtain at any time, it will increase inflation. Ex-servicemen are entitled to their war gratuities, and money for that purpose should be provided from the general revenue of the Commonwealth. Undoubtedly the expenditure of that money by the exservicemen will have an inflationary effect, but by withdrawing money from the woolgrowers in order to pay war gratuities the Government will not halt inflation in any way. There is no truth in the claim that this measure will assist in curbing inflation as it only transfers the right to spend from one section to another section.
This Government repeatedly promised that it would increase the value of the £1, or to use the words of the leaders of the Government parties, that it would put value back into the £1, and thus increase its purchasing power. The Government, which has done nothing to honour that promise, now finds itself unable to meet its commitments without mulcting an important section of our primary producers in what is virtually a fine. It proposes to. take money from the woolgrowers and instead of restoring value to the £1 as it promised to do, it intends to spend that money in such a way as to make it more difficult for the woolgrowers to buy the things that they require. The Government has said to the wool-growers, in effect, “ You cannot have this money, but all the other people can have all the things they require provided that they are prepared to pay the higher prices demanded for them “. By this bill the Government will increase rather than reduce inflation.
No provision has been made for the imposition of a special impost on those who have made exorbitant net profits from secondary industry and business enterprises. Industrialists and the distributing companies of this country have made tremendous profits, but it has not been suggested that some of those profits should be drawn off by the Treasurer to assist him to meet his commitments.
This bill is supposed to contain provision for hardship, so that if a wool-grower considers that he is undergoing hardship he may apply to the commissioner and perhaps have some amelioration of the requirement that he should pay the 20 per cent, tax, or obtain a refund of some portion of it. Although the man who is entirely engaged in wool production is suffering no financial hardship at the present .time, there are people in this country who produce wool in conjunction with other primary products. They may not be able to prove hardship and yet be in such a position that they are not able to meet their commitments. They will be forced, as they were in the past, to go to stockbroking firms or banking institutions and endeavour to obtain advances to assist them .to carry on. In some cases they may be able to use the fact of this forced loan as a kind of ^guarantee that they will be able to repay an advance issued to them to tide them over a period of hardship. The cost of production of wool on mixed farms is greater than it is in the great pastoral areas, because the mixed farmer must apply his land to purposes other than the grazing of sheep. This measure denies to even the big wool-growers, who have been waiting several years for wire, wire netting and posts, the opportunity to purchase those things. They have not been available for a considerable time, and just when they are becoming available the Government says, “ No, you cannot get them this year because we intend to take 20 per cent, of your gross income “. Whether the Government has the idea that in doing so it might reduce prices, I do not know, but if it has, it does not understand the methods of business in this country.
Seventy-three per cent, of Australian wool-growers are small growers who produce from 1 to 30 bales of wool a year. No consideration is given in this measure to those small producers. The moment a wool-grower sells some wool the Government instructs the selling agent to deduct 20 per cent, of the gross receipts. It does not matter to the Government that the wool-grower may have already paid provisional tax or made payments in connexion with joint organizations which may operate in the future. He is obliged to pay 20 per cent, of the gross amount received for the wool sold. I suggest to honorable senators that this measure is not fair and that it singles out one section of the community and makes that section the means of balancing the budget. It would have been much more equitable to impose increased taxes on all the people, in accordance with their ability to pay, rather than to impose sectional taxation in this manner. I do not .think that there is any truth in statements that have been made to the effect that the wool-growers are responsible for the inflation that exists in Australia to-day. People who make such statements are not cognizant of the position throughout the world. If they were they would understand that Australia is not the only country which is in difficulties because of inflation. Yet this Government attempts to make scapegoats of the Australian wool-growers by telling them that they are the people who are responsible for inflation because they are receiving such tremendous prices for their wool.
It has been stated that the payments to be made under this legislation will be advance payments, and also that the measure adopts the principle of “payasyouearn “, which was put into operation by the Australian Labour party. Nothing could be further from the truth. “ Pay-as-you-earn “ applies to the man who receives wages or salary. As he earns his money, he pays a contribution, on a net basis, to cover his income tax for the year. In assessing the deductions to be made, an average is struck on the basis of a man with a wife and one child, or two children, and so on. Deductions are then made from his pay in accordance with that average. If his earnings subsequently prove to be above the amount on which the average was previously struck, he will be required to pay a little extra at the end of the year. On the other hand, if his earnings are below the figure on which the average was estimated, he will receive a refund from the Commissioner of Taxation. But this is an entirely different matter. Deductible items are not to be taken into consideration at all. They are to be considered only in the provisional tax paid by wool-growers. A wool-grower will furnish a return of income, showing deductions, and will also show the net amount he has paid. An adjustment will be made on the previous year’s return and he will receive a provisional tax assessment. By that method he pays net income tax, but under this measure no provision is made for .a net payment, nor is consideration given to the fact that a wool-grower might be expending money for the construction of a dam or the sowing of special pastures, deductions for which are allowed in the assessment of income tax.
– He will still be able to make exactly the same deductions.
– By this measure the Government says, in effect, “ If you receive £50 for your wool, we want, £10 of that £50. You may speak to us about it some time next year, but not now “. I think honorable senators will agree that it is not a fair proposition.
Perhaps I shall be pardoned for saying that the great Australian Labour party has looked after the interests of the primary producers of this country. My colleague from South Australia, Senator Mattner, who is on the other side of the political fence, knows that for many years I have been telling the farmers and the primary producers of South Australia that they should join the Australian Labour party because it is the only political party which will look after them. The proof of the pudding is in the eating. The honorable senator knows very well that this is an iniquitous tax and yet he is obliged to vote for it. He may even tell us that the Government has lost the finance that was contained in some fund or other and that it is necessary to make up the deficiency in this way, at the same time remarking that the wool-growers are the backbone of the country. Generally speaking, the Australian Labour party has put the primary producers of this country on an even keel and has given them a better deal than they have ever received. I am dealing not so much with prices as with the results of marketing arrangements for their commodities, which have enabled them to enjoy the full results of their labours. The nearest approach that they have ever made to that objective is being made to-day because the Australian Labour party took them under its wing and introduced legislation to ensure that they received a better deal. As the result of conferences with wool-growers’ associations, the Labour Government assumed control of marketing arrangements for wool when the industry was in the doldrums. Honorable senators will remember that that was done during the war. No other government ever did as much for them or has attempted to do so.
Last year £25,000,000 of profit made from the sale of wool was distributed to the wool-growers of this country. There was no necessity for the Government to do that; the money could have been paid into revenue, but the Labour Government of the day considered that it was just that it should be paid to the woolgrowers. Because it did that it was accused of bribing them.
– Why did not the Labour Government mete out the same justice to the wheat-growers?
– I am not dealing with wheat-growers. I repeat that when the Labour Government distributed that £25,000,000 it was accused of bribing the wool-growers. I remind honorable senators that in that fund there was an additional £40,000,000 which was ready for distribution to wool-growers. It should still be there and be available for distribution. I wish the Minister in charge of this bill to tell me whether the Government intends to distribute that £40,000,000 or to transfer it to Consolidated Revenue. If the Government retains that £40,000,000 as well as the £103,000,000 to be obtained from this advance tax, as it is called, it will have £143,000,000, plus the 1i per cent, for payment to the joint organization, and the provisional tax received from wool-growers. Honorable senators opposite have the effrontery to say that they are the friends of the wool-growers. If I were a wool-grower I should never again have anything to do with them from a political viewpoint. I should tell them outright that that would be the last money they would get from me, and that I should not vote for them in the future.
I have come to the conclusion that, compared with this Government, and its actions in relation to this matter, the confidence tricksters who frequent trains and race-courses are gentlemen.
The Government has perpetrated a confidence trick of the greatest magnitude. It has said that the sums deducted from wool-growers will be only deductions or advance payments of tax, but, in fact, it proposes to impose an additional tax upon one section of the community, although it is not game enough to say so. A man told me the other day that he believed that the members of this Government were the greatest thieves he had ever encountered in his life. I shall not go as far as that, because I realize that this year the Government must meet commitments that will not recur every year, but I believe that it should try to overcome the difficulties with which it is faced by increasing taxation generally thus requiring every person in the community to help the country in accordance with his ability to pay. The members of the Government should admit that they acted irresponsibly when they promised the people that .they would put value back into the £1 and reduce taxes, and that they made a mistake when they said that the Chifley Government was accumulating huge reserves by taxing the people too heavily. Let the Government admit that the proper thing for it to do is to ask all the people of Australia to help it to raise the money that is needed to meet our commitments this year. I am confident that the people of this country would respond to an approach of that kind. But it is wrong to select one section of the community and force it to provide the money that is needed merely because the prices that it is receiving for its products have doubled. It is the intention of the Government that the wool deduction shall be continued after this year, and the rate of future deductions will depend upon the Government’s whim.
It is not too late for the Government to withdraw the measure and to devise a. more equitable means of raising the money that is required to meet nonrecurring commitments. If the Labour party is successful at the next general election, it will repeal this iniquitous bill, under which wool-growers will be subjected, in effect, to a fine equal to 20 per cent, of their incomes.
Senator REID (New South Wales) statements that have been made by members of the Labour party in the Parliament and outside it about wealthy graziers and “ wool barons “, I was very amused to hear the observations made by Senator 0’Flaher.ty and to learn that the Labour party had taken the woolgrowers under its wing and would safeguard their interests in future. In New South Wales, a Labour government sponsored a measure that was a repudiation of an agreement that it had made with wool-growers in connexion with the western lands. That Government, following the example of the Government of Germany in 1914, treated the agreement as only “ a scrap of paper “. It tore the agreement up and threw the woolgrowers to the wolves. Senator O’flaherty has tried to persuade the wool-growers that the Labour party will protect them, but they will not be misled by him as they were misled by a Labour government in New South Wales. The wool-growers, despite the many protests that they made when announcements of the Government’s proposals were published in the press, realize .that what the Government proposes to do is not unfair and that it will ultimately be of benefit to them.
Senator O’Flaherty said that in the policy speech which the present Prime Minister (Mr. Menzies) delivered on behalf of the Liberal party and the Australian Country party in November last year, a definite promise to reduce taxes was made. If the honorable senator will read the speech,, he will, find that the right honorable gentleman said that if the present Government parties were successful at the election they would review taxes and reduce them whenever it was possible to do so. When this Government assumed office, it surveyed the general financial position of this country. It then discovered that the huge reserves which the Chifley Government had told the electors were available for use were, to a large degree, nothing more than paper reserves. The promise that was made by the Prime Minister will be honoured, and taxes will be reduced when it is possible to do so.
I shall deal now with the reason for the introduction of this bill into the Parliament. The cost of living has been increasing steadily for some time. This Government is no more responsible for the increase than was the previous Government, because prices have been increasing consistently for two or three years. The percentage increase at the present time is not greater than it was twelve months ago. The Treasurer (Mr. Fadden), in preparing his budget, had to consider, among other things, what could be done to curb the inflationary trend. He knew that wool prices this year were much greater than in previous years, and he realized that the increased incomes of wool-growers would have an adverse effect upon the national economy unless something were done. He came to the conclusion that the withdrawal of some of the additional money from woolgrowers would be beneficial not only to the nation but also to the wool-growers themselves, because if a huge sum of money were suddenly injected into the economy costs would rise, and the increased costs would affect the woolgrowers as well as other sections of the community. He decided that he should skin some of the cream from high wool prices, but he did not decide, as Senator O’Flaherty would have us believe, to impose an increased tax upon wool-growers. They will not have to pay one farthing more in taxes than they will be called upon to pay under the present tax scale. The sum of approximately £103,000,000 that will be deducted from returns for wool will be a prepayment of the taxes that will have to be paid by wool-growers in this coming year. It has been estimated that the proceeds from wool sales this year will be £500,000,000, compared with approximately £300,000,000 last year. During the last three or four years, the average price received for a bale of wool has risen consistently. That average price was £50 14s. 5d. in 1947-48, £G0 3s. 8d. in 1948-49 and £80 2s. 8d. in 1949-50. This year, so far it is £160. It is proposed that 20 per cent, shall be deducted from the returns for wool, and that the deductions shall be credited to wool-growers for the purpose of, in effect, adjusting the provisional taxes that they will be called upon to pay upon their incomes for this year. If, when the assessments are issued, it is found that the deductions and the provisional taxes levied are more than the amount of tax due, refunds will be made. If the deductions and the divisional taxes are insufficient for that purpose, wool-growers will be called upon to pay additional amounts. The average price received for a bale of wool last year was £80. This year it is £160, and the price is still rising. Let us work upon the basis of £180 a bale. Wool-growers’ incomes this year will be approximately 100 per cent, more than they were last year. The position, as I see it, is that the provisional tax paid by wool-growers in respect of their incomes for this year will be insufficient to meet their tax commitments.
Senator O’Flaherty has claimed that the proposed deductions will not be equitable. I point out that they will be merely prepayments. The honorable senator also contended that the Government will obtain an interest-free loan. I remind honorable senators that an ordinary prudent businessman, realizing that the payment of taxes may be required at short notice, ensures that there is an adequate credit in his current account for the purpose.. He does not receive interest on that money. Under the proposed scheme the wool-growers will be credited with the amounts of deductions by the Taxation Branch. This measure has been introduced to help to curb the inflationary trend. Although Senator O’Flaherty considers that costs will rise, because of increased governmental expenditure, the amount of approximately £103,000,000 that will be deducted from wool-growers’ cheques will be used by the Government to help to meet non-recurring expenditure, including war gratuities totalling about £67,000,000, and the stock-piling of war materials at a cost of £56,000,000. Senator O’Flaherty has stated that immediately the Government commences to stockpile goods it accentuates the inflationary trend. However, the bulk of the materials for stock-piling will be bought overseas. If the amount proposed to be deducted from the woolgrowers were left with them, it would be spent doubly, because after they had spent the money the Government would have to raise a loan to meet the non-recurring expenditure that I have mentioned.
Surely honorable senators opposite do not consider, in view of the situation overseas, that Australia should not prepare in association with other countries to prevent war? This Government wants to curb inflationary trends by skimming off about £103,000,000 from the woolgrowers’ cheques. Defence expenditure this year will cost about £130,000,000, compared with £54,000,000 last year. I consider that the Government is fully entitled to impose these deductions on the wool-growers at present, because they have received inordinately high prices for their wool. Speaking as a wool “ cocky “, I am in a position to say that even the prices that were received last year were far higher than the wool-growers had ever hoped to receive. They received £S0 a bale for their wool last year, compared with £160 a bale this year. If, as has been suggested, the proposed deductions would impose hardship on the woolgrowers, one may fairly ask how they managed in 1945-46 when wool realized only £17 a bale. Yet the Opposition claims that the Government is trying to do something that is unfair. I am convinced that when the position is explained fully to the wool-growers they will not oppose the scheme.
Professor Copland’s suggestion that a tax of 33-J per cent, should be imposed on the wool-growers was criticized by certain sections of the community, particularly the metropolitan press, which grasped the opportunity to activate the wool-growers with the object of forcing revaluation upon the country.
– That would have been much fairer than the proposed scheme.
– The wool-growers already realize that what is proposed to be done will be ultimately to their advantage. It is interesting to consider alternatives. Professor Copland is a theorist. Although I admit that theorists play a valuable part in our affairs, unfortunately in the past we have been influenced by theorists to a greater degree than I considered to be wise. Many theories go by the board when applied to practical problems. “We have also heard a suggestion that revaluation of the currency would have been preferable to the pro posed scheme, and we have been told what Labour would have done if it had been in office. The Labour Premier of Queensland, Mr. Hanlon, has advocated the introduction of- a home-consumption price for wool.
– We have a homeconsumption price for wheat.
– If a homeconsumption price for wool was established at least £50,000,000 a year would be taken out of the wool-growers’ pockets and lost to them forever. By the proposed deduction scheme the Government will obtain what could be called a loan of about £103,000,000, not one farthing of which would be lost to the wool-growers. The Minister administering prices in New South Wales, Mr. Finnan, has stated that it is time that the primary producers “ got off the backs “ of the consumers. I consider that the reverse is the true position. The wheat producers originally agreed to a home-consumption price for wheat in 1938, when prices were relatively low.
– There was a Liberal government in power at that time.
– I happened to be the Minister who introduced the relevant bill into the New South Wales Parliament. It was considered that the wheat producers were very important to the general economy of Australia, because their incomes were distributed to a greater degree than were the incomes of other sections of the community. A flour tax was introduced at the same time as the home-consumption price of wheat was agreed upon. The intention was that the home-consumption price would apply only to human consumption. As a result of the increased cost of production, however, the homeconsumption price has now been increased to 7s. Id. a bushel. The wheat-growers do not complain about receiving only 7s. Id. a bushel for their wheat, although other industries are being maintained at their expense. Poultry men and pig men usually buy wheat at the home-consump-tion price, but in times of drought the farmers supplied them with wheat for feeding purposes at 5s. 2d. a bushel. The wheat producers have for many years been playing their part in helping the economy of the country, as have the dairymen and sugar producers. Compared with the overseas price the sugar producers are losing £12 on every ton of sugar consumed in Australia. The wool producers are not being asked to do. anything unreasonable, but merely to come into line with other primary producers. The Government merely proposes to skim off some of the high returnsnow being received for wool so that it may meet certain non-recurring expenditure, thus avoiding the imposition of increased taxation. Senator O’Flaherty said that the bill gave: the Commissioner of Taxation power to declare the value of wool for deduction purposes. He did 1 not explain that the provision applied only to wool that was not sold through the ordinary channels. The great bulk of the wool will be sold through brokers or agents, who will deduct 20 per cent, of the proceeds, and forward it to the Commissioner of Taxation. I think it is quite fair to. authorize the Commissioner to declare the value of wool thatis not sold by auction. If the returns submitted by the man who does not sell his wool by auction are not consistent with the average price of wool of that class, it is surely proper that the Commissioner should have authority to declare its value. The honorable senator implied that this provision would apply to all wool disposed of, but that is not so. That is not provided in the bill, and it was never intended by the Government.
A suggested alternative to this proposal is the revaluation of the Australian £1, whilst the Labour party suggests that there should be a home-consumption price for wool. If that were done, it would be necessary, in order to meet the extraordinary commitments that have to be met this year, to impose special taxation. Thus, the wool producers would be much worse off than under this legislation. A home-consumption price would cost them about £50,000,000, and they would also have to pay their share of the special taxation. If the Australian. £1 were revalued, the wool-growers would lose 20 per cent, of the proceeds of wool sold overseas. This Government is merely asking the wool-growers for what is, in effect, a loan representing 20 per cent, of’ their wool returns.
– If our currency were revalued, the primary producers would be able to buy imported goods for less.
– It is claimed that the primary producers would be able to buy imported goods for 25 per cent, less than, the present price, but what assurance have we that it would work out that way? It is very probable that the importers would find some way of avoiding a. reduction of prices by the full amount. Apart from that, local manufacturers would immediately apply to the Tariff Board for higher protective duties to enable them to meet the competition of overseas goods, and the Tariff Board would, in all probability, grant their request. The Government’s proposal is not unfair to the wool-growers, but the revaluation of our currency would undoubtedly be unfair to them and to other primary producers. The people generally would obtain no benefit from revaluation. Most of the food they eat is produced in Australia, and revaluation would not affect its price. Most building materials are made in Australia,” so that revaluation would not reduce building costs.
Members of the Labour party have claimed that the Labour Government took the primary producers under its wing and obtained higher prices for their produce. Nothing could be further from the truth. Under Labour administration, wheat no longer belonged to those who produced it. but to the government of the day. The production of wheat was socialized, and the growers no longer had any say in its disposal.
– The growers approved by referendum of the marketing scheme.
– Yes, because they were misled by propaganda. Only now are we getting back to normal trading methods. Under the Labour Government, wheat was sold at the direction of the Minister for Commerce and Agriculture at whatever price he decided upon. The Australian Wheat Board had nothing to do with the matter.
– Wheat was sold at 18s. a bushel.
– Some of it was, and some of it was sold to the Labour Government in New Zealand at 5s. 9d. a bushel. That was how the Labour Government in Australia tried to bolster up the Labour Government in New Zealand at the expense of the wheat-growers of Australia. At the direction of the Minister, wheat was sold to other countries, also, at less than the world parity price. The board stood out against the proposal to sell wheat to India at 18s. Id. a bushel when 21s. lid. could have been obtained for it.
– While millions were dying of starvation in India.
– The cost of helping them should have been spread over the whole community. It should not have been borne by the wheat-growers alone. The Labour Government took the primary producers under its wing so that it could get control of production, and socialize it. The primary producers are not prepared to hand over the control of their products to any government authority.. They will not agree to the fixing of a home-consumption price for wool. We know that a Labour government would set up a board to control the disposal of wool, and fix a home-consumption price. The wool-growers, and the primary producers generally, know what kind of government is best for them.
The wool-growers were at first misled by propaganda in the press about the scheme which we are now considering. Such propaganda had the effect of stirring up feeling among the growers, but most of them now realize that they were deceived. Of course, human nature being what it is, a few of them are reluctant to admit openly that they were led up the garden path, but some of them have admitted it privately to me. They rather regret now that they made so much fuss.
This is not sectional legislation. The Government is only asking the woolgrowers for the use of £103,000,000 a few months before it becomes payable under ordinary taxation provisions. This is being done in order to help the Government to meet certain non-recurring commitments in regard to defence and the payment of war gratuities. The woolgrowers will realize that they are only being asked, to come into line with other primary producers in order to assist the Commonwealth through a particularly serious time. Senator O’Flaherty claimed that this deduction would be made in perpetuity, and that if the present Government parties were returned to office at the next elections, it might be increased to 33 per cent, or more. The honorable senator should know quite well that if the deduction scheme i3 to remain in operation this legislation will have to be re-enacted every year. Furthermore, the deduction cannot- be increased beyond 20 per cent, without the approval of the Parliament. The Government will be quite open about this matter. It has no desire to go behind anybody’s back. It will reconsider the position at the end of the financial year. I am convinced that by that time, the wool-growers will realize that the deduction scheme is of great benefit to the community and imposes no hardship on them. I repeat that the bill merely makes provision for the pre-payment of an income tax commitment which ultimately would have to be met by the wool-growers. Virtually the scheme is a re-adjustment of provisional tax.
In the preparation of this measure, the Government naturally realized that all sorts of anomalies would probably be created, and that cases of obvious hardship would arise. Therefore, specific provision has been made in the bill for such oases. If a wool-grower considers that the deduction of 20 per cent, of his gross earnings will impose hardship on him, lie may immediately appeal to the Commissioner of Taxation. If the Commissioner is satisfied that the application of the provisions of this legislation would entail hardship on the producer, he may make certain remissions. Should a producer be dissatisfied with the decision of the Commissioner, or should the Commissioner fail to notify the producer of his decision within 30 days, the producer may appeal to the Land Valuation Board. Therefore, wool-growers have nothing to fear from the provisions of this legislation.
After a consideration of all the factors, we on this side of the chamber believe that this proposal will, to some degree at least, check inflation by drawing off surplus spending power. The money will be used to meet certain non-recurring expenses which otherwise would have to be met out of loan funds, thus contributing further to the inflationary movement. To the wool-grower, the scheme merely means a re-adjustment of his provisional tax to ensure that when his tax commitment ultimately falls due, there will be sufficient money available to meet it. When the wool-grower understands the provision of the bill, I am sure that he will have no desire to look to Labour for protection in spite of the distributions of money that Senator O’Flaherty claims have been made by Labour administrations. The profits of the joint organization will be distributed when that organization finishes its work next year. What did the Labour Government do with a surplus of £7,000,000 that belonged to the wool-growers? That money was paid over to a research organization which already had ample funds. I support the bill because I believe that it will serve the purpose that the Government intends it should serve. It will curb inflation, and will prove beneficial, not only to the wool-growers but also to the general public of Australia.
– I am afraid that Senator Reid did not make a genuine attempt to reply to the arguments advanced by Senator O’Flaherty against this measure. He merely offered excuses for the Government’s action. Senator Reid said, deliberately, I believe, that this bill had been decided upon because of the inability of the Australian Country party and the Liberal party to agree on revaluation of the Australian currency.
– That is ridiculous.
– The honorable senator made no secret of that. Senator O’Flaherty put his case very well indeed. His main point was that the proposed tax was unfair because it involved discrimination against one section of the community. We on this side of the chamber all subscribe to that view. As Senator O’Flaherty pointed out, when this legislation becomes law, wool-growers will be called upon to pay a tax of 20 per cent, of their gross earnings, in addition to their normal tax commitments. Further, they will have to continue to pay a levy of 7i per cent, for the stabilization scheme. The Opposition believes that this measure will set a dangerous precedent. It is entirely wrong for a government to select one section of the community, however prosperous it may be, for a special impost, while other people, some of them much better off than the wool-growers, are allowed to go free. When Senator Reid was speaking, I asked,’ by interjection, “ What about the woolbrokers ? “ Before World War II. the value of the Australian wool clip was between £A.60,000,000 and £A.70,000,000. This year, it is worth £A.550,000,00. The woolbrokers are probably receiving a higher percentage than ever, and are no doubt benefiting more than many woolgrowers are from the present high prices. The Government is acting most unfairly in endeavouring to meet its financial obligations by means of this impost. If £103,000,000 has to be taken from the people of Australia, it should be taken from those who are best able to make the sacrifice. I cannot understand the Government’s attitude to this proposal. I certainly cannot understand the attitude of the Australian Country party. Probably, rather than sell out all the Australian primary industries by supporting currency revaluation, the Australian Country party has decided to sell out only the wool industry.
Senator Reid did not advance one reasonable argument in support of this legislation. He merely made excuses for the attitude that the Australian Country party has been compelled to adopt. Obviously, if the Liberal party had had sufficient numbers in this Parliament, the Australian Country party would have had no say in the matter. I have seen similar situations in this Parliament before. This is not the first time that the Australian Country party ha3 not seen eye to eye with the Liberal party. No mention cf this proposal was made in the policy speech of the Prime Minister (Mr. Menzies), or in that of the Treasurer (Mr. Fadden), who is leader of the Australian Country party. In the past, when Labour governments have introduced legislation affecting certain sections of the community, particularly the primary producers, they have been asked, “ Have you a mandate for this action.
What about taking a vote of the industry concerned ? “ ‘Clearly there has been no attempt by the present Government to secure the approval of wool-growers for this action. The scheme is fundamentally unsound. The excuse that it will assist to curb inflation is nonsense and humbug. If this money were allowed to remain in the hands of the wool-growers, it would be used to better advantage, because it would not come into such close association with those elements that have the greatest bearing on inflation.
The wool-growers of this country have experienced many difficult periods in the past. They have suffered from droughts and other calamities. During the last 50 years they have had to rob the land to exist, and the high returns that are being obtained from wool to’-day could well be used to check soil erosion and to carry out pasture improvement, both of which would be of great assistance to the industry. That would be a much more desirable method of dealing with the present high prices than this proposed tax. What about the breweries, the bookmakers, .and the distributors of motor vehicles and tractors? I know something of the huge profits that they are making. Why is the wool industry being singled’ out for this impost? This is not a tax on net income; it is a tax on gross income. Notwithstanding the jibes of honorable senators opposite, I say that the Labour party has always recognized the great value of the wool industry to Australia. This industry provides between 30 per cent, and 40 per cent, of our national income, and I say in all sincerity that this Government’? financial policy has failed. Despite what Senator Reid has said, we all know that, during the last election campaign, the present Government parties bribed the people of this country to return them to office. They made all sorts of rash promises. For instance, we were told that taxes would be reduced and that purchasing power would be restored to the £1. Neither promise has been fulfilled. We on this side of the chamber knew, of course, that no government could put value back into the £1 as honorable senators opposite promised to do, but to resort to measures such as this as a means of solving our financial difficulties, is deplorable, and I am sure that primary pro- ducers will have very grave suspicions of supporters of the present Government from now on.
Senator Reid referred to many matters, including the operations of the sugar industry, which had no relation whatsoever to this bill. I remind him that the sugar industry has never complained because it has to provide the sugar requirements of the Australian people at a price very much lower than would be charged by overseas countries. The sugar industry is satisfied to be in such a stable position that it is able to make a worthwhile contribution to the economy of this country. Likewise, the wheat-growers have not complained. Under the beneficent administration of Labour governments it progressed very satisfactorily. Wheat-growers were invariably consulted by the Labour Government on every matter which affected their welfare. It is true that some criticism was made of the New Zealand wheat agreement. I admit frankly that the Labour Government may not have acted wisely in making that agreement, but we must not. forget that New Zealand is almost a part of Australia and that during the war it supplied us with leather at one-half the price we would have had to pay had we obtained it from any other country. Indeed, during the war many of the people of Australia would have had to go without footwear had New Zealand not met our requirements at a reasonable price.
This sectional tax is being imposed on the wool-growers in order to enable the Government to meet its commitments in the present financial year. It is virtually a tax on the industry of the wool-growers We all know that many thousands of wool-growers are in such a fortunate financial position that this tax will not greatly affect them, but there are many others on whom this tax will bear heavily. The Government has said thai it must obtain money for the payment of the war gratuity and for defence purposes. The war gratuity should be a charge on the Consolidated Revenue of the Commonwealth, and if this Government needs additional money for defence purposes it should obtain it from all the taxpayers of Australia rather than from only one section of them.
The 90,000 wool-growers of the Commonwealth are to be subjected to a sectional levy. This proposal may very well create an undesirable precedent which may be used by a future government to justify the imposition of a similar unfair sectional tax on some other section of the community. The ability of the wool-growers to bear this impost is beside the point. As ‘Senator Grant has rightly said, many other sections of the community have benefited greatly from the inflationary conditions that exist to-day. They, too, should make additional contributions to the revenue to enable the Government to meet its commitments.
– There has been no change in the tax schedule. “Wool-growers will continue to pay taxes in accordance with what they earn.
– That is not so.
– This bill proposes not an increased tax but merely the prepayment of tax.
– But for this proposal the wool-growers would have 20 per cent, of their income to spend as they wish. Moreover, as the money which the Government proposes to extract from the wool-growers will be used to finance its commitments in the present financial year, any refunds made to the woolgrowers next year will have to be met out of the proceeds of the tax in that year.
– What is wrong with that? The Labour Government adopted that principle when it introduced the pay-as-you-earn tax system.
– There is no similarity between that system and the proposal contained in this bill.
– The principle of pay-as-yo.u-earn is again being applied.
– If that is so, why did the Australian Country party oppose this proposal for so long? Why was it made the subject of disputation for week after week? Had a decision on this matter been left to the Australian Country party, this proposal would probably never have seen the light of day. That party would have agreed to it, only as an alternative to revaluing the Australian £1 in relation to sterling. There was no need for the Australian £1 to be revalued.
– The Australian Country party accepts full responsibility for the decision to introduce this bill.
– I have received numerous telegrams and letters from wool-growers asking me to do my utmost to induce the Government to withdraw this measure which they regard as iniquitous. They contend that if the Government decides to proceed with it, Opposition senators would be justified in forcing a double dissolution and, as honorable senators know, only differences on very important issues justify a double dissolution.
The Government should have taken other steps to raise the necessary money to finance its commitments fox the current year. This proposal will in no. way curb inflation as the Government has claimed it will. During the general election campaign the leaders of the anti-Labour parties promised the people that if they were elected to office they would restore value to the £1, bring about peace in industry and generally improve the conditions of the Australian people. They said that if the people returned them to office the £1 would again be a real Australian £1. They said, “ The Menzies £1 will buy a £l’s worth of goods; the Chifley ‘ quid ‘ “ - they used that vulgar term to describe it - “ is worth only 12s.” They likened the Chifley £1 to the “ Fisher “ flimsies, which were first circulated when the Commonwealth Bank was established. During the general election campaign the then Opposition parties went to extraordinary lengths to discredit the Chifley Government in the hope that the people would remove it from office. Their chickens are now coming home to roost. The Chifley Government was defeated solely because it refused to make dishonest promises simply in a desire to tickle the ears of the people. It had made every effort to bring about peace in industry and to maintain our economy on an even keel. On every possible occasion the then Opposition accused it of appeasing the Communists. Members of the anti-Labour parties said that only strong action on the part of the Chifley Government was needed to restore peace in industry and to counter the activities of the Communists. When this Government was elected to office, the people thought that the leaders of the antiLabour parties would honour the promises which they had made, but they have since made no attempt to do so. Although this Government has been in office now for almost a year it has made no attempt to restore the value of the £1 or to bring about peace in industry. I do not criticize it for its inability to achieve those objectives, but I do castigate its supporters for having dishonestly misled the electors during the general election campaign into believing that if the Chifley Government were removed from office all these things would come to pass.
During the eight years in which the Curtin and Chifley Labour governments were in office, this country made rapid progress. More than 300,000 additional employees were engaged in secondary industries, vast amounts of overseas capital were attracted to this country for investment, industry generally made great progress and our economy was kept on a stable footing. The Chifley Labour Government was removed from office solely as the result of the dishonest propaganda that was disseminated by the anti-Labour parties during the general election campaign. The people are now beginning to wonder whether they made a mistake. The wool-growers now realize that they made a grave mistake in rejecting the Labour Government. A government which was actuated by the principles of equity and fair dealing would have enabled the Treasurer to meet his commitments during the current financial year by spreading the necessary additional impost evenly over all sections of the community. This Government does not propose to extract any additional money from the industrial magnates who have reaped huge profits at the expense of the country during the last few years. On this occasion, the wool-growers have been singled out for a special levy. Next year, some other section of the community may be selected for similar treatment.
The present Treasurer (Mr. Fadden) was first elected to the constituency of Darling Downs in this Parliament on the catch-cry that Liberal party interests in the Parliament were sucking the very life-blood out of the primary producers.
– The Liberal party was not in existence at that time.
– It has been known by many names. At that time it was known as the Nationalist party. On almost every great political issue that arises there are considerable differences of opinion between the parties which form the present coalition Government. The interests of the two parties are so diverse that they are never able honestly to agree on a common policy.
Senator Reid has said that Mr. Hanlon, the Premier of Queensland, spoke of the wool-growers as riding on the backs of the consumers. That is only so much moonshine. The Hanlon Government has an enviable record of legislation which aims at the betterment of the conditions of the primary producers of this country. It introduced marketing legislation and established commodity boards, the operations of which have done more to lift the conditions of the primary producers of Queensland than has any legislative act taken by Liberal and Country party governments.
I oppose this measure because I regard it as unjust and wrong in principle. If the Treasurer needs additional money to finance his commitments, he should obtain it from the taxpayers of Australia as a whole and not from one section of the community. I number many woolgrowers among my friends. I have seen the battle that they have waged in the past during periods of drought and difficult conditions. What does this Government propose to do if the price of wool falls next year or the year after, while other industries are still enjoying prosperity? It seems that the Treasurer found himself in need of £103,000,000 in order to balance the budget, and that he said, “ This is where I can get it “. The methods of Ned Kelly were those of a Christian compared with some that have been adopted in. order to carry this Government over a difficult situation. T should like to see this measure defeated.
– Does the honorable senator intend to vote against it?
SenatorCOURTICE- The defeat of the Government’s budget proposals will mean that a lot of people would suffer. It is a matter of choosing the less of two evils. But even at this late hour I consider that the Government should attempt to find some other way out of its financial difficulties. Apparently, before the elections it thought that there were other ways out, because supporters of the Government then stated that heavy taxation must be removed or reduced in order to enable legitimate industries to carry on. They also stated that the large number of bureaucrats, who were living on the country and who should be usefully employed, would be reduced. However, almost 8,000 were added to their number within a few months after the Government assumed office. Was it dishonest then or is it dishonest now?
– It might perhaps be fair to ask the honorable senator is he honest in what he says? That might be a question more to the point.
SenatorCOURTICE.- I resent the action of any political party in promising the people-
– I did not place the honorable senator in that category. I thought that he was a decent man.
– If the administration is to function properly, the people must be told the truth, and both sides of each question must be presented to them. I challenge the Government, parties to point to any proposal of the Australian Labour party that was not submitted to the people before being put into effect, and that the people have not since endorsed. The suggestion made by honorable senators opposite that the Australian Labour party has done nothing for the primary industries of this country is entirely wrong. As I have repeated on many occasions, the Australian Labour party realizes that there is a close association between the workers of this country - and I do not mean only those who wear bowyangs - and the primary producers. When the Australian Country party was first formed, it was in close association with the Australian Labour party, but since that time the vested in terests have become so powerful that they have absorbed the Australian Country party. Surely the Government parties do not claim to represent the small woolgrowers when they introduce a measure of this kind ? They must know that many small wool-growers would be very glad to retain the 20 per cent, proposed to be deducted, and would need it to improve their properties.
Much could be done for the men on the land. There is, for instance, the need for arresting soil erosion, as I mentioned earlier in my speech. Surely that problem could be dealt with by the Government, rather than that this large sum of money should be taken away fromprimary industry, placed in Consolidated Revenue, and used to pay the salaries of the 8,000 additional public servants?
– The speeches that have been made by honorable senators opposite during this debate remind me of the constant wheedling of two gentlemen in Dickens’s Old Curiosity Shop. Honorable senators will remember that Little Nell and her grandfather wandered around the country for some time with two itinerant showmen named Codlin and Short, and that on occasions Codlin would take Little Nell aside and say to her, “ Codlin’s the friend, not Short “. I suggest that that quotation sums up the attitude of the Opposition.
This measure has been introduced as a part, and only a part, of the various measures that will be necessary to meet the growing rise in the cost of living. We should distinguish between those inflationary forces which have been at work for some time, some of which cannot be controlled or even modified by any action in this country, and the inflationary effect of the phenomenal rise in the price of wool. I wish to quote to honorable senators some figures which they would do well to remember because they illustrate how tremendously the price of wool has risen, and why there is a case for differentiation between the treatment accorded to wool-growers, and that accorded to other producers. The estimated taxable income from the sale of wool in 1950-51 is £380,000,000, representing an increase of £157,000,000 over the previous year, or approximately fifteen times the income of 1945-46. That is something unprecedented in the economy of this country. We all know that the wool industry is the most important industry in Australia and that to some extent we are all dependent on it. One of the finest exponents of the Australian way of life to people overseas pictures the whole of Australia hanging on to an enormous sheep. Whether we are city or country dwellers, whether we are wage-earners or draw incomes from fees or secondary industries, we are all beneficiaries from the wool industry. That is a cardinal fact to be grasped. Certainly, no honorable senator on this side of the chamber has any intention to single out that industry as an industry to be penalized. From sheer selfinterest, we must keep it going, and endeavour to preserve the present methods of producing wool.
Professor Portus, of Adelaide, .who is certainly not a friend of vested interests, and who is, on the contrary, usually regarded as being somewhat on the “ Left “ side, has pointed out that the wool industry is the most efficient in Australia. He considers that it is because a large part of the wool industry is conducted by growers on a large scale that it is so efficient. The majority of wool-growers are small growers, but those small growers, together with the rest of the community, benefit from the fact that there is a certain number of large growers who can afford to experiment and to return to the industry the savings from their incomes. If it were possible for this surplus money from the sales of wool to be put back into the wool industry, I should welcome such a plan and I should oppose this levy.
While examining this question of the enormous increased income from wool, honorable senators should recognize that it is not altogether- a bad thing. It would be a terrible world if we were all to wring our hands because we received high prices instead of low prices. One of the results of the high prices being received for wool is that payments can be made to reserves overseas, and that goods can be imported. To the extent that importations will increase the quantity of consumer goods in the country, it will be a good thing. But this is where the difficulty comes in: a very <« large part of that increased income must necessarily be spent in chasing goods that are not available here, and that cannot be produced or imported. That is thereason for this exceptional measure. I. admit that it is exceptional, and I trust that measures of this kind will seldom be necessary. I hope that it will be as exceptional as an operation for appendicitis is for an individual, but I am sure that honorable senators will agree that some such legislation is necessary at this time. It cannot be denied that a very large part of this extra income earned by wool-growers would be expended in the purchase of goods that we all need. Quite obviously - and I think that this applies particularly to small wool-growers - if a man who has laboured hard for years and whohas a family receives a windfall, hespends some part of it in providing betteramenities for his family than they previously enjoyed. That would be one of the certain results of increased purchasing power in the hands of the woolgrowers. It would mean more money for motor cars, clothes and entertainment.. That would be bad for the woolgrowersthemselves ultimately, and also for every other section in the community.
The so-called Copland plan was a plan for a tax. I opposed it from the beginning because I considered that it was a sectional tax and was a much moredesperate measure than was justified in the circumstances. If this measure provides a reasonable alternative to thatplan, by all means let us accept it. But I emphasize that this is not a tax at all. When honorable senators opposite whohave spoken during this debate read theirremarks in Hansard, I think that they will see that much of what they havesaid falls to the ground and that they will realize that this is not a tax. It hasbeen called a forced loan, and it may beso called if it is desired, but in fact it is a. prepayment of tax.. It is the kind of thing that most of us have been doingfor many years. It is no more unjust to collect in advance from woolgrowers than it is to do so from factoryworkers or public servants. It is a recognized method of tax collection. If this measure is more severe, and if it takes more from the wool-grower than has been taken from other sections of the community, it is simply because, as the figures show, the wool industry is in an unprecedented situation which will probably never again occur.
I wish to emphasize that the woolgrower to-day cannot possibly put back into his property as much of his income as he and every one else could wish. It is all very well for honorable senators opposite to say that this is the time to deal with soil erosion, or to build a new woolshed, but it will be found that most of the improvements that the wool-grower should make are impossible because of high prices and shortages of labour and materials. He could not obtain bricks without robbing some other person or institution, nor could he purchase wire or fencing posts in sufficient quantities. It is futile to speak of leaving this money in the hands of the wool-growers. With the money left to them they will still have sufficient to cause a rise in the prices of consumable goods, and to effect all possible improvements to their properties. I do not believe that it is the duty of the Government to be constantly protecting people against themselves. They should be able to make their own decisions. I point out, however, that the small man, who has had a hard time and whose family has never known anything like luxury, is particularly subject to the temptation to get rid of his surplus income by having a very good time. The wool-grower is no more subject to that temptation than is anybody else, but a small man would be particularly subject to it. I know that if I had worked hard on a farm for fifteen years and then received a little extra income, I should be very glad to expend it upon enjoying myself and giving enjoyment to others. It is the small wool-grower who, in some future year, will have cause to bless the Government for this measure.
The question of revaluation has been raised. I say now, as I have said before in this chamber, that I do not regard revaluation as an ordinary legislative or administrative measure that can be quoted as an alternative to anything else. It is an exceptional step that should be taken only when all the industries of the country call for it. I believe that there have been occasions since the Australian £1 was devalued when it would have been wise to revalue it. Whether similar occasions will arise in the future depends, not only upon conditions in this country but also upon the very fluid conditions overseas. I do not believe that it is wise for any Government to make the revaluation of the £1 an issue on the hustings or in party debate. It is a measure that stands apart from all other types of measure and should be judged solely on its own merits. I do not regard it as something that should even be canvassed as an alternative to this bill. Revaluation would be so far-reaching in its effects that it cannot be considered as an alternative to this measure. This bill is not an alternative to a complete policy, but only one part of a plan to counter inflation. It deals only with one inflationary force, not with all of them.
What is the alternative to this measure that has been suggested by the Labour party? I mention the Copland plan at this stage only because it has been mentioned by honorable senators opposite. I remind the members of the Opposition that, although Sir Douglas Copland was the official adviser to the last Government he is not the official adviser to this Government, although he may be one of a number of men from whom opinions are sought by the Government. I believe that if the Labour party was in power at the present time - this is something for the wool-growers to keep in mind, because they are not as guileless as Little Nell and cannot be persuaded by subtle and cajoling words like “ Codlin’s the friend, not Short “ - the Copland plan or something just as drastic would be put into operation.
– How does the honorable senator know that?
– I do not know it. I merely state it as my belief and as something that I can infer from the close relations between the author of that, plan and the last Government.
There is another plan that can justly be regarded as Labour’s plan. Labour’s overall plan is socialism or socialization, call it what you will.
– The honorable senator subscribed to it.
– I admit that I once subscribed to it, just as St. Paul once subscribed to the creed of the Scribes and the Pharisees. I have entirely repudiated any belief that I ever had in socialism. I am not a crypto-socialist in an individualist camp. There is no more thorough and complete individualist in the Liberal party than I am, and other members of the Liberal party know that that is so. The honest members of the Labour party do not attempt to disguise the fact that socialism or socialization is the policy of their party. One of them - I think it was the present honorable member for Lalor (Mr. Pollard) - speaking at Ballarat when the Chifley Government was in office, said -
The Labour party has a master plan for socialization. The wealth will be owned by the people and will be operated in a socialistic manner for the people as a whole.
Whatever that means, it does not mean that the members of the Labour party are prepared to leave the wool-growers, large or small, in their present position. I do not say that it necessarily means that the Labour party advocates the kind of collective farms that the Russians have, because there are diverse ways of interpreting a principle, but I say that it does mean that the Labour party advocates some kind of collective ownership and direction of primary industries. Let the primary producers who hear the cajoling words “ Codlin’s the friend, not Short “, keep well in mind that they have nothing to hope for from the Labour party but collective ownership and collective control. I am an individualist. Therefore, T oppose that system.
Senator Courtice complained that this measure had not been discussed by the people. During the last general election campaign, the present Prime Minister (Mr. Menzies) placed before the people a comprehensive programme, and a large part of that programme, -considering that only one-third of the period of office of this Government has passed, has been implemented. But it is impossible for any political leader to consult the people in an emergency. It is the duty of the Executive or of the party in power to meet emergencies as they arise and deal with them boldly. This is an emergency measure. The Government wants to prevent, at the earliest possible moment, too much of this extra income from going into channels where it would increase the cost level for all of us. The measure is designed to do that. The Government accepts full responsibility for it, and honorable senators on this side of the chamber support the Government’s decision.
asked why we have singled out a particular group. I have pointed out that we have only singled out a group in the sense that, in connexion with the prepayment of taxes, we have put it into the position in which other groups of the community were previously. We have not singled out the group for sectional taxation. The wool-growers have had, as they frankly recognize, a windfall. Something unexpected has happened - something that they, individually or collectively, are unable to deal with to their own advantage or to the advantage of the community. The Government has introduced this measure in order to prevent that windfall from doing harm, either to the wool-growers or to the rest of the community.
I believe that the great majority of the wool-growers understand the situation. Unfortunately, in every group there arc spokesmen who rush in and pretend to speak for the whole of the group, sometimes with some kind of authority and sometimes without it. Honorable senators opposite know that that is often the case in the trade union movement and that frequently the rank-and-file members of trade unions have to assert themselves against those who claim to be their spokesmen. Although the wool-growers may not like this measure - I do not like it, and I have no personal interest in it - I think they realize that it represents an honest attempt by this Government to protect the interests of both the woolgrowers and the community as a whole. Therefore, I give it my wholehearted support.
– At the outset of my remarks, I want to make it known to the country that the Opposition in this chamber would defeat this measure if it were constitutionally possible for it to do so.
– Why is not that possible ?
– This1 is a tax measure.
– The Opposition could reject it.
– If it were rejected, the budget would have to be recast. I oppose the measure because I believe it to be an iniquitous piece of legislation. I shall demonstrate to. honorable senators opposite that the Government has neither a mandate for it from the people nor the consent of the wool-growers to introduce it. The Government, in order to raise money, has imposed an additional tax upon one section of the community. It has said that its reason for doing so is to curb inflation. Senator Reid told us that business men keep in their current accounts sufficient money to pay their income tax. The wool-growers of this country are not penniless, and I am certain that they keep in their current accounts or savings bank accounts enough money to discharge their income tax liabilities. The deduction of £103,000,000 from their incomes this year will help the Government to solve its financial problems but it will not prevent inflation from increasing. Something more drastic than this measure will be required to do that.
I have received many letters from Western Australian wool-growers. One of them reads as follows: -
At the last meeting of the Yuna branch of the Farmers’ Union held on the 4th instant, a motion of strong protest was carried against the 20 per cent, wool tax, as it is sectional.
That is the point of principle upon which we are fighting this measure. The bill makes provision for the imposition of a sectional tax and we maintain that no government should do that. The letter continues -
We think that if the Government was genuine in its efforts to stop inflation, it would cut down on its numbers of unproductive civil servants and sec that the wool tax money was not used in the current year. It was decided to ask State and Federal members to fight this bill to the limit.
Sitting suspended from 6 to 8 p.m.
– I ask for leave to continue my remarks at a later stage.
Leave granted ; debate adjourned.
Bill presented by Senator Cooper, and read a first time.
Motion (by Senator O’Sullivan) proposed -
That so much of the Standing Orders be suspended as would prevent the bill being passed through its remaining stages without delay.
– There being an absolute majority of the whole number of senators present, and no dissentient voice. I declare the question resolved in the affirmative.
– I move -
That the bill be now read a second time.
It gives me very great pleasure to introduce this measure in the Senate. I think that all honorable senators will agree that ex-service men and women who have suffered in the service of their country are entitled to the best care and attention the community can give to them when they are sick, and that it is the duty of the Parliament to see that adequate compensation is provided for those who suffer from war-caused disabilities and are handicapped in making a living, so that they will be assured of securing the comforts of life for themselves, their wives and families. The Prime Minister (Mr. Menzies) in the policy speech that he delivered on the 10th November, 1949, when dealing with repatriation, stated -
Repatriation remains a great and proud responsibility. The Opposition Parties contain a majority of Members and an overwhelming majority of new candidates who are ex-Servicemen. We shall see to it that there is speed, financial and human justice, and understanding in our administration of soldier problems.
Current legislation will be promptly overhauled and anomalies adjusted. We will sympathetically review financial allowances particularly those related to disability or war widowhood, in the light of all the circumstances, including the fall in the value of money. For advice in relation to them’ and other repatriation matters, we shall establish ex-Servicemen’s Committees of Cabinet and of Parliament, to confer with representatives of ex-Service Organizations.
The Government already has approved of the provision of motor cars for exservice men and women whose war-caused disability is amputation of both legs above the knee, or whose war disability is similar in effect, e.g., persons who, by reason of injury or diseases of the spine, have lost the use of their legs. An allowance of £120 per annum is payable to cover registration, compulsory third party and comprehensive insurance, and to help in meeting the general running costs of such cars. Recreational transport allowances were payable only to members who were confined to wheeled chairs or cots, or who have lost both legs above the knees. The Government has extended this benefit to persons who are able to walk only short distances with the aid of crutches or walking sticks, and to members who have lost both arms or hands. The Government has approved of the grant of a sum of up to £15 towards the cost of fitting a driving device to a motor car owned by a member who has lost a leg at or above the knee, and of the grant of a sum up to £10 for a similar purpose to a member who has lost his left arm at or above the elbow.
The new Cabinet, at its first meeting, appointed a sub-committee to review the money payments being made under the Australian Soldiers’ Repatriation Act. The members of the sub-committee were ill returned servicemen. After a number of meetings, the sub-committee submitted its report to Cabinet. Its recommendations are reflected in the bill now before the Senate. The principal object of the bill is to provide for increases in the rates of war pensions paid to members of the forces and their “dependants in respect of incapacity arising from wai service, and for increases in the rates of war pensions payable to the dependants of deceased members. In addition to the provisions for increases in rates of pensions, a number of amendments have be»n made with the object of removing anomalies in the principal act, and clearing up vague and indefinite wording so that the act will more clearly indicate the intention of the legislature. Furthermore, there are certain machinery amend- ments in the bill. An example of an anomaly in the principal act is that if the incapacity or death of a member, who served during the 1914 war, is due to his default, or arises from, or from any occurrence happening during the commission of, any breach of discipline by the member, the incapacity or death is not pensionable; but in 1939 war cases, the incapacity or death is pensionable unless it was due to the member’s serious default, or arose from or during a serious breach of discipline. I am sure honorable senators will agree that such an anomaly should not be permitted to continue, and it is the Government’s intention to bring the 1914-18 war cases into line with the 1939-45 war cases. It will be clearly seen that, because of a minor default during their service the 1914-18 members and their dependants could be easily deprived of pensions. In respect of the 1939-45 war that was altered to serious default. I am sure that honorable senators will agree with me that a serious default is very different from an ordinary default.
The number of minor amendments to the principal act will not take away any present right of any member or dependant, but as I stated earlier, they will make clear eT the intention of the act. It will be observed that the rates of pensions specified in this bill are expressed in fortnightly rates, as war pensions are payable fortnightly. However, in this speech I shall refer to weekly rates. The proposed increases in the rates of war pensions would cost £5,800,000 in a full year. The largest group of war pensioners comprises members receiving general pensions rates, in respect of incapacity assessed from 10 per cent, to’ 100 per cent. The First Schedule to the act sets out the general pensions rates payable to a member upon total incapacity. This is generally referred to as the basic rate. In 1920 the basic rate was £2 2s. a week. This was increased to £2 10s. a week from the 6th May, 1943, and to £2 15s. a. week) from the 28th October, 1948 and the Government proposes to increase the rate by 15s. a week to £3 10s. a week. There was a total increase of only 13s. a week in thirty years. This basic rate is generally not quite understood. It is the base rate upon which all other pensions are assessed. The amount that a pensioner receives varies according to the assessment of his pensionable incapacity. For example, a member who is assessed at 50 per cent, incapacity will receive a pension equivalent to 50 per cent, of £3 10s., which is £1 15s. a week. His dependants “will also receive pensions which bear a similar proportion to the maximum amount of dependants’ pensions. The base pension varies from 10 per cent, to 100 per cent. There is no means test in respect of the rate of pension in any way. I should say that the majority of ex-servicemen and exservicewomen who are in receipt of the base rate are also engaged in employment.
When as the result of war service, a member is incapacitated for life to such an extent as to be precluded from earning other than a negligible percentage of a laving wage, he is granted a special rate pension. At present that rate is £5 6s. a week, and it is proposed to increase it to £7 a week. The wife of a totally incapacitated member :at present receives a pension of £1 4s. .a week, and each child under sixteen years of age receives « pension of 9s. a week. The bill provides for the rate for a wife to be increased from £1 4s. to £1 10s. 6d. a week, and for the rate of a child to be increased from ‘9s. to lis. 6d. a week. These rates vary according to the percentage of the assessment of the member. As I 1 ave explained previously, they are variable rates and the wives and children .receive the same percentage of their maximum pensions as the member receives of the base rate pension.
Under the proposals already outlined, the family income of a member who is a special rate pensioner and has a wife and three children, aged thirteen years, fourteen and a half years and fifteen and a Ti alf years respectively, will be -
In addition, if the children are attending school, an education allowance of £1 13s. a week will be payable. Thus the family income from the Repatriation Department would be £11 18s. a week, which, with child endowment of £1 5s. a week, would make a total of £13 3s. a week.
I propose now to deal with an anomaly that dates back to 1931. Under the provisions of the Financial Emergency Act 1931, wives of ex-servicemen who were married, and children who were bom, after the 1st October of that year were debarred from receiving pensions, later, the period was extended for seven years, which brought the date up to the 30th June, 1938. As the act stands at present, no wife married, or child horn, after the 30th June, 1938, to a member of the forces who served in the 1914-18 war is eligible to receive pension in respect of the member’s incapacity. Over the years, numerous representations have been made by ex-servicemen’s -organizations to previous governments to have this bar removed, and it will be observed that the bill makes provision for pensions to be granted to these wives and children. I attended the 35th annual congress of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia in Hobart three weeks ago. At that time, the proposed repatriation benefits had been approved by the Treasurer (Mr. Fadden) ‘and I was able to give the conference some details of the proposals likely to “be incorporated in this bill. I can assure honorable senators that there was great satisfaction among delegates that this long-standing anomaly was to be corrected.
The act provides for payment of pension at 80 per cent, .rate in respect of incapacity .arising from total loss of speech, and at 70 per cent, rate for total deafness. These ‘disabilities are very serious from a social point of view, and are a great handicap in employment. It is proposed to increase each of these rates to 100 <per cent. There is provision in the Fifth Schedule to the act for the payment of additional amounts to members who have lost limbs or an eye. It will be observed that the bill provides for substantial increases to be made in the additional amounts payable in such cases. The new rates, as compared with the old, are shown in the following table : -
Under the Second Schedule to the act, an attendant’s allowance of £1 4s. a week can be paid to a member who has been blinded, or to a person who, by reason of injury or disease affecting the cerebro-spinal system, is deemed by the Repatriation Commission to be in need of an attendant. The bill provides for this allowance to be increased to £1 10s. a week, and to £3 a week if the member is blinded and totally deaf, or blinded and has total loss of speech.
I should like to say a word about blinded ex-servicemen. I have circulated to honorable senators a book entitled Blinded but Unbeaten. It was edited by Mr. H. Gilbert Nobbs, of Sydney. Mr. Nobbs is himself a blinded soldier of the 1914-18 war, and is now managing director of a large industrial organization in New South “Wales. The book consists of a record of incidents connected with the training and return to active life of soldiers blinded in World War II. It is a wonderful record of what one man has been able to do for victims of the 1939-45’ war. As the result of the training they have received, they are now able to carry on a variety of occupations, and to earn their own livelihood. One man was blinded, and in addition, has lost his arms. Through the tuition and encouragement received from Mr. Nobbs, this man has been fully rehabilitated in civil life.
The Fifth Schedule to the act provides for the payment of an attendant’s allowance of £2 8s. a week to a member who has lost both arms, and £1 4s. a week to a member who has lost two legs and one arm, or has had one leg amputated at the hip, and the other in the upper third. The Government proposes to increase the allowance to £3 a week in the case of loss of both arms, and to £1 10s. a week in the other cases.
The existing rate of war pension payable to the widow of a deceased member is £3 a week where the rate of pay of the deceased was 22s. 6d. a day or less. Where the member’s rate of pay exceeded 22s. 6d. a day, the pension rate increases gradually to £3 18s. a week where the member’s rate of pay was over 50s. a day. Provision is made in the bill for the pensions of widows to be increased uniformly by 10s. a week. In addition to the war pension a widow is granted a domestic allowance of 7s. 6d. a week if she has one or two children under sixteen years of age. The allowance is payable under regulations to the act, and the Government intends to increase it to 10s. a week, and make it payable to all widows with a child or children under sixteen years of age, and also to a widow who has attained the age of fifty years.
Approximately 90 per cent, of war widows are included in those two classes. The pension and allowances amount to £4 a week, and are payable in addition to any other income or assets they may have. The bill provides that, when a widow re-marries, she shall be paid an amount equivalent to 26 instalments of pension. The amount payable will be approximately £182.
Since the 6th May, 1943, war pensions payable to children of deceased members have been -
It is proposed to increase these rates to 22s. a week for the first child, and to 15s. 6d. a week for the other children. The proposed rates of pensions for widows and children, together with other benefits, would give a widow with three children, aged 15i years, 14£ years and 13 years respectively who are attending school, an income as follows: -
When both parents of a child are deceased, a pension of 17s. 6d. a week is now paid if the child is under fourteen years, and 20s. a week if the child is over fourteen years of age. In addition, 6s. a week can be paid for each child if it is in necessitous circumstances. Honorable senators will observe that the bill provides for the pensions of such children to be increased to 40s. a week each.
The widowed mother of a deceased unmarried son is entitled to receive a pension, irrespective of her circumstances. Under the act a “ widowed mother “ of a deceased unmarried member is a widowed mother who became a widow prior to, or within three years after, the death of the member. The existing rates of pensions payable to such dependants are set out in the First Schedule to the act, and provision is made in the bill for these rates to be increased by 10s. a week. Subject to the widowed mother having been dependent upon the deceased member, her pension may at present be increased to such amount as will provide her with an income of £3 a week from all sources, and it is proposed to increase this amount to £3 10s. a week.
A parent of a deceased member is entitled to receive a war pension if he, or she, is at any time without adequate means of support, but the rate of war pension payable cannot exceed the rate provided in the First Schedule to the act in relation to a widowed mother. A large percentage of parents who receive war pensions in respect of deceased members also receive some benefit under the Social Services Consolidation Act. In the 1914 war cases these parents would average about 80 years of age. The Government considers that the pensions in such cases should be paid by one department, and thus save the parents from having to approach two departments to obtain what they are entitled to receive from the Commonwealth. Provision is made in the bill so that the Repatriation Department will assume the liability for payments made to these parents by the Department, of Social Services.
Service pensions, which are distinct from war pensions, are payable to members who served, in a theatre of war and have attained the age of 60 years, or are permanently unemployable, and also are payable to members suffering from pulmonary tuberculosis. These pensions are subject to the same means test as are age and invalid pensions payable under the Social Services Consolidation Act. The rates of service pensions payable to members will be increased by 7s. 6d. a week, this being the same as the increase in the rates of age and invalid pensions.
In the case of a member who is permanently unemployable or who is suffering from pulmonary tuberculosis, his wife and children cannot be granted service pensions unless, in 1914-18 war cases, the wife was married to the member and the children were born prior to the 2nd October, 1931. It will be seen that the bill provides for the general removal of that bar so that such wives and children will be eligible to be granted service pensions. That will remove a longoutstanding anomaly.
I am sure that it will be of interest to honorable senators to know that on the 30th September, 1950, the annual liability for war pensions in respect of the 1914-18 war was £10,174,678, and the annual liability for the 1939-45 war pensions was £10,881,433. Those figures are approximately equal. From now on, the annual liability in respect of “World War I. will continue to decline and that in respect of “World War II. will increase. Under the regulations made pursuant to the act, sustenance is payable when a member, because of the necessities of treatment, is unable to follow his occupation. The rates of such sustenance are linked with the rates of war pension and will, accordingly, be increased.
It is proposed that the provisions that I have outlined will operate from the 2nd November, 1950, and payment at the increased rates, plus arrears, will be made as expeditiously as possible after the bill has received assent. Honorable senators will see that the bill provides for the extension of pension and other benefits to members of the forces who served, or are serving, in Korea and Malaya. I have every reason to believe that the bill will meet with the approval of all honorable senators, and I trust that it will be passed as speedily as possible. I commend the bill to the Senate.
– Every Australian is most grateful indeed for the advantages that we all enjoy in this country to-day. For the preservation of the Australian way of life, we all owe a debt of gratitude to members of our armed forces, and to the many thousands of civilians who supported them during the war years and helped to save this country from the horrors of a’ foreign invasion. No party has done more than has the Labour party to show Australia’s appreciation in a practical way, and to ensure that those members of our community who played such a magnificent part during the war years, shall be able to enjoy freedom from fear and from want for the rest of their lives. So important did members of the Labour party regard repatriation that we endeavoured to place the problems of our ex-service men and women above the realm of party politics. When the Curtin Government decided to review the entire ramifications of the Australian Soldiers’ Repatriation Act, it sought the assistance of representatives of all parties in the Parliament. An all-party committee- was appointed to report to the Government on repatriation. Its chairman was the honorable member for Lalor (Mr. Pollard), the present Minister for the Navy (Mr. Francis), Senator Charles- Lamp, the honorable member for Corangamite (Mr. McDonald.), and the late Senator H. B. Collett, a great soldier and statesman, who, since the. days of World War I., had taken a keen interest in the affairs of ex-servicemen. The entire framework of our repatriation services to-day is based on the report that was presented by that committee. It is regrettable indeed, therefore, that the present Government has departed from the practice established by the Curtin Administration of seeking the assistance of all political parties in dealing with repatriation matters, and has made repatriation a political football. I remind honorable senators opposite that it was due to the efforts of Labour governments that the repatriation of ex-servicemen after World War II. was carried out so smoothly and so effectively. The Minister for Repatriation (Senator Cooper), in his secondreading speech, quoted the present Prime Minister (Mr. Menzies) as having said in his policy speech delivered on the 10th November, 1949 -
Repatriation remains a great and proud responsibility. The Opposition parties contain a majority of members and an overwhelming majority of new candidates who are ex-servicemen. We shall see to it that there is speed, financial and human justice and understanding in our administration of soldier problems. Current legislation will be promptly overhauled and anomalies adjusted. We will sympathetically review financial allowances, particularly those related to disability or war widowhood, in the light of all the circumstances, including the fall in the value of money. For advice in relation to them and other repatriation matters, we shall establish ex-servicemen’s committees of Cabinet and of Parliament to confer with representatives of ex-service organizations.
Why have such committees not been appointed 1 I have no knowledge of any invitation having been extended to the Labour party to assist the Government to review repatriation benefits. I shudder to think that, after the sacrifices that were made by Australian servicemen and by many of those who remained at home during World War II., a national responsibility such as repatriation is to be made the plaything of party politics. Surely that is one aspect of our national life that should be kept out of the political arena. We were not concerned with the politics of the men whom we asked to carry guns in defence of this country. Throughout the Commonwealth’ to-day,, there are organizations of ex-servicemen that claim to be nonsectarian and non-political. If that claim be true,, those organizations are not interested in whether their problems are dealt with by representatives of this or that brand of politics. Their only concern is to enlist the assistance of members of the Parliament generally, and to seek the co-operation of every section of the community in solving the problems of their members. Australian soldiers died for me as well as for honorable senators opposite, and their dependants are as much my responsibility as theirs. I was hurt to-night to hear the Minister for Repatriation trying to invest the Government with some glamour merely because it has honoured its obligation to review repatriation pensions. They had to. be reviewed in the light of the diminished purchasing power of the £1.
– Could they not have been reviewed in 1949?
– When the Minister was sitting on the Opposition benches he repeatedly asked that war pensions be reviewed by an all-party committee. Now that he has an opportunity to give effect to such a policy he conveniently forgets all about it. He does not now consider the establishment of such a committee to be necessary.
– War pensions have been reviewed by a Cabinet subcommittee.
– The necessity for a complete review of all repatriation benefits is as great to-day as it was when the Curtin Government established an all-party committee for that purpose.
– Increases of pensions were made in 1947-48.
– While the Minister for Repatriation was speaking I listened to him in silence. I ask him to extend a similar courtesy to me. If he thinks that something that I have said is contrary to fact, he will have an opportunity to correct me when he replies to the debate. Every word that I have uttered is gospel truth.
– That is not so.
– The Minister is seeking to deceive the listening public into believing that this Government is doing wonderful things for ex-servicemen, when, in fact, it proposes to give to them only what they are entitled to receive to compensate them for the increased cost of living and other factors which have diminished the purchasing power of the £1. The Government proposes to give them no more and no less than that. Indeed, no government could have done less for the ex-servicemen than has this Government. It has by no means been generous.
In his second-reading speech, the Minister stated that in 1920 the basic pension was £2 2s., and that it was increased to £2 10s. on the 6th May, 1943. That increase was granted because of the report which was presented on the 28th January, 1943, by the all-party committee, and not because of any representations which b, may have made in the Parliament. From that time onwards the wages of all those who were employed in industry were pegged, as were the -prices of all commodities, so that the national economy could be put on a stable war-time basis. The recipients of pensions had to put up with the same conditions as were imposed on everybody else in the community, and accordingly no further increase of the pension rate was made until the 28th October, 1948, when it was increased to £2 15s. a week.
– Did that increase also result from the report of the allparty committee?
– Order ! I ask the Minister to remain silent. I remind him that he will have an opportunity to reply to the debate.
– I object to these interruptions by the Minister. I ask him to extend to me the courtesy which he expected from me and which I extended to him while he was making his secondreading speech. As I have said, the pension rate was increased to £2 15s. a week in 1948. In 1949, a general election was held. During the campaign a promise was made and repeated on many occasions by the leaders of the non-Labour parties that if their parties were elected to office they would increase the rate of war pensions. That promise had the desired effect, and the Menzies Government was elected to office, but only after it has been in office for almost twelve months does it propose to honour that promise. Exservicemen who were in a bad way in 19-49 fell for the promise that if the nonLabour parties were elected to office, the pension rate would be speedily adjusted. If this is an example of speedy fulfilment of a promise made by a Government I shudder to think how long we should have to wait for it to increase pensions if it had merely promised to look into the matter at its leisure.
The proposed increases of the pension rate will not restore the pension to its former level in relation to the basic wage. The Government now says to the totally incapacitated ex-serviceman, who, I agree, is entitled to. all that the country can afford, “ We shall increase your pension from £2 15s. to £3 10s. a week and we shall appropriately increase the pensions paid in respect of your wife and children “. I remind the Senate that 90 per cent. of these men are still able to earn a full week’s wages. Most of them are employed in workshops and offices and receive not less than the basic wage. A totally incapacitated pensioner with a wife and three children under sixteen years of age who is in receipt of the basic wage receives a total income from war pension, child endowment and basic wage of £16 a week. I do not contend that he is not entitled to such an income, but I point out that he is in a very much better position than is a totally and permanently incapacitated ex-serviceman whohas similar family responsibilities. A totally and permanently incapacitated exserviceman with a wife and three children under the age of sixteen years receives a total pension of £11 10s. a week. Such an exserviceman, whose wife has to wheel him about in an invalid chair and look after his children is in a very much worse position than a totally incapacitated exserviceman who may receive a total income of £16 a week. If the Government is sincerely desirous of doing something worthwhile for ex-servicemen it should give first consideration to the totally and permanently incapacitated man with a wife and three children who cannot earn a “ cracker “, and is constantly struggling to make ends meet. Instead, it has decided to give a further kick along to the pensioner who is able to earn a full wage. To the dumb ex-serviceman who is able to earn full wages in industry, and who now receives 80 per cent. of the maximum pension, the Government has said, in effect, “ We shall increase your pension to 100 per cent. of the total rate and give you an additional 26s. a week.” To the man who is totally deaf who is also able to earn full wages in industry, it has said, in effect, “We shall increase your pension to the maximum incapacity rate, and give you an additional 31s. 6d. a week “. Men in both of those categories have all their faculties other than the sense of hearing or of speech, and both are able to earn full wages in industry, yet they are to be treated much more liberally than those who are in the greatest need of assistance from the Government because they cannot augment their pension by engaging in employment.
I appreciate the decision of the Government to increase war pensions, belated as it may be. While I wholeheartedly support the bill, I believe that the Government could have gone much further than it has done, and adjusted pension rates so as to give the greatest assistance to those who are in the greatest need.
The subject of repatriation benefits should be treated on a national basis. I do not think that there is anybody in the community who is not prepared to give the most sympathetic consideration to those men and women who were prepared to risk their lives in the defence of their country. The Labour Government established the principle of referring matters of this kind to an all-party committee for review and report. I trust that this Government will follow its example, and establish an all-party committee for this purpose to which representatives of the Opposition will be appointed.
Debate (on motion by Senator Wordsworth) adjourned.
Debate resumed (vide page 2803).
– Prior to the suspension of the sitting, I was dealing with communications which I have received objecting to the proposals contained in this bill. Some members of the Government have stated that they are wool-growers and that they have no objections to this bill. I have received a letter from the Farmers Union of “Western Australia, dated the 2nd November, in the following terms: -
With reference to the 20 per cent, wool tax proposals contained in the budget, a meeting of the executive of the Wool Section of the Farmers Union of Western Australia carried the following motions : - ‘ The Wool Executive of the Farmers Union in session protests vigorously against the grossly inequitable wool taxation proposal of the Federal Government on the grounds that it introduces discrimination between wool-growers and other sections of the community, also between wool-growers themselves. It further considers the proposal entirely contrary to democratic principles; that it contains obvious anomalies, and will in no way check inflation.” “ That the wool tax is calculated to have a detrimental effect upon the Post J. 0. Plan, particularly as it contains no provision for including the levy, and that the Executive considers that the prevention of the exploitation of the wool market upon which Australia’s real prosperity depends should be the first consideration of the Government.”
Tn explanation of the executive’s attitude, I was directed to advise you that in the opinion of the executive it is wrong in principle that oric section of the community should be singled out to pay the whole of a year’s taxation twelve months or more in advance of the Pr,vailing tax provisions which apply to the community as a whole. To control the income of any section of the community by special sectional taxation is to create a precedent which might, in other circumstances, be extended to the detriment of any section of the people. While, to some growers, the prepayment of this tax would entail only temporary sacrifice, it is certain that to many small growers, soldier settlers and those developing their properties, it will create real hardship, and will, moreover, act as a very definite check to development. Serious anomalies would exist in the incidence of the proposed prepayment, and, to illustrate this, a table is enclosed showing its effect upon n cross section of growers, selected to give as wide a range as possible.
Fairly high income tax group. Old established. 70 bales. Somewhere around what he would pay in 1951-52. (fi) Medium income tax group. Old established. 45 bales. 20 per cent, equals two years’ tax.
Low income tax group. Old established. 34 bales. 20 per cent, equals ten years in advance. Bought additional new property last year. Will stop developments.
Only farming two years. 30 bales. Tax forecast £300, including provisional tax. 20 per cent, equals £050, or five years’ tax.
Started two years ago, Soldier settler. 10 bales (1949), 19 (1950). Loss last year.
No tax forecast. 20 per cent, equals £400. £1,000 behind last year; money spent in development. (/) Fairly high group income tax. Old established. Grows wheat as well as wool. 35 bales. 20 per cent, will about meet tax for 1951-52.
Low income tax group. Old established. 30 bales. 20 per cent, tax £600-£700, or six years’ tax. (7i) Low income tax group. New soldier settler. 15 bales. Made loss up to last year owing to development. 20 per cent, equals £300. Seven to eight years’ tax. Have to get loan to pay tax or carry on. Developing place.
– Does the honorable senator believe those statements?
– I have not checked the schedule. I shall invite the Minister to do that, so that he will be in a position to discuss it when he is speaking in reply to the debate. The letter continues -
While rejecting the principle, and pending reconsideration by the Government of the proposal, the executive asks that such anomalies as indicated should be corrected. While, in some cases, this tax would mean the immediate prepayment of the whole, or part, of their 1951-52 income tax, the adverse effect upon the proposed Post J.O. Plan causes the executive much concern. To many growers the deduction of the 20 per cent, special wool tax, plus ordinary taxation, plus the 7-J per cent, levy for our Post J.O. Plan, will mean the deprivation of almost the whole of their net income for this year. It is feared that sufficient of them may be so hard-pressed in respect of commitments already made that they will take the short view and decide against the Post J.O. Plan in an effort to retain the sum - of itself quite a considerable proportion of their net income - represented by the levy. Those so influenced may be in sufficient numbers to tip the balance against the Post O.O. Plan. Tt is considered that the implementation of the plan is a matter of national interest, and is in principle embodied in the policy of all parties. The executive feels, therefore, that you will support it in its endeavour to remove a factor which may affect the implementation of the plan adversely, more particularly as the growers and Governments of other Dominions have been joined with those of Australia in sponsoring the plan internationally.
Without prejudice to the objection raised, the executive considers that, should the Government persist in spite of growers’ objections, the effect upon both the Post J.O. Plan and thu finances of growers might be somewhat mitigated by the inclusion of the 74 per cent, levy in the 20 per cent, deduction from proceeds. Because of the disturbing effect of the proposal, both on the growers and their business, and because of the precedent created, the executive earnestly requests that the matter’ raised bc given your earnest and active support.
– I rise to a point of order. As I understand that Senator Fraser is quoting from a letter received by him from the Farmers Union of Western Australia, would the honorable senator be good enough to place that letter on the table of the Senate after the conclusion of his speech so that other honorable senators may have an opportunity to study it?’
The DEPUTY PRESIDENT (Senator Nicholls). - The Senate can decide that matter under Standing Order 364. It is necessary for a motion to be moved at the end of the honorable senator’s speech. He should not be interrupted now.
– I wish to point out to the Senate that, despite everything that has been said to the contrary by members of the Australian Country party, both in the House of Representatives and in this chamber, very strong protests concerning this legislation are being made by wool-growers.
– The answer is that they consider that they have been singled out as a section of the community and that an established principle has been departed from because of the imposition of this tax.
– It is not a tax.
– If there must be taxation it should be spread over the whole of the community. I have here another letter which I have received from the Farmers Union of Western Australia, and I shall be glad to table both letters. This one is dated the 14th November, and it states -
On Tuesday night last the Wool Section of this union held a special meeting to further discuss the 20 per cent, wool tax.
– The honorable senator is proceeding on a wrong basis. It is not a tax at all.
– I am quoting from the letter.
– I should have thought that the honorable senator would be better informed.
-The honorable member for Moore (Mr. Leslie), and the honorable member for Canning (Mr. Hamilton) were both present at that meeting to discuss the 20 per cent, wool tax. They explained the Government’s point of view in connexion with the matter, but, despite the endeavours of those gentlemen, they were unable to convince the members of the Farmers Union, that the wool-growers had not been selected from the community for the imposition of a special tax.
– It is not a tax.
-The letter from the Farmers Union continues -
It is, as previously pointed out, considered1 to be legislation of a sectional nature directed’ against the wool-growers, and strong and continued objection is on the question of principle. The executive is of the opinion that the Federal Government’s desired object o’ raising the amount which would be contributed by the wool-growers could be gained by thi1 floating of a loan, to which wool-growers anil others could contribute. The feeling is thoi if this course was decided upon woolgrowerswould contribute generously, and that thenwould be no difficulty in raising the amount by this means. As it is, taking 20 per cent, of the wool-growers’ income is nothing but a forced free of interest loan. This whole question has also been considered by the general executiveof this union, and the Wool Section executive’sattitude is completely endorsed.
Those are protests made to this Government by a responsible body, and themembers of the Opposition endorse the opinion of that body that this measureproposes to impose a sectional tax. Senator McCallum has stated that itinvolves the same principle as payasyonearn taxation. I am surprised that the honorable senator should have made such a statement, because it is entirely wrong. When a basic wage-earner receives hispay envelope he finds that his tax has been deducted. Some time ago I asked’ the Minister for Social Services (Senator Spooner) if the Government proposed to pay interest on the amount received over and above the tax to be deducted,, and he replied that it definitely did, npt propose to do so.
SenatorSpooner. - Interest is not paid on provisional tax or on tax collected by the pay-as-you-earn method. Why should it be paid on this?
– As I have already pointed out, this schedule shows that there are wool-growers who are paying their tax for two or three years ahead.
– They are not !
SenatorFRASER.- It is the duty of the Government to repudiate that contention. I consider that the introduction of the pay-as-you-earn method was the best thing that ever happened to the wage-earners of this country. I approve of that method, but I consider that this bill does not provide for the payasyouearn method.
– It does.
– I suggest that it does nothing of the kind. When a woolgrower sells his wool he is obliged to hand over 20 per cent. of the amount received. His income tax could not possibly be as much as that.
– If it is not, the balance will be refunded.
– When ?
– Straight away.
– Senator Reid is not the Minister.
The DEPUTY PRESIDENT. - Order ! There are too many interjections. Every honorable senator will have an opportunity to participate in the debate, but Senator Fraser has the call.
– It is not true to say that the wool-grower is placed upon the same basis as a wage-earner or even a member of Parliament. I put it to the Minister that it will be possible for this deduction to be increased or decreased merely by regulation. If the price of wool were to increase still further, could the Government, by regulation, increase the rate of deduction?
SenatorSpooner. - That would not be possible.
– I am pleased to have that assurance from the Minister. Provision is made in the bill for a producer to apply to the Commissioner of Taxation to be credited, in payment or part payment of his income tax or pro visional tax, with an amount not exceeding the amount of his wool deduction certificate although he is not entitled to a credit in respect of that certificate, on the ground that, because of losses due to floods, droughts, or other adverse seasonal conditions, he would suffer serious hardship in paying income tax or provisional tax. It is provided also that the producer may appeal to the Land Valuation Board if the Commissioner refuses to accede to his application, but the onus of proving hardship is placed upon him. I should like the Minister, in his reply, to tell the Senate whether the brokers will receive anything from the Government. They will have to deduct 20 per cent. of the money that a wool-grower receives for his wool, pay that sum to the Commissioner and remit the balance to the wool-grower. It would be of interest to know whether the brokers have requested that they be paid for the extra work that they will have to do.
We have heard a lot about the Government’s promises. I noticed that the Minister became rather annoyed when Senator Courtice stated that the Government was elected upon promises that will never be honoured. I do not want to repeat the statements that were made by members of the present Government parties about the last budget presented to the Parliament by the Chifley Government. The Treasurer (Mr. Fadden) and the Minister for Commerce and Agriculture (Mr. McEwen) had a lot to say in criticism of that tremendous budget, but this year’s budget will be balanced on the sheep’s back. The present Prime Minister (Mr. Menzies), in the policy speech that he delivered last November, promised that taxes would be reduced. It is useless for honorable senators opposite to deny that. The right honorable gentleman said -
The Government has been forced by public opinion, to reduce the rates of tax to even a greater extent than we proposed at the last election. Yet the Commonwealth’s taxation revenue is £200,000,000 more than in the most critical year of the war. We still believe that rates of taxation must be steadily reduced, as national production and income rise, and as economies are effected in administration.
In last year’s budget, it was estimated that Commonwealth revenue would he £578,000,000, but the estimate for this year is £738,000,000 It is difficult to reconcile the increase with the statements that were made by the Prime Minister during the last general, election campaign. The Minister became, to use the vernacular, very hot under the collar at Senator Courtice’s remarks.
– I always like to hear the truth told.
– 1 shall tell the Minister the truth. This is a dishonest Government.
– That statement is offensive.
– It is the truth.
– What the honorable senator has said illustrates that the Labour party has not one constructive idea and that all it can do is to sling mud.
– I am stating facts, and the Minister does not like that. The Prime Minister, in his policy speech, spoke about the bureaucrats at Canberra. Referring to the Public Service, he said -
We are not without experience of office. While, therefore, we will check the present unhealthy expansion, we are not contemplating (as some of our opponents appear to suggest) wholesale dismissals.
Despite that statement by the Prime Minister, the number of Commonwealth public servants, has increased by 4,000. In August of this year, it rose by 400 or 500.
The Government said that the reason why it intends to impose a 20 per cent, tax upon the wool-growers of this country is that that tax will help to curb inflation. I wonder whether the Government intends to freeze the £16,400,000 that is now owing to Australian wheat-growers!
– Let us put it in the National Welfare Fund.
– This is not a matter that should be treated lightly. After all, the purpose of the three measures that we are now discussing is to take £103,000,000 from one section of the community in order to balance the budget. Honorable senators on this side of the chamber say that it is not right that the Australian wool-growers should be asked to bear that burden. It is not correct, as was suggested this afternoon, that the Labour party is not prepared to agree to the expenditure of money upon defence.
We believe that in this matter a vital principle is at 3take. Senator McCallum spoke with his tongue in his cheek. He said that he did not like this bill, and that he hoped it would be the last of its kind. I hope that also. The Government is departing from established practice. If money is required for defence, repatriation, social services or other purposes, the Government is under an obligation to ensure that it will be paid by those who are in the best position to pay it. It; should not pick upon one section of the community.
I repeat that, under the Constitution, the Senate is not permitted to amend this bill.
– The Opposition could throw it out.
– If the Opposition did that, it would be necessary to recast the budget, and pensions and repatriation benefits would be adversely affected. The Government will have to accept responsibility for imposing a sectional tax upon the Australian wool-growers. To my knowledge, no previous government has > attempted to impose such a tax.
– It is not a tax; it is a loan.
– The wool-growers will be forced to make a loan to the Government free of interest to enable the budget to be balanced. As I have said before, the budget will be balanced on the sheep’s back. Mr. Fadden will go down in history as the “Wool-gathering Treasurer “. The Government is heading for a fall. It is divided amongst itself on this very important matter.
– That is wishful thinking.
– Senator Robertson may say that that is wishful thinking, but we know that it took weeks for the Liberal party and the Australian Country party to settle the differences that existed between them on this matter. Despite the promises that the present Government parties made during their last general election campaign, which was a dishonest one, and notwithstanding the assistance that they received from the press, the radio stations, the banks and the large insurance companies of this country, the people will take the Government for what it is worth - a dishonest government that made promises that will never be fulfilled.
Not all the wool-growers of this country support the Labour party. I hope .that the Minister, in his reply, will give me some definite information about the schedule prepared by the Farmers Union to which I have referred to-night. After all, hardships will be caused by this measure. The ‘Government has already caused hardships to new settlers on the land in Western Australia by withdrawing the superphosphate subsidy. The Prime Minister has stated that the Government does not intend to assist farmers who had placed orders for superphosphate prior to the withdrawal of the subsidy on fertilizers, despite the fact that many of them have to transport their supplies over long distances. I can only conclude that the Government is most unsympathetic towards the farmers of Western Australia, and that the Australian ‘Country party has sold out to the Liberals.
, - I consider that the Treasurer (Mr. Fadden) has displayed a high order of statesmanship by bringing in this measure, which is designed to raise an amount of £103,000,000 by what has been described as a loan from the wool-growers of this country. The proposed deductions from wool cheques will be credited by the Taxation .Branch to the accounts of the wool-growers concerned, and will be applied towards the discharge of their future tax commitments. I am convinced that when the wool-growers learn the full terms of the proposal they will adopt a truly patriotic attitude in the matter, realizing the necessity for the Government to withhold a portion of the present inordinately high proceeds from the sale of wool. It i3 indeed amusing to hear honorable senators opposite who for years past have used the term “the brutal graziers “ in their theme songs, now referring to the “ poor unfortunate woolgrowers “. They remind me of a boaconstrictor slobbering over a gazelle before crushing and swallowing it. I am convinced that if a Labour government was in office now it would not be content to extract only a compulsory loan of 20 per cent, of the wool cheque from the graziers, but would also take the land on which the sheep are run, because the policy of the Australian Labour party is the socialization of the means of production, distribution and exchange. Furthermore, it would take their stock from them, as has been done in Russia and other countries where socialization flourishes. The graziers would become the slaves of the State.
– The Liberal party stands for the robbers.
– In that event it must stand for the Australian Labour party. I remember the time when the wool-growers, for whom honorable senators opposite are ostensibly 30 sorry to-day, owned £7,000,000 worth of wool, the proceeds from the sale of which was paid into Consolidated Revenue. Labour promised to apply that money in the interests of the wool industry, but, instead, expended it in the interests of the loafing coal-miners and the wharflabourers who are too darned lazy to work. When the honorable member for Lalor (Mr. Pollard) was Minister for Commerce and Agriculture in the previous Labour Government, he decided that the farmers were getting too much for their pork, beef, mutton and lamb. I recollect that a big Victorian buyer and exporter was sent to the district in which I carry on farming pursuits to attend stock auctions. When the bid for a pen of pigs reached a certain figure, he tapped the auctioneer on the leg with his walking stick, whereupon the pigs were knocked down. There were then only five prospective buyers present. The man who had decided that the price bid should be accepted, received one-fifth of the pigs. That practice was observed throughout the district. The graziers and pig raisers subsequently decided not to send in any more stock for auction. That is indicative of the treatment that the Government that honorable senators opposite supported meted out to the farmers. Yet they are now almost woestricken because of the proposed deductions.
– Why does the honorable senator look so hard at me? I have not cried yet.
– If Senator Critchley were a hysterical type of person, I am sure that he would have been carried out of the chamber on a stretcher this afternoon. Prior to the last general election campaign, the Government parties stated that if elected to office they would reduce taxes. I remind honorable senators opposite that this Government did not cause the Korean war, and that the international position to-day is vastly different from what it was twelve months ago. The budget for 1948-49 was approximately £590,000,000. During this financial year the Government will be faced with non-recurring expenditure including approximately £67,000,000 for war gratuities, £133,000,000 for defence- £79,000,000 more than last financial year- and £50,000,000 for the stockpiling of defence stores. Although honorable senators opposite have stated that expenditure for stock-piling will increase the inflationary tendency, I point out that the greater proportion of that money will be expended overseas in the purchase of tanks, aircraft, guns and other arms. It cannot be denied that we are in grave danger of a third world war. Anybody who does not realize the present danger is blind to the facts. Although we hope to escape another conflagration, we must make adequate preparation now for defence. Irrespective of the promises that were made twelve months ago, I consider that the supporters of the Government would be merely craven curs if they did not raise the money that is required to prepare for the defence of this country. Honorable senators opposite have stated that the wool-growers are opposed to this measure, and that they have never been assisted by an anti-Labour government. I believe that the man on the land owns the produce of his land. The previous Government did not share my views. Its policy was to take control of primary produce by the appointment of boards. The men engaged in the industry were not permitted to select the members of the boards, but were required to submit panels of names to the Minister, who then selected those that he considered were the weakest and would do what they were told. The Minister appointed the chairman of each board, who was empowered to overrule majority decisions of the members. Furthermore, the Minister retained the right to overrule the chairman. By that means, the former Government gained control of the produce of the farmers. In the past, the woolgrowers have received flour made from cheap wheat, as well as butter, at the home-consumption price.
– The honorable senator himself has received such assistance.
– I produce much more wheat and butter than I could ever consume. In addition, the farmers were subsidized in respect of superphosphate.
– That subsidy has been withdrawn.
– The farmers have received very good concessions in the past, including the averaging of taxation. If they were paying tax at rates based on the present year’s income they would be paying tax on an income of approximately £400,000,000. Under the averaging provision, however, their rate of tax this year will be that applicable to an income of £171,000,000. In other words, they are paying tax of approximately 6s. in the £1 instead of 14s. in the £1. “However, just as the graziers have great interests, so have they great responsibilities at a time like the present. A great deal of the opposition to this measure originated with the suggestion of Professor ‘Copland that a straightout tax of 33-j per cent, should be imposed on the wool-growers. I am convinced that if Labour was in office now, that tax would have been imposed, because Labour administrations of the past have followed slavishly any suggestions that Professor Copland has made. Many of the things that the former Government “ put over “ were the children of his brain.
Much of the hostility in this matter was engendered in ill-informed people by the propaganda that was disseminated by the press, which is prepared to adopt any means to gain its own ends. It is common knowledge that the newspaper proprietors of this country would have saved £2,000,000 a year if the Australian £1 had been appreciated. That is why they are weeping tears of blood about this alleged sectional taxation, and why they are claiming that the housewives, because oi the policy of the Country party, are not getting the deal they should. I should like to know how much of the £2,000,000 that they would save annually would find its way into the handbags of the housewives. I venture to suggest not a farthing.
– We will agree with the honorable senator.
– If honorable senators opposite agree with my contention, there must be something wrong with my argument. Not only would they save £2,000,000 a year, but they would also save approximately £750,000 on wages paid, and cables sent, to their employees in other parts of the world. The reason why the press has disseminated this propaganda is obvious. Honorable senators should not believe that the press of this country is concerned with the truth to any appreciable degree. They use it only when nothing else will suit. The propaganda in favour of revaluing the Australian £1 has also been carried on by the great wool firms, which have reaped a tremendous harvest out of the present high prices of wool. They want the £1 to be revalued in the interests, not of the graziers, but of their shareholders, most of whom are in Great Britain. The money that will be raised under this measure will be used to pay war gratuity which is a non-recurring commitment. The total amount involved under this head is £67,000,000, of which the Labour party says that £37,000,000 is already in “kitty”. The kitty that is depending on that source of supply will not get much milk. There is nothing in the fund but I O TPs, which can be redeemed only by the raising of a loan, or by an increase of taxation.
One honorable senator referring to the fact that provision has been made in the bill to deal with cases of hardship, said that there was no hardship amongst graziers at the present time. I remind honorable senators that, in spite of recent bountiful seasons, there are cases of hardship amongst the wool-growers. Some graziers in north-western New South wales and south-western Queens land have lost a third of their sheep in floods. Others have suffered losses just as great from blowfly strike. Honorable senators will understand how great are the losses when they realize that sheep are selling at £5, £6, and £7 a head, and that the fleece of a wether may be worth £6. In addition to stock losses, some graziers have lost hundreds of miles of fencing, so that rabbits and wild dogs are free to range their properties. It will be ten years before some of the graziers get back to where they were five months ago.
Senator O’Flaherty said that there was no need to worry about the small woolgrowers because the Labour Government had taken them under its wing. The Labour Government took them in the same way as a wedge-tail eagle takes a lamb in its claws and drives its beak into, the lamb’s heart. Even the sugargrowers of Queensland do not owe much to the Government of that State. Although I come from Victoria, I say that it is high time that sugar-growers obtained a greater return for their produce. By fixing a home-consumption price for wheat, the federal Labour Government deprived the wheat-growers of £25,000,000 a year. Graziers and other producers obtained the benefit in the way of cheaper stock feed. However, I do not believe that one wheat-grower in 100 objected, because they know that stockraisers were having a rotten time.
– We say that no one section should be singled out to make a special contribution.
– The honorable senator says that now, but when the Labour Government was in office the wheat-growers were deprived of the full return for their product, and graziers, poultry-raisers, &c, benefited at their expense. In effect, the money was taken from the wheat-farmers, and handed to those whom the Government thought might vote for it.
The taxable incomes from wool for the year ended the 30th June, 1950, was an all-time record at the figure of £225,000,000, and the average proceeds from the sale of greasy and scoured wool was £79 16s. 7d. a bale, compared with £60 ls. 2d. a bale for the previous season.
Based upon estimates available, and having regard to the trends of wool sales up to the present, it is estimated that the taxable income for the current year will be £372,000,000. For this season, the average yield will be nearly £160 a bale. Consequently, the taxable income in respect of the current year will be approximately £150,000,000 more than the then all-time record of £225,000,000 for the previous year and the Government proposes to obtain and place to credit for future payments of taxation, subject to the adjustments for hardship, fee., £100,000,000, or two-thirds of the increase over the previous record year. Senator Grant used to say, “Why not take from the big graziers? “ To-day, he is expressing his sorrow for the poor graziers, but even the graziers will not be convinced by him.
– Are not the wool-growers entitled to interest on the money taken from them?
– The Labour Government did not pay interest on the provisional tax it collected.
– Two wrongs do not make a right.
– The Labour Government never repaid the meat producers what it took from them by regulating the sale of meat. It did not. repay the principal, let alone pay interest. Under this measure, it is proposed to raise £103,000,000, which will ultimately be used to cancel taxation commitments, or it will be refunded. Any money the Labour Government got its hands on went into Consolidated Revenue, and we know that nothing that goes into hell or Consolidated Revenue ever returns.’
I congratulate the Government on having the courage to introduce this bill, which is essential in present circumstances. Although Australia has not declared war, our men are fighting and dying in -Korea. The Government is faced with great commitments, and large amounts of money must be raised in order to arm and supply our forces. Many graziers are now enjoying colossal incomes. I have been growing wool all my life, and I remember selling good merino wool in 1914 at 6-Jd. per lb.
– That was under a Liberal government.
– No, it was under a Labour government, which remained in office until 1916. when the traitorous behaviour of certain Labour supporters who referred to members of the Australian Imperial Force as “sixbobaday murderers “ caused their decent colleagues in the party to leave them.
The DEPUTY PRESIDENT (Senator Nicholls). - Order! I suggest that the honorable senator get back to the bill.
– After World War I., wool of the kind that is now selling at from 160d. to 170d. per lb., was sold at from 24d. to 30d., and the growers believed that they were getting a good price.
– At one time, the price of wool went down to 3d. per lb.
– Only under the Scullin Labour Government did the price of wool ever approach that figure. I am convinced that the Opposition, knowing that this measure is justified, will allow it to pass. I am also convinced that the graziers, for whom I have a great admiration, will accept the Government’s proposal, and will do their utmost to enable the Government to meet the commitments arising out of the need to provide adequately for the defence of the country.
– The measure before the Senate is an extraordinary one in that it provides for the imposition of a sectional tax. It is unethical and dishonest having regard to the accepted principles of taxation. Honorable senators opposite claim that this proposal is not a tax but a loan, yet we find in the Wool Sales Deduction (Administration) Bill exemptions similar to those contained in the Income Tax Assessment Act. If the proposed deduction is merely a loan necessitated by the high prices prevailing for wool, why is the loan not to be made by every wool-grower? The truth is, of course, that it is not a loan but a capital grab from one section of the community. The tax is being imposed unfairly and is likely to remain. When Senator O’Flaherty said that the tax was likely to continue, Senator Reid contradicted him emphatically, and claimed that the legislation would have to be re-enacted every year. I point out to the Senate, however, that clause 4 (3.) of the Wool Sales Deduction Bill (No. 1) states -
Until a proportion of the sale value is fixed by the Parliament for a later financial year, the proportion of the sale value for that financial year is the proportion fixed for the immediately preceding financial year.
Clearly this legislation is intended to be continuous. The proposal now before us is that the Government shall take 20 per cent, of the gross earnings of woolgrowers. That impost is expected to yield £103,000,000, which having been drawn from one section of the community, will be placed into Consolidated Revenue. It is not to be put into a trust fund. In effect, the Government is trying to balance its budget by taking a compulsory loan without interest from the wool-growers, and handing to them an IOU. Honorable senators opposite have tried to make us believe that the deduction is merely a loan, but that is not so. It is a tax which will be continued in subsequent years at the same rate, or perhaps at a higher rate. The Government is seeking to cancel one year’s liability with the next year’s income. In addition, growers will continue to pay a tax or contribution of 7$ per cent, to the wool marketing organization. Thus, when this legislation has become law, the woolgrower will be paying concurrently provisional tax, the 20 per cent, tax grab, and a 7& per cent, stabilization contribution.
Senator George Rankin abused the Opposition. He claimed that the exigencies of the present situation necessitated this grab from one section of the community. The honorable senator also said that under the administration of the Liberal-Australian Country party Government, at least the wool-growers’ product was his own; but it is his own only inasmuch as he produces it, because the Government now proposes arbitrarily to take from him 20 per cent, of the yield from the sale of his wool. It is all very well for honorable senators opposite to argue that the wool-growers are getting good prices and can afford to make this contribution. Undoubtedly some of the big wool-growers are receiving tremendous incomes, but that good fortune is not confined to wool-growers. The wool brokers who are receiving percentage payments for selling wool are also making high incomes. What does the Government propose to do about them? Motor car distributors, too, are making huge profits on the present day inflated prices of motor vehicles. What does the Government propose to do about them? Real estate prices have increased by 300 per cent, or 400 per cent, in recent year3 and estate agents are consequently making substantial incomes, but we have not heard of any proposal to draw off some of their surplus spending power. If the Government is honestly in need of money for defence purposes, it should not confine its attention to one particular section of the community. The Government is endeavouring to justify this tax grab by creating a fear complex among the public. If we are in fact preparing for a third world war, the burden of taxation should be spread over all sections of the community, with strict observance of the principle of ability to pay. To suggest that this legislation is fair in any respect is completely untrue. It imposes a sectional tax.
Members of the Australian Country party profess to be in full accord with this proposal. We are told that there is no real opposition to the plan, even among wool-growers. When Senator Fraser read to the Senate a letter that he received from the Farmers Union of Western Australia, honorable senators opposite implied by their interjections that the writers of the letter did not know what they were talking about, and did not represent the real wool-growers. I have before me information showing that protests against this legislation are being made throughout Western Australia. For instance, at Wagin, on the 17th August, farmers at their monthly meeting expressed strong opposition to the proposed “ class tax “ on wool. They pointed out that the stock answer given to requests for better returns in the years between 1930 and 1940, when wool was bringing low prices, was that the price was dictated by the law of supply and demand. They maintain that this law should still apply, and that farmers should ‘be permitted to build up their reserves for future years. A mass meeting of farmers held on the 28th September at Narrogin, claimed that, at the present high prices for wool, farmers were only obtaining back pay to which they were entitled, and should be allowed to reap the benefits of their labour without the imposition of a tax. At Merredin on the 21st October, vigorous and unanimous opposition to the wool tax proposal was expressed, and it was decided to urge Western Australian members of the Commonwealth Parliament to vote against the measure. Is it suggested that members of the Australian Country party did not receive those communications?
– They got bags of them.
– At Narrogin again, on the 21st October, opposition to the proposal for the prepayment of tax by
Wool-growers was expressed at a meeting Of the Cuballing branch of the Farmers Union of Western Australia, and the following motion was agreed to : -
Failing this taxation proposal being withdrawn, it is suggested that all primary produce should be withheld by all members of the Farmers’ Union and affiliated organizations until the taxation proposal has been abolished.
The Minister for Social Services (Senator Spooner) gave a rather naive explanation of that portion of this legislation which prescribes severe penalties for the marketing of wool outside the normal channels. He said that the provision was to meet the position that might arise should some farmers decide to dispose of their wool through other than normal channels. Provision for the imposition of penalties has been included, I believe, because of the fear that some farmers, considering their product to be their own, will resent the imposition of this tax and will seek to avoid paying it. Obviously the legislation envisages substantial opposition to the proposed tax grab.
At Goomalling on the 30th October, a meeting of the zone council of the Farmers Union decided unanimously to despatch a telegram to the Prime Minister (Mr. Menzies) and the Minister for Commerce and Agriculture (Mr. McEwen) stating that if a system of preemption were agreed to, farmers would organize a withholding of wool. Discussing the plan for the prepayment of taxes by a 20 per cent, deduction from growers’ wool cheques, the meeting was critical of the proposal, and described it as “ an interest free loan grab by the Federal Government”. The localities that I have mentioned cover practically two-thirds of Western Australia. I comp now to the middle Great Southern area. At Pingelly on the 30th October, the local branch of the Farmers Union agreed to the following motions :- -
That head office be asked to take legal advice and if necessary fight the plan for the prepayment of tax by wool-growers in the High Court.
That the branch telegraph Mr. Hamilton instructing him to do all in his power to stop the passage of the bill; and that delegates move at the zone council meeting that all Government representatives of this State be requested to oppose the plan for deductions from wool-growers’ cheques.
At Katanning, on the 30th October, the president of the wool section of the Farmers Union, Mr. Ball, said that a perusal of the proposed legislation had revealed that it was just as contrary to democratic principles and equal justice as preliminary advice had led him to suppose. The hardship clause he said would not deal adequately with serious anomalies that would arise under it. No amendment could make the measure acceptable. Mr. Ball added that the feeling of alarm in the sheep country that he had toured during the previous week had confirmed his executive’s opposition to the whole proposal. Subsequently all sections of the Farmers Union endorsed the decision of the wool section.
It is useless for the Government to say that it is not imposing a sectional tax on wool-growers, or that the wool-growers are prepared to accept this proposal. In a telegram of protest that I have received, the President of the United Farmers Association, Mr. Chapman, states -
Money left with growers after normal taxation kept by them for rainy days but spent hy Government recklessly as soon as it goes into revenue. We propose in event this tax being continued to recommend to all growers that they submit for sale only sufficient wool to cover their current expenses. Balance will be withheld in wool sheds until Government assumes some sense of moral responsibility.
The Australian Primary Producers Union has also made an emphatic protest.
Sot one honorable senator opposite has been able to justify this sectional tax. The Government has no mandate for the proposal which, I am sure, will . cause every section of the community to wonder when its turn will come. The money derived from the tax is not to be placed in a trust fund. It will go direct into Consolidated Revenue. We are told that £67,000,000 of it will be used to meet our war gratuity commitment. There i? already £37,000,000 in a trust fund for that purpose, but there is no indication that the £67,000,000 will also be put into that trust fund. Obviously the money is to go into Consolidated Revenue to meet current expenses. The Government is acting dishonestly by collecting this year a tax which rightly should be included in next year’s revenue. I repeat that this legislation is not temporary. The tax grab will continue at its present rate of 20 per cent., or perhaps at a higher rate. The money that the tax will yield is not to be used for immediate non-recurring expenditure. By introducing this measure the Government has established a precedent of which it should be thoroughly ashamed. It cannot claim that it has a inundate from the people for the introduction of legislation of this kind. The bill imposes on those who seek to evade payment of the tax penalties, which are equally as severe as those in any taxing measure that has been placed on the statute-book. Government supporters have challenged us to throw out the measure. Yet they have repeatedly uttered the threat that delay in the passage of the budget and Estimates will result in corresponding delay in the payment of increased pensions to exservicemen, invalids, widows and aged persons and of Public Service salaries. They know very well that if we delay the passage of the budget the Government will be placed in an intolerable position. Behind the facade of threats of that kind the Government has introduced this dishonest and iniquitous bill to impose a tax on one section of the community.
Another unsatisfactory aspect of this legislation, which is also a noticeable feature in other legislation which this Government has introduced, is that it precedes instead of follows the passing of the budget and Estimates. The Go vernment is putting the screw on the Opposition and is forcing it to consider these validating bills before the budget has been considered by the Parliament. That is a dishonest practice. I sympathize with the Government because having no sound economic policy the Treasurer (Mr. Fadden) was compelled to recast the budget no fewer than seven times before he could devise one which he could present to the Parliament with the assurance that it would be supported by the members of the two Government parties. As the result of the Government’s inefficiency and its delay in presenting the budget, the payment of increased pensions to ex-servicemen, widows, invalids and aged persons has already been delayed unnecessarily. If the Treasurer had done his job efficiently he would have presented the budget months ago and the increased rates of pensions would already be operative. Because the Opposition honestly and logically criticizes these measures, it is accused of being responsible for withholding from pensioners the . increased payments to which they are entitled. Such delay as has occurred is the sole responsibility of the Government, which deliberately introduced these measures late in the present sittings in the hope that, by so doing, it would be able to avoid criticism of them. The Government is thoroughly dishonest in acting in that way. The contention of honorable senators opposite that the wool sales deduction is not a tax but a loan is equally dishonest, and is in keeping with the false propaganda disseminated by them during the general election campaign.
– The value of the wool industry to Australia is appreciated by the Government. I assure honorable senators that it has no desire to take from the wool-growers the good fortune that has come their way. We are delighted, as are most Australians, that the wool industry is so prosperous. It is not the intention of the Government to take any of that prosperity from its rightful owners. A great deal has been said about the part that is played by the woolgrowers in stabilizing the economy of this community. I agree that the product of the wool-growers has done much to enable our economy to be stabilized. [Quorum formed.’] This Government has a duty to regulate the prosperity of the wool industry so that the great mass of the people of Australia, the wage and salary-earners and workers generally, shall not be penalized by the high price of wool. It gave me great pleasure to learn of the recommendation of the Government for the payment of a subsidy to wool consumers. I am delighted that it proposes to set aside £20,000,000 for that purpose. Nothing would harm the wool industry more than to allow our economy to get out of balance.
– Where will the Government obtain the money to pay the subsidy ?
Sheehan reminds me of an animal that I have on my property.
– What kind of animal ?
– As the honorable senator has a most vivid imagination I leave the answer to his question to his good judgment.
Let us consider the income that has been received by the wool-growers. In 1949-50 the wool cheque amounted to approximately £300,000,000 - a previously unheard of amount. Even in his wildest dreams no person in Australia would have believed that our wool cheque would ever reach such staggering dimensions, This year it is likely that the wool cheque will amount to £550,000,000.
– Is the honorable senator afraid of his own prosperity?
– No; I rejoice that the wool-growers are so prosperous. Honorable senators opposite have indulged in a great deal of cant in discussing this subject. We are not as pessimistic as they are. We have a joyful outlook; we leave pessimism to the members of the Labour party. We rejoice that the wool-growers are so prosperous and we have no intention to take that prosperity away from them. Honorable senators opposite may choose to call the wool sales deduction a tax or a loan. We are perfectly frank about our intentions. We intend to take £103,000,000 from the wool-growers perhaps six or seven months before it is due. We propose to pay the money into the Consolidated Revenue fund. We shall spend it, but when we do so we shall not try to make the public believe that we still have it. Honorable senators opposite have asked how this money will be spent. Some of it will be spent in meeting our commitment of £67,000,000 for war gratuities next year and some of it will be used for the stock-piling of defence requirements. The Government is committed to an expenditure of £83,000,000 for the defence programme and undoubtedly some of it also will be used to finance that programme. I have not yet met a wool-grower who is not prepared to pay for the defence of his country. Wool-growers are patriotic persons and all of them are prepared to pay their fair share for the defence of this country.
– But only a fair share.
– If we did not propose to take the money from the woolgrowers, in what other ways could the Government’s commitments be financed? We could raise an additional loan from the public, but I remind honorable senators that we are already committed to a loan programme of £260,000,000.
– Or impose an excess profits tax.
– An existing loan of £129,000,000 is due for conversion this year. In such circumstances the raising of an additional loan would present great difficulty.
– So the Government decided to “pinch” money that belongs to the wool-grower.
– Not at all. We could raise the requisite money by increasing taxes generally. It has been suggested that all taxpayers should be called upon to p”ay additional tax and that the wool-grower should be allowed to go scot-free. Is it seriously suggested by honorable senators opposite that the toiling masses of the people - the poor downtrodden workers, the slaves of thi9 community - should be further penalized by the imposition of punitive rates of income tax while the wealthy wool-growers are allowed to go scot-free? We believe that the wool-growers are best able to carry this additional burden. If we thought otherwise, we should have arranged to issue treasury-bills. That, however, would have had a definite inflationary effect.
This proposal is similar to the payasyouearn income tax system.
– Pay-as-you-earn plus provisional tax.
– Does Senator Sheehan sincerely object to the proposal? The Curtin Government was responsible for introducing the pay-as-you-earn income tax system. This is merely an extension of the same principle. Let us consider how the pay-as-you-earn income tax system affected the great mass of the workers. In 1944-45 income tax amounting to £82,000,000 was extracted from the salary and wage earners of this community.
– After they had earned the money.
– Exactly, no one denies that. In 1945-46, £81,000,000 was extracted from salary and wage earners and £4,500,000 was subsequently refunded to them. In 1946-47 the Labour Government collected £85,000,000 in advance payments and returned £8,500,000 ; in 1947-48 it took £80,000,000 and returned £12,500,000; in 1948-49 it took £86,000,000 and returned £10,500,000; and in 1949-50 it took £78,000,000 and returned £13,500,000. I remind honorable senators opposite that not one penny of interest ‘ was paid to the workers on that money. It has been stated that the proposed deductions may amount to more than the ultimate tax liability of the wool-growers. That may be so, but the amount involved would probably not exceed £5,000,000. When that sum is compared with the sums taken from the wageearner by the Labour Government, the wool-grower has nothing to complain about.
– The honorable senator should have a chat with the wool-growers and find out whether that is so.
– The Government is prepared to accept full respon sibility for its actions. It is not grumbling about this matter, and I cannot see any reason why the members of the Opposition should perturb themselves about it. The Government is delighted to assume some responsibility and to be able to tell the people frankly, freely, and truthfully what its actions will be. It is perfectly happy to allow the people to judge it. If Senator Hendrickson thinks that I should advocate something in which I do not believe, he must think again. I consider that this is a just measure, and in spite of the statements that have been made by honorable senators opposite, I advocate its adoption. On this side of the chamber honorable senators are permitted to express their own opinions and do not receive orders from an outside “ big twelve
A flat rate has been adopted as the only practical means of assessing deductions. A graduated scale would have been far too complicated. This measure contains generous provisions to permit cases of hardship to be dealt with. Its best feature, from my point of view - and I speak as an agriculturist - is that it provides that the wool-grower will pay his tax when the money is available.
– But the Government intends to use it in the meantime.
– Of course it does. I have some knowledge of farming, and I also know something about paying my debts. I repeat that the best time to pay one’s tax is when the money is available, which is after the wool has been sold. With the bumper prices that are being received for wool at the present time, the prudent farmer will do that. Let us suppose that the price of wool falls - and what sensible person honestly believes that the present prices will be maintained? I have no idea how long they will continue, but it is reasonable to assume that they will not always be on the same level as they have been during recent times. In 1949-50 the average price received for wool was approximately SOd. per lb. Very few -people in Australia previously believed that such a price would ever be paid. It is true that it brought greater prosperity to this country, and we are all glad of that fact. However, to-day the same class of wool would probably average 160 pence per lb. If, for purposes of illustration, we take an average price of 140 pence per lb., and consider at the same time the bumper price of 80 pence per lb. in 1949-50, we shall see that the incomes of woolgrowers will be stepped up by 60 pence per lb. on every pound of wool they sell. Out of that 140 pence per lb. the Government proposes to take 28 pence and to set it aside as a taxation reserve. That means that in fact, of the 60 pence over and above the bumper price received last year, the Government will take 28 pence and the wool-growers will retain 32 pence per pound over and above the 1949-50 price. After setting aside that taxation reserve - which is the wool-growers’ own reserve - they are still 32 pence per lb. better off than when they received the bumper price in 1949-50.
A great deal has been said concerning the small wool-grower and the hardships that he will suffer. I suggest that no prudent person engaged in the sheep industry would attempt to balance his budget by assuming last year that wool would double its price. No sane farmer would have worked on the assumption that he would receive 160 pence per lb. this year for his wool, and planned accordingly. If he had done so, he would have been courting disaster. Let us suppose that a small wool-grower received a wool cheque for £500 twelve months ago. Such a man could not be considered to be a big sheep farmer. Let us also suppose that this year his income will be £1,000. The Government proposes to take £200 of his income and put it away as reserve taxation.
– Free of interest !
– I am not concerned with interest. That farmer will still be £300 better off than he was twelve months ago, and he will have the £300 with which to improve his property. No prudent farmer would have budgeted for additional expenditure to the extent of £300 above the peak period prices received in 1949-50, so I cannot see that this measure will occasion any hardship to even a small farmer. If, by any chance, there should be hardship, this measure gives him access to relief from that hardship. Not only does it make provision for damage caused by floods, but it also takes into consideration his financial situation. I admit that it may have some adverse effect on a man who deals in sheep, but I suggest that such a man enters upon that line of business with his eyes open. A dealer in sheep is not of great assistance to the wool industry.
As I have previously stated, if there is a fall in the price of wool, the woolgrower will still be required to meet his taxes, and the reserve that is to be put aside will represent a most useful asset to him. This deduction is in the same category as the action of a prudent farmer who puts aside in mouse-proof sheds reserves of fodder, such as oats or hay, against the day when feed will be in short supply. This sum of money is to be put aside and will be used when the grazier may be short of money. I believe that he will thank the Government for the prudent manner in which it has looked after his interests. It has also been stated during this debate that some of the benefits that the graziers have received-
– What about some of the profits ?
– The grazier knows that he has received benefits from other sections of the community, and he appreciates the fact that he has a part to play in the community. While there may be some opposition to this bill from interested persons, most wool-growers are prepared to agree to it, and before very long they will openly thank the Government for introducing one of the best pieces of legislation to be placed on the statutebook.
Honorable senators opposite have stated that if the Australian Labour party is returned to office it will repeal this legislation. I have no doubt that it will do so, and that it will attempt to socialize the wool industry. The first plank of its platform is socialization of the means of production, distribution and exchange. If the wool-grower is prepared to vote in favour of that programme, he is free to do so, but I remind him that that is the alternative to this measure. I regret that Senator O’Flaherty is not in the chamber at the present moment, because during a speech in this House he stated that he is a socialist and that he stands for all that socialism means. He also stated that he supports nationalization of the banks. I hope that I am not being unfair to the honorable senator, but I also understood him to say that he is not in favour of the stockpiling of £50,000,000 for defence purposes because he considers that it would cause inflationary trends. Nothing could be further from the truth. The honorable senator advocated the raising of a further loan of £103,000,000. I suggest that that would accelerate the inflationary tendency, whereas the drawing-off of this money will have the opposite effect. The honorable senator mentioned that he expected that I would support this bill. I am pleased to do so, and he has my assurance that I support it in its entirety. I believe that this Government has the courage of its convictions and that it will introduce legislation which, whilst perhaps not being really popular, will be in the national interests and to the advantage of every person in the community. The electors may judge me on my statements. If I should be rejected at the next election, there will be no moaning on my part. 1 am prepared to accept the will of the people, which is something that honorable senators opposite are not prepared to do. I repeat that I support the bill, and I trust that it will be passed through all its stages as quickly as possible.
– Honorable senators have been informed that the purpose of the Government in introducing this bill is to stem inflation. That being so, we are entitled to judge it accordingly. It has been said to-night that it is the intention of the Government to skim £103,000,000 from receipts for wool this year, and divert it to revenue. That means, in effect, that £103,000,000 will be taken from the custody of the Australian wool-growers and placed in the hands of the Government, which will then spend it. It means that the wool-growers of this country will be called upon to pay to the Government money that should be raised from all taxpayers in the community.
It may seem odd to some people that honorable senators on this side of the chamber are championing the cause of the graziers. It has been stated in the press and elsewhere that the graziers are the political opponents of the Labour party and that they see nothing to their advantage in its policy. I know many graziers in Queensland who have worked in the pastoral industry for years and who still subscribe to the policy of the Labour party. They still think as much of their membership in the Australian Labour party as does any honorable senator on this side of the chamber. Members of the Labour party have taken up cudgels on behalf of the graziers because they are greatly concerned about the economic welfare of Australia, and because they see in this measure a serious threat to the economic stability of this country.
We have been told by honorable senators opposite that there is no way of estimating how long the present high prices for wool will continue to be received. That is a matter for conjecture, but we can form some opinion from the recent announcement that the United States of America intends to clothe the whole of its military forces with wool. That decision alone will mean that Australia will enjoy - I use the word “enj’oy” advisedly - high prices for its wool for the next few years. That being so, what are we to do next year and after that? Is not there some alternative to the Government’s proposal ? Is the Government so bereft of ideas that it cannot think of anything other than taking £103,000,000 from the woolgrowers and setting it aside as a kind of taxation reserve from which each woolgrower will have his taxation account balanced yearly? Cannot the Government think of some other way of ensuring the economic stability of this country? With my knowledge of the pastoral industry, I see in high wool prices an opportunity to establish a reservoir of employment for the Australian people that could be drawn upon during the next nine or ten years. It is well known that thousands of Australians are employed in the Queensland wool industry. The towns in which those people live are situated in country areas, and each of them depends upon the industry for its very existence. They include Roma, Mitchell, Morven, Charleville, Wyandra, Cunnamulla, Quilpie, Blackall, Longreach, Winton, Cloncurry, Richmond, Hughenden, Emerald and perhaps Charters Towers. There are several others. From time to time we hear that the population of the western areas of Queensland is dwindling, and the experience of Queensland in connexion with a dwindling population is doubtless shared by other States. Is not the population of those areas dwindling because employment for the people of the towns to which I have referred is very insecure ?
– No. People are leaving the rural areas to find easier employment elsewhere.
– Senator Maher is a grazier, but I have as much knowledge of the pastoral industry as he has, and I can discuss the industry with him. When I have finished my speech, he will have an opportunity to address the Senate. When he has done so, we shall probably find that there is not much difference between what we have said. Why is it that the wool industry, which is one of Australia’s oldest and greatest industries, is judged to be unstable? I am speaking now from the Queensland viewpoint. The history of the industry shows that :i. good season is the exception. There is approximately one good season in three. I know from my own experience that, after two years of drought, one property that had once grazed 46,000 sheep had 6,000 sheep left on it. The carcasses of the other 40,000 sheep were scattered over the property. Those sheep died, notwithstanding that’ the owners of the property had fed them upon mulga for as long as they possibly could. Losses are caused by factors other than drought. There are wild dogs and also dingoes roaming the grazing lands of Queensland. We know what they can do to flocks. The blowfly pest is another cause of losses. It is a menace to which the Commonwealth Scientific and Industrial Research Organization should devote its attention with a view to eliminating it or, at least, abating it.
To show why the pastoral industry is not in a sound condition, I shall tell the Senate of the losses that were suffered a few years ago by some people who had been in occupation of a large station property in central Queensland for 40 or 50 years. They were requested to erect accommodation for their workers at a cost of £500 or £600, but they replied that they could not afford to do so. Having regard to the facts that they had occupied some of the best grazing land in Queensland for years, and that they had 40,000 or 50,000 first-class sheep, it seemed to me that it was a stupid and weak, excuse to say that they could not afford to spend £500 or £600 upon accommodation for their workers. I pressed the matter, and intimated that if nothing were done, proceedings would probably follow. Later, the representative of a pastoral finance company interviewed me, and informed me that it wa3 impossible for the owners of the station to spend £500 or £600 upon the provision of accommodation. He offered to show me the ledgers and account books of the station owners. I did not make the examination, but I was shown sufficient to convince me that what I had been told was perfectly correct and that people who had been in occupation of a station property for 40 or 50 years and were grazing 40,000 or 50,000 sheep could not afford to provide accommodation costing £500 or £600. They had experienced a serious drought. They fed their sheep for so long that they became involved with a pastoral finance company. It cost them a fortune to feed their sheep for a year or two, but the drought did not break and they had to continue to feed the sheep. The longer the drought continued the worse their financial position became.
– They had to pay their interest.
– They had to pay their interest, of course. I have mentioned that case to indicate to the Senate some of the difficulties that have been encountered by Queensland graziers.
– The hardship provision would meet a case of that kind.
– As Senator Maher knows, that is not an isolated case. One of the things that we must consider in dealing with a bill which makes provision for a sum of £103,000,000 to be taken from graziers is how losses of that kind cnn be avoided so tbat people living in the pastoral towns can be assured of employment in the districts adjacent to those towns. One way to reduce losses is to construct fences that will prevent dingoes and wild dogs from trespassing upon station properties. A fence of that kind costs twice as much as does a rabbit-proof fence, because the posts must be sunk much deeper.
– Order ! In accordance with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question resolved in the affirmative.
The following paper was presented : -
Commonwealth Public Service Act - Appointment - Department of Health - B.E. Christophers.
Senate adjourned at 11 p.m.
Cite as: Australia, Senate, Debates, 22 November 1950, viewed 22 October 2017, <http://historichansard.net/senate/1950/19501122_senate_19_210/>.