Senate
20 October 1953

20th Parliament · 1st Session



The President (Senator the Eon. A. M. McMullin) took the chair at 3.30 p.m., and read prayers.

page 661

QUESTION

URANIUM

Senator McKENNA:
TASMANIA

– “Will the Minister representing the Minister for Supply inform the Senate, whether it is a fact that Great Britain . and the United States of America are paying. to Australia 16s. 3d. per unit of uranium as against the price of 30s. per unit paid to Canada ? Has the Minister seen a report from London to that effect in to-day’s press?

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– I shall be very pleased to direct the attention of the Minister for Supply to the question that has been asked by the Leader of. the Opposition, and - endeavour to obtain a reply for him as early as possible.

Senator ASHLEY:
NEW SOUTH WALES

– Has the attention of the Minister for Trade and Customs been drawn to the announcement in to-day’s press that Great Britain and America are paying Australia 16s. 3d. a unit for uranium compared with the world price of 30s. a unit?

Senator O’SULLIVAN:
Minister for Trade and Customs · QUEENSLAND · LP

– That has already been asked by the Leader of the Opposition.

Senator ASHLEY:

– I am seeking further information. Is it true that a source which is claimed to be close to the British Cabinet has said that the Australian Prime. Minister is pressing vigorously for a higher price? How does the Government reconcile that statement with answers that have been given in the Senate and in the House of Representatives affirming that Australia is receiving a fair price for uranium ? Is it a fact that the policy of maintaining silence about .the price of uranium was adopted not for security reasons, but solely to avoid embarrassment and condemnation - as the result of the low price that is being obtained for uranium under the contract entered into by the Menzies Government?

Senator O’SULLIVAN:

– I have not seen the newspaper report to which the honorable senator refers.

Senator SCOTT:
WESTERN AUSTRALIA

– In view of the importance of uranium as a source of power in the future, will the Minister for National Development inform the Senate whether a survey has been undertaken of the large deposits of rare minerals in Western Australia, with a view to the discovery of uranium in that State? If not, when does the Government intend to arrange for such a survey to be carried out? : Senator SPOONER.- The Australian Atomic Energy Commission has requested the State governments to proceed with prospecting for uranium .deposits. It offered to make available assistance to the States, and that assistance will be provided by the Bureau of Mineral Resources in my department. At present we have only one aircraft equipped to undertake the search for uranium, but the bureau is in. the process of obtaining another suitably equipped aircraft, which will enable tho search to proceed more quickly.

page 662

QUESTION

COPPER

Senator GUY:
TASMANIA

– Will the Minister for Trade and Customs inform the Senate whether there is any foundation for the published statement that it is expected that the Australian Government will make an early announcement of a plan to sustain the economic stability of the important Australian copper mines, which are working on low-grade ores? If so, when does the Minister expect that the statement will be made ?

Senator O’SULLIVAN:
LP

– I am aware that some discussions in connexion with copper mining in Australia have taken place between interested Ministers. I understand that the Prices Ministers of the States mct recently, and that a statement was made by them, but I am not aware of any statement proposed to be made on behalf of the Australian Government.

page 662

QUESTION

BASIC WAGE

Senator SANDFORD:
VICTORIA

– In view of the recently published report that the cost of living has increased by an’ average of 3s. a week, will the Minister representing the Minister for Labour and National Service inform the Senate whether the Government intends to take any action to see that employees under federal awards shall not suffer injustice as a result of the stated intention of the Commonwealth Arbitration Court recently to freeze quarterly adjustments of the basic wage?

Senator SPICER:
Attorney-General · VICTORIA · LP

– I should have thought that it would be obvious to the honorable senator by this time - at least it should be - that this Government, unlike some of the State Labour governments in this country, stands unequivocably by the system of arbitration. The decision of the Commonwealth Arbitration Court in relation to this matter was made in a case after a very long hearing, during which both sides placed voluminous evidence before the court. The order of the court was to the effect that the provision for quarterly adjustment should be eliminated from certain awards. I should have thought that it was in both the public interest and the interests of the trade unions, that the system of arbitration should be upheld by all of us.

Senator COOKE:
WESTERN AUSTRALIA

– Will the AttorneyGeneral inform the Senate whether any application has been made to the Commonwealth Arbitration Court in connexion with the cessation of the quarterly adjustment of the basic wage ? Did the court give notice to either employers or employees that it desired evidence in relation to these adjustments which serve to counteract inflation ?

Senator SPICER:

– The alteration that the court made in awards in relation to the basic wage was made after the hearing of a log of claims which had been filed by the employers and to which certain employees were respondents. I think that the case extended over almost twelve months. The request for the suspension of adjustments to the basic wage was one of the applications which the employers made to the court in association with other applications including applications for the reduction of the basic wage and an increase in standard working hours. It was the one application which was granted by the court after it had heard all the evidence.

page 663

QUESTION

CHINA

Senator GORTON:
VICTORIA

– Has the Minister representing the Minister acting for the Minister for External Affairs seen a statement relative to the recognition of the Communist government of red China, published in the Sydney Morning Herald to-day, and purporting to have been made by Mr. C. W. Anderson, of New South “Wales. Is it a fact, as that statement alleges, that the present Australian Government is committed to recognize the government of red China? Is it a fact that Mr. Nixon, the Vice-President of the United States of America, is visiting Australia partly to persuade the Australian Government not to recognize red China?

Senator SPICER:
LP

– The honorable senator was good enough to indicate to me that he proposed to ask this question. I have seen the report and I have directed the attention of the Minister acting for the Minister for External Affairs to it. He has supplied the following reply: -

The Australian Government is not permitted to recognize Communist China and a number of statements to that affect have been made by the Prime Minister and the Minister for External Affairs. For example in the communique issued at the end of the second Anzus Council meeting on the 10th September the Minister for External Affairs (Mr. Casey), the United States Secretary of State, Mr. Dulles, and the New Zealand Minister for External Affairs, Mr. Webb stated; “Each Minister expressed the view of his Government that in present circumstances, no question of the recognition of Communist China or of the admission of its representatives to the United Nations would be entertained “. It is quite untrue to suggest that Mr. Nixon’s visit to Australia is in any way connected with the recognition of Communist China. It is part of a tour of a number of countries and the Australian Government has been very pleased to welcome Mr. Nixon here because of the opportunity that it affords for the Vice President of the United States to see Australia and to meet leading members of the Government and of the community.

page 663

QUESTION

LIGHTHOUSES

Senator AYLETT:
TASMANIA

– I preface a question to the Minister for Shipping and Transport by stating that recently several cases of sickness which might have been fatal occurred among the staffs of lighthouses established around the coastline of Australia and that rough weather hampered the work of rendering assistance to them. “Will the Minister consider the provision of helicopters under the supervision of Aero Clubs or the Department of Civil Aviation so that assistance may be given to the staffs of lighthouses in the event of sickness or other emergency? “Will the Minister consider also weekly mail services by helicopter to the lighthouses ?

Senator McLEAY:
Minister for Shipping and Transport · SOUTH AUSTRALIA · LP

– I shall have the matter examined and furnish a detailed reply to the honorable senator as soon as possible.

page 663

QUESTION

PRIMARY PRODUCTION

Senator MAHER:
QUEENSLAND

-Will the Minister for National Development inform the Senate whether any officer on the payroll of the Division of Industrial Development or any other division of the Department of National Development, or any person outside the official staff, has ever been employed to visit grazing properties in search of information affecting pastoral production or for any other purpose? How many persons were so engaged? If so, in what Australian States were they engaged and over what period of time were they occupied in the collation of the information that they sought ?

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– Such an inquiry was made by officers of my department. I believe that the full details are contained in a published report which is available to the honorable Senator. It should supply the answer that he seeks. I believe that I am correct in stating that the costs of that inquiry and an investigation that is now proceeding are being paid from the “Wool Use Promotion Fund at the specific request of the wool industry.

page 663

QUESTION

HEALTH AND MEDICAL SERVICES

Senator ROBERTSON:
WESTERN AUSTRALIA

– I desire to ask the Minister representing the Minister for Health whether the Minister for Health has reached any decision in relation to my suggestion that persons in receipt of superannuation benefits should be included in the free medical benefits scheme in the same way as age and invalid pensioners are covered.

Senator COOPER:
CP

– I have no information on that subject yet, but I shall let the honorable senator have a reply to her suggestion as quickly as possible.

page 664

QUESTION

SHIPPING

Senator SCOTT:

– In view of the fact that Western Australia is now suffering ari acute shortage of steel supplies and that the shipment of large quantities of steel has been delayed in the last month, will the Minister for Shipping and Transport state what action has been taken to promote the immediate shipment of this vital commodity to “Western Australia?

Senator McLEAY:
LP

– Honorable senators and various business organizations in Western Australia have drawn my attention to the unsatisfactory supply of steel for Western Australia. I have made arrangements with the management of the Australian Shipping Board to provide a special ship in an endeavour to get steel to Western Australia as quickly as possible. The only reason for the delay in shipment has been the continued industrial trouble at Newcastle which has caused considerable congestion. Ships are available but during the last month many hours have been lost because of the attitude of certain elements associated with the waterside workers. I hope that the ship to which I have referred is now on its way to Western Australia but I shall make inquiries and let the honorable senator know whether it has sailed.

page 664

QUESTION

RAIL TRANSPORT

Senator LAUGHT:
SOUTH AUSTRALIA

– Is the Minister for Shipping and Transport aware that some discussion has taken place in the press and in parliamentary and business circles in South Australia concerning a suggestion that the Government may close the narrow gauge railway from Brachina to Quorn when the new standard gauge line from Port Augusta to Brachina is opened Will the Minister state what the position will be in relation to this old established line when the new line is opened ?

Senator McLEAY:
LP

– My impression from discussions that have already taken place was that it had been proposed that the line should be kept open provided there was- sufficient business to warrant the running of a train at certain intervals. However, I shall have the matter examined and provide the honorable senator with an answer as soon as possible.

page 664

QUESTION

PAPER

Senator HENTY:
TASMANIA

– Is the Minister representing the Minister for Supply aware that first quality bank and bond papers are now manufactured in Tasmania? In view of this fact, is preference given to Tasmanian tenders for government requirements of printing paper ? If not, will the Government institute such a system of preference?

Senator COOPER:
CP

– I shall direct the attention of the Minister for Supply to the honorable senator’s question and obtain a reply as early as possible.

Senator O’SULLIVAN:
LP

– On the 18th October, Senator Wright asked the following question: -

Can the Minister for Trade and Customs inform the Senate of the stage reached by the Tariff Board in its inquiry concerning paper, and can he also indicate when the report of the board will be placed before the Parliament?

I now furnish the following answer to the honorable senator’s question: -

The Tariff Board has completed its public inquiry into the Australian paper industry and I am advised that the relevant report is in an advanced stage of preparation. The honorable senator may rest assured that when the board’s report is received I shall arrange for its tabling in Parliament at the earliest practicable opportunity.

page 664

QUESTION

CIVILIAN INTERNEES FUND

Senator KENDALL:
QUEENSLAND

– About two years ago the Civilian Internees Fund was established. It was intended originally that applications for payments from the fund should close on the 28th February, 1953, but as at that date, it was quite obvious that not all applications had been received, the time was extended to July. Can the Minister for Trade and Customs say when payments will be made from the fund ?

Senator O’SULLIVAN:
LP

– I have not the information sought by the honorable senator, but I shall endeavour to get it for him before the Senate rises.

page 665

QUESTION

COMMUNISM

Senator ANDERSON:
NEW SOUTH WALES

– Can the Minister for Trade and Customs inform the Senate whether it is a fact that the President of the United States of America, Mr. Eisenhower, has denounced the Communist regime in Poland because of its continued persecution of religious bodies and authorities, particularly Cardinal Wyszynski, who was the Primate of Poland and whose arrest and enforced retirement was brought about by the Polish Communist satellite government? Is it also a fact that this outright war on religion conducted by the Polish Communist regime is an attack on national traditions, of which religion has always been a vital part in every Englishspeaking nation, including Australia ? If these are facts, will the Minister inform the Senate whether the Government supports President Eisenhower’s strongly worded condemnation of such religious persecution ?

Senator O’SULLIVAN:
LP

– On several occasions I have seen reports of very strongly worded protests by President Eisenhower concerning the Communist attack on human freedoms, particularly religious freedom, in countries behind the Iron Curtain. I am sure that those protests are strongly supported not only by Christian people throughout the world, but also by all people of goodwill who still cherish respect for human freedom and decency. As far as I know, the matter has not been specifically discussed by this Government, but I am sure that every member of © the Government, and, in fact, the majority of Australians, regardless of politics or religion, would associate themselves with protests against the atheistic Communist war on freedom of thought and religion.

page 665

QUESTION

NATIONAL DEVELOPMENT

Senator MAHER:

– Can the Minister for National Development inform me whether, apart from the quarterly issue of the publication entitled National Development, any annual report covering all the activities of the Department of National Development and ‘ its subdepartments and/or divisions, has ever been submitted to the Parliament?

Senator SPOONER:
LP

– As far as I am aware, the department has done no more than is usual. I have no knowledge of any annual report made to the Parliament. The department submits its Estimates to the Parliament each year, and it is then open for honorable senators to inquire into those Estimates and to ask such questions concerning .them as they see fit.

page 665

QUESTION

VIRUS INFLUENZA

Senator COOPER:
CP

– On the 16th October, Senator Cooke asked the following question: -

Can the Minister representing the Minister for Health furnish the Senate with any information in connexion with a particular kind oi virus influenza known as sleeping influenza that is reported to be prevalent in New South Wales and other States? Has this kind of virus influenza been classified? Is it possible that through that medium a mild form of encephalitis is being introduced into Australia from Asian countries? Will the Minister have inquiries made by the Department of Health and inform the Senate what action has been taken to check the spread of that type of virus influenza?

The Minister for Health has now supplied the following information: -

The present influenza epidemic is characterized by intense headache and drowsiness, particularly in children. The virus isolated from such cases has been classified as type B influenza virus. The outbreak appears to have originated in Melbourne, as the World Health Organization has not recently reported cases of this type from other countries, including Asia. Influenza is not a notifiable disease and there do not appear to have been any widespread measures taken by the States to prevent its spreading, other than by the closing of some schools. The Commonwealth Serum Laboratories are preparing and have available a virus vaccine which includes the current strain.

page 665

QUESTION

POLIOMYELITIS

Senator COOPER:
CP

– On the 15th October, Senator Wood asked the following question :-

In view of the tragic results of poliomyelitis outbreaks in this country, will the Minister representing the Minister for Health urge that immediate steps he taken to investigate the effectiveness of Dr. Salk’s vaccine? Should such an investigation show the vaccine to be effective, will every effort be made to have supplies of it made available in Australia as a vaccine would be of much more lasting benefit to the individual?

The Minister for Health has now advised that his department has a specially trained medical officer in the United States of America observing and studying all developments in poliomyelitis vaccine production. The main purpose of sending this officer to the United States was to ensure that the Commonwealth Serum Laboratories shall be properly and fully informed of all technical details associated with the production of an efficient vaccine.

page 666

QUESTION

ATOMIC ENERGY

Senator COOPER:
CP

– On the 8th October, Senator Robertson asked the following question: -

Can the Minister representing the Minister for Health say whether it is a fact that the United Kingdom Government has introduced most comprehensive health hazard regulations regarding the handling, transport and disposal of radio-active materials? If that is so, will the Minister consider the advisability of introducing similar precautions in the Commonwealth with a view to safeguarding the health of those in close touch with such material ?

The Minister for Health has now supplied the following reply: -

It is a fact that the United Kingdom Government has introduced legislation concerning radio-active materials. The enactment of similar Commonwealth legislation .presents constitutional difficulties ; but the Committee on Industrial Hygiene of the National Health and Medical Research Council has drafted a model radio-active substances act for the consideration of State authorities. The Commonwealth has already taken power to control the importation of such radio-active materials. However, precautions have been taken in Australia for many years concerning radio-active radiations, administratively and by advice without the support of legislative enactment. Since 1934, there has been available a booklet revised from time to time, issued by the Commonwealth Department of Health giving recommendations for protection against radio-active radiation, based on international and British recommendations. When radio-active isotopes became available from the United States Atomic Energy Commission after the war, they were channelled through one Australian source, the Commonwealth X-ray and Radium Laboratory. Their use for non-medical scientific purposes was controlled by “the Tracer Elements Research Committee with the major assistance of Commonwealth Scientific and Industrial Resarch Organization and their medical use was under the supervision of the Standing Committee on Radio-active Isotopes of the National Health and Medical Research Council, set up in 1947. With regard to Commonwealth activity in the quest for radio-active materials in Australia, adequate precautions have been taken to control health hazards.

page 666

QUESTION

CANCER RESEARCH

Senator WEDGWOOD:
VICTORIA

– Has the attention of the Minister representing the Minister for Health been directed to a report issued recently by the United States Atomic Energy Commission which states that atomic energy is certain to aid in the solution of many problems associated with cancer? Is he aware that the United States Atomic Energy Commission has established a programme in cancer research, that this programme is being conducted in four major government cancer research centres and in co-operating universities, medical schools and private laboratories? Is he in n position to inform the Senate whether the Australian Atomic Energy Commission is directing any of its activities towards research into the multiple problems of cancer and its allied diseases?

Senator COOPER:
CP

– I am unable immediately to furnish the honorable senator with the information that she seeks. However I shall be very pleased to direct the attention of the Minister for Health to her question, and request him to furnish her with a considered reply at an early date.

page 666

QUESTION

TAXATION

Senator ROBERTSON:

asked the Minister representing the Treasurer. upon notice -

  1. Is it a fact that sales tax remains on sewing machines bought by housewives in a private capacity, while machines bought for factories are exempt?
  2. If so, will the Treasurer consider the advisability of cancelling^ the sales tax on those machines sold to housewives?
Senator SPOONER:
LP

– The Treasurer has furnished the following answer: -

  1. Manufacturers of goods are entitled to obtain, free of sales tax, machinery for use by them in manufacturing processes. This exemption was designed to obviate the double taxation which would occur if tax were payable on manufacturing plant as well as on the finished article which is sold for a price which takes into account the cost of the plant. The exemption applies to plant and . machinery used to produce goods which are themselvesexempt from sales tax so that the benefit of exemption may be complete. There is. however no provision in the law to authorize exemption of sewing machine? for private use.
  2. There are nm,11 v other kinds of plant and equipment which become exempt when used industrially to produce other “roods for sale but which are not exempt when purchased for private use and which, ifsewing machines were to be exempted, would have good claims for similar treatment. If all were exempted, a heavy loss of revenue would be involved. Nevertheless, the Government has’ the sales tax legislation constantly under review in an endeavour to remove anomalies, and this matter will be noted for future consideration.

page 667

QUESTION

COAL

Senator ASHLEY:

asked the Minister for National Development, upon notice -

Will the Minister supply particulars of plant, machinery, equipment and stores sold by the Joint Coal Board during the financial years 1949-50, 1950-51, 1951-52, and 1952-53?

Senator SPOONER:
LP

– I now supply the following information in reply to the honorable senator’s question : -

page 667

QUESTION

DRUGS

Senator ROBERTSON:

asked the Minister for Trade and Customs, upon notice -

  1. Has a special branch of the Department of Trade and Customs been established to deal with the entry of drugs into Australia?
  2. Has a trained pharmacist been appointed; if not, will applications be called for this position, and when ?
Senator O’SULLIVAN:
LP

– I now furnish the following answers to the honorable senator’s questions: -

  1. Action is at present in course for the establishment of acentral narcotics section in the Department of Trade and Customs to administer Commonwealth legislation govern ing the importation, exportation and wholesale distribution of narcotic drugs, and to ensure generally that Commonwealth obligations under the International Drug Conventions are fully met.
  2. The question of the appointment of a technical officer (pharmacist) to the proposed narcotics section has received consideration, but, at the suggestion of the Director-General of Health, the matter is being allowed to remain in abeyance for the present. The director-general has agreed to make available to the Department of Trade and Customs, as required, the services of a senior pharmacist to assist in matters requiring technical advice.

page 667

QUESTION

IMPORTS

Senator BENN:
QUEENSLAND

asked the Minister for

Trade and Customs, upon notice -

  1. How many licences have been granted since the 30th June, 1953, by the Central Import Licensing Branch to persons, firms and companies to import toys from Japan?
  2. What is the value of toys each licensee willbe permitted to import during the present year?
Senator O’SULLIVAN:
LP

– I now furnish the following answers to the honorable senator’s questions : -

  1. Ninety.
  2. It is not the practice to disclose the details of licences issued as this information is confidential as between the department and each licensee.

page 667

QUESTION

HOUSING

Senator PALTRIDGE:
WESTERN AUSTRALIA

asked the

Minister for National Development, upon notice -

  1. What amounts have been advanced to each State by the Commonwealth, under the Commonwealth and State Housing Agreement, for each year since the commencement of the scheme ?
  2. In each year how much was provided from (a.) loan raisings; and (6) revenue?
Senator SPOONER:
LP

– I now supply the following answers: -

page 668

ADMINISTRATION OF SALES TAX

Report of Public Accounts Committee

Senator PALTRIDGE:

– I present the report of the Public Accounts Committee on the following subject: -

Seventh Report - Administration of Sales Tax

page 668

A U STRALIAN SENATE PRACTICE

The PRESIDENT (Senator the Hon. A. M. McMullin). - I lay on the table the following paper: -

Australian Senate Practice: Manuscript of a book by J. R. Odgers.

This manuscript has been written by the Usher of the Black Rod, Mr. J. R. Odgers, with the cordial approval of the Clerk of the Senate.. It is a comprehensive study of the procedure of this Senate and I am sure that it will be of very great value to the members of this chamber as well as to many other persons. One part of the work, the chapter on Money Bills “, was published in 1951 in the Public Administration Journal and copies were circulated to honorable senators. During the debate on the Estimates in 1952, the Leader of the Opposition (Senator McKenna) suggested that the Government should give consideration to the publication of the complete work. The printing of it as a parliamentary paper would give it a suitable circulation, and I recommend that course to the Senate.

Senator O’SULLIVAN:
Minister for Trade and Customs · Queensland · LP

– Honorable senators will probably remember that this matter came before the Senate some time ago. The Leader of the Opposition (Senator McKenna) and honorable senators on the Government side of the chamber spoke in laudatory terms of the work, and the Leader of the Opposition suggested that the Government should consider printing it. The manuscript has been revised and brought up to date and I move -

That the paper be printed.

Senator ARMSTRONG:
New South Wales

– I support the motion. The Opposition is pleased that the suggestion made by the Leader of the Opposition (Senator McKenna) is to be given effect. The paper will be of valuable assistance to honorable senators and the proposed action has the full approval of honorable senators on this side of the chamber.

Question resolved in the affirmative.

page 668

TARIFF BOARD

Senator O’SULLIVAN:
LP

– I lay upon the table the following paper: -

Tariff Board - Annual Report for year 1052-53, together with summary of recommendations.

The report is accompanied by an annexure which summarizes the recommendationsmade by the Tariff Board and sets out the action taken in connexion with them. It is not proposed to print the annexure..

Ordered -

That the Teport only be printed.

page 668

INTERNATIONAL WHEAT AGREEMENT BILL 1953

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator McLeay) read a first time.

Second Reading

Senator McLEAY:
Minister for Shipping and Transport · SOUTH AUSTRALIA · UAP; LP from 1944

– I move -

That the bill be now read a second time.

The purpose of this bill is to seek the approval of the Parliament for the ratification of the 1953 International Wheat Agreement. That agreement is the outcome of negotiations between wheatimporting countries and wheat-exporting countries which commenced in the International Wheat Council in April, 1952, and terminated at a meeting in Washington in April, 1953. The object of those negotiations was to endeavour to ensure a healthy and stable international trade in wheat for a further period after the 1949 four-year International Wheat Agreement expired on the 31st July, 1953. Following the Washington conference,. Australia became a signatory to the new agreement, as did also 41 importing countries and three other exporting countries, namely, Canada, the United States of America and France. The signing of the agreement did not in any final manner commit Australia or any other signatory country to adherence to the agreement, which is dependent upon the lodgment of a formal instrument of ratification to follow the constitutional or legislative requirements of each individual country. The price and other operative provisions of the new agreement have actually been in operation since the 1st August; 1953, but Australia, in common with several other countries, sought and was granted an extension of the time until the 31st October, 1953, in which to make a firm decision regarding ratification.

The Government would not proceed to ratification without parliamentary approval, and the approach to the Parliament has, unfortunately, been delayed until now, through the inability of the seven Australian governments to agree upon a comprehensive orderly marketing plan for wheat, which is necessary before the Government could accept obligations under the International Wheat Agreement. Unless such a plan was in operation, Australia’s commitments under the agreement would be quite unmanageable. As honorable senators are aware, it is only a matter of days since all governments have agreed to the principle of a joint Commonwealth-State orderly marketing plan, to which I addressed myself in my second-reading speech on another bill at present before the Senate.

I wish to make it clear at this point that the Government intends to proceed to ratification of the International Wheat Agreement only when the States have already legislated for the new orderly marketing plan, or it has been demonstrated to the satisfaction of the Government that there is no room for doubt that the necessary State legislation will be enacted in the immediate future. All State governments have already given assurances on that point. Copies of the new agreement have been circulated to honorable senators for their information and reference. I have also arranged for the distribution to all honorable senators of copies of a publication by the Bureau of Agricultural Economics called The Wheat Situation. This includes a very Useful summary of the International Wheat Agreement.

This agreement operates for a period of three years from the 1st August, 1953, and except for amendments to certain important provisions, to which I shall refer later, it is substantially the same as the four-year agreement which preceded it. I feel, therefore, that it is unnecessary for me to elaborate on the historical background or on the general nature of the agreement.

The most important features are -

  1. The determination of a price range for wheat sold under the agreement through the fixation of maximum and minimum prices to operate for the duration of the agreement ; and
  2. The determination of a quota for each importing country. An importing country may be required to purchase its quota at the minimum price under the agreement, and an exporting country may be required to sell its quota at the maximum agreement price.

The principal objectives of the agreement, as stated in Article I., are to assure supplies of wheat to importing countries, and markets for wheat to exporting countries, at equitable and stable prices. These must be regarded as very worthy objectives and important stabilizing factors in relation to a commodity which, in unregulated trading times, has been notorious for the violent and unpredictable manner in which prices have fluctuated. Moreover, the stipulation of prices in the agreement over a three-year period provides a valuable basis for the calculation of risks in which the Commonwealth would involve itself in respect of a guarantee under a stabilization plan.

This agreement comes at a time when marketing conditions and arrangements are changing. Government trading is giving way in important markets to open marketing, and after a period of shortage there are now very heavy world stocks of wheat. Australia’s quota under the agreement could, therefore, prove important to the welfare of the industry within the three-year period of the agreement. Although enforcement of the conditions of the agreement would present a problem if the necessity should arise, the experience of the four years of the last agreement has shown that it can work.

The determination of maximum and minimum prices under the International Wheat Agreement has been a major issue, and because of the unwillingness of the United Kingdom Government to accept a maximum price of 2.05 dollars a bushel, equivalent to 18s. 3½d. Australian currency, under the new agreement, the United Kingdom is not a party to it. This maximum price represents an increase of 25 cents a bushel, or 2s. 2½d. Australian currency, over the maximum price in the previous agreement. The fixed minimum of 1.55 dollars, or 13s. l0d. Australian currency; under the new agreement compares with a minimum price under the old agreement of 1.50 dollars or 13s.4½d. Australian currency, in 1949-50, declining by 10 cents a year to 1. 20 dollars, or 10s. 8½d. Australian currency, in the fourth year, 1952-53.

The maximum price under this agreement must be regarded, as a satisfactory figure on present day world wheat trade conditions, while the minimum price is well above the assessed cost of production of wheat in Australia. The withdrawal of the United Kingdom, which is Australia’s biggest customer for wheat, has affected the original quota provisions. It is necessary for Australia to ensure that its traditional wheat and flour markets can be supplied and to adjust its commitments to the International Wheat Agreement accordingly. In this connexion, a reduction of the quota allotted to India and the accession of four new countries must also be taken into account. The total of the quotas negotiated at Washington was 595,000,000 bushels. The adjustments necessitated by the withdrawal of the United Kingdom and the other factors to which I have just referred would reduce the total quotas to about 421,000,000 bushels. Some further adjustments may still be required if several countries which have not yet ratified should fail to do so.

After consideration of all factors the Government has applied to the International Wheat Council for a reduction of Australia’s quota from 75,000,000 to 48,000,000 bushels. The urgency of this measure lies in the fact that the Inter- national Wheat Council meets at Madrid on Tuesday, the 20th October, 1953. The Government must be in a position to indicate where it stands in the matter, otherwise there is real danger that the other exporting countries may take advantage of any indecision on the part of Australia to press for the re-allocation to them of our quota under the agreement.

I wish to make it very clear that the present stage in the International Wheat Agreement has been reached in the closest collaboration with the wheat industry in this country. Unlike the 1949 procedure, when the government of the day proceeded to a very late stage without taking the industry into its confidence, this Government has maintained the closest collaboration with the industry all the way along. There has been continuous consultation with the grower-controlled Australian Wheat Board, and with the Australian Wheat Growers Federation. At the London meeting last year, and the Washington conference this year, the Australian delegation had the benefit of advice on the spot from the chairman of the Australian Wheat Board, Sir John Teasdale, and a representative of the Australian Wheat Growers Federation, on each occasion. In fact, I may say that the Government’s proposal to accede to the new International Wheat Agreement has the strong support of all State governments and the industry. I commend the bill to honorable senators.

Debate (on motion by Senator Sheehan) adjourned.

page 670

WHEAT MARKETING BILL 1953

Second Reading

Debate resumed from the 16th October (vide page 637), on motion by Senator McLeay -

That the hill be now read a second time. - Senator SHEEHAN (Victoria) [4.25]. - This is a bill for an act to amend the Wheat Industry Stabilization Act 1948-1953. I think that all honorable senators will agree that this is a most important measure, in view of the fact that the wheat industry is the second greatest industry in Australia as far as its effect on the national income is concerned. The wheat industry affects all

States, and I think that it is quite appropriate that honorable senators should give this matter their very serious consideration. It is regrettable that a bill affecting such a vital industry as this, and having such implications for those who grow wheat and the consuming public, should be discussed in what might be termed the closing hours of this session. A bill of this description needs very comprehensive consideration. This billhas one unfortunate aspect. It is described as a bill to amend the “Wheat Industry Stabilization Act 1948-1953. In his second-reading speech, the Minister for Shipping and Transport (Senator McLeay) intimated that one of the important amendments of the original legislation would concern the subject of stabilization. A perusal of the bill indicates that stabilization, which has proved so valuable to the wheat industry, has now disappeared entirely and that the real purpose of the bill is to perpetuate the existence of the Australian Wheat Board as the authority to sell wheat on behalf of the Australian producer.

The 1948 wheat industry legislation was the product of a Labour government. It is Labour’s policy that the wheat industry should be stabilized. No other industry in Australia has suffered as much as the wheaat industry has suffered from the fluctuation of prices. No other industry has found it necessary to seek financial assistance from governments in order to tide it over a difficult position. Those of us who have been in this Senate for some years will remember vividly the discussions which have taken place on wheat from time to time. The legislation of 1948 did not represent the first effort of this Parliament to stabilize the wheat industry. Other legislation had been introduced in 1946 and various efforts had been made prior to that year to stabilize the industry. Eventually, in 1948, after a good deal of opposition from honorable senators of the then Opposition, and after long and intense discussions with organizations representative of producers and consumers, the Labour Government was able to bring before this Parliament a scheme which it considered would meet the requirements of the wheat-growers and the people.

A measure of this description is assured of the support of the Labour party. Those honorable senators who are aware of the attitude of the Labour party to the protection of primary industries will know that it has long been the belief of the Labour party that the labourer is worthy of his hire. The Labour Government established a system of arbitration courts and conciliation commissioners in order to guarantee a fair wage to the worker who applied his labour power to the production of commodities. We believed that the primary producer who applied his labour to the land and produced food for the people was entitled to proper protection and to an adequate reward for his effort. Before the establishment of wages boards and arbitration courts, the labourer was exploited by those who paid him only what they thought he deserved. Primary producers were in exactly the same position. They had no guarantee of a reasonable return for their crops. In the words of the old poem “ When McDougall Topped the Score “ -

They ploughed, they sowed, they harrowed, And then they prayed for rain.

And then they all got flooded out,

And had to start again.

That truly describes the lot of the primary producer in those days. Even when seasons were bountiful and harvests good, they were not assured of an adequate return because often good crops in other parts of the world too flooded the world’s markets and kept prices down. Thewheatgrowers were dependent upon the good graces of the Darlings, the Bells and the Dreyfusses, who came to station sidings and haggled over the last halfpenny or farthing. The farmer had no security at all. Labour decided that that state of affairs must end. We knew that if we were to have a stable economy, the wheat-grower must no longer have to depend upon whatever might be offered to him by food manipulators and speculators who bought against a rise and waited for a drought somewhere else to enhance his profits. The Labour Government began to look for some more solid arrangement under which wheat-growers might know exactly what to expect in return for tilling the soil and growing and harvesting their crops.

Labour’s proposals were opposed not only by the present Government parties which were then in opposition, but also, remarkably enough, by some wheat-growers who were difficult to convince that the new plans would be- in their interests. “We were told that we were introducing socialistic measures and so on. Some primary producers are rather conservative and they are inclined to regard radical changes cautiously. So, there was considerable opposition ‘to the Labour .Government’s scheme. Indeed, among some individuals who claim to speak for primary producers there is even to-day some diffidence about the wheat marketing plans which this legislation proposes to continue. I have said that this measure does not deal with stabilization. It merely seeks to continue the Australian “Wheat Board as the authority for the organized marketing of Australian wheat at home and overseas. That is something with which I think we can all agree. No one would like to see a return of the old conditions in the wheat industry of which I have spoken. The pooling of wheat which was debated so extensively in years gone by, will continue. * The other measure which is associated with this legislation relates to the International “Wheat Agreement.. Under this bill a home-consumption price is established. That is very important. There has been considerable disputation amongst representatives of the States about that price. Government spokesmen who are eager to find some excuse for the late introduction of these two measures may claim that the delay has been caused by negotiations between the States. But it was well known that the wheat stabilization scheme would end this year. “When the scheme was introduced in 1948, one of the criticisms levelled at it by the then Opposition was that the period of five years was too short. It was suggested that a ten-year period of stabilization should be substituted. In an endeavour to obtain the support of wheat-growers and to destroy the high regard in which the Labour Government was held by wheat-farmers because of its genuine efforts to improve conditions in the industry, members of the present Government parties stated in their 1949 policy speech that if returned to office they would undertake the continuation of stabilization schemes and would, to use the Prime Minister’s own words, support a long-term stabilization of the dairying industry for ten years - by subsidy where the price is not raised - and that they believed that the wheat stabilization scheme should operate for a similar period. Therefore, it can be said that it has been the policy of this Government ever since 1949 to extend the wheat stabilization plan. Nevertheless, although the Government knew that that plan would expire this year, it has done nothing to iron out the difficulties that arose from the scheme.

It is useless for critics of the Opposition to suggest that the urgency of this legislation is due to the fact that, only in the last week or so, finality was reached in regard to a home-consumption price for wheat. I think that honorable senators generally will agree that this is a most important question. The cost of wheat affects the basic wage, which, in turn, affects the economy generally. During recent months, there has been a great deal of discussion concerning the relationship between the basic wage and costs of production. As honorable senators are aware, recently the system, of quarterly adjustments of the basic wage was discontinued. Bread is one of the vital commodities considered in compiling the C series index. The most recent figures issued on the subject indicate that the cost of living has increased during the last three months and that, therefore, wages also should increase. It will be remembered that, not long ago, the governments of certain States of the Commonwealth refused to agree to a price for wheat which was above the ascertained cost of production. Honorable senators may be aware that when Australia became recognized as a wheat-exporting country, and the need to arrive at a price-fixing basis arose, it was generally agreed by those concerned that wheat producers should receive the ascertained cost of production for their product. The wheat industry organizations went into this matter very thoroughly at the time. From time to time, the Bureau of Statistics examines the costs involved in producing a bushel of wheat, just as the cost-of-living figures are examined to determine whether wages should rise or fall. Those adjustments are a natural corollary of a guaranteed price for a commodity.

I believe that the State governments were justified in examining very closely the question of the homeconsumption price for wheat, in order that a fair and reasonable price might be paid to the wheat-growers. That price has now been decided. It is not my intention at the moment to discuss the low prices for wheat which once prevailed. Perhaps it will be more appropriate to do that when other legislation is before the Senate. However, it is a matter for extreme regret that a stabilization plan is not included in the provisions of this bill. As honorable senators represent the States of the Commonwealth, and as most States produce wheat, I take ifr that all honorable senators are interested in this legislation. I think that it will be generally agreed that the position of wheat in the world to-day is somewhatuncertain. . In Canada and the United States of America sufficient wheat still remains unsold from previous crops to supply all the requirements of those countries for next year if not one grain of wheat were placed upon the market this year. There is no shortage of wheat throughout the world at the present time. Indeed, there is over-supply. Countries such as France are now exporting their surplus. That position leads one to ask what our position will be without a stabilization plan. Unless this Government, in the near future, introduces legislation to make good the omission from the bill now before the Senate, I suggest that the wheat industry in this country will be in a serious position before very long.

There would be little possibility of this Parliament discussing wheat stabilization legislation, even if it were introduced, before several months had elapsed. Because of the world position of wheat, by that time the confidence of our wheatgrowers may well have disappeared. I have no doubt that many of them do not realize that, at this moment, legislation in regard to their industry, but which makes no reference at all to continuation of the stabilization plan, is being passed by this Parliament. Some of them will receive a rude shock when they learn of this legislation. The Government must take some responsibility for the fact that the stabilization plan has lapsed, because it has known, for the last five years, that the plan would end this year. Surely the Minister for Shipping and Transport (Senator McLeay), who introduced this measure, will remember the anxiety of wheat-growers when he visited Donald and other places. .Surely he, as the Minister representing the Minister for Commerce and Agriculture (Mr. McEwen). would have urged the Government to have legislation ready to introduce when the need for it arose. One would have expected the Minister for Commerce and Agriculture, who, during the stormy days of the wheat industry, was in the forefront of the argument, to be prepared for the lapsing of the plan. Like certain other honorable senators, I played a part in trying to get the wheat industry stabilized. Nevertheless, I and other members of the Opposition in the Senate to-day are obliged, because of the dire need to provide . even the small measure of protection for wheat-growers proposed by this bill, not to oppose the passage of the legislation. This legislation will last for three years at the most ; and that is a short period. Despite these imperfections, the Opposition is obliged to support the measure because, as I have said, we are anxious to give to the wheat industry all the protection that we possibly can. For that reason, in spite of the criticisms that I have offered, the Opposition will not oppose the measure.

Senator REID:
New South Wales

– I was rather amused to hear the accusations that Senator Sheehan made when he referred to what he termed the belated introduction of this measure. He said that the Government was returned to office in 1949 after it had wooed the electors in the wheat-growing areas by giving to them a definite undertaking that it would introduce legislation to implement a stabilization scheme for the industry for a period of ten years. The honorable senator knows quite well that the measure -then in force had a period of five years to run and that, in those circumstances, no necessity devolved upon the Government when it assumed office to interfere in any way whatsoever with- the scheme that was operating under that legislation. The Government did not require to take action until a date reasonably close to that on which the existing stabilization scheme would expire. Only at that time could it be expected to honour the promise that it had made to the industry. Yet, the honorable senator said that it did nothing to implement a stabilization scheme until a few months ago. If he cares to peruse the proceedings at meetings of the Australian Agricultural Council, he will realize how unfair and untruthful his allegations are.

I pay a tribute to the Minister for Commerce and Agriculture (Mr. McEwen; because to him alone must the credit be given for the introduction of even this measure in order to maintain a selling organization for wheat. Senator Sheehan claimed that the Government did nothing to ensure that upon the expiration of the existing stabilization scheme in June last, the requisite legislative action would bo taken to enable that scheme to be continued. I shall demonstrate the honorable senator’s insincerity in making thai statement. Early in 1951, that is more than two years before the stabilization legislation was to expire, the Minister called the State Ministers of Agriculture In conference in the Australian Agricultural Council and warned them that Ae existing scheme would lapse in June, i.9’53. And with what result? He was not able to get any satisfaction from the Australian Agricultural Council. .That was early in 1951. But, on three specific occasions that year, he raised the matter in the Australian Agricultural Council and with the various wheat-growers’ organizations and emphasized that the existing stabilization scheme would expire in June, 1953, and would not be continued unless legislation was introduced for that purpose. In spite of the setbacks that the Minister encountered in 1951, he did not relax his efforts to the slightest degree. He realized that the State Ministers were adopt ing an irresponsible attitude and he determined to achieve some measure of justice for the wheat-growers. In April, 1952, he again took up this matter in- the Australian Agricultural Council, but again no finality was reached. He took it up again in May and July of the same year, and again the State Ministers failed to reach finality.

Senator Ashley:

– He was a political failure.

Senator REID:

– The Minister was. not a failure. The failures were the State Labour Ministers of Agriculture, who refused to co-operate with him in any shape, or form. Then, in March last, he again took up the matter in the Australian Agricultural Council, but again no finality was reached.

Senator Ashley:

– Another failure.

Senator REID:

– It was another failure on the part of the Queensland and Victorian Ministers of Agriculture to realize their responsibility to the people of Australia.

Senator Ashley:

– I should keep quiet about that if I were the honorable senator.

Senator REID:

– The governments of the other States were prepared to accept the proposed guaranteed price of 15s. a bushel; but Victoria and Queensland refused to co-operate and the situation deteriorated still further from the viewpoint of the wheat-growers. The Minister, realizing that he had no prospect of persuading all of the States to agree to a stabilization scheme, immediately set about preparing legislation so that the growers would have at least a selling organization. Having regard to the. attitude of Queensland and Victoria, he realized that it would not be possible to introduce a new stabilization scheme. In those circumstances, he set out to do all that he possibly could to ensure that at least a selling organization would be enabled to operate. Therefore, the charge made by Senator Sheehan that the Government has not been alive to the interests of the wheat-farmers and made no attempt to introduce this legislation until a. few weeks ago is entirely groundless. Had it not. been for the determination and persistence of the Minister and the tact with which he handled the difficult situation that I have indicated, I doubt whether it would have been possible for the Government to introduce even the measure now before the Senate.

Senator Ashley:

– Had it not been for Mr. Graham, the Minister for Agriculture in New South “Wales, there would be no scheme at all.

Senator REID:

– The scheme that Mr. Graham suggested was not acceptable to any of the other States. But for the persistence of the Minister, even this measure would not now be introduced. Therefore, Senator Sheehan’s charge that the. Government, by failing to introduce this legislation earlier, prevented the farmers from having a stabilization scheme falls to the ground. Right at the beginning of the negotiations in 1951, the Minister set out to establish not a selling organization but a complete stabilization scheme.

Senator Courtice:

– The fact is that he did not succeed.

Senator REID:

– He did not succeed because Victoria and Queensland refused to co-operate with other States and with the Commonwealth in the matter. The Minister proposed to the Australian Agricultural Council a scheme whereby the Commonwealth would guarantee a cost of production price in respect of 100,000,000 bushels per annum. As I have said, we were not able to obtain the agreement of the other States. If that agreement had been forthcoming we would have been able to introduce the necessary legislation before last June. As Queensland does not produce a vast quantity of wheat, I believe that the Labour Premier of Victoria is to blame for the fact that legislation to provide for a continuance of the stabilization of the wheat industry has not been brought clown in this Parliament. He steadfastly refused to co-operate.

Senator Courtice:

– “What was the cost of production?

Senator REID:

– It was lis. Hd. a bushel. The Minister for Commerce and Agriculture advocated a homeconsumption price of 14s. plus 3d. a bushel to cover freight to Tasmania.

Senator Sandford:

– In what year?

Senator REID:

– I am referring to this year. Ultimately, the Minister became desperate, in the interests of the farmers of Australia, because his efforts were being thwarted by a member of the community who was spiteful towards him.

I believe that that person was prepared to sacrifice the interests of the wheatgrowers of this country in order to give vent to his spite. I compliment the Minister for the work that he has performed in the interests of the wheat industry. I support the bill, although, in” common with Senator Sheehan, I regret that it does not provide for continued stabilization. That is not our fault. “We were prepared to extend the period of stabilization for another five years, provided that the wheat-growers indicated by ballot that they desired such an extension. “Wheat is not a government product; it belongs to the wheat-growers, who should, therefore, have the right to decide how it shall be handled. Why have not the wheat-growers yet been asked to decide by ballot whether or not they want a continuance of stabilization ? The Commonwealth offered to provide machinery for ballots to be held in all States, but in each instance the States said, in effect, “ This is our responsibility. You must not trespass on State rights. We will hold the ballots “. But not one ballot has yet been held. I remind honorable senators that all but one of the States are controlled by Labour governments at present. The assertion that the Australian Government has denied stabilization to the wheat-farmers of this country is not borne out by the facts. If the State Labour governments sincerely desired stabilization to be continued they could have conducted ballots of the wheatgrowers twelve months ago, and if the farmers decided in favour of a continuance of stabilization, legislation could have been introduced into this Parliament, and complementary legislation into the State parliaments at the same time.

I reiterate that the Victorian Labour Government, through its attitude in this matter, has denied stabilization to the wheat industry. Only as a last resort did that Government agree to this half measure, in order to provide for the continuance of the marketing authority, so that the farmers would not find themselves in the invidious position of having their product available for market but having no organization in existence to handle it. But for the persistency of the Minister for Commerce and Agriculture

I do not know how the farmers would have marketed this season’s crop. One would believe from Senator Sheehan’s speech that, under the agreement that expired in June, 1943, the wheat-farmers received more than they were entitled to: Honorable senators opposite would like the wheat-farmers to forget that under that legislation the Minister for Commerce and Agriculture in the previous Labour Government exercised complete control over the industry. He approved of the sale of wheat to New Zealand at 5s. 9d. a bushel, which was then the price of wheat for home consumption in Australia, although the export price at that time was lis. 6d. a bushel. Furthermore, despite the views of the Australian Wheat Board, he gave a definite instruction that wheat for stock-feed must be sold at the homeconsumption price, irrespective of the kind of stock for which it was required. Therefore it is obvious that the wheat-farmers of this country did not, under that legislation, receive the excellent deal that honorable senators opposite contend that they received. The present Government increased the price of stock-feed wheat above the home-consumption price, as a result of which the wheat-farmers have received the price to which they are entitled. Bight down the years the wheatfarmers have considered that a.n obligation has devolved on them to see that the community was able to obtain bread at a reasonable price. On the other hand, however, the wheat-farmers do not consider that wheat should be sold to industries, such as the wool and poultry industries, at a price below export parity. It is unfair to expect the wheat-farmers to supply wheat to those industries at the home-consumption price. The cost of so doing should be borne, not by the industry, but by the taxpayers as a whole. However, the farmers have accepted the position without quibbling.

Senator Ashley:

– Does the honorable senator remember the time that the country came to the rescue of the wheatgrowers ?

Senator REID:

– That was in 1938. However, I remind the honorable senator that only for an agreement that was reached in New South Wales the farmers would have been left high and dry.

Senator Aylett:

– Has the honorable senator ever heard about the flour tax?

Senator REID:

– Yes, in the early stage that tax was imposed in order to ensure a reasonable home-consumption price of wheat. The farmers did not squeal when wheat prices rose during the last four or five years. They agreed that the homeconsumption price should be the price of wheat for flour, not wheat for stock feed or wheat exported to New Zealand. I consider that the farmers have more than repaid the concessions that were granted to them in 1938. I remind the Senate that in 1945-46 the home-consumption price for wheat was 4s. 7.3d. a bushel, compared with an average export parity price of 10s. 6.5d. The prices for the following years were as follows : - 1946-47, export parity 15s. 8.1d., home consumption 5s. 0.5d. a bushel; 1947-48, export parity 17s. lid., home consumption 6s. 7.2d. a bushel; 1948-49, export parity 13s. 0.4d., home consumption 6s. 4.4d. a bushel; and 1949-50, export parity 19s. 4d., home consumption 7s. Id. a bushel. I consider that the wheat-farmers have more than compensated the community during those years for the concessions that they received in 1938. On a number of occasions during the last few years, wheat-growers’ organizations were favorable to proposals that were made in connexion with stabilization, but, as I have said before, when it came to the pinch, objection was raised by the Victorian Government. The farmers have not complained, and I believe the wheat growers’ organizations would have been quite satisfied to support a new stabilization scheme on the basis of cost of production. In the years that I have mentioned the wheatfarmers sustained losses, in respect . of home-consumption wheat, of approximately 5s. lid. a bushel in the first year, and 10s. 7d., Ils. 4d., 6s. 8d. and 12s. 3d. a bushel respectively in the following years. That was the difference between the home-consumption price and export parity.

Senator Courtice:

– The sugar industry was selling sugar for 4d. per lb., although it cost ls. per lb. to produce.

Senator REID:

– The sugar industry has no contributed as much to the community as the wheat industry

Las done. The wheat-growers have contributed between £60,000,000 and £70,000,000 by accepting the homeconsumption price for stock-feed wheat. However, the industry is not squealing about that. It wants a stabilization scheme, and the wheat-growers were prepared to contribute to a stabilization fund. Yet Senator .Sheehan has accused this Government of being insincere, and stated that- we have set out to prevent stabilization in order to force the wheat-farmers into the hands of the wheat merchants of this country. I remind the Senate that in 1951 the Minister for Commerce and Agriculture set about bringing the States into agreement, in order to make sure that a measure to continue stabilization could be introduced into this Parliament in 1953. Therefore no blame for the present position can be placed upon the Minister, or upon this Government. Although I could speak at great length on this subject, there is no necessity for me to do so because I am sure that this bill will be supported by the Opposition. The object of this measure is to ensure that there shall be retained an organization that was established in the interests of the farmers, so that they will at least be able to receive the price that they are entitled to receive for wheat sold for home consumption, and export parity for the wheat sent overseas. This Government has always honoured its .responsibilities in connexion with the wheat industry.

Senator O’FLAHERTY:
South Australia

– Honorable senators on the Government side go to extraordinary lengths to try to justify the action of a colleague while, at the same time, they claim that they are not squealing. Throughout his speech, Senator Reid did nothing but squeal about criticism that was expressed by Senator Sheehan earlier, in the debate. Senator Reid said that Senator Sheehan doubted the sincerity of the Minister of Commerce and Agriculture (Mr. McEwen) and the Government. In my opinion, Senator Sheehan was not expressing doubt about the sincerity of the Government or the Minister, but he doubted their ability to fulfil their promises. Such doubt does not imply that the Government and the Minister were not sincere when they made the promises, or that they are not sincere when they discover that they cannot fulfil their pledges. There is proof, however, that they are irresponsible to some degree. Senator Reid said that the Minister for Commerce and Agriculture called several conferences of the Australian Agricultural Council in 1951 and 1952 and three times in 1953, and that a decision upon the marketing of wheat could not be leached because the State Labour governments disagreed. I am sure that Senator Reid did not intend to mislead the Senate, but in 1951 and 1952 Labour governments were no in office in all States. The Government of South Australia was not a. Labour government, for example. Senator Reid, therefore, was misleading. Honorable senators on the Opposition side are not questioning Senator Reid’s sincerity, but we challenge the accuracy of his statements.

I was pleased to note that Senator Reid stated that lie stood in favour of a stabilization scheme. I remind him that in 1946 a conference was attended by delegates of the Australian Wheat Growers Federation and representatives of wheat-growers outside the organization. Senator Reid took part in those discussions and advocated a stabilization scheme. Before that, date, however, members of the present Government and the present Minister for Commerce and Agriculture, as well as some of their supporters who were then members of the Parliament, opposed any stabilization scheme that involved government expenditure. The point is that all reference’ to stabilization has been taken out of the legislation. Therefore, stabilization is not of the essence of the matter. One of the earlier opponents of stabilization was the present Minister for Commerce and Agriculture. Even in the days when he was fighting for the Australian Country party in Victoria, he did not believe in stabilization where government money was concerned. He and his colleagues wanted complete control of wheat by the wheat-growers. In 1940-41, the Government had to go to the rescue because wheat was rotting and could not be shipped overseas. The present Minister did not believe in stabilization.

Senator GEORGE RANKIN:
VICTORIA · CP

– The Labour government of the day gave away Australian wheat to New Zealand for a maximum price of only 5s. 9d. a bushel.

Senator O’FLAHERTY:

– Given the same circumstances, I believe that the present Minister for Commerce and Agriculture would act similarly because the price was made up by the Australian Government.

Senator Reid:

– After pressure.

Senator O’FLAHERTY:

– That does not matter. The Senate is not concerned now with the circumstances that caused the delivery to New Zealand of a quantity of. wheat. Senator Reid knows that Australia had wheat for sale and New Zealand could not get it anywhere else. On the other hand, Australia was able to ship wheat to New Zealand but could not export it elsewhere. Something had to be done to help New Zealand. The Government decided to sell wheat to New Zealand and the Parliament ratified the arrangement. If this Government had been in power, it would probably have done the same thing. The stabilization, plan was approved in 1948 by a plebiscite of those engaged in the wheat industry. All who had the right to vote were given the opportunity to do so. A majority of the growers in all States were in favour of the stabilization plan. Senator Reid has confirmed that fact but he did not mention the plebiscite. The plan was to operate for five years. The sale of 100,000,000 bushels was guaranteed at specified price levels. This bill contains no provision for a guaranteed price apart from wheat that is sold for home consumption.

In 1949 a general election was held. Not long before the election, the wheatgrowers of Australia asked for a set selling price for wheat’ sold for stock purposes and a guaranteed price for international sales. Supporters of the present Government seized upon that request for propaganda purposes and made promises to the wheat-growers. The present Prime Minister (Mr. Menzies) spoke of a longterm plan to last ten years for the dairying industry and then, turning his attention to the wheat industry, he stated -

We . . . believe that the wheat stabilization scheme should operate for a similar period. Home-consumption prices should be periodically reviewed, and losses on concession sales recouped.

The losses could, be recouped only in one way. The average person naturally would believe that the statement meant that the Government would recoup the growers for the losses and Senator Reid has borne out that statement. The Prime Minister made his promises four years ago. He said that there should bo a ten-year plan and that the difference between the home-consumption price for wheat and. the overseas price should be recouped. He did not say definitely that if returned to office his Government would make up the difference. The Opposition of that day was composed of two partners, just as the Government of to-day has been formed by a coalition. One partner represented the Australian Country party, but the two partners claimed that they were speaking with the same voice. The present Treasurer (Sir Arthur Fadden) who was the leader of the Australian Country party, said -

The difference between the export value of the product consumed in Australia, other than for human consumption, and the price determined by the Government for sale to other primary industries for production purposes, shall be paid out of Consolidated Revenue to the Board controlling the market of the industry. This provision is to keep down costs to the consumer and prevent increased costs to other industries without loss to the industry concerned.

That promise was made four years ago and a’ similar proposal has been advocated in this debate by Senator Reid. A review of the history of the wheat industry between 1949 and 1951 reveals that nothing was done to recoup the farmers for wheat sold for stock feed at. concessional rates. In 1951, the present Minister for Commerce and Agriculture called the Australian Agricultural Council together and said that something had to be done about the concessional wheat price. This Government forced the State governments to agree to . increase the concessional price by 2s. a bushel. Certain bounty payments were made from that period. From 1949 to 1951, however, nothing was done about a concessional price or a bounty and the farmers lost over the transaction because the Government did not fulfil its promises.

Senator Seward:

– It could not get the bill .through the Senate.

Senator O’FLAHERTY:

– It did not try to do so. The Government merely arranged some of the details for the marketing of wheat and forgot about the farmers. Another election was held in 1951. Since that election the Government lias had a majority in the Senate, but it has done nothing to recoup the farmers for the concessional wheat.prices. Senator Reid said that several conferences had been held. Generally speaking, they had nothing to do with a stabilization scheme. They merely considered the establishment of a home-consumption price. The Government and the Minister for Commerce and Agriculture have made frequent promises to recoup the farmers out of Consolidated Revenue but they have done nothing except charge the Victorian Government and the Queensland Government with causing the current difficulties. That is not true. In the reports of agricultural societies and wheat-growers’ organizations one will not find any mention of a stabilization plan of this Government. The Government has not’ kept its promises.

The Minister for Shipping and Transport (Senator McLeay) stated that the delay in the introduction of this bill was due to the failure pf the States to reach agreement on a selling price for wheat. The Minister for Commerce and Agriculture has stated that because the Commonwealth had no control over prices he would have to rely on the States reaching agreement if Australia was to meet its commitments under the International Wheat Agreement. It was not necessary for the States to reach agreement before Australia could renew the International Wheat Agreement. Agreement between the States could have been reached after the International Wheat Agreement was signed. The Government has now decided to guarantee a price of 14s. l£d. a bushel for wheat which is more than the cost of production. Senator Reid has informed the Senate that the present cost of production of wheat is lis. lid. a bushel. I think that honorable senators will find that at the end of this month the cost of production of wheat will be announced at about 12s. 9d. a bushel because of the inflationary trend of economic conditions during the last twelve months. The Go vernment has agreed to pay the cost of shipping wheat to Tasmania although the Government parties criticized the Labour Government for paying the cost of shipping wheat to New Zealand. The Government’s attitude to this matter is absolutely illogical. The Government has guaranteed a price for wheat which is probably ls. 4d. a bushel above the cost of production.

Senator Pearson:

– State Labour governments approved of that price.

Senator O’FLAHERTY:

Senator Pearson’s interjection is quite irrelevant to the point that I am making.

Senator Robertson:

– What point is the honorable senator making ?

Senator O’FLAHERTY:

– My point is that the Government has not been consistent in its attitude and that it has not carried out the promises that have been made by the Prime Minister and his satellite, the Treasurer. The Government is now deliberately breaking its promises and avoiding the establishment of a wheat-stabilization scheme. In the course of the negotiations that were conducted on the marketing of wheat during 1951, 1952 and 1953, no stabilization plan was put forward by. the Minister for Commerce and Agriculture. The Minister wished to have orderly marketing. But he does not believe in stabilization and neither does the Treasurer, who considers that growers should not be paid the difference between the homeconsumption price and the export price of wheat. He considers that money should not be taken from Consolidated Revenue for this purpose although it should be taken from Consolidated Revenue for other purposes which I shall mention at another time. The Treasurer is using Consolidated Revenue for the benefit of other people but he is not prepared to use Consolidated Revenue to lower the price of wheat for the manufacture of such a staple food as bread. He refuses to put the standard of living on an even keel.

This hill has been introduced by the Government as a pretence that it believes in a principle in which it does not really believe. The bill provides’ that all reference to a stabilization plan shall be omitted from the principal act. The Government has provided only for an orderly marketing plan. Honorable senators opposite have not the courage to support Senator Reid in his request that a provision for a stabilization plan should be inserted in the bill.

Senator Pearson:

– “What about Mr. Gain? “What did he do?

Senator O’FLAHERTY:

Senator Pearson is referring to an event that occurred since May of this year. The attempts of the Government to reach agreement on an orderly marketing plan started five months ago. The Government eventually agreed to a compromise that was suggested by Mr. Cain. The Government considered that the guaranteed price for wheat should be 13s. a bushel. It agreed to* a guaranteed price of 15s. -a bushel because the Minister for Commerce and Agriculture thought that there was a chance of inducing Labour governments to fight, one against the other. The Minister is as full of politics as a porcupine is full of prickles. Then the governments of Victoria and Queensland offered a compromise. Despite all that the Minister said about those governments, he accepted the compromise.

Senator Robertson:

– In order to save the situation in Australia.

Senator O’FLAHERTY:

– The Government was either right or wrong in the first place and if it considered that it was right it should have remained firm in its. decision. But the Government was wrong. Because the Government had broken its promise to the farmers of this country it decided that if it compromised it would be able to put the blame elsewhere and bewilder the farmers into believing that a stabilization plan would be introduced in the future. It was only after this bill was introduced that the Minister for Commerce and Agriculture stated that he proposed to return approximately £12,000,000 to the farmers, retain £9,000,000, impose an export levy of ls. 6d. a bushel, and start another stabilization scheme. Honorable senators opposite cannot claim that the farming community has agreed to the proposal of the Minister.

Senator Hannaford:

– Why did the Minister propose to retain £9,000,000?

That fact upsets the honorable senator’s argument.

Senator O’FLAHERTY:

– It does not. The Treasurer cannot find the money to pay the full amount. Rather than approach the private banks for money or issue treasury-bills, the Government decided to propose a stabilization scheme. Unfortunately ‘for the people, the Government succeeded in its use of these tactics in the general elections of 1949 and 1950. The statements that are made by the Government border on complete dishonesty. The real object of the Government has been to destroy the stabilization plan that was inaugurated by the previous Government. The supporters of the Government are the private merchants in whom honorable senators opposite believe. Every honorable senator opposite has, at some time, proposed the replacement of some governmental activity by private enterprise. The farming community can expect the Government to hand them back to the wolves again in the near future. The wheatgrowers will then find themselves in a position similar to that which they were in before 1939 when they received ls. Sd. a bushel for their wheat. The then Government, whose political outlook was similar to that of this Government, did not make any effort to secure a better price for wheat-growers in those days. It left them to private enterprise.

As Senator Reid has said, the cost of production of wheat in Australia is at present stated as lis. Hd. a bushel. When the Bureau of Agricultural Economics announces the new cost of production I think that honorable senators will find that it is about 12s. 9d. a bushel. Costs of production will have risen because of the inflationary trend which the Government has done nothing to prevent. The increase price of wheat will penalize large families more than any one else because it is the large family with perhaps five or six children that is the biggest consumer of bread. Therefore, this Government, by breaking its promise and not recouping wheat-growers for the sale of wheat for home consumption at a. concessional price, will be robbing an already over-burdened section of the community. As Senator Sheehan has said, the Opposition will not oppose the bill. T have risen merely to tell the Senate something of the history of organized wheat marketing in this country.

Question resolved in the affirmative.

Bill read a second time.

Sitting suspended from 5.47 to 8 p.m.

In committee:

The bill.

SenatorO’FLAHERTY (South Australia) [8.0]. - Clause 7, which deals with the removal from office and resignation of members of the Australian Wheat Board, states -

Section eight of the Principal Actis amended by omitting from sub-section (1.) the words “ representing the wheat-growers.”.

The representatives of the wheat-growers on the board are selected by the wheatgrowers themselves and appointed by the Minister. They are not the only members of the board, however. There are also some Crown representatives. I should like to know why special provision is being made for the removal from office or resignation of representatives of the wheat-growers.

Senator McLEAY:
Minister for Shipping and Transport · South Australia · LP

– I am advised by my technical officers that the representatives of the wheat-growers are not being singled out as the honorable senator has suggested. This amendment will put all members of the board on the same footing and, in extraordinary circumstances, it will be possible for the Minister to remove any member from office. It is more of a drafting amendment than a practical alteration of the existing provision. It puts everybody in the same category.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 681

INTERNATIONAL WHEAT AGREEMENT BILL 1953

Second Reading

Debate resumed(vide page 670). Senator SHEEHAN (Victoria) [8.7]. - This bill, like the legislation with which we have just dealt, had its origin in the parlous condition of the wheat industry between the two world Avars. Between 1932 and 1939 the price of wheat fluc tuated between 2s. l0d. and 5s. 4d. a bushel, the latter price for one year only, and those fluctuations made it impossible for the wheat industry to prosper. Part of Labour’s programme for the stabilization of the wheat industry in Australia was the support of this country for the International Wheat Agreement. I do not suggest however, that prior to that time, there had not been any discussion between exporting and importing countries of the desirability of an international agreement under which exporting countries would be assured of a market for their wheat, and importing countries would be assured of supplies of wheat at p re-determined prices. In those years, wheat exporters and importers alike were the victims of the machinations of merchants who controlled the marketing of foodstuffs throughout the world. The International Wheat Agreement has now been in operation for five years. I shall outline the conditions of Australia’s participation in the agreement in view of certain statements which were made when this legislation was before the House of Representatives and which may be made again in this chamber. The scheme was introduced to eliminate price fluctuations which had caused chaotic conditions in the marketing of wheat for many years and both the wheat-growers and the Commonwealth agreed to accept a certain risk. The wheat-growers agreed toa certain price for wheat for homeconsumption knowing that in the event of an increase of the overseas price, they may be out of pocket. On the other hand they were assured of a ready market for their product. The Australian Government undertook the risk that, should the overseas price not rise, the Australian taxpayers would be liable for something like £25,000,000 or £30,000,000 in order to pay the guaranteed price to wheatgrowers. Fortunately, the price of wheat on the world’s markets rose to such a figure that acceptance of these risks imposed no additional liability on either party.

There are some people in our midst notably the honorable member for Riverina (Mr. Roberton) and the honorable member for Wimmera (Mr.

Turnbull), members of the House of Representatives, both of whom are representatives of wheat-growing electorates, who point out that because some of the importing nations had failed to obtain an adequate quota from the international pool, and had therefore found it necessary to purchase additional quantities on the open market at a higher price than that guaranteed under the International Wheat Agreement, and who had suggested that Australian wheat-growers were worse off under the agreement than they would be selling on the open market. That argument has no solid foundation at all because had it not been for the agreement, and the fact that many importing countries had guaranteed to purchase so many bushels of wheat at the agreement price, the chances are that the price would not have been as good as it was. It is idle for men who should know better to talk in such a strain. I doubt whether any such person can be regarded as a friend of the wheat industry because, at the moment, we are uncertain whether the new proposals will be’ accepted by the wheat-farmers. Propaganda of that kind might lead some wheat-growers to adopt the short-sighted policy of refusing to support ratification of the International Wheat Agreement. That would be fatal to the wheat industry. It is interesting to note the changed attitude on the part of certain other people who claim to speak on behalf of wheat-growers. When the original international wheat agreement legislation was before this chamber it met with considerable opposition. We were told that is was socialistic in the extreme, that it would not work, and that the government of the day was about to kill production of wheat. In short, the legislation was condemned by people who professed to be great admirers of free enterprise. However, to-day we find that an almost identical measure has been introduced by a government of the same political colour as the party which condemned the Labour Government’s legislation. There is, therefore, a certain amount of pleasure on the part of honorable senators on this side of the chamber at the introduction of this bill, because it represents a reenactment of previous Labour legislation.

The Minister stated in his secondreading speech that Australia has noi yet signed the International Wheat Agreement, although that agreement has been in operation since August last. He also stated that the International Wheat Council will meet in Madrid to-day, which means that, before an early hour to-morrow morning, it will be necessary for the Australian Government to send a cablegram to the council to intimate that the Australian Parliament has ratified the agreement.

Senator SHEEHAN:
VICTORIA

– I should have no objection to that being done. In my opinion, an important measure such as this is should have been introduced in sufficient time to enable the Senate to consider it carefully. An unpleasant feature of the legislation, and one which I think should be discussed fully, especially by honorable senators who represent States in which there are large wheat-growing areas, is that the United Kingdom, which was formerly our best customer, is not a signatory to the agreement. As a result. Australia’s quota of wheat under the agreement has been reduced considerably. I hope that the Minister will inform the Senate why the United Kingdom is not a party to the agreement. In the absence of such information, honorable, senators must assume that the representatives of Australia endeavoured to drive too hard a bargain -with Great Britain. The absence of the United Kingdom from the agreement, perhaps, indicates that the price which we are at the moment receiving for our wheat is likely to fall, and that for that reason the United Kingdom considered that it would be able to do better on the open market. Because of the refusal of that country to sign the agreement, the whole wheat marketing structure will be weakened, and it is possible that in a short period of time great difficulties may be experienced in arriving at a new international agreement, which would be very serious for the Australian wheat industry. Should there be no international wheat agreement, the

Australian wheat industry might experience again bad times such as those which have been referred to during this debate. In my opinion, this matter should have been discussed in greater detail. However, I shall not further delay the passage of the bill.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator McLEAY:
Minister for Shipping and Transport · South Australia · LP

– I appreciate the attitude of Senator Sheehan in assisting the Government to have this bill passed by the Senate. The honorable senator has asked why the United Kingdom refused to be a party to the International Wheat Agreement, which is a matter of great importance. The reason is that the United Kingdom considered that the ceiling price was too high. In the previous agreement, which operated for four years, the ceiling price was16s.1d. a bushel. Having regard to increased costs, the exporting countries were of the opinion that the ceiling price should be advanced to18s. 3d. a bushel. The United Kingdom was not prepared to pay that price. The Australian representatives agreed to accept a quota which had been reduced considerably in order that we would have sufficient wheat to supply the United Kingdom, which has been our best customer for many years. Honorable senators will be pleased to know that that country is still our best customer. Although Great Britain is not a. signatory to the International Wheat Agreement, the ‘Australian Government is confident that it will take as much wheat from Australia as it would have taken had it been a signatory to the agreement.

Senator Robertson:

– At the old price ?

Senator McLEAY:

– At a price very close to the ceiling price. It will be considerably higher than 16s. a bushel, but is to be negotiated from time to time. Naturally, we could not force the United Kingdom to enter into the agreement. I believe that, in the circumstances, those entrusted with bringing about the InternationaT Wheat Agreement did the best they could. I agree with Senator Sheehan that violent fluctuations in the market arc undesirable and that there should be an orderly arrangement which will do justice to both sellers and purchasers of wheat.

Senator Cameron:

– There may yet be dumping of wheat by America.

Senator McLEAY:

– If thereis, I shall call upon Senator Cameron to help na to sell our wheat.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 683

NEW BUSINESS AFTER 10.30 P.M

Senator McLEAY:
South AustraliaMinister for Shipping and Transport · LP

– I move-

That Standing Order68 be suspended up to and including Saturday next, the 24th October, to enable new business to be commenced after 10.30 p.m.

The Government is eager to finish its business this week, and proposes to ask the Opposition for special favours.

Senator McKENNA:
Leader of the Opposition · Tasmania

– I had a discussion with the Minister for Shipping and Transport(Senator McLeay) on this matter and I understood that his motion would relate only to the proceedings of the Senate this evening. I suggest that the Minister modify his motion so that it will relate to to-day only, and thus allow us to consider the position one day at a time. I was not prepared for a motion in the terms now proposed. I shall raise no objection if the honorable senator relates his motion to to-day only.

Senator McLEAY:
South AustraliaMinister for Shipping and Transport · LP

in reply - I appreciate the courtesy and the assistance of the Leader of. the Opposition (Senator McKenna) and ask for leave to amend the motion accordingly. (Leave granted.]

Motion, as amended, put.

I therefore move -

That Standing Order68 be suspendedfor this sitting to enable new business to be commenced after 10.30 p.m.

The PRESIDENT:

– There being an absolute majority of the whole number of senators present, and no dissentient voice, I declare the question resolved in the affirmative.

page 684

STANDING ORDERS COMMITTEE

Motion (by Senator McLeay) - by leave - agreed to -

That the report from the Standing Orders Committee, presented to the Semite on the 16th October, 1953, be adopted.

page 684

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION ASSESSMENT BILL (No. 2) 1953

Second Reading

Debate resumed from the 14th October (vide page 518), on motion by Senator Spooner -

That the bill be now read a second time.

The PRESIDENT:

– That procedure will be followed.

Senator O’FLAHERTY:
’ tralia · South Aus

– The Income Tax and Social Services Contribution Bill (No. 2) seeks to provide concessions in respect of certain classes of individuals and companies. Generally speaking, however, it will effect only minor alterations. As usual, the Minister for National Development (Senator Spooner) in his secondreading speech, made certain party political observations concerning the concessions proposed to be made under both these measures.’ He emphasized that the Government was reducing taxes enormously, and that the reductions on personal incomes averaged 12£ per cent. In order to place that claim in its true perspective, I shall compare collections of taxes for each financial year since the Government assumed office at the beginning of 1950. Of course, taxes are a matter of figures, and figures can be manipulated to prove almost anything. The Government resorts to that stratagem when it claims that under these measures taxes on company and personal income will be reduced on the average by 12-J per cent. In 1949-50, the last year of the Chifley Government’s term of office, collections of direct taxes amounted to £332,700,000 and of indirect taxes, such as the sales tax, to £186,300,000, a total of £519,000,000. That total represented a tax of £64 9s. 5d. per capita. I anticipate that Government supporters will claim that in that year expenditure on defence was not nearly so high as it is to-day. After deducting defence expenditure which in that year amounted to £55,000,000, collections of direct and indirect taxes totalled £464,000,000, an average of £57 12s. per capita. At that time we were expending on defence an amount of approximately £7 for every person in Australia. In 1950-51, which was the first financial year of this Government’s term of office, direct taxes amounted to £555,000,000 and indirect taxes amounted to £222,200,000, a total of £777,200,000, which averaged £93 10s. 2d. per capita, that is, an increase per capita of £29 0s. 9d. compared with the per capita tax for the preceding year. Excluding defence expenditure which in that year amounted to £149,000,000, collections of direct and indirect taxes totalled £628,000,000, which averaged £76 15s. per capita. Thus, after excluding defence expenditure, the tax per capita was increased by 4.9 per cent., compared with the average for the preceding year. I emphasize that that increase was imposed by a Government that was elected to office mainly on its promise to reduce taxes.

In 1950-51, the Government did not alter the rates of assessment to any marked degree, but. it altered the methods by which the rates were struck. Whereas prior.. to 1949-50 the rate of tax automatically increased by a fraction of one penny for every £1 by which the taxable income exceeded a certain sum, in 1950 this Government said that it would be much easier to impose tax on a’ flatrate basis; and as a result of that slight alteration total collections of taxes increased still further. I remind the Senate that when I spoke on the relevant measure in 1950, 1 stated that the Government was merely altering the incidence of tax so that, later, it could abolish the social services contribution and by that means levy tax on incomes in the lower ranges, most of which were previously exempt from tax. The Government actually followed that course in 1951-52 when it imposed a levy of 10 per cent., and although it abolished the social services contribution, persons who had previously paid only the contribution were obliged to continue to pay an equivalent amount as tax, plus the 10 per cent. levy. As a result of that arrangement, direct taxes amounted to £624,000,000 and indirect taxes to £309,000,000, a total of £933,000,000, that is, an average of £109 7s. 6d. per capita. Excluding expenditure on defence, which in that year amounted to £170,000,000, collections of taxes totalled £674,000,000, an average of £89 9s. 3d. per capita. In 1952-53, direct taxes amounted to £612,400,000 and indirect taxes amounted to £272,900,000, a total of £885,300,000, that is, an average of £97 per capita. Excluding expenditure on defence, which in that year amounted to £215,000,000, collections of tax totalled £670,000,000, that is, an average of £77 10s. per capita. Thus, this Government each year since it assumed office has collected an increasing amount in taxes. It is estimated that for the current financial year direct taxes will amount to £583,400,000 and indirect taxes to £291,300,000, a total of £874,500,000. Excluding expenditure on defence, which, it is estimated, will be £200,000,000, collections of taxes will’ total £674,000,000, or an average of £76 per capita.

Senator Hannaford:

– That is a reduction of more than £1 per capita.

Senator O’FLAHERTY:

– It is a re’duction of 30s. per capita. It is estimated that total collections of taxes for the current financial year will be £10,000,000 less than the amount collected last year. Even after allowing for that reduction of 30s. per capita, the average tax per capita for the current financial year will be £18 8s. more than the average for the financial year 1949-50. At the same time, our population has considerably increased since this Government assumed office.

Senator Robertson:

– But the rate of tax payable in this country is still much lower than that payable in the United Kingdom.

Senator O’FLAHERTY:

– That is not so. However, I shall deal with that matter when I am discussing the rates. The fact is that the Government, since it assumed office at the beginning of 1950, has increased by 32 per cent, the tax payable on the average by each person in Australia. Yet, Government supporters have the audacity to say that this year the Government is reducing taxes on the average by 12 per cent. In 1950- 51, total collections of taxes increased to £770,200,000 from £519,000,000 in 1949-50, an increase of £258,200,000, or an increase of 53.4 per cent, in its first year of office. Taxation yielded £934,000,000 in the ‘ financial year 1951- 52, which was an increase of £415,000,000 compared with the collections in 1949-50. It was 22 per cent, more than in that year. No doubt honorable senators will remember the Minister for National Development (Senator Spooner) telling us in 1951 that there would be only an overall increase of 10 per cent, on the previous year. In 1952-53 £885,000,000 was collected in taxation, or £366,000,000 more than was collected in 1949-50. They were 5.2 per cent, lower than in the previous year, but supporters of the Government claimed -that taxation was being reduced considerably. In this financial year the Government expects to collect £874,000,000, or £355,000,000 more than in 1949-50, and only 1.1 per cent, lower than in the last financial year. By the 30th June, 1953, this Government had collected from the people of Australia in taxes £1,039,200,000 more than would have been collected had the rates for 1949-50 been continued. Now, in an overall period, the Government proposes to remit £10,000,000. Despite the proposed reduction, the Government will still collect in taxes £355,000,000 more a year than was cellected in 1949-50, and £96,800,000 more than the amount collected in 1950-51. Yet honorable senators opposite claim that this Government is reducing taxation. They are endeavouring to hoodwink the people.

The Government claims that it will reduce taxation in this financial year, and it has produced tables of rates - prepared by the experts, of course - to substantiate its promise. However, it is clear that £355,000,000, more will be collected in taxes in this financial year than was collected in 1949-50, and at the end of the last financial year this Government had taken out of the pockets of the people £1,394,200,000 more in taxes than if the 1949- 50 rates had continued to be applied. It is true that some sections of the people will benefit from proposed concessions in this financial year of £81,000,000. This Government has taken more in taxes each year since it has been in office than the amount of £519,000,000 that was collected in the base year.

Senator Robertson:

– But we are giving the people better service than did the previous Labour Government.

Senator O’FLAHERTY:

– Of course! That is a very good suggestion. 1 am reminded of the story of the highwayman who, having hit a traveller on the head and emptied his pockets, said “ I have been a good servant to you “. Whilst telling the people that it is reducing taxation, the Government, in effect, has both hands in their pockets. I wonder if the widows of this country will consider that the Government is giving them . good service by increasing the widow’s pension by 2s. 6d. a week?

I come now to company taxation. In 1949-50 the Government collected £83,600,000 by company taxation. Collections from ‘ this source rose to £90,500,000 in 1950-51, and to £150,800,000 in 1951-52 under the horror budget. In 1952-53 company taxation yielded £167,000,000, which was more than in the year of the horror budget. In three years the Government has collected in company taxation £163,500,000 more than it would have collected had the 1949-50 rate of company taxation been continued. Now the Government proposes to reduce company taxation by £23,400,000. The Government will still collect in company taxation this year almost as much as it did last vear, and considerably more than it collected from this source in 1949-50 and

1950- 51.

Senator Laught:

– The poor companies !

Senator O’FLAHERTY:

– I am concerned not so much about the poor companies as about the Government’s claim to have reduced taxation. The figures that I have cited prove conclusively that this Government has not reduced taxation. It has performed a confidence trick on the people. Although the Treasurer (Sir Arthur Fadden) stated that company taxation would be reduced by £23,400,000, in this financial year, as I have pointed out, this Government has collected in company taxation during its term of office £163,500,000, more than it would have collected had the 1949-50 amount of collections continued to apply. The right honorable gentleman also made a comparison of taxation in Australia with taxation in other countries. However, the comparison was not accurate, because he did not take into consideration the fact that this Government is not providing by way of social services as much as is provided in other countries. ‘ But he took into account not only taxation in those countries but also social services contributions. In this respect, the Government is resorting to another confidence trick on the people. It is proposed to reduce taxation by £81,000,000 in this financial year. I point out that more than 50 per cent, of that benefit will flow to big business, companies, and persons in the higher income categories. The people in the lower income ranges will not derive a benefit. The Government proposes to reduce company taxation by £23,400,000 and pay-roll’ taxation by £3,900,000. As I pointed out when the pay-roll tax legislation was before this chamber, big business will benefit by about £3,000,000 as a result of the reduction of pay-roll tax, and the remainder of the community will benefit by only £900,000. About 32,000 taxpayers receive incomes of £5,000 a year or more. They are not small people. Altogether there are about 3,500,000 taxpayers. Yet of that number the Government has provided a concession of £16,500,000 to only about £2,000 taxpayers. The total reduction of taxation under headings that I have mentioned will be about £43,000,000. and the total of proposed concessions in this financial year will be £81,000,000. Therefore, more than 50 per cent, of the proposed reduction of taxation will benefit big business and private income earners in the higher income categories. The remaining 50 per cent, will be divided amongst nearly 3,500,000 taxpayers. It is obvious that those taxpayers will not derive an overall reduction of taxation of about 12£ per cent, as the Minister has claimed. It is true that they will derive a small concession.

Let us consider the small benefit that will be derived by a man with a wife and two children. Senator Kendall cited the incidence of taxation on such a taxpayer. . In 3949 a man with a wife and two children in receipt of the then basic wage of £326 a year - the figure for the average of the six capital cities - was not required to pay tax or social services contributions.

Senator MARRIOTT:
TASMANIA · LP

– And he did not receive endowment for the first child.

Senator O’FLAHERTY:

– I shall have something to say about child endowment before I conclude my remarks. In 1950-51, the man that I have mentioned received £369 a year, provided that he worked on all of the working days in the year. That was the year in which the Government merged income tax and social services contributions. In effect, it abolished social services contributions but retained in the act provision for the payment of those contributions, in order to be able to collect arrears. In that year he had to pay 16s. That does not sound much but previously he did not pay anything. That “was the first confidence trick in 1950-51.

Senator Spicer:

– Since then the basic wage has been increased by £1 as a result of the prosperity loading alone.

Senator O’FLAHERTY:

– The comparison exists just the same. In August, 1953, the basic wage for six capital cities was £614 a year. A man with a wife and two children who receives that wage pays £13 10s. in income tax. The Government claimed that it would not take more in taxation. It declared that it believed taxation should be reduced, but first it brought a new group within the range of income tax and now it is making those on the lower wages pay more. Recently Senator Kendall quoted taxation figures that had been given by the Treasurer (Sir Arthur Fadden). He said that a man with a wife and two children on an income of £350 would not pay anything. I asked at the time, by way of interjection, whether Senator Kendall meant income or taxable income. He said that he was speaking of taxable income. That being so, his earlier statement was incorrect. A man with a wife and two children on an income of £350 would not pay any income tax under the current proposals, but on a taxable income of £350 he would pay at the rate of 2s. 2d. in the £1.

Senator Spicer:

– His real income would be about £800.

Senator O’FLAHERTY:

– The AttorneyGeneral (Senator Spicer) apparently has not been listening to me intently. I said that the Government had hoodwinked the electors and that Senator Kendall had repeated the Treasurer’s statement. I was correcting him. A person in the circumstances that I have mentioned would pay 2s. 2d. in the £1 income tax, but Senator Kendall said that he would pay nothing. The truth is that such a taxpayer would have to pay £35 3s. Honorable senators on the Government side are so obsessed by the belief that they are giving the people reductions of taxation that they try to make political capital out of statistics without understanding them. I believe that Senator Kendall is an average senator, but he should not be hoodwinked and bewildered by propaganda that is distributed by ‘the Government he supports. The Government hopes that the people will believe it when it claims to be reducing taxation. The Government has not attempted to control inflation and has achieved nothing in that direction. The cost of living has risen and the basic wage has tried to keep pace with it, but an increase of £1 granted by the Commonwealth Court of Conciliation and Arbitration is useless in the circumstances. The basic wage is quite insufficient for a man and a wife and , two children. Child endowment and social services are designed to help such families to make ends meet, but even with those additions, their total income is barely sufficient for the ordinary needs of a man, wife and two children.

The Government takes £13 10s. from a man in such circumstances. It claims that he pays less in income tax than anybody else, but he has to pay a sum ranging from £7 16s. to £13 10s. a year to get some of the social services that were taken from him by this Government and a few new concessions that have been given by it. Those social service provisions are not’ as good as those provided in some other countries. Hospitalization and medical benefits are limited. The people get the benefits that were initiated by the Labour Government and a little extra in the way of medical attention from this Government, but they have to pay extra for the services they get. Very soon the Government will make additional charges for the extension of social services benefits. Since 1950 it has not paid into the National Welfare Fund the full amount that should have gone into that account. ‘ If it had done so, the National Welfare Fund would now total £254,000,000 instead of £186,000,000.

Senator Mattner:

– There is nothing there.

Senator O’FLAHERTY:

– The Government has taken all that too, and it is making provision for social services out of Consolidated Revenue. I have stated that a man on the basic wage of £614 with a wife and two children will pay £13 10s. in income tax. If he pays £7 16s. to get the minimum .hospital and medical benefits, the demands upon him will total £21 6s. In 1949, under a Labour Government, a man on the basic wage received most of the benefits that he gets now, and did not pay any income tax or social services contribution. This Government, which claims to be reducing, taxation, is inflicting higher taxes upon the small income-earners so that it can. assist those in the higher ranges of income. The 32,000 persons with incomes from personal exertion exceeding £5,000 will receive in income tax concessions this year £15,000,000. Exemption from the full penalty payment of 14s. in the £1 has been extended to incomes of £16,000. A man with an income of £15,000 will receive a reduction of taxation amounting to £905 a year. A basic wage earner has to pay at least £13 10s. in addition to the money that he will have to find for various benefits. Previously, that man paid nothing in income tax or social services contributions. The man on £15,000 income, as I have said, will receive income tax concessions amounting to £905. That amount is more than the individual incomes of 2,680,000 taxpayers. The Government is trying to hoodwink the people. It has called its taxation proposals incentive taxation. It has called this an incentive budget. What for? It seems to me to provide an incentive only to tip the Government out of office.

When Senator Kendall compared the statements to which he referred he only followed the line of argument that was used by the Treasurer (Sir Arthur Fadden) and his propaganda officials. I am sure that the Treasurer would not have used this argument of his own volition. If he had thought about his figures foi- a moment he would have realized that they were wrong. As Senator Kendall was hoodwinked by these figures it is probable that a lot of people outside this chamber were also hoodwinked by them. It is the duty of the Opposition to point out where the Government is wrong in what it has done. It is easy for anybody to come to false conclusions on the basis of headlines, and those headlines which concerned an overall reduction in taxation of 12-J per cent, were particularly misleading. The people are already discovering that the Government has not kept the promises that it made in relation to taxation. The people have noticed that the pay envelopes that they collect once a week or once a fortnight do not contain any more than they used to contain. The Minister for National Development (Senator Spooner) may reply that the tax reductions will not apply for some time, but people are already comparing the amount that should be deducted from their wages with the amount that is actually being deducted. The people are paying 32 per cent, more in taxation than they paid in 1949.

When the Labour Government was in office, everybody who earned less than £104 a year was exempted from taxation. In 1950, the present Government required single persons in receipt of £104 a year to pay social services contributions. Since then the Government has discontinued the social services contributions and has granted exemption from taxation to certain people. But it has not raised the amount of income which is exempt from taxation above £104. The Government increased from £1,040 to £4,160 the amount of pay-rolls to be exempt from pay-roll tax. Does that fact not represent an. admission that the value of money has fallen ? The amount of pay-rolls exempted from pay-roll tax has been raised four times but the level of income tax exempt from income taxation has been left at £104. In order to be consistent the Government should have raised the level of income exempt from income tax to £416. I shall not ask the Government to be consistent because I know that it cannot be consistent. The Government does not understand that when it makes a promise it should carry it out. If the Government raises the exemption amount in relation to one tax four times it should raise the amount of exemption in relation to another tax four times.

Senator Kendall:

– Does the honorable senator say that the level of exemption from income tax is still £104? It is £150.

Senator O’FLAHERTY:

Senator Kendall is thinking of something else. The deduction permissible from taxable income in respect of a wife has been raised from £104 to £130, but that is a different matter. I am dealing with the amount of income that is exempt from taxation. If honorable senators consult the tables with which they have been supplied they will find that the single person who earns £105 a year has to pay 10s. a year in taxation. Had the Government raised the amount of income which is exempt from taxation four times it would have only cost approximately £8,600,000 and it would have given relief to over 1,000,000 taxpayers. But honorable senators opposite have not suggested that the Government should take that course.

I fail to understand why the Government has increased the deduction from taxable income on account of a wife by only £26. It has long puzzled me how a man can keep a wife on £104 a year. That is only £2 a week and the Government -has only increased that amount to £2 10s. a week. I do not think that even a man on the basic wage could keep a wife for £2 10s. a- week. The Government has made some splendid concessions, such as those relating to wives and to children attending school. It is to be commended on that action. Before the Government parties came into office they used every conceivable style of propaganda against the Chifley Government. Honorable senators opposite said that they would reduce taxation. They did not merely say that they would stabilize the value of the £1. They promised to put value back into the £1. Yet from the moment that the Government took office the value of money dwindled. One now receives fewer goods for more money. The Government has had the audacity to claim that it has reduced taxation by 124 per cent, or a paltry £81,000,000 this year. Over 50 per cent, of the reduction in taxation will benefit big business interests and 32,000 people who are earning over £5,000 a year. The remainder will be divided among the millions of people who pay income tax and they will npt receive an average reduction in taxation of 12-J per cent. The average taxation reduction applicable to those people will be approximately 3 per cent. Some companies will be able to pay an additional 3 per cent, in dividends as a result of the reductions in company taxation.

Senator MARRIOTT:
TASMANIA · LP

– Did the Labour Government permit those companies a 40 per cent, depreciation allowance?

Senator O’FLAHERTY:

– The present Government* took that allowance away, but it has given the companies an equivalent concession in the form of reductions of company taxation. But the depreciation allowance applied to people who were making some improvement to their plant for the purpose of providing employment or producing a greater quantity of goods. The Government’s taxation concession has been made to these companies without requiring them to do anything for it. Those facts illustrate the difference between the present Government and the previous Government. I repeat that some companies will be able to pay an increased dividend of 3 per cent, because of the tax reduction provided for in this measure. But for more than 3,000,000 taxpayers the reduction will be an average of 3 per cent., and not 124 per cent, as has been suggested by the sponsors of this miserable legislation which, in the aggregate, will yield only £10,000,000 less in tax than was paid last year.

Senator SPOONER:
New South Wales Minister for National Development · LP

in reply - The real test of the effectiveness of this legislation is the reactions of taxpayers to it. I do not think the Australian taxpayers will be at all persuaded by Senator O’Flaherty’s arguments. They will not be impressed by percentages and their relation to the national income. They will look at this legislation and say, in effect, “ This is a good Government. It has reduced the rate of tax that I am called upon to pay. It has increased the amount that I may deduct for my wife from £104 to £130 a year. This is a good Government because it no longer levies the surcharge on income that I get from property. This is a good Government because it has increased the income that I may earn in my later years before paying taxes. This is a good Government because it has reduced the taxes that companies have to pay. It has allowed me a greater deduction for education expenses, and if I am an artist or an author, it will allow me to spread my taxation commitments in a more equitable manner “. Those are the hard practical tests that every taxpayer will apply to the Government. When we get into the realm of percentages, then, in truth, we are getting into the. realm of fantasy, because percentages vary from year to year. The bona fides of a government must be tested in relation to the circumstances that exist when it brings down its budget. The revenue that taxpayers are called upon to contribute under a budget must be compared with the revenue that would be obtained if the tax reductions contained in that budget were not granted. That is the real test. Each taxpayer must ask himself, “How much tax would I have to pay at the existing rate3 and how much will I have to pay at the reduced rates ? “ With all respect to Senator O’Flaherty, that is the commonsense approach to the problem, and when one adopts that approach to the record of this Government one finds that it has reduced taxes in three out of its four budgets. In our first budget tax reduc tions aggregated £16,500,000. In 1952-53, tax reductions amounted to £52,500,000. This year, tax reductions will amount to £118,400,000. It is all very well for the Opposition to claim that it could do better. The proof of the pudding is always in the eating. In the last three years in which Labour was in office, tax reductions amounted to £29,000,000, £26,000,000 and £46,000,000, respectively. Those reductions were not as big as the ones this Government has made. In addition, Labour was in office at a time when loan funds were freely available for public works, and revenue moneys were not needed for that purpose. It was a period of true peace, when provision for the defence services was not nearly so great as is now necessary. It was a fair weather era. World War II. had just ended, and the Government was receiving substantial receipts from the sale of wartime assets; yet, in spite of those advantages, in the three years that I have mentioned, Labour’s record in tax reductions did not match ours. In these circumstances, therefore, it is of little use to debate issues ‘and argue points. Facts speak louder than words. This legislation provides for an overall reduction of 12½ per cent, in income tax rates. For taxpayers, without dependants, . in the lower income ranges the reductions- will amount to 24 per cent. Taxpayers with dependants, will receive reductions ranging from 100 per cent in the case of low income-earners, to 20 per cent in the middle income groups. Generally speaking, taxpayers in the lower income groups will receive reductions considerably more than the average of 12½ per cent.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator ARMSTRONG:
New South Wales

.- The Minister for National Development (Senator Spooner) said in his second-reading speech that the new scales of income tax instalments for salary and wage-earners could not be introduced until the 1st of November, 1953. The reason he gave was that the calculation, printing and distribution of the new. scale would take some time.

Whilst there may be some justification for this delay, it is strange indeed how grudgingly tax concessions are given to persons in the smaller income groups, whether they be pensioners or salary and wage-earners. Why is it necessary to wait until the 1st of November for the new scale to be applied? It is true that when assessments are issued at the end of the year, excess contributions will, be refunded to taxpayers and perhaps, in the long run, many taxpayers may prefer it that way, but the fact remains that the reductions should be made at the earliest possible moment. T should like to be assured before this measure passes the committee stage that it is essential to wait until the 1st of November before applying the new scales of deductions.

Senator GUY:
TASMANIA · LP

– It is only ten days away.

Senator ARMSTRONG:

– That is not the point. The budget should have been brought down very much earlier in the year and the new rates introduced long before now. As soon as the budget has been presented, a. start could be made on the calculation of the new scales. The Government knows very well that its budget legislation will not be amended. No matter how long the Senate may discuss a taxation measure, the possibility of securing an amendment of that legislation is remote indeed. I am sure that no member of this chamber can remember the last occasion on which a Senate amendment to budget legislation was accepted. Therefore, there is nothing to prevent a government from having its new taxation scales printed as soon as its budget proposals have been determined. Again I question the necessity to delay the introduction of the new instalment scale until the 1st of November.

This measure also abolishes the differentia] rate of tax on income from property. I am one of those who believe that any reduction of taxes must be good. We so seldom see a tax reduction these days that we are inclined to applaud warmly when one is made. But, when we come to examine any tax reduction proposed in this Government’s budgets, we are inclined to ask ourselves, “Is it a fair reduction?” In fact, our main criticism of this budget has been the unfairness of its tax reductions. When we compare the substantial tax concessions that are being granted to companies with the pension increases of 2s. 6d. a week, we are inclined to have our doubts about all this Government’s budget proposals. The Government takes great credit for its action in removing the differential rate of tax on income from property. After reading the Minister’s second-reading speech, I am inclined to think that, in justice, the Government has had to take this action. One result of uncontrolled inflation during this Government’s term of office is that those members of the community who depend upon small incomes from property have been impoverished by the high cost of living. It is all very well to talk about the wealthy income earner from property, but when one examines the matter, one finds that a great majority of the people who derive income from property are not wealthy at all. Inflation has reduced the value of their incomes by half, and many of them are unable to continue to pay income tax at the differential rate. What the Government has had to do in this and other legislation is a direct result of its maladministration which has allowed value to disappear from the fi and inflation to speed on unheeded. This is just one more instance of the impoverishment that has been brought to many people including pensioners by the depreciation of our currency.

There is another matter that I should like to bring to the notice of the Minister. Let us consider the tax payable on the undistributed income of a private company in excess of £5,000. If, for instance, that income is £100, tax at the rate of 6s. in the £1 amounts to £30, which leaves £70. If we subtract the retention allowance of 25 per cent., which would be £17 in this case, we get the figure of £53. Division 7 tax on undistributed profits at a rate of 50 per cent, on this amount equals £27, so that when £30 is added to £27 we get a. total tax of £57 to be paid on an income of £100. Whether that provision has been left in the act deliberately or by an oversight I do not know, but in the case of a public company tax payable at the rate of 7s. in the £1 amounts to £35. This seems a most unfair burden to be (borne by private companies as compared with public companies. I should like the Minister to consider that matter and inform the committee of the reason for the differentiation.

Senator AYLETT:
Tasmania

– I had not intended to speak on this hill until I heard the remarks of the Minister in his second-reading speech, in which he emphasized the tax reductions which the Government is making. I suggest that reductions of taxes can be related only to purchasing power of money. The basic wage-earner, with a wife and two children, at the present time pays double the amount of tax that he paid in 1948, 1949 and 1950. Yet this Government is attempting to convince the people that it is reducing taxes paid by the working classes. I point out that a man on the basic wage with a wife and two children, and with a taxable income of £400 a year, is liable to pay income tax of £23 6s., whereas in 1947, 1948 and 1949 he would have paid no tax at all. Therefore, the Government cannot claim that it is reducing taxes as far as the lower income groups are concerned. After all, the basic wage is designed to cover only the bare necessaries of life.

The TEMPORARY CHAIRMAN (Senator Pearson:
SOUTH AUSTRALIA

– Order! I do not think the honorable senator’s remarks are connected with this bill.

Senator AYLETT:

– In my opinion, they are relevant. I shall connect them with the bill.

The TEMPORARY CHAIRMAN:

– Order ! It seems to me that the honorable senator is addressing himself to the subject-matter of a bill which will come before the committee shortly.

Senator AYLETT:

– I understood you to say that the two bills would be dealt with together.

The TEMPORARY CHAIRMAN:

– No. The bills are being dealt with separately at the committee stage.

Senator AYLETT:

– I understood the Clerk to refer to bills Nos. 252 and 253”, and I also understood you to ask, “Ls it the pleasure of the committee that the bills be taken as a whole ? “

The TEMPORARY CHAIRMAN:

– The bill that was read a second time was a bill for an act to amend the Income

Tax and Social Services Contribution Assessment Act 1936-1952, as amended by the Taxation Administration Act 1953, and by the Income Tax and Social Services Contributions Assessment Act 1953. The second-reading stage of the two bills was dealt with simultaneously, but the bill before the committee at the moment is the one to which I have referred.’

Senator AYLETT:

– What is its number ?

The TEMPORARY CHAIRMAN.No. 252.

Senator AYLETT:

– Have I your word, Mr. Temporary Chairman, that bill No. 253 will be dealt with after this bill is disposed of ?

The TEMPORARY CHAIRMAN.That is correct.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 692

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION BILL 1953

Second Reading

Debate resumed from the 14th October (vide page 521), on motion by Senator Spooner -

That the bill be now read a second time.

Question resolved in the affirmative.

Bill- read a. second time.

In committee:

The bill.

Senator AYLETT:
Tasmania

– I wish to deal with the rates of income tax referred to in the first schedule and to point out to the Minister that a high rate of tax has been imposed by this Government on the basic wage-earner who, in previous years, was exempt from tax. It seems to me that that has been done in order to allow the Government to reduce the tax payable by those on the higher incomes. It has been said that allround tax reductions have been made by this Government, but I suggest that that is not so. Inflation is still forcing up the basic wage. Although many workers are now in relatively high income groups, their purchasing power is no greater than, it was before this Government came to office. The Government proposes to give an additional £1,000 a year to the man with an income of £20,000, but will continue to rob the basic wage-earner, with a wife and two children, of £23 6s. a year. There is no all-round reduction of taxation in that instance. The Government might be able to sell that idea to those who own big sheep stations or who have shares in companies, but it will not be able to sell the idea to industrial workers, for instance. They are the people who are being robbed of their purchasing power to-day. I suggest that the Government -should consider this matter closely before the next general election, with a view to giving married workers with responsibilities a real reduction of taxes and helping to restore them to the financial position they enjoyed when Labour was in office.

Senator COOKE:
Western Australia

.- The Minister for National Development (Senator Spooner), who is in charge of this bill claimed, during his second-reading speech, that inaccurate statements had been made concerning the Government’s taxation proposals. Honororable senators may remember that the Minister also claimed- that the Public Accounts Committee had made inaccurate statements, and that certain honorable senators were also guilty of inaccuracies when the Estimates for his department were challenged in this chamber. He is an accountant and should be aware of the facts.. I should like him to justify his claim that this Government is reducing the burden of taxes, in the face of certain actuarial calculations to which I shall refer. In 1946-47, the total amount of taxes levied was £373,900,000 on a national. income of £1,365,000,000. That was then the greatest tax impost in the history of Australia and represented 27.4 per cent, of the national income. In 1949-50, which was the last year of office of the Chifley Government, £504,400,000 was taken, by way of taxes, from a national income of £2,293,000,000. In other words, 22 per cent, of the national income was taken to cover the expenses of government. Under the present co-called incentive budget of this Government, £982,140,000 will be taken for govern ment expenditure from the national income which, based on last year’s figures, will be £3,579,000,000. That means that 27.4 per cent, of the national income will be again taken from the people. This Government requires an additional 5.4 per cent, of the national income compared with the proportion of thi; national income that was collected under the last budget - of the Chifley Government. Thus, this Government’s revenue represents the highest proportion of the national income to be collected by any government since 1946-47. At that time, as honorable senators will recall, Australia was confronted with the most pressing problems arising from war and during the transition period from a war-time economy to a peace-time economy. If the Minister disputes my contention that that additional 5.4 per cent, of .the national income is being taken from the pockets of the people, I should like him to give the correct figures. Whereas, in 1949, the Chifley Government’s expenditure totalled £504,400,000, this Government’s annual expenditure has now increased to £982,140,000, an increase of £478,000,000, or an increase of approximately 100 per cent. Will the Minister explain whether the value of the £1 has decreased in the same ratio ? Does he agree that owing to the reduced purchasing power of the £1, the Government to-day must expend nearly twice the amount that the Labour Government expended in 1949 in order to achieve the. same results? If the Government’s revenue represents 5.4 per cent, more of the national income to-day than it represented in 1949, how can it be said that under this budget the Government is affording relief to the community ?

Senator SPOONER:
Minister for National Development · New South Wales · LP

Senator Cooke compared total collections of taxes by this Government, and collections by the Chifley Government in relation to the national income. In making such a comparison, the first point that arises is that allowance must be made for total annual expenditure on defence to-day and the total expenditure incurred under that heading during the regime of the Chifley Government. I have not the precise figures available, but accepting the figures that Senator O’Flaherty cited as being correct, the position is that whereas in 1949 defence expenditure amounted to £55,000,000, expenditure under that heading for the current financial year is estimated at £215,000,000. Senator Cooke said that in 1949-50 total expenditure was 22 per cent, of the national income whereas to-day it is 27.4 per cent, of the national income. After deducting expenditure on defence, it will be seen that in 1949-50 government expenditure was 20 per cent, of the national income, whereas this year it will be 21 per cent, of the national income.

Senator Cooke:

– In any event the revenue is collected from the pockets of the people.

Senator SPOONER:

– Whatever complaint the people may make, I do not believe that they complain about the need to make provision for defence. They realize that if they do not carry that commitment gladly, they must at least face up to it as responsible citizens.

In reply to Senator Aylett, I point out that in respect of every income range, the rate of tax under this budget will be lower than it was under the previous budget. It is fallacious to attempt to relate varying levels of income without paying regard to changing economic conditions and the varying purchasing power of money. As I said earlier, the only test that can be applied in respect of each financial year is the degree to which rates of tax are reduced, or increased. How much more, or less, is the taxpayer obliged to pay under the new rates of taxes ? The overriding reply to Senator Aylett is given in the tabulations which were distributed to honorable senators. For instance, the tax payable on an income of £600 which, to-day, is the income of the basic wage-earner, is £17 16s., whereas on a similar income the tax payable in Great Britain is £44 10s. and that payable in New Zealand is £57 13s. 6d. That comparison, I believe, should make us more cheerful.

Senator, BENN (Queensland) [10.8 J. - I should like the Minister for National Development (Senator Spooner) to inform me, in terms of purchasing power, of the equivalent to-day of the sum of £600 in 1949. It has been claimed that in 1949 tax of £26 5s. was payable on an income of £600, whereas at present tax of only £13 ls. is payable on a similar income. In 1949 the sum of £600 was £262 more than the basic wage, which at that time was £338 on an annual basis. At present the basic wage is £11 2s. a week, or £577 annually. The total of the sum of £262, by which amount the basic wage was less than £600 in 1949, and the sum of £577, which is the annual equivalent of the basic wage at present, is £839. Whereas the tax on an income of - that amount at present is £46 6s., the tax on an income of £600 in 1949 was only £26 5s. Will the Minister inform me of the present equivalent of the sum of £600 in 1949? Having regard to the increase of the basic wage since 1949, will he agree that it would be in the vicinity of £800 ?

Senator O’FLAHERTY:
South Australia

.- The Minister for National Development (Senator Spooner) stated that the tax payable by persons in the lower’ income groups had been reduced’ by 100 per cent. The budget papers illustrates the tax payable by a man with a wife and three children and shows that on an income of £350 last year he would pay 16sl in tax. During the current financial year, a person coming within that class will not. be obliged to pay any tax at all. Is the Minister in a position to inform me of the number of persons who come within that category? The tables supplied in the budget papers and in the annual report of the Commissioner of Taxation illustrate the position of persons in the class to which I have referred who have an income of from £200 to £350 and also those with incomes from £351 to £400. I should like to know the number of persons in respect of whom income tax will be reduced by 100 per cent, during the current financial year.

Senator SPOONER:
Minister for National Development · New South Wales · LP

.- Senator 0’Flaherty will be aware that the annual report of the Commissioner of Taxation contains tables showing the classifications of taxpayers in respect of varying levels of income.

Senator AYLETT:
Tasmania

– The Minister for National Development (Senator Spooner) has admitted that a man on the basic wage with a wife and two children will pay tax amounting to approximately £17, whereas a man in the same category was not obliged to pay income tax at all in 1948-49, 1949-50 and 1950-51. I rise simply in order to thank the Minister for making that admission.

Bill agreed to.

Bill reported without requests; report adopted.

Bill read a third time.

page 695

ESTATE DUTY ASSESSMENT BILL 1953

Second Reading

Debate resumed from the 14th October (vide page 516), on motion by Senator Spooner -

That the bill be now read a second time.

Senator McKENNA:
Leader of the Opposition · Tasmania

– The purpose of the bill before the Senate is to amend the Estate Duty Assessment Act. Its main purpose is to increase the amount of the statutory exemption and to alter the sliding scale upon which the exemption operates. Its second purpose is to provide that the exemption of £5.000 at present applicable to exservicemen of World War I. and World War El. shall apply also to members of the forces serving in Korea and Malaya. The Opposition supports the bill in both those aspects, and accordingly I shall devote no time to a discussion or consideration of them. However, we consider that the Government should have gone further in the matter of granting exemptions. It is well, at the outset, to direct attention to the soaring revenues that have been available to successive governments down the years from this tax. When it was instituted in 1914-15 the total yield from this source was £39,646. In the last four years it has risen very sharply. In 1948-49 the tax yielded £4,700,000. It rose to £6,000,000 in 1949-50, £6,300,000 in 1950-51, £7,700,000 in 1951-52, and £8,300,000 in 1952-53. There has been very extensive growth during the last four years. The estimated revenue from the tax in this finan cial year, prior to the concessions that are granted in this bill, was £9,200,000- a further grand increase ! On the Minister’s figures, the proposed alteration will result in a loss of revenue amounting to £80,000 in this financial year. It is expected that the estate duty tax will yield £9,120,000 in this financial year. In fact, that will be an increased revenue of £727,000 to come from the estates of deceased people compared with the amount’ that was collected by this means in the last financial year. The first point, that I make is that there will be a substantial increase of revenue from this source in this financial year compared with the last financial year. The conclusion 1 draw is that the Government has ample room to make more concessions in relation to this tax. Although supporters of the Government continue to claim taxation is being reduced, I point out thatmore will be collected in tax from this source in this financial year than was collected during the last financial year. Without embarking on that subject, however, I stress that there is obviously room for further concessions to be granted. The Opposition considers that it is time that a new principle was introduced in relation to estate duty taxation, the proposal being that where a serviceman of any degree, serving in any place . in the defence forces of Australia, is unfortunate enough to be killed, whether on active service or on home service, and whether as a result of compulsory training or voluntary effort, or suffers sickness that results in his death within a limited period, his estate should be given the benefit of the £5,000 exemption. If his total estate is of less value than that amount, the total amount should be exempt. The Opposition considers, in the first place, that there should be some special consideration of men who serve their country in any arm of the defence forces. It is not likely that a compulsory trainee will have a large estate, and it is not very likely that many of the men in that service or in the Citizen Military Forces will be killed whilst they are engaged upon service, or die as a. result of their service. I am not posing that there will be a great amount of money involved. However, in view of the very intensive kind of training that is undertaken in many instances by young people in the highly mechanized forces, who handle explosives and dangerous weapons, it could easily happen that some of them could be killed, or die from injuries sustained on service. The Opposition considers that this new principle should be incorporated in the legislation, in order to provide that the exemption in those circumstances, quite apart from any compensation that may accrue to relatives, should be extended to cover such men. There is already an appropriate provision in the act in relation to ex-servicemen of World War I. and World War II. That broad principle has operated since 1914, and we believe that it ought to be extended.

Under the present act the question of fact as to whether a man was or was not injured while on active service, or contracted a disease during service which resulted in his death, is determined conclusively by a tribunal established under the repatriation legislation. If we write the new principle into the act, it will be necessary to have some person or body to determine those questions of fact. The Opposition’s proposal on that point is that if a matter is not conceded by the commissioner, and becomes a dispute, it should be determined by a judge of a State court. Accordingly, the Opposition will, at the committee stage, move an amendment designed to vest State courts with federal jurisdiction for that particular purpose.

Senator WEDGWOOD:
Victoria

– I desire to support the bill, and to congratulate the Government on fulfilling its election promise to reduce taxation. The original act was introduced by a Labour government in 1914. The honorable member for Melbourne Ports (Mr. Crean) has truly stated in another place that estate duty does not seem to have attracted a great deal of attention in the Parliament since that time. There have been very few fundamental alterations of the original act. It was amended by the previous Menzies Government in 1940, when a concession was granted in respect of an estate passing to the widow, children, or grandchildren of a deceased person. That amendment, in addition to liberalizing the general exemption, raised to £2,000 the exemption in respect of estates passing to the relatives that I have mentioned. The object of the 1940 legislation was to exclude small estates from liability to pay estate duty. The further liberalization now contemplated will raise the statutory exemption from £2,000 to £5,000, where the estate passes to the widow, children or grandchildren. The exemption will be raised from £1,000 to £2,000 when a part of the estate passes to the widow, children or grandchildren. The Leader of the Opposition (Senator McKenna) has stated that the Opposition would like to introduce a new principle into the act. I, also, would like to introduce a new principle, and I foreshadow that, at the committee stage, I shall move an amendment with relation to the statutory exemption. Clause 4 reads -

  1. – ‘(1.) Section eighteen a of the Principal Act is amended by omitting paragraphs (a) and (6) of sub-section (1.) and inserting in their stead the following paragraphs: - “ (a) where the whole of the estate passes by will, intestacy, gift inter vivos, settlement or right of survivorship to the widow, children or grandchildren of the deceased -

    1. i ) where the value of the estate does not exceed Five thousand pounds - a sum equal to the value of the estate; or
    2. where the value of the estate exceeds Five thousand pounds - the sum of Five thousand pounds decreased by One pound for every Three pounds by which that value exceeds Five thousand pounds ; “ (6) where no part of the estate so passes to the widow, children or grandchildren of the deceased -
    3. where the value of the estate does not exceed Two thousand five hundred pounds - a sum equal to the value of the estate; or
    4. where the value of the estate exceeds Two thousand five hundred pounds - the sum of Two thousand five hundred pounds decreased by One pound for every Three pounds by which that value exceeds Two thousand five hundred pounds ; or “. (2.) The amendment effected by the last preceding sub-section applies in relation to the estates of deceased persons dying on or after the date of commencement of this section.

I consider that after the word “ widow “, wherever occurring, there should be included the word “ widower “. I point out that, with many people in the middle income groups, money is saved by the wives and, as has been mentioned by the Minister for National Development (Senator Spooner), the home is frequently in the wife’s name. Therefore, as the clause stands, if a wife predeceased her husband, the estate would not receive the benefit of the statutory exemption. That anomaly has existed down the years. In almost every instance in the legislation, where reference to the deceased person has been made, only the masculine gender has been mentioned. “We all know that in many homes the saving is done by the wife. In most working-class homes, she does all the financing, and in most instances the husband allows her to have her own banking account. As I have already mentioned, the husband frequently ensures that the deeds of the marital home are in his wife’s name. Therefore, I consider that an amendment along the lines that I have foreshadowed is warranted. 1 consider that the matter that I have raised is of considerable importance, and I hope that the Minister will discuss it with the Treasurer (Sir Arthur Fadden) with a view to the amendment that I shall move being accepted.

Senator LAUGHT:
South Australia

– I rise to support the bill and to lend my support to the amendment that has been foreshadowed by Senator Wedgwood.

Debate interrupted.

page 697

ADJOURNMENT

The DEPUTY PRESIDENT (Senator Reid). - 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 negative.

page 697

ESTATE DUTY ASSESSMENT BILL 1953

Second Reading

Debate resumed.

Senator LAUGHT:

– I support the amendment that has been foreshadowed by Senator Wedgwood, and I believe it is proper that the Senate should briefly consider the estate duty from all angles. I have before me the fourth and final report of the Royal Commission on Taxation in 1934. In paragraph 1207, the royal commission, in dealing with estate duty, made the suggestion that Senator Wedgwood has advanced. It, stated -

The concession might also he extended to the widower, in view of the fact that although dependence might be regarded as exceptional, yet where there is no dependence, the wife’s estate has frequently been built up from the husband’s means and the widower is then only receiving from her estate assets which he himself created.

I go further to say that under the modern tendency, quite often the family home is held by husband and wife as tenants in common. Subsequently, when the wife dies, invariably half the value of the home is in her estate and passes usually to the widower. Therefore, I predict that the amendment foreshadowed by Senator Wedgwood would be availed of in many cases, and would bring the exemption from estate duty to many deserving males, many of them ageing men and possibly living on superannuation. If this amendment were agreed to by the Senate, a woman could leave an estate up to £5,000 before any estate duty would be chargeable to the husband or family. I believe that that would bring relief to many deserving cases, because many houses and estates are held by spouses as joint tenants.

I wish to direct the attention of the Senate to another matter connected with estate duties that should have consideration. Honorable senators will recall that assets that pass to a widow or widower up to the value of £5,000 are exempt from estate duty. The Taxation Branch does not require a return and no duty is payable in such cases. In one of those estates, a beneficiary could be left £1,000. Being a beneficiary in a small estate, he would not pay any duty because the estate would not be examined. He might be a nephew of the deceased person or a complete stranger in blood. But if the estate totalled £10,000 and the beneficiary received £1,000, duty would be payable.

In other words, it is detrimental to a person to share in a large estate. I submit that the Minister in charge of this bill should examine that proposition. A beneficiary who shares in a large estate has to pay quite a large sum in duty, but if he shares in an exempt estate, his legacy is free of duty. The principle that is common in South Australia might be considered with a view to its introduction into the Commonwealth law. Under that principle, duty is paid according to the amount of a person’s succession rather than according to the size of the estate. In the course of some years, I have noticed considerable hardship in cases such as those that I have mentioned. I commend the bill. I think that it is in keeping with the times. In particular, I commend the amendment that has been foreshadowed by Senator “Wedgwood.

Senator WRIGHT:
Tasmania

– At the risk of intruding, I wish to add one or two observations to the debate. I cannot allow the passage of the bill to occur without taking the opportunity to make representations to the Government primarily, and also to the Senate, in support of a suggestion that I consider to be overdue. That is with regard to the collection of estate duty. Estate duty was imposed for the first time in the year when the land tax had its origin. An apparatus for valuation under federal law had been set up previously in connexion with the land tax. Since that time, the federal authorities have clung to three separate valuations and assessments of all property for the purpose of estate duty. However, the change that has come over Federal-State financial relations since then has been revolutionary. The Australian Government collects a few millions of pounds from the estate duty and, at the same time, acquires through the medium of income tax at least £29,000,000 which this year will be redistributed among the States by way of financial assistance. That is in addition to tax reimbursement. _ I believe that that statement is sufficient .to indicate that this is one of the taxes that should go back to the States under the altered outlook of Federal-State financial relations. It should be added to the revenue of the States for their own purposes. That would enable the Australian Government to diminish the special assistance over and above tax reimbursements that is given to the States. I hope that that suggestion will be considered worthy of consideration.

In case it is not and this tax is retained by the Australian Government, I urge that the Commonwealth permit the States to make the collection as agents of the Commonwealth. I affirm strongly that taxpayers are vexed by a multiplicity of forms for assessment and a multiplicity of tax inquiries just as much as they are by the actual payment of the exaction. I believe that the Australian Government presents the opinion, in answer to that suggestion, ‘ that before making an arrangement with the various States for their collection of estate duty as agents on behalf of the Commonwealth, it is necessary that there should be uniform estate duty laws in the various States. I contest that proposition. I do not propose to debate it on this occasion, but I remind the Senate that there was never any suggestion that income tax laws should be uniform when the States were made the agents for collecting income tax. The one form of affidavit of assets and liabilities could be so compiled as to enable the taxpayer to return all the essential information that would deal with the State of domicile and the federal assessment, and the State of domicile would be the agent for the Commonwealth in the collection of the tax. The economy of that course in eliminating separate tax departments would be quite marked.

Reference has been made to the fact that gift duty is the prerogative of the Commonwealth department for collection. Two years ago, outside this chamber I put forward the suggestion that I have just made and a further suggestion that I shall explain. I also put it before the Treasurer (Sir Arthur Fadden). I frequently meet people who are quite ignorant of their obligations regarding gift duty. They are taken into the taxation net when some disclosure is made and then have to pay penalties as well as the duty. I urge that gift duty should be collected by the States at the same time as they collect their stamp duties. Then every person making a declaration for stamp duty would have to make a declaration as to the gift and disclose whether it was taxable. That is outside the scope of this bill, and I halt myself promptly, but I hope that the suggestion will be. considered.

Believe it or not, it is a requirement of the Commonwealth in connexion with the separate collection of estate duty that the return shall be filed within three months. Then the Commonwealth files the return away until the States complete the assessment. That might occupy two years. The Commonwealth foregoes any activity in relation to the assessment, and when the State has completed its assessment, it takes the figures of the States as its basis and starts anew upon a new assessment. As I have said, two years may have gone by, despite the fact that the Commonwealth rigidly enforced its requirements that an estate duty return be lodged within three months of death and default by even one month involves penalties. There is not the slightest need for the provision for a return to be lodged within three months. In the case of the Commonwealth, twelve months would be reasonable and sufficient in most cases. I am not indicating anything but appreciation of the bill that is before the Senate, but I want to take the opportunity to urge consideration of the proposals because I think that the collection by the Commonwealth of estate duty amounting to a few million pounds, when the Australian Government is giving away so much in addition to tax reimbursement to the States, is an idle duplication of processes and adds to the vexation of the taxpayers.

Senator SPOONER:
Minister for National Development · New South Wales · LP

in reply - Parliamentary life is full of surprises. This bill seemed to me to be a comparatively simple measure which, would not take a great deal of piloting through this chamber, but that has not proved to be the case. I shall try to deal with the statements that have been made on it by each honorable senator who has spoken.

The Leader of the Opposition (Senator McKenna), if I do not unduly reduce his arguments, put two principal points. He said that there was room for a greater reduction in estate duty than the conces sion which has been proposed in this legislation. The answer to that contention is that all things must be considered in their proper perspective. All proposals must be viewed in the light of the budget arrangements. A certain amount was allotted for this particular form of tax relief and if the extent of that relief were to be increased the Government would have to reduce some other concession. The Leader of the Opposition then said that he proposed to move an amendment to the bill at the committee stage and he was good enough to circulate a copy of his proposed amendment which contemplates giving the benefit of the exemption from estate duty to all those who are or have been members of the naval, military or air forces of the Commonwealth. A similar amendment to this bill was proposed in another place and the Government indicated that it was not prepared to accept it. That is the Government’s attitude in the Senate also. I shall state its reasons. The concession for which provision has been made in this legislation corresponds to the provisions of the Repatriation Act which defines war service and operational areas in respect of which repatriation benefits are available. In drafting the Estate Duty Assessment Bill the Government has adopted the definitions that are set forth in the Repatriation Act. Needless to say, the definitions in the Repatriation Act have been adopted only after a most exhaustive examination of the whole position and the Government considers that there is no justification for a variation of the definitions in the Repatriation Act for use in the Estate Duty Assessment Act. A variation of the definitions in this bill would result in this legislation being inconsistent with the Repatriation Act. The object of the Government is to make the concessions mentioned in the Estate Duty Assessment Bill available to the estates of persons whose services would bring them within the scope of the Repatriation Act.

Senator Wedgwood indicated that she proposed to move an amendment in committee which would extend the exemptions in estate duty to widowers no less than to widows. I discussed the amendment which Senator Wedgwood proposed to move with the Treasurer (Sir Arthur Fadden) and I have great satisfaction in informing the Senate that the Treasurer thanks Senator Wedgwood for her suggestion and is prepared to accept it. Therefore, when consideration of the bill reaches the committee stage, I shall move the amendment that Senator Wedgwood has proposed. The thanks of the Government go to Senator Wedgwood for bringing this proposal forward and to Senator Laught who, I am told, has been advocating the principle for some time as chairman of the taxation advisory committee of Government supportei’3.

Senator Wright proposed that estate duty should, in due course, become entirely a State matter. He said that the States should be permitted to use estate duties to increase their revenue which would result in a reduction of the amount payable to them by the Commonwealth. That is too big an issue for me to express an opinion on just now. I think it is a matter that must be considered from year to year. I do not think that I should attempt any prognostication in relation to it. However, the Government has already stepped out of the field of entertainments tax and perhaps it could consider vacating the field of estate duty in due course.

Senator Wright also proposed, with a great deal of vigour, that estate duty should be collected by the States on behalf of the Commonwealth. I discussed that matter with the Treasurer who has made a careful inquiry into the matter and furnished me with his views. At this stage the Treasurer is not prepared to adopt the proposal. I propose to read some of the reasons that actuated him in making that decision. One extract from the Treasurer’s report reads as follows : -

All authorities appear to agree that an essential condition precedent to such an amalgamation, if any Teal benefit is to be derived therefrom, is that there should be uniform legislation in the Commonwealth and State fields . . . The legislation at present existing varies from State to State and between the Commonwealth and the States … In Queensland and South Australia, the duty levied is a succession duty levied on property which a beneficiary takes by succession on the death of the deceased. In addition, Queensland levies a probate duty on personal property passing on the grant of representation. In Victoria and Western Australia, the duty imposed is a probate duty based on property passing on the grant of representation. Conflicting recommendations have been made by two Royal Commissions as to the form which a possible uniform act should take. The Royal Commission on Taxation 11)32-34 . . . stated that, while the present diversity in law and the practice as between the Commonwealth and States continues it is doubtful whether any considerable saving would be effected by an amalgamation of the offices.

Those comments will indicate to honorable senators that the representations that were made to me have been given very careful consideration although the final result is that the Government is not prepared to accept the proposed amendment. The Government is prepared to accept the amendment that Senator Wedgwood contemplated. The Government, with regret, finds itself unable to accept the amendment that the Opposition contemplated.

Question resolved in the affirmative.

Bill read a second time.

In committee :

Clauses 1 and 2 agreed to.

Clause 3 - (1.) Section nine of the Principal Act is amended -

  1. by inserting after sub-section (1.) the following sub-section: -

    1. by omitting from sub-section (2.) the words “ the last preceding subsection “ and inserting in” their stead the words “ sub-section ( .1 . ) or (1a.) of this section”:
  2. by adding at the end thereof the following sub-section : - “ (‘4.) For the purposes of this section the expression ‘Korean or Malayan war service ‘ has, in relation to a . . . (2.) The amendments effected by paragraphs (a), (6), (c) and (e) of the last preceding sub-section shall bc deemed to have come into operation on the twenty-seventh day of June, One thousand nine hundred and fifty.

Section proposed to be amended -

  1. – (1.) From the value of the estate of a person who is or has been a member (3.) Where the question as to whether such a person Iws or has not died . . .
Senator McKENNA:
Leader of the Opposition · Tasmania

[10.48 J. - I desire to move amendments in relation to three matters. At the moment, I do not propose to deal with the first amendment that I have circulated because it is purely incidental to the others. I move -

That after paragraph (e) of sub-clause (1.), the following paragraph be inserted: - “ (/) by adding the following new- subsections : - (5.) From the value of the estate of a person who is or has been a member of the naval, military or air forces of the Commonwealth and who during service as such member or within three years of the termination of such service dies as a result of injuries received or disease contracted during such service, there shall be deducted in respect of such part of the estate as passes to the widow, children, grandchildren, parents, brothers, sisters, nephews or nieces of the deceased a sum of Five thousand pounds or where the value of that part is less than Five thousand pounds, an amount equal to the value of that part. (ti.) Subject to sub-section (3.), the question as to whether a person has ot has not died as a result of injuiries received or disease contracted on service as a member of the naval, military or air forces of the Commonwealth may on the application of the legal personal representatives of such person or a person beneficially interested in his estate be determined by a Judge of the Supreme Court of a State or Territory and the Supreme Court of a State is vested with Federal jurisdiction for the purposes of determining the question.”.

Those proposed sub-sections are selfexplanatory. The first proposes that the exemption of £5,000 at present available in respect of men who die while on active service or contract a disease which results in early death, shall be extended to all members of the services who die during their service or contract a disease that results in their early death. I concede that it is an entirely new principle. I suggest to the committee that not very much money would be involved in making this concession, and that it would be a gesture to men who serve their country at home or abroad. I may add, too, for what it is worth, that it would be some inducement to men to enlist in the Citizen Military Forces. Surely anything that the Government can do to stimulate recruiting in the Citizen Military Forces should be done. Proposed sub-section (6.) is a consequential amendment which provides that the question whether or not a peron died on service or contracted a disease on service which resulted in his early death, shall be determined, if he were a man who came under the repatriation tribunals, by a judge of the Supreme Court of a State. Then follows the very necessary provision vesting State courts with the necessary federal jurisdiction. If these proposed new subsections are inserted in the bill, I shall then move the. first amendment which is consequential upon the other two being agreed to. I think it would be as well for the committee to see these proposed subsections in their proper setting. Clause 3 of the bill proposes to amend section 9 of the act. Sub-section (1.) of that section extends the benefits of the exemption of £5,000 to the estates of servicemen of World War II. Sub-section (2.) deals with multiple deaths, and I need not amplify that. It relates to a special case where the estate of one serviceman passes on to another serviceman who subsequently dies on active service or as the result of a disease contracted while on service. Sub-section (3.) provides that where the question of fact about death or injury has been determined by a tribunal of the Repatriation Department that determination shall be conclusive. The Government is proposing in the bill to insert sub-section (4.), which will include service in Korea and/or Malaya as a part of active service, entitling the serviceman to the benefit of the £5,000 special exemption. Then would follow the two subsections contained in my amendment.

Senator WRIGHT:
Tasmania

– I notice that the benefits of the provisions of this clause are confined to such part of an estate as passes to a widow. We have not carried our sympathy for the widower to the extent of providing for him, too, although it is to the credit of the womenfolk that, in certain of our services, they have served with, distinction. This omission should be rectified.

Question put -

That the words proposed to bc inserted (Senator McKenna’S amendment) he so inserted.

The committee divided. (The Temporary Chairman - Senator E. W. Pearson.)

AYES: 24

NOES: 30

Majority . . 6

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Clause 4 - (1.) Section eighteen a of the Principal Act is amended by omitting paragraphs (a) and (6) of sub-section (1.) and inserting in their stead the following paragraphs: - “ (a) where the whole of the estate passes by will, intestacy, . . . (2.) The amendment effected by the last preceding sub-section . .

Amendments (by Senator Spooner) proposed -

That in sub-clause (1.) after the word “amended” the following letter be inserted: - ” - (a)”

That at the end of sub-clause ( 1 . ) the following words be added: - “; and (6) by adding at the end thereof the following sub-section: - “(3.) In this section ‘widow’ includes widower.’.”.

Senator SEWARD:
Western Australia

– I should like some legal luminary in this chamber to explainwhy it is necessary to go to all this trouble to accomplish the objective whereas it could be done simply by putting the word “ widower “ before the word “ widow “ in the clause.

Senator SPICER:
AttorneyGeneral · Victoria · LP

– I am informed by the Parliamentary Draftsman that he contemplated effecting the amendment in the manner suggested by the honorable senator, but that upon looking at the whole provision, he discovered that it would involve about two pages of amendments. By following the course he has taken he has achieved the result with a single sentence.I agree that it is not the prettiest way of amending the clause, but I point out that we are not dealing with the initial act. We are dealing with an amendment of the act.

Amendments agreed to.

Clause, as amended, agreed to.

Title agreed to.

Bill reported with amendments; report adopted.

Bill read a third time.

page 702

HOUR OF MEETING

Motion (by Senator O’Sullivan) agreed to -

That the Senate, at its rising, adjourn to to-morrow, at 10.30 a.m.

page 702

PAPERS

The following papers were pre sented : -

Defence Transition (Residual Provisions) Act - National Security (Industrial Property ) Regulations - Order - Inventions and designs.

Nauru - Ordinances - 1953 -

No. 1 - Chinese and Native Labour.

No. 2 - Prohibition of Sale or Barterof Administration and Employers’ Stores.

Public Service Act - Appointment - Department of the Army - J. H. Ramsay.

Public Service Arbitration Act - Determinations by the Arbitrator, &c. - 1953 -

No.66 - Professional Officers’ Association, Commonwealth Public Service.-

No. 67 - Federated Clerks’ Union of Australia.

Social Services Consolidation Act - Twelfth Report of the Director-General of Social Services, for year 1052-53.

Senate adjourned at 11.17 p.m.

Cite as: Australia, Senate, Debates, 20 October 1953, viewed 22 October 2017, <http://historichansard.net/senate/1953/19531020_senate_20_s1/>.