20th Parliament · 1st Session
The President (Senator theHon. Edward Mattner) took the chair at 3 p.m., and read prayers.
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The. PRESIDENT. - I desire to in form honorable senators that I have received the following letter from, the Australian Democratic Union: -
AUSTRALIAN DEMOCRATIC UNION-
198 Alice-street, Brisbane. 3rd September, 1952.
The Honourable,
The President of the Senate,
Parliament House, Canberra, A.C.T.
Sir,
As by virtue of Chapter 1, Part II, Section. 17 of the Commonwealth Constitution,theoffice of President is the chief office of the Senate, I am directed by my Executive to submit to you, for the official information of the Senate, the attached copy of a memorial toHis Excellency, the Governor-General.
Your faithfully, C. W. Russell, President.
I add, for the information of honorable senators, that the memorial referred to deals with the position of parliamentary. allowances and pensions, and parliamen tary under-secretarias.
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– Can the. Minister for Trade and Customs give meany further information in answer toa question that I asked on the 6th August last about the allocation of government contracts to the textile industry in order, that employees may enjoy continuity of employment? I have in mind particularly the Actil cotton mills, and the Mount Gambier worsted mills, both in. South -Australia.
– I cannot add any details to the answer that I gave the honorable senator when he first asked hisquestion. However, I can obtain for him. exact details of Government contractsgiven to textile firms in order to see them over the difficult period through which they are now passing. I know that the total value of such contracts runs into many millions of pounds. The honorable sena tor will be pleased to know that there hasbeen a decided improvement in the industry of late.
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– Can the Minister for National Development inform metwhether it is a fact that although the Commonwealth holds a majority of the- shares in Commonwealth.Oil
Refineries Limited, the agreement signed in 1920 by the Australian Government and the Anglo-Persian Oil Company, as it then was, provides that the company has the right to appoint four of the seven directors? Is it also a fact that the agreement to which I have referred places the technical and business management of Commonwealth Oil Refineries Limited solely in the hands of the company, so that the Australian Government has no practical control over the policy and the technical and business management of Commonwealth Oil Refineries Limited?
– The statements made by the honorable senator are substantially correct. The board of directors of Commonwealth Oil Refineries Limited consists of seven members, four of whom are nominees of the Anglo-Iranian Oil Company (Australia) Limited and three of whom are nominees of the Australian Government. I recollect that that arrangement has been the subject of caustic questions from members of the Opposition in the past. By means of such questions, the Opposition has registered its objection to a .Commonwealth investment being under the control of a board, the majority of members of which are nominated by the Anglo-Iranian Oil Company (Australia) Limited. Speaking from, memory, the agreement with the company provides that all commercial transactions and all technical matters are to be left for decision to the board of directors of Commonwealth Oil Refineries Limited. The Australian Government, as a government, has no say in those decisions, other than to the extent that representations may be made by its nominees on the board of directors.
– Can the Minister representing the Treasurer inform the Senate whether it is a fact that half the shares, less one, of Commonwealth Oil Refineries Limited are owned by Anglo-Iranian Oil Company Limited? Is it also a fact that Anglo-Iranian Oil Company Limited is one of the seven companies that control the bulk of the world’s supply of oil, and that five of those seven companies are at present being examined by the American Anti-trust Committee because of their monopolistic practices? Is it the intention of the Go vernment to sell to a unit of that international monopoly the shares owned by the Commonwealth in Commonwealth Oil Refineries Limited? “Will the Government set up an investigating committee similar to that which functions in the United States of America, to examine the activities of all oil companies which operate in Australia ?
– The only part of the honorable senator’s question about which I can speak with authority is that concerning the Australian Government’s holding in Commonwealth Oil Refineries Limited. The Australian Government owns one half of the shares in that company, plus one. Beyond that, all I can say is that it is very well known that the other partner, Anglo-Iranian Oil Company Limited is a very large company indeed. It has organizations throughout the world. I am not familiar with the arrangements or the ramifications of that company, nor do I know of any reason why there should be an examination of its affairs or of those of any other oil company in Australia.
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– I preface a question to the Minister for Trade and Customs by drawing his attention to a question which I asked of the Minister for Shipping and Transport last week in relation to a tug imported by Howard Smith Limited, and which has been held up in . Melbourne because of the refusal of the Seamen’s Union of Australia to man it. Does the Government consider that the action of the Communist-controlled Seamen’s Union of Australia in fact constitutes a monopoly, in its worst form, as a cartel of labour? Will the Minister undertake to consult with the Attorney-General in order to ascertain the steps that may be taken to control this monopoly that is creating so much havoc and causing so much expense to the Australian public? I point out to the Minister that in 1906 this Parliament passed an act known as the Australian Industries Preservation Act, the purpose of which is to control monopolies.
– I think that we are all aware, particularly the longsuffering Australian people, that there have been and still are some Communistcontrolled unions, which could be described as having a monopoly in the control and disposition of labour. “Were honorable senators opposite to use their political influence to support that robust Australianism that is in evidence in the trade union movement, we should very soon be rid of Communist control of certain unions. Under legislation introduced by the Menzies Government, truly Australian trade unionists have been able gradually to gain control of the trade union movement by eliminating Communists from positions of authority. With respect to the last part of the honorable senator’s question, I shall be happy to take that matter up with the AttorneyGeneral and to ascertain what action, if any, can be taken to protect Australia and Australians against whatever monopolies are destroying our economy. (Senator WRIGHT. - Can the Minister for Shipping and Transport inform the Senate when a statement can be expected in regard to the proposed sale of Commonwealth ships? Has the attention of the Minister been drawn to the published statement of the Premier of Tasmania in which he expressed dismay at such a proposal ? Will the Minister assure the Senate that the Government will make provision for the continuation of Tasmanian shipping services on terms no less advantageous than those which obtain to-day?
– Negotiations are proceeding in relation to this subject but it is not the policy of the Government to make an announcement on such a matter until a decision has been reached. The Government will do everything possible to provide an adequate shipping service for Tasmania - both passenger and freight. Whatever arrangements the Government may make for the future, the interests of Tasmania will be safeguarded. I feel certain that the Government will not take any action which will not result in a better and more regular service and strong action against Communists.
– I desire to ask a question of the Minister for Shipping and Transport, and with your permission, Mr. President, I shall preface it with a short explanation because it is based on a practice which is not generally known, and perhaps even the Minister himself is not aware of it. It is customary in the merchant shipping service, when a ship is sold, for the master, officers and engineers to be discharged. . Then, when they look for employment, they have to start at the bottom again. If the Commonwealth line of steamers is sold, will the Minister have inserted in the bill of sale, or contract with the purchasers, a provision to ensure that the master, officers and engineers shall be continuously employed by the purchasing company, and that their rank and seniority will be preserved? These men have given good service over a number of years, and many of them are now getting on in years, so that they would find it difficult to obtain other employment.
– I appreciate the importance of the honorable senator’s question. I cannot say what the final decision will be, but I assure Senator Kendall that the point raised by him will receive my personal attention, and I shall do whatever is possible to protect the men should the circumstances that he envisages arise.
– Is the Minister for Shipping and Transport aware that the Peninsular and Oriental Steam Navigation Company directly controls the Orient Steam Navigation Company Limited, the Union Steamship’ Company New Zealand Limited, and, through subsidiaries, controls the Australian Steamship Company Limited and the Aberdeen and Commonwealth Line? Is he aware that it also controls the British India Steam Navigation Company Limited, the General Steam Navigation Company Limited and the New Zealand Shipping Company Limited? Is the Minister aware that many of the shares in Australian National Airways Proprietary Limited are owned, by subsidiary companies of the Peninsular and Oriental Steam Navigation Company Limited? Will the Minister assure the Senate that if the Commonwealth line of steamers is sold it will not fall into the hands of this organization, which already has a strong hold on the air and sea transport systems of Australia?
– The honorable senator is ill-informed. The company referred to is not a transport monopoly. It is, in fact, one of the most efficient companies engaged in the overseas trade to Australia, and it is also one of the most important companies engaged in the Australian coastal trade. I shall not give any assurance at all, other than to say that if the ships are in the hands of an efficient organization such as the one referred to, I am sure that they will provide a better return than they did under the control of Senator Ashley.
– It has been reported that the Government intends to place a number of orders for the building of ships with the Australian Shipbuilding Board. . Can the Minister say whether it is the intention of the Government to consult with Mr. E. V. Elliott, the secretary of the Seamen’s Union of Australasia, regarding the design of the ships ?
– It is not proposed to follow the practice of the previous Government in this matter.
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– Has the Minister acting for the Minister for Labour and National Service read the report which appeared in the Melbourne press yesterday and to-day that the number of unemployed had increased in July by 19,000, according to figures given by the Commonwealth Statistician? Is it a fact that Commonwealth Hostels Limited still employs a considerable number of immigrant married couples, thus denying employment to Australians? Is it also a fact that the Department of “Works, which carries out the maintenance of immigrant hostels, has received instructions to put off certain numbers of Australian workmen and to employ recently arrived new Australians instead? I understand that, after a short period of employment, those new Australians are themselves dismissed to make way for more recent arrivals, thus producing a quick turnover in employment in this phase of the department’s activities.
– I am aware that a statement was issued at the end of last week, by the Commonwealth Statistician setting out the employment position in Australia at the end of August. If the honorable senator would like to have a copy of that statement, I shall be happy to obtain one for him. It indicates that, while there has been some increase of the number of registered unemployed, the tendency has been for that process to slow up a little in the last month or so. I am afraid that I have not at hand the information that the honorable senator seeks in the other portions of his question, but I think I can say that it has not been the practice of the department to displace Australians and to employ immigrants in their stead. However, if the honorable senator will place his question on the notice-paper, I shall be glad to obtain a reply for him.
– I draw the attention of the Minister representing the Acting Minister for Labour and Nation al Service to a statement which recently appeared in the Tasmanian press, attributed to the Premier nf Tasmania, that 1,000 workers have lost employment on Tasmanian public works because of the shortage of finance with which to ‘ carry out such works. Is it correct that 200 of those persons have since been employed on hydro-electric power schemes and that the remaining 800 are still out of work ? Has this Government made any provision to supply the finance which is needed to enable urgent public works to proceed, in order that the unemployed persons may be re-employed ?
– I should have thought that some portions of the honorable senator’s question might more pro.perly be directed to the Premier of Tasmania. As I have said in this chamber on a number of occasions - apparently the honorable senator has not heard me or did not understand what I said - this Government has done more, last year and again this year, to maintain State public works than has any other government in the history of federation.
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– Can the Minister representing the Minister for Air say whether it is a fact that No. 87 Photograph Reconnaisance Squadron of the Royal Australian Air Force recently completed a survey of 180,000 square miles of the Northern Territory and has been transferred to Amberley, Queensland, from which base further survey flights will be made? Does the Government intend ‘that Western Australia, especially the north-western portions of the State, shall be included in this very important work?
– I am not able to reply specifically to the honorable senator’s questions. I know, of course, that the Royal Australian Air Force makes aerial surveys of various parts of the Commonwealth, and that, in -so doing, it renders valuable service. The Department of National Development always acquires photographs and other data obtained by those surveys us soon as it become available. I am not aware that the squadron has been transferred to Amberley. I was under the impression that it was at present carrying out work in north-west Australia. Obviously, I must have been misinformed. T shall make inquiries into the matter and acquaint the honorable senator with the results.
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– Will the Minister representing the Minister for the Army state whether it is a fact that war gratuity, due to ex-servicemen who died while prisoners of war have been paid to their next of kin? Is it also a fact that the term “next of kin” is held to apply only to parents, wives or children of deceased ex-servicemen? Why were war gratuity not paid to other persons as next of kin, for example, to a sister, when the stipulated next of kin were non-existent? I have in mind the case of a sister of a deceased prisoner of war who brought him up and was named as the sole beneficiary under his will, but who did not receive his war gratuity. In such circumstances, has not a sister a greater right to the war gratuity than has the Consolidated Revenue Fund?
– I am sorry that 1 am unable to answer the honorable senator’s question, as I have no knowledge of the circumstances. I do not know why such a distinction should have been made, if in fact it was made. I ask the honorable senator to place his question on the notice paper so that I may obtain an appropriate reply from the Minister for the Army.
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– My question is directed to the Minister for Shipping and Transport. As diesel locomotives have now been in service on the TransAustralia Railway for some months, is the Minister able to provide information about the running costs now incurred, compared with those previously incurred when steam locomotives were used? Has the volume of overtime previously worked by drivers, firemen and maintenance staff been decreased as the result of the use of diesel locomotives, and if so, to what extent?
– In reply to the first part of the honorable senator’s question, the latest report that I have received from the Commonwealth Railways Commissioner indicated that the change-over from steam to diesel locomotives on the Trans-Australia Railway would result in a saving of £500,000 a year. I am not in a position to state the number of employees who are now working overtime or the number of hours of overtime that have been saved as the result of the change. I shall obtain the information from the Commissioner and pass it on to the honorable senator.
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– Will the Minister for National Development cause an investigation to be made of the northwest of Queensland by his officers in order to ascertain whether the resources of his department could be utilized to prevent stock losses from drought, which,, in the twelve months ended the 31st March last, numbered 809,000 cattle and .2,250,000 sheep and lambs? If it should be found that in order to reduce or prevent heavy stock losses, the provision of irrigation schemes, conservation of fodder operations or improved road and rail facilities are necessary, will the Minister prepare and submit to the Parliament a report dealing with this problem, including information relating to the amount of capital investment involved?
– I do not like to refuse to accept a challenge such as that contained in the honorable senator’s question. I should be very happy if such a task were entrusted to my department. The honorable senator has suggested, in effect, that the Commonwealth should very largely usurp the functions of the Queensland Government; soil conservation, irrigation and transport are primarily State matters. The established practice is that the Commonwealth does not enter into these fields except at the request of the State Government. The Commonwealth Scientific and Industrial Research Organization is at present conducting a soil resources investigation in the north-western part of Queensland, and the Department of Commerce and Agriculture is. conducting an investigation into transport facilities in that area. I think that I am correct in saying that there was a comparatively recent Commonwealth grant for the purpose of road construction in the Channel country of Queensland. Although I am not prepared to undertake an investigation along the lines that the honorable senator has mentioned, I am always very interested in developments in the fields of soil conservation, irrigation and transport in the States.
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– Will the Minister representing the Prime Minister inform me whether it is a fact that in 1949 Sweden passed legislation to prevent the importation, or circulation among the children and young persons of that country, of printed matter which may have a brutalizing effect on them, or which may otherwise prejudice their moral upbringing? Is it also a fact, that at a recent conference held in Italy under the auspices of the United Nations Educational, Scientific and Cultural Organization, which was attended by delegates of 24 countries, Sweden’s action was approved, and it was proposed to establish a special committee of Unesco in all member countries ? If such a proposal was approved, and as Australia is a member country of the United Nations, will the Minister assure the Senate that a committee will be established in Australia, on which women’s organizations shall be represented?
– I shall be very happy to give full consideration to the matters that have been raised by the honorable senator. I assure the Senate that Australia’s very stringent rules already prohibit the importation of matter which is subversive, blasphemous or indecent. The difficulty is that such matter can enter Australia in individual letters. In order to effectively prevent the importation of such things, w should have to inflict on the Australian people a complete censorship of all in-coming mail. That procedure would be intolerable, and it would involve a heavy expenditure. When this matter was raised at the recent conference of Commonwealth and State Ministers, the Prime Minister pointed out that it would be a very simple’ matter for the States themselves to pass legislation to prohibit the exhibition or sale of indecent literature. The Commonwealth has power only to control the importation of such publications. As I mentioned earlier, these matters are often imported as films, slides,, or drawings, in private correspondence. They are not imported as publications. I understand that the State Premiers intend to confer on the bringing in of uniform legislation to prohibit the exhibition or sale of literature or publications such as the honorable senator has in mind.
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– I desire to ask the Minister for Trade and Customs whether he has noticed a statement in the press by ace economist, Colin Clark, that there is danger of an increase in prices occurring in the next few months? Does the Government believe that prices will increase? If it does, what steps will it take to ensure that such a tragedy will not occur?
– I have not noticed the statement by Mr. Colin Clark to which the honorable senator has referred although I share the honorable senator’s high opinion of that gentleman a3 an economist. I think that the honorable senator and his colleagues could do a lot towards preventing an increase in the cost of living by using their undoubted influence among people in order i.o have them exert themselves to a greater extent and give better service for the money that they receive.
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– On the 11th September, Senator Morrow asked me the following question: -
I understand that the Postal Department has purchased a building for the purpose of housing telephone machinery. Will the Minister representing the Postmaster-General inform the Senate whether the Postal Department has purchased the building of Wilcox Mofflin Limited, which stands in St. John’sstreet, Launceston? If it has purchased this building, what price was paid for it’ 1 now inform the honorable senator as follows : -
The Postal Department has purchased a building in Launceston from Wilcox Mofflin Proprietary Limited at a cost of £40,000. It will be used to accommodate the mail branch and a temporary automatic telephone exchange pending the erection of a permanent building.
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– I desire to ask a. question of the Minister representing the Minister acting for the Minister for Immigration. It has been suggested to me that new Australians, who are married, might be gainfully and permanently employed in country areas if suitable accommodation could be provided for them in country towns which are the centre of rural industries. It has been further suggested that huts of the Army type could be readily erected to house them. Will the Minister consider the possibility of providing such accommodation, seeing that the immigrants .would be happier to find themselves a normal part of the population, and that rural industries would benefit from their presence ?
– I shall bring the honorable senator’s suggestion to the notice of the Minister acting for the Minister for Immigration.
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– Can the Minister representing the Minister for Health state what arrangements have been made in all the States for their participation in the Commonwealth health scheme? What fees are charged in the various States in public hospital wards? Does the Minister approve of the practice of charging visitors to patients in public wards 6d. a visit, seeing that the patients are paying a minimum of £12 ,5s. a week for treatment? Is this practice general in public hospitals throughout Australia?
– I cannot supply the information asked for, but I shall bring the honorable senator’s question to the notice of the Minister for Health, who will furnish a considered reply.
– I understand that discussions have taken place about the laying down of uniform conditions for the registering of drugs. Some time ago. I asked the Minister for Trade and Customs whether the Government would consider the advisability of instituting a uniform system of registration for medical practitioners. Can the Minister say whether the suggestion has been considered ?
– I am not sure that the subject matter of the honorable senator’s question comes properly within the jurisdiction of the Commonwealth. I shall confer with the AttorneyGeneral on the matter, and let the honor able senator know the result.
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– Oan the Minister for Trade and Customs say when the Public Accounts Committee, which was referred to by the Governor-General at the opening of the Twentieth Parliament, will be constituted?
-I cannot give precise .information, but I understand that it will not be very long before the committee is appointed and functioning.
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– Is the Minister for Repatriation able to give any information about the provision of institutions for the treatment of ex-servicemen suffering from war neurosis who are at present inmates of civilian mental institutions? How many ex-servicemen are at present inmates of civilian mental institutions, and is the number increasing or decreasing ?
– I cannot supply the information offhand, but I shall have inquiries made, and furnish the honorable senator with a reply as soon as possible;
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– Has the Minister representing the Minister for Social Services seen reports in to-day’s newspapers which conveyed information that the Social Services Consolidation Bill had been passed by the House of Representatives, and that if the Opposition in the Senate would allow the bill a speedy passage to-day, the pensioners could receive their increased pensions next Thursday? Can the Minister say who made the statement, and is he able to give any information in relation to it? Cf the statement is correct, I assure him that as far as I am concerned the bill will have a speedy passage through the Senate.
– I regret to say that the honorable senator is a jump ahead of me. I have not yet seen this morning’s Tasmanian newspapers. I understand that the Social Services Consolidation Bil] has been passed by the House of Representatives, and if the necessary arrangements can be made in time I propose to explain the bill to the Senate to-morrow.
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– Will the Minister for Trade and Customs state the total quantity of tea imported into Australia during the last financial year? At the same time, will he indicate from which countries it was imported, the price paid per lb., and the amount of subsidy paid by this Government for the purpose of keeping the price of tea down?
– I cannot let the honorable senator know off-hand the price that was paid, because some of the tea was bought at auction and some under contract at varying prices. However, from the details which I shall supply, the honorable senator will be able to work out an average price.
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Dissent FROM Ruling.
– I move -
That Order of the Day No. 1 - Dissent from Ruling - be postponed until Tuesday, the 30th September next.
In doing so, I make two observations. The first is that although the motion has been embarked upon - I might say at your express request, Mr. President - I should be happy to have an opportunity to find an alternative method of resolving the point at issue, if I can do so. My second observation is that I think it desirable that all honorable senators should be given an opportunity to consider this matter.
Question resolved in the affirmative.
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Motion (by Senator COOPER) agreed to -
That leave be given to bring in a bill for an act to amend the Repatriation Act 1920-195]. and for other purposes.
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Debate resumed from the 11th September (vide page 1256), on motion by Senator 0’Sui.i.rvAN -
That the bill be now read a second time.
– This short bill proposes to amend the principal act in one ‘ particular only. Clause 2 of the bill reads as follows: -
I think it is fitting that the Minister should have authority to grant leave of absence, with payment, to members of the Tariff Board. This is not an appropriate occasion on which to discuss the -work of the board, although if it were, I should have great pleasure in doing so. Suffice to say that the board enjoys the confidence of the Parliament. I have pleasure in supporting the bill,
Question resolved in the affirmative.
Bill read a second time and reported from committee without amendment or debate; report adopted.
Third Reading. Senator O’SULLIVAN (QueenslandMinister for Trade and Customs) ‘8.61].- I move-
That the bill be now read a third time. I express to the Senate my appreciation of the manner in which it has accepted th is measure.
Question resolved in the affirmative.
Bill read a third time.
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Debate resumed from the 11th September (vide page 1257), on motion by Senator Spooner -
That the bill be now read a second time.
– This measure and the others with which it is associated will validate the sales tax adjustments which became effective on the 7th August and eliminate certain anomalies in the existing legislation. Although the bill will grant a small measure of relief, and for that reason it is supported by the Opposition, we consider that relief to be totally inadequate and to be quite unrealistic in view of the hardships that are being imposed on the Australian people by this form of taxation. The sales tax has been discussed many times in this Parliament. We, on this side of the chamber, consider it to be an unfair imposition which falls hardest upon those people who are least able to bear the burden. I refer particularly to large families. It is a snide form of taxation because the person who pays it very often does not realize that a substantial portion of the purchase price of the commodity that he is buying is being contributed to Commonwealth revenue. The Labour party believes that the fairest way to raise revenue is to impose a graduated tax directly on incomes. Indeed, this view was unanimously supported by a parliamentary committee which made an exhaustive examination of the matter some time ago. The committee agreed that any extraction of taxes from the people should be carried out according to ability to pay.
The sales tax, which is an indirect tax, hits those members of the community who are least able to pay it.for that reason the Labour party is entirely opposed to it. Prior to the war, the revenue yielded by the sales tax was relatively small. I think that the highest rate of tax was 5 per cent. However, during the war, purely for the purpose of raising revenue, the then Government was obliged to impose harsher sales tax levies. At one stage under the war-time Labour Administration, sales tax revenue reached £44,000,000 a year, but as soon as the war was over the Labour Government endeavoured to get back to pre-war standards. Its avowed intention was ultimately to abolish sales tax completely, and it set out to achieve that aim. Last year, however, the Menzies Government applied the sales tax on a new principle. The tax was imposed not only to raise revenue, but also deliberately to eliminate or curtail what the Government believed to be less essential industries. That was a completely new use of the sales tax. It had never before been used to repress industries, and I am inclined to wonder whether its use in this discriminatory manner would survive an appeal to the High Court. The Constitution expressly provides that the Commonwealth shall have power to make laws for the peace, order, and good government of the Commonwealth with respect to taxation “but. so as not to discriminate between States or parts of States “ ; yet to-day, industrial centres of the Commonwealth are suffering under this discriminatory tax. It would be interesting indeed to know what view the High Court would take of this procedure. Undoubtedly, the sales tax as it is being levied to-day hits certain areas very severely and very unfairly. This is being done merely because the Government has decided that certain industries are essential and others are non-essential or less essential. How has this segregation been made? Clearly, the proper course for the Government to adopt would have been to refer this highly important’ matter to a skilled authority such as the Tariff Board for determination. That was not done.
The Government, in its wisdom, or perhaps, lack of. wisdom, has selected certain industries that are to be depressed, and other.si that are to be allowed to flourish. Its purpose, as stated in. the Parliament, was to divert man-power from “nonessential “ to “ more essential “ industries. The. first part of its policy has been given effect and considerable numbers of. men. have been forced out of certain industries. Unfortunately, the second part of its policy has not worked out; nearly as well as it hoped. Very many workers who have been forced out of lie so-called “ non-essential “ industries have not been able to find work in other industries and are now unemployed, or,, as the Government describes them, disem ployed. Information furnished by the Government indicates that the number of unemployed persons is growing week by week. By depressing certain industries and doing nothing to encourage others, the Government has failed to achieve the objective of its policy. First, high rates of sales tax tend to force up price levels. Higher prices that result from high rates of sales tax are reflected in the- prices of other commodities, and the general effect is to’ stimulate the inflationary trend. Secondly, this form of taxation has failed to’ achieve its objective. Thirdly, the imposition of high sales tax rates is unfair because it compels individuals who are least capable of doing so to pay the greatest amount of revenue to the Commonwealth. It is appropriate that: I should direct the attention of the Senate to the fact that in’ this instance the’ Government has again failed to honour a promise to the people. The amount of indirect taxation to be collected under the .present budget will, be just double that collected under the last budget presented by Mr. Chifley. The Government has given the clearest evidence that it very lightly regards its promise to- reduce- taxation.
It is contended by the Government’ that the small concessions made in this measure are designed to give incentive to industry. Having imposed very harsh rates of sales tax last year, and having in effect killed the goose1 that laid the golden egg, the Government proposes to grant this very small measure of relief in the hope that the goose will be restored to life. There can be very little incentive to industry in the proposal to reduce the rate of sales tax upon certain commodities’ from 66j per cent, to 50 per cent. It will not provide employment for the people; it will add little or nothing to the spending power of the community ; and it will not stop the drift in our economy.
The sales tax schedule still contains as many anomalies as did the schedules that were introduced last year. Insufficient attention- has been paid to the designing of this tax. Some items have been transferred from the 66^- per cent, rate to the 12J per cent; rate, obviously because last year somebody blundered. Apparently the Government is now attempting to correct the error by transferring certain items to’ the lower schedule. In designing this form of tax the Government should have sought the advice of experts. If it desires to- close down certain industries, it should indicate clearly what industries it regards as nonessential so that those who invest money in them will know that they are investing in hazardous undertakings. Under the policy applied by this Government certain industries’ have already lost a considerable volume of business and have had to put off many of their employees; Others have gradually tapered- down their activities. But none of them has been told why it is’ regarded by the Government as of little value to Australia. Industries that have been depressed in this way should have the- same right of appeal against the decision of the Government as is granted to certain industries to appeal to the Tariff Board for protection against imported goods and commodities. An official body should be appointed to weigh the evidence and make fair decisions on matters of this kind. No right of appeal has been granted and the Government without prior notice has, in effect, ruined the businesses of many concerns. That is totally unfair. My mind goes back to the days preceding the holding of the general election in 1949 when the present Treasurer (Sir Arthur Fadden) told the people that the hand of Mr. Chifley was behind every transaction that took place in the Commonwealth and extracted from the people a certain portion of their wealth. The Treasurer has forgotten his story regarding the hand of Mr. Chifley and far from attempting to honour his promise to reduce taxation, proposes to collect double the amount of sales tax that was collected by the Chifley Government.
Let us consider some of the anomalies that are apparent in the sales tax schedules. According to the Minister for Health (Sir Earle Page) milk is the most valuable constituent in the diet of children. Indeed, in his opinion it is so valuable that he believes that a considerable amount of Commonwealth money should be expended in making available free milk for school children. Yet icecream, which consists almost entirely of whole milk, but is a little more palatable than is whole milk, is subject to 20 per cent, sales tax. A similar position exists in respect of butter. The sales tax does not commend itself to the people of Australia. The Labour party strongly opposes it. Even when the tax was imposed purely as a revenue producing medium to meet the emergencies of the war, there was resistance to it. Immediately after the termination of the war the Labour government reduced the incidence of the tax with the object of abolishing it as soon as circumstances would permit. The bill now before us grants some measure of relief but members of the Australian Labour party will not be satisfied until the sales tax legislation has been removed from the statute-book.
.- I commend the Government for having reduced the number of categories of goods and commodities subject to sales tax. In contradistinction to Senator Arnold, I compliment it on having removed from the legislation many of the irritating anomalies that it previously contained, and particularly for having reduced the number of schedules from six to four. The necessity to differentiate on invoices between the rates of sales tax on the various articles, and to show the total amount of tax at the bottom, imposes a great deal of work on the business community. The reduction from six to four categories will facilitate this work. I congratulate the Government in this connexion.
I was very interested in Senator Arnold’s remarks. The honorable senator stated that he is opposed to sales tax. If the honorable senator spoke on behalf of his party, that surely demonstrates a change of heart by the Opposition. When honorable senators opposite formed the government of this country they had ample opportunity to abolish sales tax. Should they ever regain control of the treasury bench, it will be interesting to see whether they will do so. Senator Arnold also stated that although the Government had successfully dampened down some of the industries engaged in the production of less essential commodities by increasing the rate of sales tax on them, it had been unsuccessful in increasing the production of essential commodities. That is ridiculous. Let us consider the production of coal. The Minister for National Development (Senator Spooner) has announced that 1,300 more men are now employed in the coal industry. The great steel-producing industry is now working at 85 per cent, productive capacity, compared with from 50 per cent, to 60 per cent, a short while ago. This completely disproves the honorable senator’s contention that greater production has not been attained by essential industries. The honorable senator also referred to ice-cream. A short time ago, owing to the difficulties .that were being experienced in Tasmania in the distribution of free milk to school children, a suggestion was made that ice cream should be provided to them in lieu of milk. Doctor Turnbull, the Minister for Health in the Tasmanian Labour Government, pointed out that an enormous quantity of ice cream would be required to give to the children as much benefit as they now derive from milk.
I am sure that all Tasmanian senators are pleased that the rate of sales tax has been reduced on yachts, skiffs, dinghies, launches and out-board motors, because the use of such goods by young Tasmanians is essential in ‘ their greatest pastime. During the last twelve months a number of complaints were made to the Government about the effect of the high rate of sales tax on these things. Many young fellows in Tasmania have been .recruited into the Navy. Many more will now be encouraged to indulge in water sports. The experience in seamanship so gained will be invaluable to them should they subsequently join the Navy.
It is quite evident from the number of items that have been transferred into categories bearing lower rates of sales tax, that the Government has heeded many of the representations that have been made to it during the last twelve months. String shopping bags have been transferred from the 33J per cent, category into the 12-J per cent, category. This will overcome an anomaly about which many complaints have been received. ‘I direct the attention of honorable senators to the comprehensive list of total exemptions from sales tax. Machinery, implements and apparatus for use in agricultural industry for draining purposes will be totally exempt from sales tax. During the last two years I have raised in this chamber the subject of the tax on ice blocks which resulted in the collection of an almost minute amount of revenue. The Government has proposed that ice blocks shall now be exempt from taxation, and I consider that -by taking this action it will gain revenue because the makers of ice blocks will pay tax on an increased quantity of ingredients for their manufacture. Machinery, apparatus and equipment installed in houses for the purpose of the generation or storage of electricity or gas will be exempt from sales tax, also candles and badges for awards by show societies. There is a long list of items which will be totally exempted.
In the course of debates on sales tax bills honorable senators on both sides of the chamber have criticized the sales tax on baby powder. I am glad that the rate of tax on that item will be considerably reduced. Sales tax will also be reduced on bassinettes, cradles, cots and mattresses. Perambulator seats and covers will be exempted. It seems to me that the Government has carefully examined every representation in relation to sales tax that has been made to it during the year. As a result, it has proposed relief in every category and, in doing so, it has done a very good job. Sales taxation is part and parcel of the taxation machinery of every government, regardless of its political colour. Senator Arnold said that it was an unfair tax. I do not like sales taxes, but they have one virtue. They catch the income tax dodger. Although the Taxation Banch may fail to catch a man who has evaded the payment of his income tax, the sales tax always catches him. Whenever he buys anything he makes a contribution to the revenue of the country. That is one reason why this tax should be continued. I congratulate the Government on having reduced the rate of tax on so many items and on having removed the tax from other items on which it has caused irritation for many years. The Government is to be commended for having removed the tax from these items.
.- After listening to Senator Henty one would be pardoned for believing that this measure was a form of social services benefit instead of a sales tax bill. Indeed, one would be pardoned for believing that the whole community would benefit from this bill instead of being squeezed for more money. Evidently, some honorable senators on the Government side of the chamber are not aware of the history of sales tax legislation. I propose to outline the history of this legislation in order that they may understand how unjust and how uncalled for are the demands that have been made by the Government in this bill. The first sales tax act was introduced in August, 1930, by a Labour government. At that time the act did not classify various categories of goods, but simply levied a flat rate of 2£ per cent. Let us compare the conditions that operated in 1930 with the conditions that operate to-day. In 1930 Australia was in the very depths of a depression. A quarter of a million people were out of employment. Funds were necessary for all kinds of purposes. As a matter of fact, one of the instructions of Sir Otto Niemeyer to the governments of Australia was that taxation rates generally should be increased. Consequently, this form of taxation found its way on to the statute-book. After operating at the rate of 2½ per cent, for less than a year it became necessary for the Government to increase the rate of tax to 6 per cent. Sales tax has always been a moneywinner for the Government. It is one of those hidden taxes which have been passed surreptitiously on to the people.
Economic conditions improved in Australia shortly after 1931, and the sales tax rate was decreased from 6 per cent, to 5 per cent. Later it was further reduced to 4 per cent. In 1933 it was again increased to 6 per cent. Honorable senators are fully conscious of the position in which Australia found itself in 1940, when the rate of sales tax was fixed at 8$ per cent. Australia had then entered a war which the Government knew would be a long one for which considerable funds would be required. In 1940 classifications were introduced into the sales tax legislation for the first time. Discrimination was made between luxury goods and essential goods. It was necessary to conserve materials and labour for war purposes and the sales tax rate was deliberately manoeuvred in order to increase the funds of the Australian Government and, at the same time, conserve materials for essential purposes. In 1940, even after a sharp discrimination had been made between essential and nonessential goods, the highest rate payable on non-essential goods was 15 per cent. In 1941, as the war progressed, and more money was needed by the Government, the maximum rate was increased to 20 per cent., and in 1942, when the war was at its worst, the highest rate payable on non-essential goods was 25 per cent. Let us now move on to 1950. In that year the maximum rate was 33-J per cent., although the Government was not in urgent need of funds. Then the people of Australia received their great shock because, in 1951, the maximum rate was increased to 66f per cent. And still the Government wonders why it is unpopular, and why its supporters are deserting it. The only astonishing thing is that it has any supporters at ail.
This bill provides for a maximum rate of sales tax of 50 per cent: Sales tax was introduced by a Labour government in the depression years, when funds were urgently needed in order to provide relief for one-quarter of the population. I contrast conditions in 1930 with those of to-day. During a period of 22 years, no less than £670,000,000 has been collected by the . Commonwealth Treasurer in sales tax. Last year, the Government estimated that revenue from sales tax would amount to £117,000,000, but only £95,458,000 was actually collected. Why did the return fall short of the estimate? The answer will be found in the resistance which the people offered to the high prices that rule because of the sales tax imposed by the Government. As a matter of fact, sales tax had the effect of preventing many firms from manufacturing any goods at all. This year, it is estimated that sales tax will yield a mere £88,000,000! The collection of so large an amount at a time like this amount to extortion, which is one of the worst crimes in the calendar.
From 1930 to the end of World War II., successive governments collected £218,500,000 in sales tax. Some of that taxation was necessary. A war was in progress, and revenue had to be found. From the end of the war in 1945, until the election of the Menzies Government in 1949, £186,000,000 was collected in sales tax, but during the three years that the Menzies Government has been in office £265,500,000 has been wrung from the people of Australia by means of sales tax. As I said before, it amounts to extortion. During the last year that Labour was in office only £42,000,000 wa£ collected in sales tax.
It must be remembered that these huge amounts have been paid by the people in indirect taxes. Bearing that in mind, it is interesting to recall what the leaders of the present Government had to say about indirect taxation when they were seeking the support of the people. The words that I am about to quote may be found in .the little booklet which some honorable senators opposite are so fond of consulting from time to time in order to ensure that they are on the .straight and narrow path of liberalism. From the policy .speech of the Liberal party, delivered by the present Prime Minister (Mr. Menzies) in 1949, I quote as follows : -
We have in mind also the improvement of transport, water supply, and ports, and the review of the .Incidence of taxation in developmental areas &c.
We still believe that yates of taxation must be steadily reduced, as. national production and income rise,, and as economies are effected in administration
We will review the incidence of indirect taxes (which are a huge though sometimes unrecognized item in Australia) upon basic wage and’ cost-of-living items and housing costs.
Far from decreasing indirect taxation, this Government has progressively increased it. Senator Henty had something, to say about the increased production, of steel, but there can be no general increase of production until the Government honours its promise to reduce indirect taxation. During debates oh taxation measures I have heard it said that the Government has found it necessary to skim the top off excess earnings, and to place the money in the coffers of the Commonwealth. Sales tax collections certainly do not amount to skimming off surplus incomes. They amount to taking tie pennies and threepences from children, and something from every group of society. A year ago a certain Australian economist spoke of compulsory saving. He said that there were some people in Australia who would not save voluntarily, and that the Government was compelled, therefore, to institute a scheme of compulsory saving on their Behalf. It is not a. very satisfactory scheme for the people concerned, because the money is taken from them in taxes- and used by the Government for its own purposes. The money never finds its way back to the people. We were told that the reason for imposing such high- taxation was to reduce the spending power of the people, and that this was necessary in order to- check inflation. That,, .presumably, is why high taxation is being retained. The intention of the Government is to hit at the pockets of the people, to make the people suffer, to reduce their standard of living, and all m< the interests of checking inflation!
This year, the people of Australia will pay £11 a head in sales tax, and the average- family will pay £44. Nevertheless, the Government says that the home is the foundation of society. How will sales tax affect various sections of the community? Let us start with the baby. Sales tax has to be paid on soaps, powders, mosquito netting, clothing and toys. Tax must also be paid on such articles used by children as clothing, fountain pens, ice cream, confectionery, and on games such as snakes and ladders, ludo,- &c, with which children amuse themselves. We now come to engaged couples who, by the way, need the hearts of lions to face the future, and to undertake the task of acquiring homes and furnishing them. They have to pay sales tax on mattresses, linoleums, carpets, furnishings, pots, pans, table wake cutlery, knives, forks, &c. Then we come to the general body of citizens, who have to pay tax on practically everything they use, including clothing, food, &c. When the day’s work is over, and they tune in the radio to listen to the debates in the Senate, let them remember that they have to pay sales tax at a high rate on their radio receivers. Sales tax must also be paid on a humble but very necessary toolwhich is used by butchers, bakers, buglers, carpenters, carters, caterers, draftsmen, drainers’, dentists, engineers; electricians, electro-platers, fellmongers, fettlers, farmers and fitters. L refer to the humble file, which is used by cane cutters in Queensland and by carters in Canberra. I am sure that you, Mr. President, know the purpose of an auger, although, it is. obvious that- some honorable members opposite have never seen, one: We know that augers, are used for boring heavy pieces of timber,, such as. posts, transome and headstocks Even the lights which are used on the small jetties and wharfs along, our rivers and. bays are subject, to sales tax.
Very often, goods which are) purchased by retailers who are required to pay sales1 tax on them at the time of purchase, are left on the shelves for long periods1 before: they are sold. The retailers- must therefore carry the sales tax. until the goods are sold. My main objection to sales tax is that it is- unjust.. The platform, of the> Australian Labour party provides, for its. abolition, and I support- that aim. wholeheartedly. I. think, the tax should be abolished because- it. requires the poorest person in the community te: pay the same rate of tax as does the wealthiest person. Apparently, some official decides that certain goods should’ bear a higher rate of sales tax than others. The manufacturer of the goods which are subject to a high rate of sales tax is therefore placed under a severe handicap. I have seen factories containing expensive machinery idle because of the operation of a high rate of sales tax on the goods produced by them. The manufacturer has been unable to sell his goods to merchants and retailers because of “ buyer resistance “ to such goods. The manufacturer is then in a helpless position, because he cannot correct that state of affairs. It may be necessary in the future to appoint an economic commission to review fully the operations of sales taxi It may then be possible to ascertain to what degree sales tax has increased the cost of living in Australia during recent years. I am not sufficiently foolish to believe that the £88,000,000, which the Government expects to collect from sales tax during the current financial year, will be taken from the people and that that will be the end of the matter. I know that that huge sum of money will be added to working or productive costs, and that the people will actually provide it. .
– I support the measure and congratulate the Government on its imaginative approach to the problems of sales tax. It is expected that in the current financial year the Government will collect £88,000,000 from sales tax. It is, therefore, obvious that no government could afford to scrap such a method of taxation. However, the Government has reduced the rate of tax on many items. When the Australian Labour party was in office there were six categories of sales tax, and at first, it “applied to all commodities, including food and the necessaries of life. Later, the structure was altered and built higher. This Government has reduced the number of categories to four. Under the legislation there is an exemption schedule and schedules covering articles classified to bear tax at the rates of 50 per cent., 33-J per cent., 20 per cent., and the general rate of 12-J per cent. When examining the bill before the Senate, it is important to remember that the rate of tax on unspecified items is 12£ per cent.
I compliment the officers of the sales tax branch on the great help which they have given in connexion with sales tax matters. I understand that the branch keeps most extensive records of requests for amelioration of the tax and the removal of anomalies. Because of the diligence of the officers concerned, the Government has been able to get to the root of many sales tax problems, and the sales tax law is now far more lucid than it has been for many years.
It is proposed to exempt completely from sales tax all machinery, implements and apparatus for pumping, water supply, drainage or irrigation purposes, or for the construction of drains or ditches. This exemption will give a “ new look “ to agriculture in the higher rainfall areas of the country and will be a great incentive to the farmers in those areas. Equipment for use in the fishing industry is also to be exempt from sales tax. Coming from South Australia, I know the importance of this exemption, because the South Australian crayfish industry is a vast potential dollar earner. I am pleased to see that crayfish boats, pots, engines, nets and lines, amongst other items,, are to be exempt. Great wealth swims along our shores, and the exemption of fishing equipment will act as an incentive to tap such wealth.
As Senator Henty has pointed out, home lighting plants which are important to people who live in the country are to be exempt from sales tax. In addition, the exemption, of candles and tapers will be of considerable benefit to the residents of city and suburban areas in New South Wales where, because of frequently recurring blackouts due to the inefficiency of the State government, candles are in common use. One of the finest aspects of the bill is that it proposes to exempt from sales tax goods which are used by educational institutions. As is well known, many schools, colleges, convents and universities have not been able to replenish their equipment, or to refurnish for some time. It is true that equipment such as books and blackboards have been exempt from sales tax, but the present proposal will mean that the institutions will be able to refurnish and to purchase or replace equipment such as trucks for the removal of rubbish.
Although the total saving from the reductions and exemptions will amount to approximately £6,000,000, I suggest that the money aspect is not nearly as important as is the fact that an incentive is being given to those who live in the outback, to those who are attempting to drain marshy lands, and to those interested in the education of children. In addition, perambulators, strollers, pushers, go-carts, bassinettes, sleeping baskets, cradles and cots are all to be free of sales tax. I point out that many blind people make bassinettes. The exemption of such articles will thus be aD incentive to them. The rate of sales tax on sporting equipment has been reduced from 33^ per cent, to 20 per cent., and on wireless sets from 33^ per cent, to 20 per cent., whilst the rate on razor blades and ladies’ lipsticks has been considerably reduced.
Senator Arnold appeared to be amazed by the ramifications of sales tax, but the honorable senator should remember that at the present time in Great Britain purchase tax, which in many respects is similar “to sales tax, operates. I also suggest to the honorable senator that in view of the huge present-day Government expenditure it would be impossible to do other than to impose sales tax. Senator Benn made much of the fact that the sales tax is levied on certain children’s requisites ; but let it be remembered that this tax was first imposed in the dark days of the depression by a Labour government, and that, in those days, it was levied on every commodity. Sales tax is not levied on every commodity to-day. The long list of exemptions includes agricultural equipment, foodstuffs, footwear and clothing, and is being further extended by this Government. It is true that the rates of tax to-day are higher than they were in 1931 ; but I remind honorable senators opposite that in those days, a tax of even 2^ per cent, was a severe impost. We are told that the abolition of the sales tax is part of the platform of the Labour party. My answer to that is that, if honorable senators opposite earnestly believed in this plank of their platform, they would have done something towards implementing it during their eight years of office.
I commend the Government for the introduction of this measure, and I hope that it will be passed speedily by the Senate.
.- I am opposed to the sales tax on principle, and I make no apology for that opposition. The sales tax is a flat rate tax. The poorest member of the community pays the same rates as the wealthiest members pay. Indeed wealthy people are not penalized at all by the sales tax. Its object is to tax the majority in the interests of the few. Senator Laught has asked why the Labour Government did not abolish the sales tax after the war. I remind him that in those days inflation in this country was not nearly so severe as it is to-day. Both inflation and the sales tax increase prices. The slight reductions of tax provided for in this measure will be more than offset by rising prices. The Government is definitely responsible for inflation. It has shirked its task of checking this economic evil. Like other honorable senators I have received many letters protesting against the severity of the sales tax. The following is an extract from a letter from the Wholesale Jewellers and Watch Importers Association: -
The Treasurer’s decision to merely reduce Sales Tax from 60s per cent, to 50 per cent, gives so little relief to our industry as to be completely futile.
The public did not buy our goods at the former rate and the industry was brought practically to a standstill. Some firms held on with skeleton staffs anticipating some relief but they will now have to close down altogether.
There may be a few orders placed for the Christmas trade but, after that, it is expected that the electroplating industry in this country will disappear. It is very much a case of “ We, who are about to die, salute you “.
May we ask you to remember that this is no case of hari-kiri on our part. Mr. McEwen’s statement at the Farmer and Settlers’ Conference last Friday revealed that this high Sales Tax, which will kill our industry, was deliberately intended as discriminatory legislation against us.
There is only one” hope of our reprieve; and that is for a last minute appeal to Parliament at Budget time to reduce the lethal 50 per cent. Sales Tax to a lower ‘rate.
If this appeal succeeds it will be possible for the public to buy some of the goods that we produce. They will not buy at the prices which have to be asked after a 50 per cent. Sales Tax has been added.
May we ask for your support for our cause? [[ it should fail - further unemployment and greater distress is inevitable.
That letter was from a properly constituted and important organization. So far as I am aware’ no attempt has been made in this chamber or in the House of Representatives to answer the problems that it poses. As I have said, prices are increased both by inflation of the currency and by the imposition of sales tax. Those two forms of indirect taxation are reducing production and increasing unemployment. Honorable senators opposite speak continually about the need .to increase production; yet they acquiesce in the continuation of a tax which aids the enforcement of the monopoly law of minimum production and maximum prices. To the extent that we have unemployment, we shall also have reduced production, and to the degree that we have reduced production and further inflation through the sales tax, we shall have maximum prices. It is all a. conspiracy. When I hear honorable senators opposite telling us how their hearts bleed for the working classes it is clear to me that many of them do not care what they say or do not understand what they are talking about. They have no idea of the science of economics and the production and distribution of wealth. Anybody who had a thorough knowledge of economics would not impose a sales tax or any other indirect tax which would have the effect of reducing production. The sales tax does not increase the wealth of the community. Inflation increases the purchasing power of the wealthy, but decreases the purchasing power of wage and salary earners, superannuants and others on low fixed incomes. The small reductions proposed in this measure will not help the situation to any appreciable degree and I regret that a more intelligent approach has not been made by the Government to this important problem. Senator Benn has suggested the appointment of an economic commission to inquire into matters such as this. I should support such a move. An exhaustive” inquiry might yield a more equitable form of taxation, but, of course, I cannot conceive of this Government following the Opposition’s advice. At the election campaign in 1949, honorable senators opposite painted the skies red with their slogan, “Put value back into the fi “. Nearly three years have elapsed since then hut nothing has .been done. The economic plight of the Australian people has been aggravated by high sales tax impositions. The tax has reduced the purchasing power of those upon whom we must depend for the production of wealth. Obviously a reduction of purchasing power must .also reduce production. The Minister for Shipping and Transport (Senator McLEAY) appeals constantly for increased production and claims that the Communists are responsible for all our industrial dislocation, but honorable senators opposite are themselves doing more than any one else in the community to retard production. Whether they are doing it deliberately or because they are thick-headed I do not know, but it is being done. The Communists are used as a bogy to distract the attention of the people from the real cause of the deterioration of our economy.
The Government should reduce indirect taxes to their irreducible minimum. If inflation is permitted to continue, -and no strong remedial action is taken by the Government, the position that we shall have to face in the near future will be much more desperate than it is to-day. I am not the only one who is predicting that. Financiers in both Melbourne and Sydney are apprehensive of the future. This is clearly revealed in articles that have been published recently in the Financial Review, and in the financial sections of our newspapers. ‘Strong criticism is being -voiced of the manner in which this Government is handling our economic and monetary problems. Therefore, when I say that the position is likely , to go from bad to worse, I am merely supporting the views that have been expressed by prominent Government supporters outside the Parliament. Fortunately there are physical limits to the drift. One such limit will be resistance on the part of the workers. I have no doubt that when that day comes Senator Cormack and his colleagues will once more blame the Communists, but if I were a member of an organization on which extortionate demands were being made, I, too, should be among the strikers. I urge the Government to consider this matter rauch more carefully than it has done in the past. I do not like strikes. I like to see disputes adjusted scientifically to the degree that such adjustment is physically possible, rather than by the workers striking and getting things the hard way. If I were asked to describe the key to political processes, or indeed life’s processes, in one word, I should say “ adjustment “. To the extent that one understands economics as distinct from finance and politics, one can bring about adjustments with a minimum of friction. The Government is primarily responsible for most of the friction that is occurring in our economy to-day. That friction will continue so long as inflation is. permitted to continue and, as I have said, the sales tax makes a substantial contribution to inflation. The Government will have to make up its mind whether it is to adopt a commonsense approach to the adjustments that are necessary, or whether it is to continue its catch-as-catch-can or rule of thumb methods. The relief that is provided in the measure now before us is insignificant. If sales tax rates are reduced but the prices of commodities continue to increase, what relief will be afforded to the people by those concessions? The average Australian may not understand the ingenious way in which the sales tax is being applied, but he understands its effects. Although he may not be able to establish the relationship between causes and effects, he knows that he can no longer afford to buy the goods that he wants and that he should have.When the effects of the Government’s sales tax policy reach a certain stage they may become an embarrassment to it. The slight concessions proposed in this legislation are just so much make believe and so much pretence. They are merely a political soporific designed to lull the uneasiness of the people. If the Government does not remedy the anomalies that exist in the sales tax legislation it will not escape the consequences of their effects upon the people.
.- When we are considering the Sales Tax (Exemptions and Classifications) Bill we must take cognizance of the conditions that existed when the sales tax measures were brought before us at this time last year. We must remind ourselves that the steep increases of sales tax rates then imposed upon the people were designed to enable the Government to meet the very serious position that faced it both internally and externally. The international situation had then so deteriorated that in order to enable Australia to play its part in the protection of the free world sufficient funds had to be made available to the Government toprovide for a full programme of rearmament. The necessity for rearmament does not conjure up pleasant thoughts in the minds of many people. Most of us hate the thought of spending money on things that we may not require. Because of the tense world situation which existed at this time last year, the Government had to take extraordinary measures to finance its defence and rearmament programme. It had to find the requisite additional money from one source or another. The sales tax was one of the sources from which it sought to secure additional revenue. Another factor which then operated, and which, to a certain degree, is still operating, was the inflationary trend against which the Government had to fight most strenuously. Several measures were adopted by the Government last year to jolt the people out of their complacency and to bring them to a realization of the seriousness of Australia’s position. In addition to imposing increased sales tax rates, the Government was forced to impose credit and other restrictions to maintain our economic stability. The situation was then so serious that the people needed to be jolted out of their complacency. There was a lack of responsibility among many- people who did not pull their weight in the right direction. To meet the situation the Treasurer (Sir Arthur Fadden) very properly introduced measures that were necessary but unpopular. The sales tax increases formed a part of them. The Government had a duty to perform, and it did not hesitate to introduce the most unpopular measures in order to put our defences into a state of preparedness. Some were hurt in the process, but it cannot be denied that Australia is now in a much better position than it was twelve months ago. Production has increased; people are working harder; there is a sense of responsibility in the community ; and people are getting back to normal thinking. Two or three years hence we shall reap the full benefit of the unpopular measures that were taken by the Government last year. It is a truism that medicine is never enjoyed by the sick because it usually leaves a nasty taste in the mouth. The steeply increased sales tax rates imposed last year undoubtedly left a nasty taste in the mouth of every person in the community. They affected not only the people but also the industries of Australia. I am pleased that the Treasurer has been able to grant concessions in sales tax, some small and some large. That fact indicates that we are now treading the right road. The people appreciate the fact that the economic and military situation has so improved that the Treasurer has been able to honour his promise to reduce taxation. While some persons fear that the Government is spending money on the stockpiling of weapons and equipment that may never be used, they realize that by so doing it is ensuring our protection in the event of another war. A government that left the defences of the country in a state of unpreparedness would, in the event of war, be very much more severely criticized by the people than has this Government in respect of its taxation measures which have been imposed solely for the purpose of putting our defences in order. In the concessions embodied in this bill the Government has shown that despite its huge defence commitments it is prepared to grant some measure of relief to the people.
Whilst I applaud the Government for having done so much for the benefit of Australia during the last twelve months, I must direct its attention to some matters which it should consider as quickly as possible. I am not one of those who are prepared always to be satisfied with everything that is done by a government which I support. It is always our duty as members of the Senate to direct the attention of the government of the day to matters which should be further considered. There are several items upon which sales tax is imposed to which further consideration should be given by the Government, if not ‘ now then at a. later date. The sooner consideration is given to some, of them the better it will be for the nation. In some instances the rate of tax imposed on certain goods and commodities is so high that it has resulted in the development of a buyer resistance. The Government should keep prominently in mind the fact that whilst it has a duty to collect revenue to finance its activities, and, in certain circumstances to divert workers from non-essential to essential industries, it should not disregard the rights of persons who have invested their money in less essential industries. Unless careful thought is given to this matter, over the years certain industries may lose skilled artisans whose services may be required in time of emergency. Not many months ago, when I travelled on an aircraft from Queensland to New South Wales, a fellow passenger, Mr. Norman Wright, the well-known yachtsman and boat-builder from Queensland, reminded me that in time of war we depended to a great degree upon the services of experienced boat-builders, particularly those skilled in the building of small launches. If war broke out to-morrow we should need very many small craft, and it is essential that, in considering its sales tax policy, the Government should give very close consideration to the imposition of a low rate of tax upon small craft of various kinds. It is desirable that as many boat-builders as possible be kept in employment so that should an emergency arise the services of these skilled artisans shall be available to the nation.
I turn to a consideration of the effect of sales tax on musical instruments, which are now subject to 20 per cent, sales tax. Every encouragement should be provided for the development of culture. I have always believed that a country whose citizens are music-lovers is sound in character. When the rate of sales tax on pianos and other musical instruments was under consideration last year I expressed myself in similar terms, and I am very glad that the Government has seen fit to place musical instruments in a lower sales tax category. I appeal to the Government to reduce still further the rate of sales tax on these items, in order to encourage the people who are intensely interested in the development of this phase of our national life.
As far as I can ascertain, the rate of sales tax imposed on ladies’ handbags, evening bags, purses, and shopping bags has not been altered. I consider that a reduction is warranted. As honorable senators are aware, I am keenly interested in primary production, with which the leather-ware manufacturing industry is basically associated. I consider that the imposition of 33^ per cent, sales tax on the items that I have mentioned is having a detrimental effect on the industry, and I hope that the Government will reduce the rate. After all, ladies’ handbags could scarcely be considered to be luxuries. Travelling bags, which also are included in the Third Schedule, are essential to people who have to undertake travelling for any purpose. Although I realize that the Government needs increased revenue in order to carry out its defence programme, and for other purposes, I should like consideration to be given to reducing the rate of sales tax imposed on travelling bags. A handbag is as essential to a woman as are pockets to a man.
– It is also essential to have money to put in the handbag.
– A man’s clothing has a number of pockets.
– If the honorable senator were married he would not refer to pockets.
– I consider that the present rate of 33^ per cent, on handbags is too severe.
– Does the honorable senator support the bill?
– I do, but I consider that the Government should reduce further the rates of sales tax on the items that I have mentioned. The leather-ware manufacturers of this country now provide many articles that were formerly imported.
Articles enumerated in the Fourth Schedule to the bill are subject to 50 per cent, sales tax. I shall address myself particularly to fancy goods and electroplated ware. I have recently discussed the matter of sales tax on electro-plated ware with a person who is interested in this industry. Some of the views he expressed merit the serious con sideration of the Government. This industry has been developed to a reasonably high standard in Australia, and I do not believe for a moment that the Government intends to discourage its further development. However, the imposition of sales tax of 50 per cent, on electro-plated ware is proving too heavy a- burden for the industry to carry. A gentleman in Sydney, who is interested in the manufacture of electro-plated ware, told me yesterday of six principal manufacturers of this ware in Australia who, prier to the increase of sales tax to 66-$ per cent, last year, paid about £58,000 a. year in sales tax. During the last twelve months, however, they have paid only about £24,000 in sales tax. I am well aware of the necessity for the Government to obtain increased revenue, but I consider that the imposition of 50 per cent, sales tax on electro-plated ware is unjust and should be reduced. Although I am not closely associated with this industry, because it is relatively smaller in Queensland than in the other States, I understand that a number of artisans have already sought other employment, as a result of the lessened demand for electro-plated ware. It may be difficult to obtain- their services again in the future. The Government should encourage as much as possible the manufacture of jewellery and fancy goods. Before Czechoslovakia went behind the Iron Curtain that country derived a considerable export income from such goods. Its artisans were masters of the craft of making jewellery. This industry could be just as valuable to Australia. Jewellery to depict the coral, coloured fish and marine life of the Great Barrier Beef would be very popular. I have always considered that jewellery designed on such marvellous motifs would find a ready market both in Australia and overseas. It could also be patterned on our glorious tropical flowers. People of an artistic nature could readily capitalize on the beauties of nature in this country, in order to develop this very valuable industry. People who manufactured jewellery and trinkets depicting our natural beauties and sold them to members of the American forces that visited Australia during the war were hampered by many restrictions. I realize that the government of that day was faced with grave difficulties, but if those small manufacturers could have been encouraged to develop the industry at that time, it could Iia vo earned many valuable dollars from the Unites States servicemen who were then in this country. I do not intend to be critical of the present Government, because I realize that it has put this country back on the right road. We have turned the corner. However, I urge the Government to give further concessions to the industries to which I have referred. If sales tax could be reduced on the items they manufacture I am sure that in the long run the Government would derive increased revenue.
As I have already mentioned, sales tux is most unpopular with the people. I realize the necessity for diverting manpower from less essential into essential industries and I realize also the necessity for the Government to obtain adequate revenue. It is imperative to divert people into primary production, and in this connexion the Government has been successful during the last twelve months.
– The Queensland Labour Government is not assisting the primary producers.
– I consider that the high rates of sales tax that are being imposed on the goods that I have mentioned are tending to put them out of production in this country. As I have said before, I am not critical of the Government, because I am deeply conscious of the good that it has done since coming to office. The people of this co.11n.try consider that the Government is doing a good job, and I am sure that its proposals designed to effect further improvements will meet with a ready response from the people.
– During the debate this afternoon many points of view that were expressed when the subject of sales tax was under consideration in previous years have been reiterated. Some Government senators have referred to the fact that Labour did not abolish sales tax when it was in office. Senator Arnold has already stated that Labour is opposed to sales tax. I have always held the view that it is a most iniquitous tax. As usual, Senator Wood has proved to be a keen ambassador for Queensland. He never tires of extolling the virtues of the State that he represents in this chamber. The honorable senator stated that he is deeply conscious of what the Government has done. I, too, am deeply conscious of what’ it has done, but we approach the subject from different points of view. 1 should be prepared to wager - if I may be permitted to use that word, Mr. President - that if the people were given an opportunity to pass judgment on what the Government has done to honour its 1949 and 1951 pre-elect)ion promises, they would condemn the present Government. Senator Laught has stated that the Government has displayed great imagination in its approach to the matter. The only imagination that it has displayed has been to lessen the work of accountants by reducing from six to four the categories of goods subject to sales tax. Any person who gives ,even elementary thought to this subject will admit readily that sales tax is wrong in principle. It applies with unequal severity, because a worker in receipt of only £12 a week is required to pay as much tax on clothing as is an executive receiving £100 a week. One of the reasons why Labour was forced from office was that it had failed to abolish sales taxation. Yet the present Government has increased, this impost. Sales taxation was introduced by the Labour Government in 1930, as a depression measure, in order to obtain additional revenue with which to carry on the functions of government. It was retained during the war period in order to enable the Government, to gain additional revenue to assist the war effort. Despite the reasons for which sales tax was imposed by Labour, I have raised my voice in protest against this unfair imposition on every occasion that measures to impose sales tax have been before this chamber. Fully 90 per cent, of the people who. purchase 1 goods that are subject to sales tax, are in the lower income group. Sales tax has always been an unfair and unequal imposition on these people.
Sitting, suspended from 5.U5 to 8..15 ft.m.
-The sales tax is the, most, iniquitous form- of taxation levied on people anywhere in the- world. I know that it has been imposed by successive governments. As I have said previously, it was instituted by a Labour government in 1930, during the depression and was continued in a more severe form by another Labour government during the war years. Despite the fact that honorable senators on both sides of the chamber defend the tax when their party is in office, I believe that the overwhelming number of honorable senators are really hostile to this form of taxation. There are very many anomalies in it. Honorable senators opposite have appeared to take some comfort from extolling the slight remissions of sales tax that have been proposed by the Government. In view of the many pledges which the Government made to the people but whnch have not been fulfilled, I suppose that honorable senators opposite are grateful to the Government for having fulfilled one of its promises to some small extent. I cannot repeat too often that sales tax is a most savage form of taxation. It hits people on lower incomes harder than anybody else. The same amount of sales tax is paid on each commodity by all sections of the community and the people on the smaller incomes, being in the majority in. the community, pay the most salestax
The sales tax is also levied on sporting equipment. The Australianpeople love sport. Last year in order to provide gear for young men to exercise themselves an Adelaide cricket club had to pay over £80 in sales tax. Yet, as Senator Ashley said, this Government professes to “ play cricket “. It is wrong for the Government to continue this iniquitous form of taxation. Whilst honorable senators opposite have made great play on the proposed reductions in sales tax they have given the impression that they have been speaking with their tongues in their cheeks. This form of taxation is completely unfair. The people know that and they do not trust this Government. Whatever faith they had in it has gone. I remind the Minister for Shipping and Transport (Senator McLeay) that the Government held out certain promises to the people, including promises in relation to sales tax. The electors will ultimately give their verdict on this measure and others that the Government has introduced. When the Prime Minister (Mr. Menzies) takes his motley crowd to the electors I have no doubt what the verdict will be. In almost every electorate in the Commonwealth a majority of the people will say, “ Deadly is your political sin “, and the Government’s epitaph will be that of the suicide in one of Burns’s poems - -
Earthed up, here lies an imp of hell.
Planted by Satan’s dibble,
Poor silly wretch, he damned himself.
To save the Lord the trouble.
’,. - In addressing myself to this sales tax measure, I point out that theburden of sales taxation during the last two years has become a most important factor in the. economy of this country. The incidence of this tax has changed over a period of years to such an extent that it has. become a far greater factorin the total revenue of the Governmentthan income tax. It has influenced themovement of labour indirectly and this has resulted in quite a degree in causing the present pockets of unemployment. It. is not long since the Minister for Commerce and. Agriculture (Mr. McEwen) announced that the Government had’ increased sales tax on what he called non-essential goods with the deliberate intention of depressing the industries which manufactured them. The Government had taken that action in order to force men back on to the land and into the iron and steel industry. The Minister said that the people that the Government had hurt hated it like hell but asked them to remember that the action had been taken in order to restore labour to the farms. The Government’s action has resulted in putting men in many so-called non-essential industries out of work and they have not been absorbed into rural industries. In Tasmania, many men have become unemployed, due to the incidence of sales tax and they cannot obtain work as unskilled farm labourers. Recently I took a deputation representing the unemployed to see Senator Plenty at Launceston and we informed him that we represented men who had become unemployed by the Government’s arbitrary method of diverting labour. Originally, there was n national security resources board to decide which industry was to survive find which should be put out of existence. That responsibility has now devolved upon officers of the Treasury.
Although the increases of this tax made last year have been a wonderful source’ of revenue for the Government they have not had the effect that the Minister for Commerce and Agriculture claimed they would have. The main hurden of sales tax that was imposed in the last budget has been perpetuated iti this one. There has been no compensating transfer of men from non-essential industries to essential industries. In Tasmania, mining companies are putting their coal on the grass. They are undertaking the tremendous expense of unloading and reloading coal because many industries which were using it have had to reduce their production appreciably because they have not been able to continue selling their goods. This situation has had an adverse overall effect on the whole economy. The tendency of this Government has been to put the main burden of financing its activities on to the shoulders of those who are least able to bear it.. During the time of the Lyons Administration, before the war, 76 per cent, of taxation was levied indirectly. Customs duties accounted for 42 per cent., excise duties for 22 per cent., and sales tax for 12 per cent. Income tax accounted for 16 per cent, of total taxation. During the time of the Chifley Government, as much as 63 per cent, of total revenue was raised by means of income tax and never less than 53 per cent, was raised by that means. Only 40 per cent, of taxation is now collected in the form of income tax. The remainder is raised by different methods of indirect taxation. Thus the workers, who enjoy -only a small margin over and above the basic wage with which to obtain some of the comforts of life, are being called upon to bear ever-increasing burdens. The policy of the Labour party has always been that taxes should be paid by those who are in the best position to do so. In these days it is the proper ambition of all families to have a refrigerator in the home, and refrigerators should not be classed as luxuries. In this bill, even such articles as brooms, saucepans and cups and saucers are taxed as if they were luxuries.
– The Government would like to have the workers drinking out of milk tins.
– Yes, with the idea of disciplining them, no doubt. In December, 1949, the present Treasurer (Sir Arthur Fadden) declared -
In view of the tremendous increase of indirect taxation receipts since the Treasurer took office, and the resultant increase of the cost of living, it is time that the Government, in fairness to Australia, substantially reduced indirect taxation.
He was referring to the late Mr. Chifley, who was Treasurer in the Labour Government. The passage I have quoted shows how this Government has somersaulted. It has, indeed, repudiated every promise that it made to the electors in 1949 and repeated during the subsequent election campaign. The present rates of sales taxhave grievously injured some very deserving sections of the community. I have here a letter from a gentleman engaged in opal cutting. In it he informs me that, owing to the incidence of sales tax, he has been put out of business. Such skilled craftsmen as he would be of great, value to the Commonwealth as makers of precision instruments for defence purposes. In his letter he registers an emphatic protest against the injury done by the Government’s taxation policy to his own and allied trades. I have here another letter from the federal council of the leather goods manufacturers in which it is pointed out that the sales tax of 33^ per cent, on leather goods has caused manufacturers to lose markets, which has resulted in a heavy reduction of trade in this old-established industry.
The sales tax was originally imposed as a minor tax on luxury goods, and was paid by those who were well able to afford it. Every year, however, and particularly since this Government came into office, the tax has been increased, and now it is a heavy burden on the whole community. Before the war, the sales tax yielded £8,000,000 a year. For the present year it is estimated to yield £88,000,000. In 1949, the tax rate was only 8^ per cent, on 75 per cent, of taxable goods. The present Government, which promised the electors that it would reduce taxation, now levies sales tax at the rate of 20 per cent, on some goods, 33^ per cent, on other goods, and 50 per cent, on what are classified as luxury goods. Many of the articles which carry sales tax are actually basic necessities. People must have them if they are to enjoy a decent standard of living. They are, indeed, just as much necessaries as are food, clothing or shelter. The arbitrary classification of goods as essential and non-essential by persons whose identity we cannot discover is opposed to all ideas of justice and fair dealing. This back-door method of dealing with the economic situation will merely aggravate our economic difficulties. We have been told that primary production should be increased but, while taxation remains so high, the farmers will not increase their output. As a matter of fact, many of them are reducing their output. For instance, if the price of dairy products increases, the average dairy-farmer will milk fewer cows because he will not go to the trouble to earn a bigger income just for the sake of paying more in taxation. Many of the older farmers, who have had to battle all their lives, now find themselves for the first time out of debt. They enjoy economic security, and the tendency is for them to slacken off and to produce less, rather than more. In order to get increased production it would be necessary to put on the land young men who would have an ambition to earn big incomes in order to pay off a debt on their farms.
Every day men approach me, many of them 50 years of age and more, who tell me that they are disemployed - that is the current phrase now. In other words, they have been sacked. They tell me that they cannot get work because, apparently, they are too old, and they have no chance in competition with young, active men. The Government is boasting that it is about to reduce sales tax rates, but we. should remember that it increased the maximum rate to 66§ per cent, last year in order to bring the rate back to 50 per cent, this year. That is just another example of the financial thimble and pea trick of which the people are now so tired. The Government’s economic policy has failed. Its approach to the problem was a negative one, and its policy of high taxation has proved disastrous. I hope that during the course of the year the Government will revise the incidence of sales tax on many household items, such as refrigerators, which are essential in the home of every Australian citizen.
– I wish to protest against the proposal of the Government to continue its iniquitous and discriminatory sales tax provisions. In my opinion, sales tax is directly responsible for the inflationary tendency in our economy. Honorable senators may recollect that the Labour Government during the war and post-war years utilized sales tax for a specific purpose and then set about reducing the incidence of the tax. Each year thereafter there was a reduction of the rate of tax. When the present Government came to office, a new financial technique was displayed. There was an immediate increase of the rate of sales tax. During the last year, the Government collected £117,000,000 from the tax. When the budget was introduced last year, honorable senators on this side of the chamber warned honorable senators opposite that the budget proposals would have certain repercussions on the national economy. Although we do not stand here to-day and say, “ Did not we warn you twelve months ago that the budget would have certain effects on the economy ? “ I wish to refresh the minds of honorable senators opposite on the matter. The Opposition contended that the Government would fail to realize the fantastic sales tax collections which it envisaged at the time the budget was introduced. That contention has been borne out. Sales tax collections last year were £21,000,000 less than the estimated collections. In addition, poy-roll tax yielded £2,000,000 less than the Government expected from that source. It is obvious that those two shortages are related, because prices of commodities naturally have a bearing upon employment. The basic wage, which is adjusted each quarter, is harnessed to prices of commodities. When the basic wage is increased, pay-roll tax automatically increases.
Last year there were six categories of sales tax, whereas this year the Government proposes to reduce the number of categories to four. Great publicity has been given to the fact that the Government proposes to reduce the total collections from sales tax by approximately £48,000,000 a year. I point out, however, that the principal reductions of tax are to be effected on goods in the higher categories, which are beyond the reach of the workers of Australia. The Government has made no attempt to reduce the rate of tax on the items of food, which come within the 12£ per cent, category. Honorbale senators no doubt remember my pleas last year concerning the harsh sales tax imposition on sporting equipment;
– There is to be a big reduction in the rate this year.
– At that _ time I pointed out that the tax on sporting goods had risen, in a most vicious and discriminatory fashion, from 8£ per cent, to 83-^ per cent., or from ls. lOd. in the £1 to 6s. Sd. in the £1. That high rate of tax was placed deliberately upon the physical culture and the physical fitness of our people. The sporting community and the manufacturers of sporting equipment throughout the Commonwealth reacted strongly to the increase. I have been inundated with letters of commendation for my efforts to direct the atten tion of the Government to the fact that physical fitness is necessary for the development of the morale of the Australian community, and that the imposition of such a high rate of tax on sporting equipment is most unwise.
For many years I was associated with the Adelaide Cricket Club, and during my active days played a small part in its destiny. The annual report of the club for the last season, which I received recently, in referring to the balance-sheet, states that -
The main reason for the low balance wai the imposition of the sales tax on sporting materials. This policy is to be deprecated, and we should continue to protest. Cricketers have always been fair-minded, but the rise in tax from 8i .per cent, to 33i per cent., and in some cases G6is per cent., is pure, unadulterated, legalized insanity. It is a tax on the physical fitness and the health of the Australian youth. It appears that the Government are impregnated with tax madness. They are always looking for something to tax.
That statement is typical of the reaction of the sporting community generally to the vicious rate of sales tax on sporting goods. Senator Robertson stated a few moments ago that relief is to be given this year, and I acknowledge that a reduction is proposed. However, I contend that the proposed reduction from 33^- per cent, to 20 per cent., or from 6s. 8d. in the £1 to 4s. in the £1, is quite inadequate. The annual reports of companies which manufacture sporting equipment disclose that during the past year the demand for sporting goods has declined considerably. In my opinion, that provides practical evidence of the response of the sporting community to the high rate of sales tax on sporting goods.
It is well known that the basic wage rises concurrently with rising prices. The basic wage is never increased until rising prices make it necessary to increase it. In all sincerity, I suggest that if the Government wishes to be logical it should peg prices. No doubt honorable senators opposite will ask, “ Why not also peg wages ? “ My reply is that wages are already pegged. Evidence of that fact, can be had from a study of the applications which have been made to the Commonwealth Court of Conciliation and Arbitration by various unions for increases of marginal rates, all of which have been rejected by the court. The workers have been blamed for the spiral of inflation. It is apparently forgotten that .the basic wage rises only after prices have risen. If prices are not pegged, obviously they will continue to rise, if they are pegged, wage pegging will follow automatically. At the present time, the workers of Australia do not enjoy the spending power to which they are entitled.
I digress for a moment to refer to the rising tide of unemployment. Those honorable senators who are associated with the industrial movement hear of increasing unemployment from conversations with trade union leaders in the States which they represent and also in other States of the Commonwealth. The amount of employment available is declining rapidly. The spectre of unemployment has appeared once again in this country. I am afraid that unemployment will continue to increase unless strong action is taken by the Government to stabilize the economy. The repeated’ increases of the basic wage do not give the worker any more purchasing power because the basic wage is increased only enough to meet price rises that have already occurred. Marginal increases have failed to keep pace with the rising basic wage, and, in addition, workers are finding that wage increases are carrying them into higher tax groups. I remind honorable senators that no provision is made in the calculation of the basic wage for the payment of income tax. At one time, a basic wage earner was free from income tax ; to-day he pays approximately £18 a year in income tax. Surely that is a travesty on wage adjustment. Some honorable senators opposite may argue that in Australia to-day there is no such person as a basic-wage earner. I assure them that many workers would like to be earning even the basie wage, and that the ranks of those unfortunate people are increasing rapidly.
The Government’s sales tax legislation is making an unwelcome contribution to spiralling living costs and I believe that all goods now in the 12^ per cent, classification should be exempted entirely from the tax. The payment of tax upon those commodities imposes a severe hardship on the Australian housewife whose purchasing power is rapidly dwindling. “ The Government has attempted to salve its conscience by exempting from tax all those foodstuffs that are included in the basic wage regimen. The C series index includes basic foodstuffs such as flour, bread, sugar, jam, dried fruits, butter, shortenings, cheese, meats, and certain other miscellaneous items; but what the Government loses on the swings it picks up on the roundabouts because the sales tax is payable on cakes and pastry and other prepared foods which consist largely or entirely of the exempted ingredients. Cakes are made from butter, sugar, milk, flour and fruit. All those items individually are exempted from the sales tax, but when they are compounded in a cake or a pudding they are taxed at the rate of 12£ per cent. The same rate of tax is payable on biscuits which also consists of flour, sugar, fruit, cream and other similar ingredients. How can the Government justify exempting those items individually from tax but imposing tax upon the products that are made from them? The anomaly is even more glaring in the case of ice cream, which is in the 20 per cent, classification. Is it any wonder that the balance-sheets of ice cream manufacturers are reflecting a loss of trade in the past twelve months ? Perhaps the Government considers the manufacture of ice cream to be a luxury industry, but I believe it to be an essential industry. Ice cream has a high food value and it is part of the daily diet of most Australians. The Government would do well to revise its sales tax legislation thoroughly. The removal of the 12£ per cent, sales tax on the items to which I have referred would place more spending power in the hands of the people. This, in turn, would do much to restore public confidence and help to stabilize prices. Honorable senators opposite tell us that the key to inflation is more production. Here is an opportunity to increase production. “With the elimination of the 12-J per cent, sales tax from the goods to which I have referred, the public demand for them would be stimulated and many Australian industries would be greatly assisted. Ultimately the result might well be a cessation of basic wage increases, and perhaps, even a reduction of the basic wage. The purchasing power of the people would be increased and value would be put back into the £1. For those reasons, I protest against the continuation of the present sales tax impositions.
– The dearth of Government speakers on this measure is understandable. Honorable senators opposite are probably just as disappointed about this measure ns we are and possibly the most disappointed of all is the Minister for National Development (Senator Spooner) who has absented himself from the chamber during this debate. Some very constructive suggestions have been advanced by Opposition speakers, and 1 have no doubt that more will be made before the debate has concluded; but the Minister is like Stalin. When he gives a command it must be carried out, regardless of what any one says. He will not listen to any alternative proposals. Senator Wood tried to make an apology on behalf of the Minister, but his effort was feeble indeed.
– I made no apology.
– The honorable senator claimed that the sales tax increases introduced last year had achieved their objective. If that is so, why ha3 this measly bill been brought before the Parliament 1 Why is the Government not abolishing all of last year’s legislation? The Government claims that the transitional stage has now been .reached. I agree with that ; but it is the transition of employment into unemployment. The high sales tax impositions closed numerous industries and forced a reduction of staffs in others. Unfortunately, many of the workers so “ disemployed “ have not been able to find work in other undertakings. We are in the transitional stage in which men are being transferred from productive work on to the unemployed list. Nothing could be more conducive to the breeding of communism than asking men to live on the dole. That is what the Government has achieved.
As Senator Critchley said, there is no more iniquitous imposition than the sales tax. I have always been opposed to it, and I shall continue to oppose it. Government supporters are boasting that this measure will reduce the number of sales tax classifications from six to four. The remaining four are the 12£ per cent. rate,, the 20 per cent, rate, the 33^ per cent, rate, and the 50 per cent. rate. The imposition of sales tax at the rate of 50 per cent, means that the purchaser of £100 worth of goods has to pay £150 for them. The only direct benefit from this transaction is that gained by the Government; but the Government also loses in an indirect way. Its increase of revenue is offset by the increased dole payments that it must make to the unemployed. Let us go a little further and see how the Government has changed its mind about the advice that we gave it last year, but which it rejected. It now admits that we were right. The Minister does not like us to remind him that the advice we gave the Government last year was good advice, and he has left the chamber. The Minister, in his second-reading speech on this bill, said -
The tax on sporting goods . . . and on wireless receiving sets is being reduced to 20 per cent, from the present rate of 33$ per cent.
Thus, sporting bodies and clubs which cater for the training of our youths in physical fitness and render a signal service to the community by keeping young lads away from hotel bars, will still have to pay £120 for £100 worth of sporting equipment. It is difficult to understand why the Government should impose such a high rate of- tax on sporting goods at a time when it is spending hundreds of thousands of pounds on a physical fitness campaign much of which is used for the placing of little boys in military uniforms. Not long ago I saw a little boy in uniform carrying a rifle. He was so small that when he placed the butt of the rifle on the ground its muzzle was 18 inches above his head. I do not know to what branch of the Army these boys belong. Probably they form the reserve militia about which the Government so proudly boasts. Most of them appear to be only eleven or twelve years of age. The Government spends tens of thousands of pounds in putting them in uniforms and paying army officers to train them in camps as part of its physical fitness campaign, yet it imposes sales tax on sporting goods at the exceedingly high rate of 20 per cent. If it is really interested in promoting physical fitness in the youth of this country let it encourage sporting clubs and bodies by abolishing the sales tax on sporting goods. We shall not develop the youths of Australia into vigorous and healthy men by instilling in them the principles of militarism.
– What would the honorable senator do? Would he teach them to turn somersaults?
– If the honorable senator will remain silent for a few minutes I shall demonstrate how the Government of which he is a staunch supporter turned a complete somersault in the last twelve months. The Minister in introducing the bill also said -
Provision is also made for the reduction of the rates of tax on certain other goods with the object of removing anomalies. For instance, the present tax on trays is 66§ per cent. It has been demonstrated that, for the most part, this classification covers inexpensive articles of every-day use, which, as such, are not suitable for inclusion in the .high-rate bracket. It is proposed, therefore, to reduce to 12 $ per cent, the rate of tax payable in respect of trays . . .
asked whether I would teach the children of Australia to turn somersaults. The decision of the Government to reduce the sales tax on trays was a complete somersault. Twelve months ago when we advised it that these articles were in every-day use in the average home, it refused to reduce the outrageously high rate of tax imposed on them. The Minister then regarded trays as luxuries. Senator Kendall referred to somersaults; surely the Government’s decision to reduce the tax on trays from 66f per cent, to 12.§ per cent, is a noteworthy achievement in somersaults - fortunately for the people in the right direction.
-t- Trays were regarded as luxuries twelve months ago.
– If they are now regarded as essential items in the average home they were equally as essential twelve months ago. The Minister also said in bis second-reading speech -
There has been criticism in the past of the fact that shopping bags made of paper or string bear the same high rate of tax as do other bags. As these are inexpensive goods of a purely utilitarian character, the tax thereon is being reduced from 384 per cent, to the general rate of 12^ .per cent.
Shopping bags were also described by the Opposition twelve months ago as essential to the wife of the basic wage worker. Here again the Government has made a complete somersault and now admits that we were right.
A great deal has been said by Government supporters about the manner -in which the Government is assisting to increase agricultural production by granting concessions to primary producers. Other Opposition senators have shown how the Government has failed to increase the labour available for agricultural production by the depression of so-called non-essential industries. Dealing with the imposition of sales tax on the requirements of the farmers, the Minister said -
Strong claims for relief from tax on goode for the use of agricultural societies have been made from time to time. There has hitherto been a limited exemption of certain specified kinds of printed matter for their use.
Of printed matter ! Apparently the Minister referred to exemption of circulars sent to members of agricultural organizations. The Government has made no reduction of the tax on spare parts for agricultural machinery. If it wished to do something concrete to assist the primary producers it would abolish the tax on spare parts for agricultural machinery. It has already removed the tax from certain classes of agricultural machinery. Why, then, should it continue to impose sales tax on spare parts for such machinery? Some time ago I presented to the Minister a case for th« remission of sales tax on a machine used by a farmer in connexion with food production. The machine was not a tractor, but a power saw for the sawing up of felled timber. The Minister said that he would consider my representations when the budget was under consideration, but he did nothing about it. The farmer had to pay the full rate of tax, not only on the machine, but also on spare parts required for its maintenance. If the Government sincerely desire to assist primary producers and increase agricultural production it should abolish the tax on motor vehicles used for the cartage of agricultural products.
-What about the special tax imposed by the Tasmanian Government on trucks?’
– If the honorable senator had to pay a tax for every stupid interjection he- makes in this chamber we should soon- get rid of him.
– There was nothing stupid in my interjection.
– Nor is there any thing stupid in my suggestion that the Government should abolish the tax on motor vehicles which is crippling industry and keeping men out of production. By its policy the Government is breeding discontent among the people. If it desires to breed communism in Australia let it continue to impose- heavy taxes, including sales tax, in combination with its credit-restriction policy. Already, that policy has resulted in the establishment of a pool of unemployed persons which the Minister ‘ admits already numbers no fewer than 4.0,000. If the Government wishes to foster communism; in Australia let it continue to allow new Australians to compete for joh* with Australian born citizens. If it. sincerely desires to promote the- welfare of Australia, let it give effect to -a policy of full employment and reduce or abolish she sales tax imposed on- the essential requirements of the people. Already, as Senator Ryan has pointed out,, the incomes. of the people are greatly reduced as a, result of constantly rising prices, and the community will reap little- or no benefit from, the miserable concessions embodied, in this bill.
When the Treasurer announced these sales tax concessions in hia budget speech the people, expected that the benefit of the concessions wo-nlcS be passed on tothem immediately, but they have been gravely disappointed. They will not obtain the’ benefit of them until the State prices authorities’ force . retailers’, to make a ppropriate price reductions in. the commodities concerned. When the Treasurer presented, the budget retailers put their heads together and said, “We shall not make price reductions in respect- of goods subject to sales tax concessions until we a.re forced to do so by the prices authorities”. When the staffs of some of “the big retailers in Melbourne were busily engaged in computing new prices following the announcement of sales tax reductions their bosses said, “ Prices will remain unaltered until the prices authorities force us to reduce them “. On the day following that upon which the budget was introduced retailers in. Melbourne held a meeting, and before 11.30 a.m. they agreed that prices would! be left unaltered until the- pricesauthorities forced them to make appropriate reductions. The prices authoritiesha,ve not. yet had an opportunity to makeappropriate price reductions. Although the rates of sales, tax om hundreds of items have been reduced, they are still getting this extra rake off. The Government would have great, difficulty in restoring to the £1 its value as at the date that Labour relinquished office, but further reductions of the rates of sales tax would at, least assist to restore some of the value that has gone out of our currency since this Government came into office.
.- -The leaders of the Government parties failed to. honour the promises that they made during the 1949 and* 1951 general election campaigns to reduce taxation if they were returned to office. As’ a result of the proposals contained in the bill, the Government expects to receive £6,000,000 less in sales tax in a full year, and £5,200,000 less in the- current financial year than during the last financial’ year. Senator Laught stated that the representatives- of district councilsin South Australia are pleased that the rate of sales tax on some commodities that, they use extensively has been reduced! and in some instances exempted! from sales tax. He made no reference; to the fact that in 1949; and again in 1951, the Government parties promised allround reductions of taxation. I have never believed in the principle of sales taxation. At limes, governments are compelled to make imposts against their wilh
The present Government came to office at the end of 1945. In 19.49-50 the revenue from sales tax, at the rates that were imposed- by the former Labour Government, was £42,420,000. That amount? of revenue did not include arrears of £200,000. As the same rates of sales tax were applied in 1950-51, increased revenue of £14,750,000 was derived from this source. As that was not sufficient, the Government brought down its “ horror budget “ last year, and increased the general rate of sales tax from 8$ per cent, to 12-J per cent. In addition, it applied sales tax at rates of from 20 per cent, to 663 per cent, on various categories of goods. The effect of that tremendous increase was to force some industries out of production. In 1950-51 revenue of £57,173,101 was obtained from sales tax. Under the “ horror budget “ of last year £95,450,000 was derived from this source, which wa3 an increase of approximately £38,280,000 over the receipts during the previous financial year. By its present proposals, the Government expects to collect sales tax of £88,000,000 during this financial year, which will be about £30,830,000 greater than was the revenue from sales tax in 1950-51. As a result of its tremendous increases of the rate of sales tax, by the end of the present financial year this Government will have collected about £98,600,000 more, from this source than if the rates of sales tax had remained at the levels that were in existence when it came to office and for the whole period that they have had control the total increase in sales tax collections amounts to £113,360,000. Yet the Government has the temerity to claim that it has assisted the primary producers by reducing the rate of sales tax on some of the commodities that they need from 66f per cent, to 50 per cent. ! Is it any wonder that honorable senators opposite are not prepared to defend the Government’s policy?
The Minister for National Development (Senator Spooner) stated in his second-reading speech -
As current conditions differ from those which obtained twelve months ago, reduction of sales tax on some classes of goods is desirable.
He made no reference to the Government’s repeated promises to reduce taxation. The Government has admitted that there is a certain amount of disemployment in industry. That is only another name for unemployment, much of which has been brought about by excessive sales tax. Doubtless, supporters of the Government now realize that they made an error when they promised the people that they would reduce taxation. They have made an even greater error by collecting approximately £114,000,000 more in sales tax than would have been the case had they continued to impose sales taxation at the 1949-50 rates. The honorable thing for supporters of the Government to do would be to admit frankly that they are unable to honour the promises that they made to the people, and, at the first opportunity, seek the people’s endorsement of a change of policy. The Government parties perpetrated a huge confidence trick on the people in the first place, by promising reductions of sales tax. Although the estimated loss of revenue will amount to approximately £5,200,000 during this financial year, the yield will be about £30,000,000 more than was the revenue from sales tax two years ago. Honorable senators opposite should realize that the people of this country would welcome a change of government. A government which does not keep its promises cannot continue in office for very long.
This is a taxation proposal which the Government kept behind the scenes during the general election campaign of 1949. This Government believes in a pool of unemployed. It believes that the workers can be disciplined only by having others ready to take their jobs. This is one of the methods whereby the Government is closing certain industries so that the men who lose their positions in them will have to compete for work in other industries. I think the AttorneyGeneral (Senator Spicer) himself said only a month ago that the government was filling 31,000 positions a week so that there was a continual pool of unemployed, although it did not continually consist of the same men. The sales tax has helped to create that pool. Since that information was given in this chamber further. statistics have been produced which show that an additional 19,000 people have lost their employment. Do honorable senators suppose that the additional £30,000,000 that the Government will collect this year by means of this iniquitous sales tax will help to get. these people back to work ? No ! The tax is deliberately designed to put people out of work so that they will be con.tinually competing one against the other
The Government’s object is to discipline the workers so as to achieve more production. The sales tax has never produced anything but it has retarded production. Yet honorable senators opposite have said that there has been an increase in the production of given lines. Every one of those lines has been increased in price because the sales tax has been increased. Consequently, people have not been able to buy them and the reduction in demand has thrown more people out of work. The Government believes in creating that state of affairs. That is why it has proposed such vicious’ rates of sales tax. I hope in the very near future to be able to say something in connexion with this matter during, the debate on other bills. I again remind the Government that it made a promise when it was seeking the suffrage of the people in 1949. It repeated that promise in 1951. It said that it would reduce taxation. It has reduced taxation this year by £6,000,000, but as it increased taxation by £38,000,000 last year it is still responsible for an increase in taxation of £30,000,000 this year.
Senator PEARSON (South Australia) 1 9.51]. - I had no intention to take part in this debate until I listened to Senator Aylett. I do not know whether he was not aware of the facts of the case or whether he set out to mislead the Senate. I prefer to think that the former was the case. He said that the Government had seen fit to exempt certain agricultural machinery from sales tax and wanted to know why it proposed to continue the tax on the spare parts for that machinery. Since the honorable senator addressed the chamber I have made a few inquiries on this matter. His statement that the Government proposes to levy sales tax on spare parts for agricultural machinery is quite without foundation. [ flatly deny his allegations in this respect. The honorable senator accused the Minister for National Development (Senator Spooner) of running away from certain criticism which he desired to offer because the Minister was absent from the chamber when the honorable senator spoke. I notice that the honor able senator himself is now absent from the chamber.
I have before me the list of items in the first schedule to the Sales Tax (Exemptions and Classifications) Act, which includes a long list of farming implements which are exempt from sales tax. In every case, the parts for these implements are also exempt. As a result of inquiries that I have made, I have found that if a person wishes to replace a part of machinery that he has had for a few years his purchase is exempt from sales tax. I defy Senator Aylett to show that I am wrong in making that statement. As a supporter of the Government I do not mind well-founded criticism but it is just as well that criticism should be based on facts. As Senator Aylett has now come into the chamber I repeat that bis criticism in regard to spare parts for agricultural machinery is entirely without foundation.
– Senator Pearson should check the Minister’s reply to questions on this subject.
– I have taken the trouble to check these facts and believe that what I have said is correct.
– I have listened with very real interest to most of the speeches that have been made in the Senate on this subject. I think that they were marked by the saving grace of brevity. The viewpoint of the Opposition has really been adequately expressed, and I merely wish to emphasize one or two points. I move -
That all words after “ bill “ be left out with a view to insert in lieu thereof the following words: - “should be redrafted so as to provide for further reductions of the burden of the sales tax proposed to be retained, with a view to increasing employment and lessening unemployment in the trades and industries directly affected by the incidence of the tax.”.
Senator O’Flaherty pointedly referred to promises that had been made by the parties which now form the Government as long ago as December, 1949, and as recently as April, 1951. I find it to be my very heavy duty to remind honorable senators on the Government side of the chamber from time to time of the exact terms of the promises that were made by the Government. On page 15 of the policy speech of the Treasurer (Sir Arthur Fadden) the following statement appears : -
If the Socialists are defeated, therefore, rates of taxation, both direct and indirect, can and will be steadily reduced. In. short, our policy is a progressive reduction of taxation on individuals and the community in general, -commensurate with nacional economic and financial policy.
Those words constitute a completely unqualified promise to reduce rates of taxation, hoth direct and indirect. The degree or quantum of that reduction is to he limited only by the nature of the national economy and financial policy. A clear and specific promise was made to the people of Australia that indirect taxation would be reduced. The Treasurer did not stand alone. The Prime Minister (Mr. Menzies), in making the policy speech of the Government parties said -
A resolute reduction in the burden of government and, with it, in the rates of tax will mean reduced costs of production. We will attack all these problems with vigour and imagination.
It appears that the Government’ has attacked the problems with imagination but with very little vigour. Let me quote the reaffirmation of these clear and specific promises which were understood by the people to mean what they said. In April, 1951, almost in the first sentence of the Prime Minister’s policy speech, he said -
This is not the occasion for a new policy. What we ask for is a fair chance to carry out our existing policy; in the sound Australian phrase, a “ fair go “.
In October, 1951, six months after that promise was solemnly repeated to the people, the maximum rate of sales tax was lifted from 25 per cent, to 66$ per cent. When the Minister for National Development (Senator Spooner) replies to this debate I invite him to be good enough to reply to this criticism of the Government’s failure to fulfill its promises. I should like him to explain, if, he can, what happened to cause those promises to be broken, and their exact opposite put into effect. In the immediate post-war years, under the Chifley Government, there” were five separate reductions both of income tax and of sales tax. Remissions of tax, both direct and indirect, amounted to £280,000,000 in the last year that Labour was in office, and the £1 then had a value long since forgotten. We now come to the record of the present Government, which is the Government that promised to reduce taxation. .Since it took office, it has increased taxation by more than £^00,000,000 a year. I think that the Government, if it has any sense of responsibility, should tell the Senate, and through “it the people, why its promises have been so shamefully disregarded.
Let us consider for a moment sales tax increases in recent years. In 1948-49, which was the last full year of Labour government, sales tax receipts amounted to £39,000,000. In 1949-50, during which Labour and anti-Labour governments were in office for almost equal periods, sales tax receipts totalled £42,000,000. In 1950-51, the first full year of office of the Menzies Government, sales tax receipt.* increased to £58,000,000. Last year the yield from sales tax increased to £95,000,000, and for the current financial year, during which the much talked of reductions amounting to £5,200,000 are to take effect, it is expected that receipts will total £88,000,000, which is more than twice the amount collected in the year when this Government took office.
The Government has not yet learned from its experience of last year. In that “ horror budget “, the minimum rate of sales tax was increased from 8-J per cent, to 12^ per cent, and the maximum rate was increased from 25 per cent, to 66$ per cent. It was estimated that the sales tax in that year would yield £117,000,000. but the actual yield was only £95,000,000. The reason, of course, is that people declined to buy. The outrageously high sales tax rates not only checked purchaser demand, but also, as a consequence, checked production. Nevertheless, the Government is optimistically working on the same premises which proved false last year. It has made a paltry remission of £5,200,000, and hopes in this year of grace to collect £88,000,000, which works out at more than £11 a head over the entire population, including men, women and children down to the youngest babe. On the basis of taxpayers alone, this year’s sales tax collections will amount to nearly £30 a head.
Every one recognizes that we are still in the midst of raging cost inflation; yet the Government, by imposing a tax which goes into the cost structure, and must, therefore, he added to the price of every article, is adding fuel to the fires of inflation. Motor vehicles of various kinds are needed by primary producers, and on every truck that is sold sales tax amounting to £200 or £250 is levied. The effect is cumulative. Prices reach a point at which the public refuses to buy, .and at that point inflation leads to unemployment. It is not enough for the Government to pick out a certain industry, classify it as non-essential, and to impose sales tax on its products at the rate of 66$ per cent. When that industry ceases to manufacture., and employees are spilled onto the labour market where they may be absorbed by supposedly more desirable industries, that is not the end of the matter. The position would not be so bad if the effects of the Government’s policy were felt only by industries which every one agreed were not essential, but the plain fact is that in any community industry is interlocking. When one industry is restricted or extinguished, all those other industries which have been supplying it with services and raw materials are also affected. Thus, when the Government imposed sales tax at the rate of 66$ per cent, on the products of certain industries it did more than it bargained for. Its action has proved to be one of the factors that led to the unemployment which is now causing, so much concern in Australia.
It is the Government’s avowed policy to use sales taxation as a weapon to restrict or wipe out what it describes as non-essential industries,, but I should like some one on behalf of the Government to define what is meant by a nonessential industry, and what is meant by a less-essential industry. For instance, does the Government regard the motor trade as essential or less essential or non-essential? Apparently, it must regard the industry as essential because, through the Capital Issues Board, the Government has approved the application of one company to raise £5,000,000 in order to duplicate its plant, and that during a period of inflation. The reason advanced is that the motor industry is vital to defence. It is not only vital to defence; it is also vital to production. People in the big mainland cities of Melbourne and Sydney would starve if motor transport were suspended, because the community has become dependent, even for its domestic arrangement, on motor transport. Are we to conclude, therefore, that the sales tax rate of 20 per cent, on motor vehicles is designed to restrict activity in the motor industry, an industry which the Government itself acknowledges to be vital to defence, and which every one who thinks will acknowledge to be vital to -production, both primary and secondary?
The tragedy is that the Government itself was responsible for bringing into existence many of the industries which it now says should be restricted or put out of existence. The Government did not repeal the capital issues regulation.. Indeed, all applications were automatically granted, and during the first full year that it was in office capital raisings and borrowings increased from £50,000,000 to £150,000,000. Industries that had been, kept down while capital issues control operated, were free to expand and to manufacture all kinds of luxury goods. Those industries,, which were established, as one might say, by this Government were a few months later attacked by the same Government through the medium of heavy discriminatory taxation.
– It was a curious way to establish industries - simply to remove restrictions.
– The Government certainly encouraged such industries, and then, a few months later, tried to wipe them out. I invite the Government to say what items or industries” it classifies .as essential or lessessential. Some of my colleagues have referred to the jewellery and electroplating industries and have pointed’ out how important they are to defence because the persons employed in them have the training necessary to make optical instruments, yet those industries are now being crushed. The same applies to the motor industry. Statistics show that registrations of new motor vehicles declined this year by 50 per cent. The secretary of the Automotive Chamber of
Commerce said only a fortnight ago that the decline was due, among other things, to the heavy sales tax on motor vehicles. The failure of the Government to halt inflation during the first two years of its existence is largely responsible for our economic difficulties. Had prices been kept down the Government would not need so much revenue. State governments would not be in their present financial straights if prices had been stabilized, and if the Government had made even a pretence of putting value back into the £1. Even now, despite the Government’s broken promises, the people would be grateful if it could even stabilize costs at their present level. If the Government could only do that, public confidence would return. As things are, businessmen cannot see where they are going, and they cannot plan ahead. The present feeling of hopelessness is bad for business, and bad for the country as a whole.
– Your Mr. Monk recently made a very optimistic statement to the Commonwealth Court of Conciliation and Arbitration.
– Mr. Monk is a very optimistic gentleman. I am delighted that the honorable senator has referred to him as “ my “ Mr. Monk, because he is a. very good friend of mine and I have great respect for his opinions. However, when I recently surveyed the economic position of Australia in the course of a speech in the Senate I found myself in agreement with the Treasurer who, as recently as May last, told the State Premiers that the outlook was gloomy. If Australian business men to-day have an apprehensive and uncertain outlook, at least they will be in accord with the Treasurer. Any one who seeks the cause of their apprehension and uncertainty will blame the Treasurer and his associates.
I have listened to-day to an honorable senator opposite begging the Government to reconsider the inclusion of various items in the sales tax schedules.
– Not begging.
– Seeking reconsideration, then. J have heard similar requests also being made from this side of the chamber. The motion that I have moved should have the support of all honorable senators who seek such reconsideration. If they are in real earnest, they will have an opportunity to vote for the motion. I assure them that they will not lack support from this side of the chamber.
– I second the amendment.
– One of the many directions in which I lack political experience is that I have never had the opportunity to be in. Opposition.
– We shall curt that!
– I look forward to the time when I can enter that, sphere of glorious irresponsibility. I also look forward with pleasure to the day when I can stand in my place, as the Leader of the Opposition (Senator McKenna) hasstood in his place to-night, and with complete abandon lay on one side all theresponsibilities of government and plan a Utopian state as only members of theOpposition can. I prognosticate that that day will come round about 1985, when thehonorable senator and I are gay and sprightly young men of 80 to 90 years of age. I shall then put to him points similar to those he has raised to-night. Although he will then have the weight of office on his shoulders, I have no doubt that he will still be full of youth and vigour and will reply just as effectively as I now hope to reply to him.
The plain position is that the Government has reduced sales tax and would like to reduce it still further. The difference between honorable senators on this sideof the chamber and honorable senators opposite is that we have the responsibility of government. We have to do what is best in the circumstances, in our judgment.
– That is what we were trying to do in 1949.
– It is futile for honorable senators opposite continually torefer to what they did or would like to do. We must face the facts. The position to-day is infinitely different from that of 1949. For instance, the present Government believes that it is necessary to expend £200,000,000 for defence purposes during the current financial year. It is obliged to contend with an economy which has been undermined by eight years of socialist government. It has also to contend with economic conditions which, whilst it would be unfair to say that the economic conditions with which it has to contend flow directly from Labour administration, because they are world wide, those conditions were largely contributed to by the maladministration of the previous Government.
It is all very well for the Leader of the Opposition to criticize the Government. The debate on this bill gives the honorable senator a great opportunity to do so. But let us examine his remarks. He claimed that the Government had done nothing about inflation. With the next breath he stated that the Government has done too much about inflation. He believes that we have not done the things which we ought to have done, and apparently he also believes that the things which we have done are responsible for the present economic position. I suggest that the honorable senator cannot have it both ways. I suspect that honorable senators opposite have the uncomfortable feeling that what the Government has done it has done wisely and well, and that the nation is now benefiting from its actions. There is not the slightest doubt that, by and large, our economy is in an infinitely stronger position to-day than it was one year or even two years ago. Honorable senators opposite should be glad that that is so, instead of being critical of the fact.
– What about the economy of the unemployed?
– I have heard a great deal about the economy of the unemployed. I suppose the Opposition must have a theme song and that it must also find a way in which to undermine the Government. However, in my experience the Australian people are not fools. If the Opposition cries “ wolf “ it will have to produce the wolf. It is perhaps somewhat unfortunate for honorable senators opposite, but it is nevertheless true, that for all practical purposes there is no great degree of unemployment in Australia to-day. The number of unemployed is substantially smaller than it -was when Labour was in office. If honorable senators opposite are endeavouring to create nervousness in the community, they are doing a great disservice to the country. I believe that it is not altogether unfair to say that those who continually speak about unemployment desire in their hearts to see employment reduced for their own purposes. Although these remarks are somewhat divorced from the subject of sales tax, it is necessary that the arguments put up by the Opposition should be followed through. Those who lack confidence, not only in the long term, but also in the short term future of Australia, will be proved entirely wrong. Other countries of the world have no lack of confidence in Australia, as is evidenced by the manner in which they are establishing industries and investing their capital here. During the last fifteen months, American businesses have committed themselves to the expenditure of not less than £45,000,000 on industrial projects in this country, whilst British concerns have committed themselves to an amount somewhat in execess of that figure. I submit that if we are to decry Australia and the advantages that it offers, we shall not do ourselves justice.
During this debate honorable senators opposite seem to have overlooked the f actthat this bill proposes to reduce sales tax. The Government recently introduced its third budget. In our first budget we made some reductions of taxes. In our second budget taxes were substantially increased for the purpose of preserving and strengthening the economic structure of the country, a purpose which seemed to us to be good. We increased taxation and budgeted for a surplus. By doing so, we protected the public works programmes of the States. Had we not provided the money that we obtained from increased taxes for the public works of the States, there might well have been no public works programme. The strength of that budget is therefore being reflected in the position that exists to-day.
-PlUS unemployment.
– The -wish is father to the thought. As I have said, those who continually cry “ unemployment “ want unemployment.
– It is a fact, not a wish.
– It is not a fact. It is a wish or a hope. The bill before the Senate aims to reduce sales tax and to simplify its operation by reducing the number of categories from six to four. In addition, it proposes to remove some of the anomalies that exist in the present sales tax legislation.
Debate interrupted.
page 1439
– Order ! In conformity 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.
page 1439
The following papers were presented : -
Audit Act - Finance - Treasurer’s Statement of Receipts and Expenditure for year 1951 -52, accompanied by the Report of the Auditor-General. lands Acquisition Act - Land acquired for -
Defence purposes - Bulimba, Queensland.
Department of the Interior purposes -
Port Fed land, Western Australia.
Postal purposes -
Burrandana, New Smith Wales.
Hanwood, New South Wales.
Varrabandai, New South Wales.
National Debt Sinking Fund Act - National
Debt Commission - Twenty-ninth Annual
Report for year 1051-52.
Papua and New Guinea Act - Ordinances- 1951-
No. 40 - Instruments (New Guinea).
No. 41 - Companies (New Guinea).
No. 42 - Companies (Papua).
No. 44- Stamp Duties. No. 45 - Animals and Birds Protection.
No. 46 - Commerce (Trade Descrip tions).
No. 47 - Foreign Judgments (Reciprocal Enforcement).
No. 48 - Motor Vehicles Insurance.
No. 60 - Appropriation (No. 2) 1950-51.
No. 51 - Appropriation 1951-62.
No. 52 - Supply (No. 1) 1952-53.
No. 53 - Auctioneers.
No. 54 - Customs Tariff (Papua).
No. 55 - Customs Tariff (New Guinea).
No. 56 - Exports (Control of Proceeds)
No.57-Criminal Code Amendment (Papua).
No. 53 - Criminal Code Amendment (New Guinea).
No. 69 - Customs (Cocoa Export) Tariff
Public Service Act- Appointments - Department of Defence Production - A. A. Anderson, R. B. Rogers.
Senate adjourned at 10.30 p.m.
Cite as: Australia, Senate, Debates, 16 September 1952, viewed 22 October 2017, <http://historichansard.net/senate/1952/19520916_senate_20_218/>.