21st Parliament · 1st Session
The President (Senator the Hon. A. M. McMullin) took the chair at 3 p.m., and read prayers.
Assent to the following bills reported : -
Meat Export Charge Bill 1954.
Appropriation Bill 1954-55.
Appropriation (Works and Services) Bill 1054-55.
– Will the Leader of the Government in the Senate say whether it is a fact that, at the recent naval exer cises off Manus Island, radar equipment on the Lincoln bombers was proved to be utterly ineffective for submarine spotting? If that is so, will the honorable gentleman make a statement to the Senate at the earliest opportunity about thismost serious and disquieting news?
– I shall bring that matter to the notice of the Minister for the Navy and get a reply for the honorable senator.
– I ask the Minister for Shipping and Transport whether it is a fact that the Australian Government has sold two coastal freighters, each of 2,000 tons, to the Western Australian Government. Has the Minister’s attention been drawn to a reported statement by the Premier of Tasmania that the vessels were reported to have been sold on very favorable terms, and that if this report was correct he would approach the Commonwealth to see whether similar concessions could be granted to Tasmania? If the Premier of Tasmania should approach the Commonwealth for the purchase, or lease, of suitable vessels for trade between Tasmania and the mainland, will consideration be given to the Island State’s isolation in assessing favorable terms?
– The Western Australian Government has had three Commonwealthships, two for five years, and one, I think, for three years, engaged in its coastal trade from Fremantle to Darwin. Recently, those ships were sold to the Western Australian Government at a price that I thought reasonable. Honorable senators who are familiar with conditions in Western Australia will appreciate the enormous task that confronts the Government of that State in providing an adequate shipping service. I. have just been provided with a report on the latest position in Tasmania, and I am sure that the arrangements in that State are much better than those that the Western Australians are able to provide. The other matters raised by the honorable senator are matters of policy. I shall have them considered and favour him with a reply at a later stage.
– Can the Minister for Shipping and Transport say whether it is a fact that the Strahan report on Tasmanian shipping recommends many practical and urgent reforms to be undertaken by shipowners, the Australian Stevedoring Industry Board, and the Australian Waterside Workers Federation for improving the turn-round of ships in Tasmanian ports? What steps does the Minister intend to take to translate those recommendations into action? As any consequent reduction of freight charges will be of the utmost importance to Tasmanian primary and secondary industries, will the Minister assure the -Senate that the report will not be relegated to a departmental pigeon-hole until every avenue of help to Tasmania has been explored ?
– I have read two very good reports submitted by Mr Strahan. One dealt with shipping services to King Island and the other with Tasmanian shipping problems generally. I have already conferred with the manager and the deputy manager of the Australian Shipping Board, and have arranged with the deputy manager of the board to confer with Tasmanian member: of Parliament. I hope to have the reports printed and circulated to all Tasmanian members of Parliament and other interested persons and organizations. I assure Senator Henty that while I have the power to do so, I shall ensure that the reports are not pigeon-holed. I shall do my best to see that practical suggestions for an improvement of the waterfront and shipping services are brought before responsible Ministers, and I hope to see them implemented to the satisfaction of Senator Henty.
– Has the Minister for Shipping and Transport received a resolution from the Western Australian Chamber of Commerce with regard to alleged neglect on the Government’s part of the shipping facilities serving that State ? Has he seen a press report of the resolution ? What steps will the Minister take to improve the shipping services to Western Australia?
– I have not seen the resolution nor any press report concerning it, hut I assure the honorable senator that it has always been my desire to ensure that distant States, such as Western Australia and Queensland, have adequate shipping services. I shall obtain a report upon the matter, and furnish him with a considered reply.
– Has the attention of the Minister for Repatriation been drawn to a statement made by Mr. Yeo, the president of the 2Jew South Wales branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, concerning the dissatisfaction that exists regarding the onus of proof clause in the Repatriation Act? Did the Minister notice the statement that only 10 per cent, of appeals have been successful ? In view of such an outspoken declaration, which I believe to be completely true, and -alao in view of the efforts that have been made in this chamber to have the act amended to remove -doubts that arise from time to time, will the ‘Government take immediate steps to have, the whole position reviewed?
– Yes, I have seen a statement made by Mr. Yeo to the effect that only a certain percentage of claims has been approved. There are two different kinds of tribunal, and I do not know whether Mr. Yeo referred to assessment tribunals or entitlement tribunals. In respect of either,’ however, the percentage cited by him would be wrong. In fact, the percentage is very much bigger than he said it was. Both the honorable senator and Mr. Yeo should know that the tribunals are quite outside the jurisdiction of the Repatriation Department. They were set up at the request of ex-service organizations, and their membership includes persons selected from a panel of names submitted by the federal executives of the ex-servicemen’s organizations. In the case of an assessment tribunal, the chairman, who is responsible for running the body, has been chosen from a panel of names submitted by the returned soldiers’ organizations. I shall obtain a carefully considered statement for the honorable senator, because I think that the remarks that have been made by
Mr. Yeo, in view ;of his position as president of the New South Wales branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, require a careful answer. I suggest to Mr. Yeo, and to .others who .are .dissatisfied with the operations of section 47 of the act, that they are at liberty to bring to my notice cases of which they have. knowledge, and I shall welcome such action. Surely, they must know of -specific instances,; otherwise they would not make statements such as .that made by Mr. Yeo. If they bring such instances to my notice, T shall he .pleased .to go into them thoroughly and ascertain whether section 47 is being applied according to the intention of the act. If there are such cases - and I do not ‘deny that there may “be - I think it -would be -only fair that Mr. Yeo, or anybody else who makes statements about the matter, should support his statements by referring to specific instances of .which he has knowledge. If that is done, I shall have .the fullest possible investigation carried out.
– Thai, is, .if the .cases are brought .to -the notice of the Minister”?
– Certainly, if they aire (brought to my notice.
– I take it that th Minister does not claim that I have not brought to his notice cases such as that’-?
– Not at .all.
– I -have brought up cases before, and nothing has -been done.
– No, that is not so. Instead, a full -investigation has been made, ‘and it ‘has been shown that it-he ‘benefit of the doubt has been given to the applicants concerned. ‘This is -a matter that concerns both sides of the Senate, because the provisions of .section 4.7 have .been applied not only during the term of office of this Government, .but also during that of previous ‘governments. As I have said, I shall welcome information from Mr. Yeo concerning specific cases, to .substantiate his statement, and I shall get out .a further statement £or Senator Critchley setting out exactly what has been done during ‘the period ‘that this Government has been in office.
– I preface a .question to the Minister for Repatriation .by explaining that .1 have been approached by an ex-Imperial soldier who is now in Australia about the manufacture of a surgical boot. Apparently, the boot that the -man requires is made in Australia only ‘at the department’s workshops, but his application for a boot from that source has been rejected. Will the Minister say whether the Repatriation Department makes surgical boots of this kind:? In the past, has the department supplied ex-imperial soldiers with surgical boots? If so, why will not it continue to do so? As this man fought for Jb.is country, and is willing to pay for the boots, I trust that the Minister will ensure that justice is done in this case.
– It is true that the Repatriation Department .makes surgical boots, and other appliances for exservicemen who suffer from physical disabilities as a result of their war service. The Repatriation Department acts ,as agent for the British Ministry of Pensions in connexion with the -provision of repatria’ tion benefits to British ex-servicemen who are now residing in Australia. If an exImperial soldier, now resident in Australia, needs medical attention for his warcaused disabilities, the Repatriation Department provides that attention, and is reimbursed the -cost by the British Ministry of Pensions. Under the Repatriation Act, the Repatriation Department may -only provide medical and hospital treatment, and issue surgical appliances to ex-members of the forces whose -physical disability has been accepted as attributable to war service. Therefore, the department cannot provide such services to an ex-Imperial serviceman whose disabilities have ‘not been so (accepted. If Senator Brown cam assure me that the ex-Imperial serviceman to whom he referred is suffering from disabilities that have been accepted as attributable to w,ar service, and -supplies me with a little ;more information about the case, I sha-1 go into it fully.
– Is the Minister for Repatriation yet able to furnish me with an answer to a ‘question that I asked on the ‘20fh October, with ‘relation to the closing of two wards at the Heidelberg Repatriation Hospital?
– I am awaiting a report on the matter. After it comes to hand, and I have prepared an answer to the honorable senator’3 question, I shall inform him of that fact prior to the sitting of the Senate at which I shall officially answer the question.
On the 9th September, Senator Critchley asked me whether mental patients at the Parkside Mental Hospital, who are entitled to medical treatment by the Repatriation Department, could be transferred either to the Enfield Receiving Home or Northfield Mental Hospital.
I have examined this question and wish to say that three mental institutions mentioned by him function as follows : -
Enfield Receiving Home. - Patients who are mentally defective are first referred to this institution and if certified, are then admitted to either Parkside or Northfield Mental Hospital. As at the 23rd September, 1954, there were no departmental patients in Enfield Receiving Home.
Parkside Mental Hospital. - This institution is used for patients whose mental condition is such that they require constant supervision within an enclosed area.
Northfield Mental Hospital. - Unlike Parkside, this institution is not surrounded by high walls, and therefore caters for patients who are not likely to become very disturbed, that is, patients whose mental condition does not call for constant supervision.
Departmental patients admitted to Parkside Mental Hospital are constantly reviewed by the Superintendent of Mental Institutions in South Australia, and when they are considered well enough for admission to Northfield, transfer is effected as soon as possible. The departmental specialist in psychiatry in that State frequently visits the institution and co-operates with the Superintendent of Mental Institutions on the review and transfer of patients.
– In directing a question to the Minister representing the Minister for Supply, I do not do so in a parochial spirit. Does the Minister not consider it anomalous that South Australia, which has the most direct interest in atomic power development, should have no voice in the Australian Atomic Energy Commission? In the interests of decentralization and because of South Australia’s vital interest in the production and treatment of uranium, will the Government consider the appointment of at least one South Australian representative to that commission?
– The question obviously must be referred to the Minister for Supply. I shall be pleased to do so and shall obtain a considered reply for the honorable senator.
– I ask for permission to preface my question, which is directed to the Minister for National Development, with an explanation. Last week, I asked a question about two volumes of a book on the Murray River valley, prepared by the Department of National Development, and requested that similar facilities be given to publicize the resources of the Murrumbidgee River in the Riverina. The Minister told me that the volumes covered the RiverinaMurrumbidgee area. I should say that two of the most important towns in the area are Narrandera and Hay. In one volume, there is a minor reference to Narrandera. The passage containing the reference states -
An extensive area of plain which has been classified as Natural Grassland or Savannah occurs west of Deniliquin, from Jerilderie to Urana, and almost as far north as Narrandera.
There are also a couple of references to Hay in the volumes. One that may be of some importance is that the town of Hay is in good company in that it is sewered, as are Albury, Benalla and Bendigo. Will the Minister say whether the people of the Riverina will be given facilities to publicize the resources of that area similar to those that have been given to the people of the Murray River valley?
– Obviously, the honorable senator has a greater regard for the northern portion of the Murray River ‘ valley than for the southern portion. I shall have a look at the suggestion he has made to see whether it would be practicable to give effect to it. I shall consider whether his statement of the position is accurate and, if so, whether it justifies any additional action being taken.
– In view of the fact that the immigration intake to Australia during 1952 fell short of the target of 150,000 by approximately 32,000, and that in 1953, when the target was 80,000, the intake fell short of that figure by 5,000, will the Minister representing the Minister for Immigration ask his colleague to strengthen immediately the Australian immigration recruiting teams overseas, in order to ensure that, in Australia’s best interests, future immigration targets will be reached?
– I shall bring the honorable senator’s question to the notice of the Minister for Immigration.
– “Will the Minister for National Development investigate the practicability of our importing soft timbers from British East Africa? As East African ports are closer to Australia than are other places from which soft timbers are at present imported, it might be advantageous for us to obtain our supplies of soft timber from British East Africa.
– I shall have the honorable senator’s suggestion investigated, and will let him know the result in due course.
– The question that I shall address to the Minister representing the Minister for Commerce and Agriculture relates to the recent halfyearly conference of the Victorian Dairymen’s Association, at which a delegate drew attention to the increasing importation of fancy cheeses into Australia. Approximately 900,000 lb. of these cheeses are imported annually, and some of them retail at 10s. per lb. Could the Minister direct the Commonwealth Scientific and Industrial Research Organization to conduct research with the object of manufacturing distinctive cheeses of similar quality in Australia, and with the object of improving the quality of cheese manufactured in Australia, particularly in regard to its “suitability for export to British and overseas markets ?
– The honorable senator has made an important suggestion. I shall have it examined, and if it is worthy of further consideration I shall have the matter taken up with the Commonwealth Scientific and Industrial Research Organization.
– In view of the disastrous strike in the United Kingdom and the consequent delay in the shipment of cargoes to Australia, will the Minister acting for the Minister for Trade and Customs extend the period of validity of import licences that have already been issued? Is it a fact that even if the industrial position in the United Kingdom were restored to normality in the near future, it would take many months to adjust the back-lag? Will the minister treat this matter as urgent, as it is imperative that importers negotiate with their agents in the United Kingdom without delay?
– Import licences normally have a validity of one year from the date of issue of the licence. It is standard practice to allow importers 21 days of grace over the expiry date shown on the licence. When the arrival of authorized imports is delayed through shipping difficulties or other emergencies, due allowance is made for those factors in dealing with requests that the period of validity of an import licence be extended.
– Last year, the Minister representing the Minister for Health obtained from his colleague an estimate of the cost of health services, including medical, hospital and auxiliary services. Will the Minister have those figures revised and made available to theSenate ?-
– I shall obtain the figures for which the honorable senator has asked from the Minister for Health and make them available to him.
– The Minister representing the Minister for Commerce and Agriculture will recollect that last week he made an announcement to the effect that the Western Australian G’overnment had decided to discontinue the subsidy that was formerly paid in connexion with the air-beef scheme. I understand that the Australian Government has paid a subsidy which was complementary to that of the Western Australian Government in connexion, with that scheme. Will, the Minister give an assurance that regardless of what, thu Western Australian Government may do,, the Commonwealth subsidy to air beef will, continue ?
Senator- McLEAY. - What the Australian Government will do should theGovernment;’ of Western Australia refuse to> assist in the scheme is a matter of policy- on which I cannot give an answer at this stage. I shall certainly have the matter- examined, but in our latest reports we have made, it perfectly clear to the people concerned’ that our offer still stands.
asked the. Minister acting for the Minister for Commerce and Agriculture, upon notice -
– The following answer is now supplied- : - 1 and 2. In l’95-l, following a report by a committee known as the. Commonwealth-State K’imberLey Development Committee, which, had been set up by the Commonwealth and Western Australian, governments, the two governments agreed to provide financial assistance to AirBeef Proprietary Limited for a four-year period commencing- with the year 1961. The. two. go vernments’ also decided’ that’ they would’ review the. question of. continuing’ this assistance’, for- & further, two years prior to the end-, of 1954. The Commonwealth assistance hae been in the nature of a subsidy of Id: per lb: on all beef, airfreighted” from the’ Glenroy meatworks to the Western Australian* Government meatworks at Wyndham where the beef has- been frozen and dien, exported. The Western Australian Government assistance has taken the form1 of keeping the- Wyndham meatworks charges for their, services to- Air-Beef Preprietary Limited down to a reasonable level. The Commonwealth Government recently reviewed the position and’ decided’ that it would be prepared to continue its financial assistance to- Air -Beef Proprietary Limited” at the existing rate for a- further two years beyond- 1954. subject to the condition, however, that theWestern Austraiian Government on- its pant would continue to maintain its financial assistance on the same basis as previously. The Premier of Western Australia has now informed the Prime Minister that his Government has decided not to further subsidize the Glenroy air-beef, scheme. The reason for thisd’ecision has not been stated’.. The rate of charge for Wyndham’s services to Glenroy that ha3 applied under this special’ arrangement was recommended* by the Commonwealth-State committee as an equitable one and any increase in the charge may be expected to operate against the interests- of Air-Beef- Proprietary Limited. The Commonwealth Government’s offer of assistance still’ stands if the Western Australian Government is prepared to participate in the arrangement.
– Earlier in the present session I asked the Minister representing the Minister for the Inferior whether- he would confer’ with his colleagues with a view to having a statement issued by the- Commonwealth Statistician on the effect’ on the Australian economy, particularly in view of the pegging’ of wages, of the increase of the price- of” tea. I should like to know whether the Minister has yet done- anything about, this matter.
– No reply to the honorable senator’s question is yet available.
– Can the- Acting Leader of the Government say whether it is- the Government’s intention to ease the burden that the increased price of taa has imposed on poor, people, hospitals, charitable institutions and so on? Can the honorable gentleman assure the Senate, that, the Government will come to the; assistance of consumers) o£ this national beverage, -either by increasing its subsidy on tea or by some other means ?
– The Government has indicated that it will make available by way of subsidy the substantial sum of £o,5’00;000. I think that is a very worthwhile contribution to the.solution of this problem. I do not expect any further action to be taken.
– ils it a fact that whilst the Australian Aluminium Production Commission .pays municipal rates on homes occupied by it3 employees, it has refused to accept liability in respect of its factory site and buildings until production has been started If this industry were conducted hy private .enterprise, would it not be progressively liable for ‘the payment of municipal rates during the construction -.period^ Oan this refusal be taken as a prime example of the inability of government enterprises to stand up to the same taxation as private enterprises?
– I shall obtain an answer from the Minister for Supply.
– Will you. Mr. President, consider the -suggestion that alongside each question that appears on the Senate notice-paper should be the date on which it was asked? The Souse of Representatives has adopted that practice, and its extension ito this chamber might facilitate the business of the Senate.
– I shall look into the matter.
asked the Minister representing the Minister for Social Services, upon notice : -
– The Minister for Social Services has supplied the following answer : -
asked -the Minister for ‘Shipping and Transport, upon, notice -
Was it a condition of -the .grant made >by the Commonwealth from strategic road funds, for the -maintenance of the Eyre Highway, that the State Government of Western Australia should spend an amount equal -to the grant on ‘the maintenance of that road?
– The following answer is now -furnished : -
A Commonwealth grant of £10,000 for the Ey.re Highway during 1953-54 was made available subject to the expenditure -concurrently by the Western Australian Government of an amount equal to at least 50 per cent, of the Commonwealth contribution. A further grant of £10,000 .under ‘similar conditions has : beer made in respect of the .current financial year.
asked the Minister -representing the Minister for Civil Aviation the following question, upon notice : -
If so will the Minister undertake to arrange that those two “ far flung “ States of the Commonwealth receive more than limited attention from this new service?
– The Minister for Civil Aviation has now supplied the following answer : -
I am advised by the Australian National Airlines Commission that present plans provide for the progressive introduction of Viscounts on the eastern inter-capital routes as the first four units of the new fleet arrive in turn from the United Kingdom. As part of this initial programme a daily return service to Launceston is proposed, commencing in December next. The final disposition and scheduling of the full fleet of six Viscounts for the most effective pattern of network operations, commencing probably not earlier than February or March, 1055, is still receiving the commission’s consideration. Decisions will be announced at a later date when firm delivery dates are established and test results known in respect of the fifth and sixth aircraft which will be fitted with engines of greater power and additional fuel tanks to provide increased flying range.
asked the Minister representing the Minister for Civil Aviation, upon notice -
– The Minister for Civil Aviation has supplied the following answer : -
These are matters which principally concern the Australian National Airlines Commission which has been consulted and advises that there have been occasions this year when defects have resulted in delays at Parafield and at Perth of the air services to Western Australia. The commission advises that, having regard to the relative infrequency of late departures from Adelaide and the extent of the daily commitment for D.C.4 operations throughout the network it would be quite uneconomical and impracticable to station a reserve aircraft at Parafield airport for use only when the scheduled aircraft is unable to depart at the nominal time. In regard to the transfer of passengers from one airline to the other it is not a function of the Department of Civil Aviation to direct or arrange the handling of traffic. That is a matter for the airlines. The commission’s policy in cases of serious schedule delays is, on all competitive routes, to oiler passengers the choice of transfer to Australian National Airways services when schedules are suitable and seats are available. However, it is rarely possible at Parafield to offer transfer as the Australian National Airways service is scheduled to leave before the Trans-Australia Airlines service but wherever it is possible transfer arrangements will be made.
asked the Minister acting for the Minister for Commerce and Agriculture, upon notice -
– The following, answer is supplied to the honorable senator’s question: -
As the honorable senator knows, in the Poulton case certain wool dealers claimed that they were entitled, as against the growers, to the profits of the joint wool scheme. They failed in the High Court, but intimated that they were considering a petition to the Privy Council for special leave to appeal. The High Court gave its decision as long ago as the 10th December last, but the Privy Council rules do not fix any time limits for seeking leave to appeal. Unfortunately it appears that the plaintiff has still not decided whether or not to seek leave. The honorable senator will readily understand that, until the matter is disposed of one way or the other, the Government cannot safely make a final distribution of the wool profits. The Government has taken every step it could to get this business brought to finality, including action to have taxed the costs arising out of the High Court proceedings. The urgency of the matter has on a number of occasions been brought to the notice of the plaintiff’s solicitor, but he has stated that until ho receives counsel’s advice on the question of an appeal he cannot indicate whether his client is prepared to abide by the decision of the High Court. The matter is in the plaintiff’s hands and I am advised that, up to the present at any rate, there is no further action which the Government can take. At the moment, therefore, I cannot say when it will be possible to make the final distribution. But the Government’s desire is to make the distribution at the earliest possible moment.
asked the Minister representing the Minister acting for the Treasurer, upon notice -
– The Minister acting for the Treasurer has supplied the following answer: -
asked the AttorneyGeneral, upon notice -
Mainguard Australia Limited, and that the Palgrave Corporation Limited undertook to sell all the steel matting?
– I have the following information in reply to the honorable senator’s questions : -
Neither directly nor indirectly was the Commonwealth a party to the proceedings mentioned by the honorable senator. The Commonwealth did, in compliance with a subpoena, produce to the court certain tenders received by the Department of Supply, but the matters in issue in the suit appear to have turned on private partnership claims as between private interests. I have neither knowledge nor means of knowledge of the terms upon which the suit was eventually settled by consent, but I note from the press account of the case that the terms seem to have commended themselves highly to the trial judge.
asked the Minister representing the Minister for Defence Production, upon notice -
– The Minister for Defence Productionhas supplied the following answers to the honorable senator’s questions : -
SenatorSPICER (VictoriaAttorneyGeneral) [3.55]. - I move -
That the bill be now read a second time.
The purpose of this bill is to make it easier for the resident pastoralist in the Northern. Territory to obtain creditfor the development of his property. Thebill marks another stage in the actionswhich the Governmenthas been taking, both to build up the pastoral industry in the Northern Territory and to bring about the desirable social effect of ensuring that the development of the’ resources of the Territory is accompanied by an increase of the number of permanent residents establishing their homes and their families in the Territory. One of the earliest steps which the Government took in that direction was to amend the land tenure system in the Northern Territory so as to, give a more favorable tenure to the resident owner. We are hoping that, as a result of the passage of the Crown Lands Ordinance of the Northern Territory, pastoralists will convert their leaseholds to the form of perpetual leasehold known, as the pastoral homestead lease. We are also hoping that,as more land becomes available for applicationin the Northern Territory, we may be able to attract to the Territory young; energetic and’ practical people who will make the Territory their home. In order to promote that objective, we not only have to make the landavailable but we should try to see that those who obtain the pastoral homestead leaseholds will have the capital resources necessary to develop them.
A cattle station in the Northern Territory requires a large capital expenditure spread over a number of years in order to bring it into a full state of economic development. There may bedifferences of opinion as to the amount of capitalization which if is economic for a pastoral property to bear, and the figure varies considerably from, property to property, according to such factorsas the type of country, access to markets, the type of cattle which can be turned off and the price likely to be received. As a broad indication to the Senate of the sort of expenditure that is involved, I may mention tha.t some cattle stations of moderate size in the Northern Territory carry a capital expenditure,, spread over a number of years, up to £120,000. Expenditure is required, on the provision of waters at a cost of possibly £4,000 each, some: miles of fencing at a cost up to £400 a mile, homestead, staff quarters and other station buildings’ at a bare minimum cost of £15,000, and the building of yards and dips, quite apart from expenditure on the herd.
Broadly speaking, there is not a great number of young settlers who have that kind of capital at their disposal. In many cases, their assets are their knowledge, their physical stamina and their pioneering spirit, plus enough capital to acquire a herd of a few thousand head and to give them their first dwelling. If they go onto new land, the Government provides the first two waters for them so that they can move their cattle onto the run straight away. Most of those who go onto properties, either new or developed properties, find themselves limited in the early developmental period by the need for more capital. To some extent, they can obtain finance through the existing institutions,, but their leaseholds are seldom accepted as security for an amount sufficient, in the early stages of development, to make progress possible and, if they give a lien over their stock, the terms are seldom sufficient to do more than meet their running expenses as an offset to their anticipated sales in each year
In any land development, whilst the need for capital is clear, it is also necessary to watch carefully for two unintended results that could impair the final good result. One is the possibility of overcapitalization, or the spending of more on the land than the prospective returns from the land would justify. It is necessary to ensure that expenditure on a property will give an economic return. The other is the possibility that, if credit is too easily obtainable, there will he an inflation of land values, which will tend, over the years, to impede the economic use of the land. Thus, the administrative problem before the Government is to make credit available for ‘the development of leaseholds and at the same time to see that the availability of credit is closely related to all other factors. After careful consideration, the. Government also reached the view that the existing financial institutions should be used, and that it was neither necessary nor desirable to create any new governmental instrumentality to achieve, its. purpose or to serve the needs, of the prospective beneficiaries of the scheme in the Northern Territory.
The bill, therefore, proposes to add to the credit facilities available to the Northern Territory settler by giving, a guarantee to the banks for advances additional to the amount which a bank raigh* be expected, to advance in the ordinary, course of business without the guarantee. An upper limit is to be set by the value of the lease plus permanent improvements, or a total advance of £30’,000, whichever is the lesser. In effect, this means that a leaseholder will be able to obtain credit up to 100 per cent, of his security exclusive of his herd - whereas banks would customarily only go to 60 per cent, of his security - subject to the provision that his total debt at any one time will not exceed £30,000. Eoi: example, if the lease were developed to the. point where the lease plus permanent improvements were valued at £30,000, the bank might be expected to advance £18,000 and the Treasury would guarantee a further advance of £.12,000, making a total of £30,000. The bill provides that guaranteed advances will be made for the purpose of effecting permanent improvements to the land comprised in the lease, or partly for this purpose and partly for the purpose of discharging a prior encumbrance so as to enable a new first mortgage to be given as security.
The measure should induce a considerable increase of the amount of credit available in the Territory, and this increase should be far greater than the amount actually guaranteed by the Commonwealth. The making of advances to pastoralists will become a more attractive proposition to the banks. Ti should stimulate their interest in this industry and reduce the conservatism they have previously shown in arriving at the amounts to be advanced. In addition, it should be instrumental in bringing about a considerable and necessary increase in the standard of improvements’ on the pastoral properties.
Up to date, we have had no direct experience of this form of assistance in the Northern Territory, and we shall watch closely the application of the provisions of the bill so that, if necessary, we can take further action in the future to ensure the adequacy of the measures we are taking to bring about the results we desire. The scheme is one that can be adjusted to meet new needs or new opportunities. We want to encourage development, but we do not want to reach that state of careless expenditure and financial light-heartedness, as a prelude to financial misery, which has been characteristic of some schemes of assisted development in! Australia in the past.
I have spoken chiefly of pastoral homestead leases, but the same conditions will apply to agricultural leases. As honorable senators know, the limits to agriculture in the Northern Territory are set, not only by the fact that most of the Territory is a low rainfall area, but also by the facts that in the areas of higher rainfall there is a long rainless period of seven or eight months every year . and that there are comparatively few rivers carrying enough water for irrigation schemes in the conventional meaning of the term. The problem is to find the crops that can be raised profitably under these conditions. In the last three years, under the direction of the Administrator, Mr. Wise, much new work has been done in experimenting with various crops under field conditions. Over a number of years, too, the Administration and the Commonwealth Scientific and Industrial Research Organization have been co-operating in various experiments and trials at the Katherine experimental farm. More recently, we have begun investigations into water supplies, the use of available waters, and the problems of water control in the higher rainfall areas near Darwin. With the help of the Commonwealth Scientific and Industrial Research Organization extensive soil surveys have been carried out and most of the soils with possible agricultural value have been mapped. In addition, a few settlers have embarked on agriculture, either producing foodstuffs for local consumption or, to a limited extent, producing bananas and peanuts for export. The credit facilities provided by the measure will be available to existing farmers and also to those others who, as the result of the experimental work done by the Government, may be encouraged to enter on agriculture.
Incidentally, it may be mentioned that, quite apart from the present scheme, there has been in existence for some time a scheme of advances for primary producers, mostly the small men growing fresh foodstuffs in the vicinity of Darwin, administered by a primary producers’ board. Hitherto the limit of advances by the hoard has been £600 a settler. The Government has decided to raise this limit to £3,000. The purpose is mainly to assist the small producer to obtain his implements and equipment.
In commending the bill to the Senate, I think it would not be out of place to indicate broadly the present scope of both the pastoral and agricultural industries. There are at present 407 pastoral leases totalling 215,355 square miles in the Northern Territory, all producing cattle. Approximately 318 of these appear to be held at present in a way that might qualify them for conversion to pastoral homestead leases with a perpetual tenure, and 89 are held by companies and would qualify for conversion to leases with a 50-year tenure. Definite improvement conditions will be written into all new leases, and in the negotiation of new leases it may be expected that some leaseholders will surrender areas in respect of which they are unable to carry out the required level of improvement As an example, Vesteys, in negotiating new leases, has surrendered 8,493 square miles of leasehold and 5,351 square miles held under grazing licence, and has accepted improvement conditions which require it to make an expenditure of £250,000 over the next five years.
On all the Territory holdings, there is a cattle population of a little over 1,000,000 . head and an average annual turn-off of 115,000 head, some going straight to the meatworks and some going as stores to Queensland, the estimated annual value being £2,720,000. In spite of a most severe and widespread drought in 1951-52 and an indifferent season this year in some parts of the Territory, the cattle industry is progressing. The approximate turn-off over the past seven years has totalled 800,000 head and the annual turn-off has varied between 146,000 and S1,000, according to seasonal conditions. It is estimated that in the past four years there has been a private investment in improvements on cattle stations of more than £1,000,000 - a heartening sign of the confidence of cattlemen in their country. The Government’s own officers estimate that the potential for development of the industry is an increase of about 50 per cent, of the carrying capacity of the land already occupied and a doubling of the annual turn-off.
The present state of agriculture is that production of foodstuffs such as vegetables and eggs is undertaken on a small scale, for local consumption, and some fruit and peanut production is undertaken for export to southern Australian markets. The potential development that is in sight is large-scale rice growing, a considerable expansion of peanut cultivation, tobacco growing for export, and mixed farming for the sake of local food supply and as an adjunct to stock raising. However, continued experimentation is necessary to demonstrate with reasonable certainty farm systems that could be applied to the land with a reasonable prospect of providing a satisfactory living for the farmers.
In conclusion, I stress that the on 7 way in which such visions of progress in the north can be realized is through the efforts of individual settlers. The aim of government policy is to help the individual Australian to do his job for the nation in the Northern Territory. That is the purpose of the attempts we have made and will continue to make to improve the basic services of education, health and communications and to add to the amenities of life. That is the purpose of the various investigations and experiments we are carrying out into the ways in which people can earn a living in the Territory. That is the purpose of our revision of the land laws. It is the purpose behind the increased provision we have made to assist various industries - for example, by the veterinary services, the stock routes and roads that have been provided for the pastoral industry. It is the purpose behind our attempts to encourage a new idea of the standard of living in the tropics, as exemplified by the housing and community services constructed by Territory Enterprises at Batchelor. It is also the purpose of this bill, which I commend to the Senate.
Debate (on motion by Senator McKenna) adjourned.
Debate resumed from the 19th October (vide page S06), on motion by Senator SPOONER -
That the bill be now read a second time.
– One’s first reaction to this measure is a feeling of very great disappointment in that, once again, an opportunity has been missed to grant worth-while reductions of sales tax to those sections of the community which are least able to pay it. The schedules to the bill show that sales tax is an indirect and unequal tax of the most vicious kind. Supporters of the Government continue to assert that there is a great measure of prosperity in the community, and that the nation was never better off. In those circumstances, I expected the Government to make a generous reduction of sales tax, which adds substantially to the cost of living of every member of the community. In order to get this subject into the right perspective, I shall outline briefly its history. Sales tax was introduced by the Scullin Government in 1930, and’, in 1930-31 yielded revenue amounting to £3,000,000. The yield rose to £9,000,000, in 1938-89, and £19,000,000- a very substantial jump- in 1940-41. In 1949-50, sales tax yielded revenue of £42,000,000. Since Labour relinquished office in that year, the sales tax collections have risen steadily. In the last financial year, the actual collections amounted to £95,688,559.
The rot set in after the introduction of the horror budget in 1950-51, in which year revenue from sales tax was £57,000,000. The yield rose to £95,000,000 in 1951-52, which was an increase of revenue from this vicious tax of approximately £36,000,000 “in two years. After the Government thought that it would be justified in easing the taxation burden on the people, it granted remissions of sales tax of approximately £6,000,000 a year in 1952-53. In 1953-54, further remissions totalling about £11,700,000 a year - which appeared very generous on paper - were granted. But, despite those remissions, the sales tax collections in that year amounted to £95,688,559 - the greatest in the history of the country. I direct attention to the fact that, although the Government estimated that, in the last financial year, £87,740,000 would be collected in sales tax, the actual collections amounted to £95,688,559. The remissions now proposed amount to £12,000,000 a year, and the Government expects to collect from sales tax £92,000,000 in this financial year. It seems likely that the conditions that applied last year will apply again this year, and that actual collections of sales tax will be greatly in excess of the estimated yield. In the light of last year’s result, sales tax may yield £100,000,000 in this financial year. Despite the remissions that have been made during the last three years, sales tax collections have increased steadily. Since 1949-50, the year in which the Chifley Government left office, sales tax collections have risen by about £53,500,000 a year.
We ‘do not Like this tax. As I said at the outset, it operates most unfairly on people who are not in the best position to bear it. I assure honorable senators that I am not linking my remarks in this connexion with Australian National Airways Proprietary Limited. Sales tax Operates very harshly on a newly married couple endeavouring to establish their first little home and raise a family, which is the basis of national strength. Due to inflation, which this Government failed to handle properly, it is almost impossible for newly-married couples to buy homes. It is quite obvious that a great majority of young couples cannot afford to pay cash for their homes, and owing to the present financial stringency, they have difficulty in arranging finance. Indeed, it is a masterpiece of organization and courage for a young couple to buy a home of their own these days. If they can get over that obstacle, they are confronted with the necessity to pay 2s. in the £1 sales tax on the numerous items that they need to make their home livable. The Minister for National Development (Senator Spooner) claimed credit for the Government for the proposed reduction of sales tax on household appliances and equipment from 12-J per cent, to 10 per cent. The items on which this rate is charged are absolutely essential in establishing a home.
At a time such as this, a generous government would have removed the sales tax from furniture and household necessities. The paltry reduction that has been proposed on these items will be offset by the fact that their price has increased. Can the Government not realize the problem that faces a young couple when they go to buy a cup or a saucer, a pot or a pan, a table or a chair, the lights that illuminate their homes, carpets or sheets, pillowslips or bedding, an ice chest or a refrigerator? These are essential items for the home. Yet the Government proposes to collect sales tax at the rate of 2s. in the £1 on them, although it has claimed that its revenue is bouyant. Household equipment ranges from brooms and mops to refrigerators, from blinds and mattresses to sewing machines. Does the Government think that the housewife buys a sewing machine because she wishes to use it as a pastime? The housewife adds to her daily labours in using a sewing machine in order to keep her costs down. Any reasonable sewing machine would cost at least £40 and the housewife must pay a surcharge of £4 on that amount under this legislation.
Young married couples constitute a section of the community which bears heavier burdens resulting from this bill than any other section. Young married couples are the basis of the future security and wealth of this country. If they can become the owners of their houses and furniture and rear good Australian families, they will contribute to the wealth of the -country. They constitute that section of the community which is most entitled to assistance. Yet the Government has made only a slight reduction in the sales tax that they have to pay. I believe that the Government was under pressure from many sources to remove sales tax from household necessities, hut it decided that the best it could do was to reduce the rate of tax to 10 per cent. After introducing its last budget the Government claimed credit for having simplified the administration of sales tax, but it has now proposed an additional rate of tax. When the Government has been in serious trouble, evidence of its inability to handle problems is .seen in the frequency with which it .has changed its mind. This bill provides further evidence of that weakness, and will not give the community confidence in the Government.
The Government has also decided to retain sales tax on confectionery, icecream, toys, Christmas stockings, fireworks, party decorations and novelties. The rate of tax on these items has been reduced from 16jj- per cent, to 12-J per cent. I can remember a time when tremendous criticism was levelled by the then Opposition against Mr. Dedman, a Minister in the Chifley Government, because it was suggested that he had killed Father Christmas. By retaining the sales tax on these item’s the Government is making the enjoyment of Christmas more difficult than it should be. The country is not in such a serious position that the Government must collect every Id. that it can from the community. Why the sales tax on ice-creams and toys cannot be ‘eliminated I do not know. T presume that the Minister for National Development will have something to say on that subject. I do not think that ho is tie Scrooge that he looks.
– Is that a compliment or not:?
– I am not sure. ‘Surely the Government could be lenient at ‘Christmas, a ‘time when we relax and try to enjoy ‘a period of festivity -which tradition has passed down to us through 2,000 years. The Government should approach . that period of the year with a generosity which is not evidenced in its sales tax proposals. I know that the Government will not amend this bill, so it will be at least twelve months before we can hope for relief from its provisions, but I hope that the sales tax on furniture and furnishings and ice-creams will be removed in the next budget.
Under this hill, sales tax on books for educational purposes will still be levied at the rate of 12£ per cent. That tax punishes a section of the community which should not be .punished because it is the least able to pay these charges. Every penny is valuable to the young boy or .girl who is attending .school. The sales tax on books for educational purposes could well be eliminated.
I come now to a matter that I had an opportunity to talk about in a very restricted way during the debate on the Estimates - sales tax on .aircraft. On that occasion, the Minister concerned suggested that honorable senators would have a fuller opportunity to make inquiries about the proposed rebate of sales tax on aircraft when the .sales tax legislation came before the Senate. I only hope that our inquiries on this occasion will receive much fuller answers than those given to us during the Estimates debate. The basis of our criticism of the Government in relation to this matter is the following passage in the Auditor-General’s report : -
Recent inquiries revealed that sales tax of approximately £393,750 had not been paid by an airline company on aircraft imported since February, 1946. An investigation by taxation officers disclosed that, in addition to £143,750 payable an two aircraft imported at the end of 1953, for which extension of time to ,pay had been granted, the company concerned had not paid sales tax of approximately £250,000 on fifteen other .aircraft imported in earlier years.
The company secured entry of the aircraft into Australia by quoting the number of his certificate of registration under the Sales Tax Assessment Act, but failed to declare when the aircraft were placed in commission and to pay the sales tax involved. The total amount of such tax was still owing to the Commonwealth on the 30th June, 1954, but does not appear in the statement of outstanding taxes hereunder because it had not been assessed by the Commissioner of Taxation at that date.
It is noted that, in the Sales Tax ‘(Exemptions :and Classifications) Bill submitted to the Parliament on .the 1.8th August, 1954, provision is made that sales tax be not payable upon aeroplanes .retrospectively to the Sst January, *94’fi.
I shall give a brief outline of the history of this matter. In 1930, when the sales tax was introduced, aircraft were taxable, but in 1934 they were exempted. Sales tax on aircraft was reimposed in 1940, and last year this Government exempted commercial aircraft from the tax. To any one who heard the second-reading speech of the Minister for National Development on this bill, it would appear that, almost by accident, the Government became aware that an airline company had failed to meet its sales tax commitments on aircraft. As the Auditor-General has not named the company concerned and the Government has failed to give this information, I can only guess that the organization referred to is Australian National Airway Proprietary Limited. As the Auditor-Gen ral has pointed out, although this company obtained, entry for aircraft by quoting its registration certificate number, it placed the aircraft in operation without paying the tax. As I have said, apparently almost by accident, the Government discovered that the tax had not been paid. Further, the Government has told us that it is quite sure that Australian National Airways Proprietary Limited did not think that it had to pay sales tax. How can we be expected to believe that when, as the Auditor-General has pointed out, the company went th ough all the procedure precedent to thi; payment of salestax and, in relation to two aircraft, sought an extension of time to meet its commitment? Surely, it is rather naive to ‘suggest that Australian National Airways Proprietary Limited did not realize that it had to pay sales tax merely because, up to some time previously, the airline company owned by the Commonwealth, Trans-Australia Airlines had not paid sales tax. This is in conformity with a pattern of behaviour that has been followed by Australian National Airways Proprietary Limited. Surely honorable senators have not forgotten that this same company refused to pay landing charges. Obviously that refusal could not have been based on any claim that TransAustralia Airlines was not paying landing charges, because Trans-Australia Airlines was meeting those charges. But Australian National Airways Proprietary
Limited refused to pay them, and quite obviously Australian National Airways Proprietary Limited refused to pay sales tax. It is as simple as that.
The Government is offering the incredible excuse that it did not know that sales tax was not being paid hy Australian National Airways Proprietary Limited, yet, as the Auditor-General has revealed, an extension of time to meet the sales tax commitments in respect of certain aircraft was granted to the company. One is afraid when speaking on a matter such as this that one may be tempted to say too much, because this to my mind is a very serious matter. I repeat that Australian National Airways Proprietary Limited’s failure to pay sales tax is in accordance with a pattern that the company has established. It is of no use saying, as has been said in past years, that the Government is helping poor struggling airlines, pioneered hy Kingsford Smith and other great Australian aviators. There is no doubt about who controls our private airlines to-day. The great shipping companies of Australia and overseas own Australian National Airways Proprietary Limited, and the assistance that has been given to this company by the Government has been beyond all rhyme and reason. It might have been different if the big shipping companies that own Australian National Airways Proprietary Limited had treated the Australian community fairly by maintaining freights at a reasonable level. We could then, perhaps, have understood a government that said, “ This company played the game by the community. We want to help it. We will publicly recognize the fact that it had tried to keep freights down to a reasonable level.” But the truth is that freight charges to Australian shippers are now out of all proportion to those imposed in other parts of the world. Are freight charges to be increased in Great Britain because of the dock strikes in that country? Of course not. But when there is a stop-work meeting at some Australian port, it is seized upon as an excuse to put up freights because of the alleged slower turn-round of ships.
The Government says, in a manner that is almost childlike, that if it insisted on collecting this tax from Australian National Airways Proprietary Limited, it would result in higher fares and freight charges. Of course it would. All taxes mean higher prices to the community. I do not know of any tax that does not have that effect. If the Government had decided years ago to exempt aircraft from, sales tax that would have been all right. It would have been a just decision according to the policy of the Government, and I would not have argued about it. But when the law right down the years since 1946 has been that sales tax shall be paid on aircraft, and the Government now tells us that it does not propose to collect that sales tax back to 1946, it is a different story altogether. In justification of the retrospective exemption proposed in this measure the Minister said -
The Government now believes that it would have been just and proper to restore the exemption which existed for aircraft from 1 034 to 1940, immediately the war ended.
I emphasize the word “ immediately the war ended “. There are many other things to which that argument could be applied. “We could list pages of costs that the community now has to bear but which it did not have to bear before World War II. For instance, in 1939 the sales tax yielded £9,000,000, whereas last year it yielded £95,000,000. If we are to apply that argument logically, we owe the public about £85,000,000 in sales tax and, on the ground on which we are to exempt the airline companies from the payment of sales tax on aircraft back to 1946, we should refund that £85,000,000 to the public. But apparently Australian National Airways Proprietary Limited is being singled out for special kindness. I wonder whether there has been any great demand by the small airline companies, which have paid their sales tax dues, for the introduction of this retrospective exemption. The Auditor-General’s report refers specifically to one company, but what about the smaller organizations such as Ansett Airways Proprietary Limited and the Macrobertson-Miller Aviation Company Proprietary Limited? What about Butler Air Transport Proprietary Limited in New South Wales, which is not much more than a subsidiary of Australian National Airways Proprietary
Limited? Apparently, the subsidiary company paid sales tax, because it appears from ‘ the Auditor-General’s report that only one company did not pay it. In other words, all the small companies paid sales tax and, at the same time, had to compete with Australian National Airways Proprietary Limited which did not pay sales tax and did not pay landing charges. To me the position is very strange indeed.
– It would be interesting to know what a royal commission would disclose.
– That . is very true. The press of New South Wales frequently makes demands for royal commissions. I think this matter warrants the appointment of a royal commission. The non-payment of sales tax, of course, would be only a facet of the inquiry. Let us have a royal commission into all the Government’s dealings with Australian National Airways Proprietary Limited. Consider, for instance, the guarantee that was given by the Government to Australian National Airways Proprietary Limited for the purchase of aircraft. We were informed by the Minister who introduced legislation for that guarantee into this chamber that the purpose was to enable Australian National Airways Proprietary Limited to purchase Vickers Viscount aircraft; but we found out later that dollar aircraft were to be purchased. That is another matter that could be examined. Then there was the refusal by Australian National Airways Proprietary Limited to pay landing charges. These, too, were remitted by the Government. Now we find that Australian National Airways Proprietary Limited has avoided the payment of sales tax on aircraft since 1946, although apparently other companies paid it whether they were government organizations or not. It is of no use citing British Commonwealth Pacific Airways, Qantas Empire Airways Limited, or Trans- Australia Airlines. The question is did Ansett Airways Proprietary Limited pay sales tax? Did Butler Air Transport Proprietary Limited pay it; and did the Macrobertson-Miller Aviation Company pay it, whilst at the same time maintaining competition with Australian National
Airways Proprietary Limited, which did not pay Itf
– Did Ansett Airways Proprietary Limited pay landing charges ?
– I do not know,, birt I know that Trans-Australia Airlines did.
– If TransAustralia Airlines paid sales tax it will be refunded.
– That is not the point. Australian National Airways Proprietary Limited competed unfairly with the smaller companies which paid sales, tax. If it was unjust to impose sales tax on Australian National Airways Proprietary Limited, it was equally unjust to impose it on the other companies. The Minister has offered only weak reasons in support of the Government’s, unwonted generosity to Australian National Airways Proprietary Limited im remitting sales: tax back to 1946.. The Minister said-
Daring the examination of this question, it, was revealed that some aeroplanes had been imported and put into operation without payment of sales tax.
This was brought about by an irregular but inadvertent use of registered taxpayers’ certificates in the belief that the same freedom from sales tax as applied to the Government airlines would apply also to other commercial transport organizations.
As if they did not know whether they would be liable to pay sales tax or not! In my opinion,, that is the joke of the year. It would seem that Australian National Airways Proprietary Limited is a very innocent organization!
– What government waa in power in 1946.?
– One of the best governments the country has had since Federation : a government of which I had the honour to be a member.
– Did not this incident of which the honorable senator is complaining happen when the previous Labour Government was in power?.
– It has happened from 194:9 onwards, but surely the- airline companies are not: entitled to have, the; rebate dated back to those years, n.ite they?
– Does not the Opposition assume responsibility for what happened when it was. in office?
– There has been no need for us to take responsibility. This Government proposes to. remit the sales tax, but do honorable senators opposite think that the previous Labour Government would have remitted it? Was the Minister serious when he asked whether Labour assumed responsibility? I assure him that the Opposition will always take its full share of responsibility. We would have collected this- money.
– Then why did the Labour Government remit it in respect of British Commonwealth Pacific Airways Limited and Qantas Empire Airways Limited?
– Because of the fact that they were government airlines, and that was government policy.
– One law for the rich and another for the poor !
– Does not that also apply to-day? At the moment, the rich are represented by Australian National Airways Proprietary Limited. That is the only difference. The Opposition contends that a special law for the rich is being applied by this Government with absolute ferocity in respect of sales tax. In the history of Australia, we have never witnessed such favoured treatment as Australian National Airways Proprietary Limited has received from this Government since 1949..
– The honorable senator has forgotten how Labour treated Trans-Australia Airlines.
– I ha<ve forgotten nothing. We stand up- to what we did when we were in offices. What is wrong with Ansett Airways Proprietary Limited? When the Government introduced legislation to stabilize competition in the aviation industry, that’ action was taken for the benefit of Australian National. Airways Proprietary Limited alone. The small airlines’ were ignored. It was1 obvious that the object of the legislation was to ensure that Australian National Airways Proprietary Limited1 woul’d be all right. The pioneers of the industry, such as Ansett and Butler; were still operating aircraft in the- small companies; hut there were- no pioneers left, in Australian National Airways Proprietary Limited. Nevertheless, the Government approached the matter by saying; in effect, “What- can- we do for Australian National Airways?.” and. it remitted £393,000 that that, company should have paid’. Apparently, the thought in the mind of the Government that it should do its best for this company is driving it. on to even, greater efforts. The reason for- its solicitude for Australian National. Airways Proprietary Limited is locked in the Government’s heart. I can only guess at the reason for the undying devotion which it has lavished, on that company. I suggest that, if we could have a royal commission to examine the contracts and negotiations between that company and this Government, the results would be illuminating indeed.
– They would not. be as. good as the report of the royal commission we received, to-day.
Senates ARMSTRONG.: - They might even bc sufficiently important to warrant the use of an identifying letter,, such as “Document J”. The revelation, of the facts concerning the unholy tie-up between die Government, and. Australian National Airways- Proprietary Limited might well bring, down this; Administration.
;. This bill provides for reductions of the rate- of sales tax which will involve a consequent reduction of revenue by £9,882;000 for the balance of this financial year and £12,822,000 in a full year. Those estimates are based on the assumption that retail trade will be of the same volume as it was during the previous year.
– Does that include the hand-out to- Australian National Airways Proprietary Limited’?.’
– During the course of my speech, I hope to reply to both Senator Armstrong, and Senator Cooke, but I shall make my remarks in the way in which I have prepared them. When r come to the proposition raised by Senator Cooke, I shall answer the honorable senator’s question, and also any other questions, which I think should be answered.
I wish, first to refer to Senator Armstrong’s- remarks concerning- the method of estimating sales tax. The honorable senator proposed’ that we should depart from- the present system of estimating what we are going to1 obtain1 by way of sales tax, because last year we received1 more than the amount- for which provision had been made-. What other basis of estimation could there: be, than to take the average of the retail sales from which sales: tax comes? That, is the source- of sales, tax, in the final analysis. Who would base, an estimate- of collections of sales tax on anything, but. conditions that had. existed over a. period of years? I should like to know what the Opposition suggests- should be done, if a 10 per- cent, drop in the wool income were- to occur,, with- a consequent reduction, of retail sales throughout. Australia.? The Opposition just cannot, appreciate that the Australian community depends on- the- maintenance of a healthy,, rural income. If a 10 per cent, drop in wool income came about, retail trade might tumble,, and the estimates of sales tax then would’ be. wrong. I commend the section of the Taxation Branch, which prepares these estimates, for sticking to a, tried and true system of preparing them.
– Even if they are wrong !.
– I do not. think that the degree of inaccuracy has been any greater during the regime of this Government than it was when- Senate Armstrong’s party was in office-. The same- basis is used now as was, used then. I think it is a tried and proved on&, and that we should stick to it.
The second point I wish to make is one. which I think is of interest to all honorable senators. When the Committee on Taxation, appointed by this Government, was inquiring, into matters concerning sales tax, I was deeply impressed by the information which the Taxation Branch had collated over the years. Tha t information included suggestions- concerning sales’ tax, which had been made by honorable senators- in this chamber during a period of three or four years. 1 think that that shows- that the Taxation
Branch is alive, that it is taking full cognizance of the suggestions that honorable senators make, and that it is attempting to use those suggestions in estimating the cost of sales tax reductions. It places such information before the government of the day which, in its wisdom, calculates the concessions which can be made, and spreads those concessions in the best possible way over the lit; of commodities affected by sales tax.
I think that the policy behind this bill is sound. It is a policy which has helped to reduce costs in industry. It will also help to reduce the cost of home furnishings, and in that way benefit the people to whom Senator Armstrong referred, young people who are embarking on married life, setting up homes and purchasing furniture.^ I am sure that Senator Armstrong voiced the opinion of every honorable senator when he said that everything should be done to help relieve the burden on that section of the community. This bill will take us a step forward in that direction, because sales tax will be reduced from 16$ per cent, to 10 per cent, in some instances, and from 12£ per cent, to 10 per cent, in other instances. I think that that is sound policy.
I am pleased to see that the bill provides for exemption from sales tax of plant used by manufacturers and persons engaged in the mining industry, and also on articles required for the repair and maintenance of their machinery. Previously, mining companies which purchased plant to repair existing machinery were obliged to pay sales tax on such plant. In future, they will be relieved of that burden, and in that way the industry will be assisted. Another exemption includes machinery and equipment used in the servicing and repairing of motor vehicles and aircraft. That exemption will lessen the burden of costs in the motor vehicle and aircraft industries. Yet another exemption applies to materials used in the construction, repair and maintenance of roads, dams, and drains. That will be of particular interest to the primary producers of Australia. In future, machinery which is purchased for digging dams will be exempt from sales tax. The benefit of that reduction will be passed on to primary producers by way of lower quotes for dam construction. I also note that machinery used for the repair of footwear is to be exempt. That provision will affect every one in the community. Our great motor industry will be assisted by the provision that machinery used for retreading and recapping motor tyres is to be exempt from sales tax. The materials which that industry needs will, in future, be free of sales tax. I could give other illustrations of the way in which costs in industry will be reduced, a matter upon which every honorable senator has commented at one time or other in this Senate, and with which we are all deeply concerned.
The schedule refers to a great number of household items which will be the subject of reduced sales tax. The reductions will help those who are furnishing homes, because the items include furniture, crockery, glassware, cutlery, refrigerators, washing machines, radiators and kitchen utensils. Sales tax on a wide range of household commodities is to be reduced from 12£ per cent, to 10 per cent, and, in respect of other commodities, from 16f per cent, to 10 per cent. For that reason, I do not think it is true to say that the Government is not aware of the problems of people who wish to purchase furniture and household goods to-day. It is, perhaps, natural for criticism to be made on the ground that the assistance should be greater, but this Government should be given credit for providing assistance of a material kind in many instances. That was overlooked by Senator Armstrong. Those engaged in rural industries are to receive the benefit of other exemptions. Seed cleaning machinery and motor trailers that are used by rural producers for carrying stock are now exempt. So also are poisons and traps for all classes of noxious animals. Those exemptions are important tq rural producers, and I do not exaggerate when I say that this Government has done more than any other Australian government since federation to help the men on the land. No honorable senator would oppose such assistance.
The fishing industry is also to be assisted by relief from sales tax. Refrigeration appliances for the preservation of fish are now exempt from sales tax. It is costly equipment, and the relief will be substantial. I congratulate the Government upon that provision. Another industry that is associated with the production of food is to gain relief under this measure. That is the honey industry. Any product, other than confectionery, that contains more than 50 per cent, honey, is now exempt from sales tax. Baking soda and similar materials are exempt. The Government has also assisted many taxpayers by exempting paper bags, wrapping paper, twine and cellulose tape from sales tax. That has been a contentious matter for many years. Some traders have sold goods that are free of sales tax, but they have had to pay sales tax on string, wrapping paper and cellulose tape used in the parcelling of the goods.
– The manufacturers will put up the prices now.
– That is supposition on the part of Senator Sheehan, and I shall not take it seriously. The fact is that the provision to which I have referred will be of valuable assistance to the food trade, and an anomaly that has existed for many years will be removed. The Government has reduced excise on brandy and wines, and it now has removed sales tax from methylated spirits.
I turn my attention now to the exemption of aeroplanes from sales tax. Senator Armstrong referred to this matter, and I know that the Minister will deal with it with relish and much better than I can, but I shall refer to it while it is fresh in the minds of honorable senators. Aeroplanes were on the exempt list, then they were removed from it, and now they are on it again. The Government now has to remit sales tax that was payable by a certain airline company. Senator Armstrong said that the company was Australian National Airways Proprietary Limited, and I believe that to be true.
– It was entirely a guess on my part.
– It is a guess on my part, too, but I believe that it is a correct one. The sales tax that is to be remitted was due in 1946, 1947, 1948 and 1949. Senator Armstrong was a member of the Labour Government that held office in those years, but that Government made no attempt to collect the tax. If the Labour Government had done its duty and had collected the sales tax that was due, a large amount of taxation revenue would not have to be remitted now because it would have been paid. The Labour Government did not attempt to collect it. The same Government was frightened to collect landing charges. Why did it not collect landing charges from Australian National Airways Proprietary Limited and Ansett Airways Proprietary Limited after those companies had refused to pay them ? Honorable senators on the Opposition side know the answer full well. Why do they continually refer to the matter when, figuratively, they know that their middle stump has been knocked down and both bails have been dislodged? Those airline companies did not pay the landing charges because they had leases over the areas concerned. They could not be charged landing fees until the leases had expired. Senator Armstrong knows that, yet he is. petty enough to refer to the matter again and again. He knows that the Labour Government refused to collect the charges, and that the charges were not legal. The companies had leases and their position was watertight.
– The charges were quite legal.
– Then why did not the Labour Government collect them? The fact is that it was frightened to do so. If the supporters of the Labour Government were not game to do so then, they should not moan about it now.
– Are the companies paying those landing charges now?
– Yes, they are paying the same landing charges as those that are paid by every other company. The Opposition is bitter about this matter because it failed to drive Australian National Airways Proprietary
Limited out of business, although it tried to do so for many years.
– Not at all.
– Will Senator A’rms’trong deny that the Labour Government relieved Trans-Australia Airlines of -any sales tax on aeroplanes, but expected private enterprise to pay .the tax? The Labour -Government did not charge Trans-Australia Airlines pay-roll tax, :but it forced private -enterprise to :pay it. It did not charge Trans- Australia Airlines sales tax or income tax, but private enterprise .had to pay those taxes. The Labour Government gave TransAustralia Airlines the right to carry all government passengers and mails. Despite those facts, honorable senators on the Opposition side claim that they did not try to drive Australian National Airways Proprietary Limited out of business. That will be the day ! The Labour Government failed to do so because Australian National Airways Proprietary Limited was too good for it. The present Government has replaced that state of affairs with fair and honest competition. Sound competition has strengthened the Government airline. Trans- Austral] a Airlines is a much more economic and efficient machine now than it was when this Government was elected to office. It has been strengthened by competition - the .straightforward competition that honorable senators on the Opposition side abhor. They want a government monopoly. They did everything they could to eliminate competition. That is their ‘aim. I have heard them say so often.
– A socialist State !
– That is the socialist conception, but we do not know now .who are socialists and who are not socialists. We ‘do not know who follows this Labour ‘leader or who. supports that one. No doubt ‘everything will be sorted out before long. Probably a certain interim report that was tabled to-day will influence honorable senators on the Opposition side in .deciding which leader they prefer. However, all political parties have been through such phases, and I do not hold that against them. As Senator Kennelly said .recently, in effect, no doubt the supporters of the Labour party will overcome their difficulties, and the sooner they become a good effective Opposition again, the better it will be for the processes of government in Australia.
– The honorable senator would like to have a government steamer or two running to Tasmania. What about the shipping services to Tasmania, and the activities of Australian National Airway Proprietary Limited ? How is it treating Tasmania ?
– Very well. We are doing very well in Tasmania. Has Senator Sheehan any objections? When the Strahan report on shipping services is implemented and the co-operation of all parties concerned is obtained, we hope to do much better. But this Government has a good Minister for Shipping and Transport, and that has helped Tasmania in the past few years.
– Senator Ashley does not hold that portfolio.
– Heaven forbid. I turn my attention now to other items in the list of sales tax charges’. In one case, I find myself in complete agreement with Senator Armstrong.
– Then the honorable senator is sure to be Tight.
– Yes, 1 am certain to he right, but I do not believe that we have reached our conclusion along the same lines. Senator Armstrong said that he hoped to see sales tax on ice-cream abolished. I agree. If we did so, the Opposition would not have .anything to talk about in connexion with sales tax. Honorable senators opposite have .harped on this subject for five years. If sales tax on ice-cream were abolished, it would be equal, figuratively, to pulling the only tooth that the Opposition has to bite with in criticising sales tax. That is why I agree with Senator Armstrong entirely.
– A Labour government imposed the .sales tax on icecream.
– Yes, but it was in difficulties at that time. Governments :of all political colours ‘have increased and reduced sales tax on ice-cream at various times, and all must share responsibility for it, but sales tax on ice-cream now is only a minor matter from the point of view of revenue. It is a petty tax, and I hope that the reduction of the rate of sales tax on ice-cream, will be a step towards its abolition.
– Why be petty about it ? Why not abolish it now ?.
– As I have just tried to tell Senator Aylett, 1 would abolish it if I had the power to do so. I turn my attention- to another matter now because, as I have already said, the Taxation Branch takes notice of all the matters that, are raised in this debate. I direct attention to the amount of exemption that is provided on bakers’ smallgoods,, cakes and pastry. The exemption covers all goods up to a value of £700 produced or sold by a baker and goods to the value of £500 that are made in a home factory for sale. The first figure has’ been £700 for many years. But the exemption does, not relate only to taxable, good’s. If a baker made £50 or £100 worth of goods that were taxable and £1,000 worth of goods that were not taxable, the two things’ would be lumped together and he would have to pay tax on the £50- or £10© worth of taxable goods. I make a plea to the Government to give further consideration to this matter. I know that the operation of the sales tax is causing difficulties for master bakers1. The baking trade is not an attractive trade because, generally speaking, bakers work in pretty bad conditions. When a master baker has finished his day’s work, he has to calculate the number of taxable things that he has made and, for the. purposes of taxation, separate them from the bread, buns and other things that are exempt from tax. That causes a tremendous amount of work for bakers^ but the revenue from the tax on the things they produce is very small. I know the revenue derived from the big’ cake manufacturers is larger, but that should not prevent the’ Government from removing the sales tax on bakers’ goods. If the Government felt that it could not remove the sales tax from all foodstuffs - I should like that to be. done - at least it could do something to bring the exemption to which I have referred more into line with present prices.. When the £700 exemption was introduced, prices were: con siderably lower- than they are to-day. 1 believe that a sound case can be made out either’ for raising the exemption or for abolishing: the’ sales tax on these goods:
I want to refer to a point that is made very often by members- of the Opposition when they are dealing with the taxation reductions made by this Government. Honorable senators opposite often argue that, as the revenue from taxes now is equal to, or perhaps a little greater than, the revenue previously, taxation has not been reduced. Applied to the sales tax, that argument totally disregards the volume of retail’ sales. We find very often that a reduction of the sales taxleads to an increase of the volume of retail sales. That is a tendency that the- Government always has in mind. When rates of sales tax are high, some people cannot afford to buy certain articles, but if the rates are ‘reduced, the articles are brought within their reach. So they buy them, and in many instances, the revenue from the tax on those articles increases. In my opinion, the reason for the rapid expansion of retail, sales during the last few years is the sound taxation policy pursued by the Government. The volume of retail sales is an indication of the state of prosperity of the nation. One of the first indications of a setback to- prosperity is a decrease of the volume of retail sales. Since this Government has been in office, the volume of retail sales has increased steadily, and, despite the. fact that rates of sales tax have been reduced, the revenue from the tax has increased. I commend the Government for two- aspects of its ta>xation policy. I have (referred to then ail ready, but I shall do. so again.
– Tedious repetition !
– Sometimes it is necessary to> repeat arguments’ in order to drive them through the bone, that separates the. hearing organs of some honorable senators opposite. The taxation policy of the Government is; designed, first, to reduce costs of production in industry, and secondly, to reduce prices. That- policy has: reduced the burden- on- people who are setting up their homes,; because, it has led to a reduction of the cost of furniture, and- furnishings.
.- On many occasions in the past we have heard discussions about the sales tax legislation operating in Australia. This afternoon, we have heard that legislation discussed again.
– We shall hear it discussed for a few more years yet.
– I have been informed in an interjection that if I remain in the Parliament, for a few more years, I shall hear the sales tax discussed again. I inform the interjector that I look forward to the day when the sales tax legislation will be removed from the statutebook. When that has been done, one of Labour’s objectives will be achieved. One fact has emerged from this debate. It is that the Liberal party and the Australian Country party firmly believe that the sales tax should be applied to as many commodities as possible. Senator Henty attempted to expound the Government’s taxation policy. He mixed landing charges with the sales tax, with the object of diverting our minds from the bill. He said that the policy of the Government in reducing the sales tax, was to reduce costs of production. What about the cost of living? The Government’s policy goes only halfway towards reducing the cost of living. It will help to reduce costs of production for manufacturers and primary producers, but it will go no further than that.
– It will go further than that.
– Senator Scott will have an opportunity to speak to the bill later, but I do not believe he will be able to tell me how the Government’s taxation policy in this connexion will help to reduce the cost of living
– It is automatic.
– Before I have finished, Senator Scott will know all about the cost of living and how the sales tax affects it. The Treasurer (Sir Arthur Fadden), in his budget speech, said that the elements of inflation were still operating in Australia. The Government regards the sales tax as a prop to put underneath the disintegrating Australian economy. There is no doubt about that. When we had, so to speak, a tornado of inflation in Australia, the Government was quite willing to follow advice given to it by any tuppenny-ha’penny expert in economics. It employed a certain economist, whose ability I do not wish to disparage, and it followed some of his advice. I remember very well that, in one of his lectures, he said there were some people in Australia who would not save and that the Commonwealth would have to save for them. He explained his statement by saying that the Government could go further into the field of indirect taxation.
– Who said that?
– Sir Douglas Copland said it in a lecture. I suggest , that Senator Scott, instead of playing golf, devote some of his time to a study of Sir Douglas Copland’s lectures.
– I did not make the interjection. I did not say anything.
– The theory advanced by that economist was that if high rates of sales tax were imposed, inflation would be checked. We remember that the Government went berserk in fixing the rates of sales tax. On some commodities, the rate was fixed as high as 66$ per cent. The Government disregarded entirely the effect that such rates would have on the cost of living and on prices generally. We know that the consuming public pays the sales tax in the end. That is one of the reasons why the Australian Labour party is so strongly opposed to it.
– I suppose that is why Labour introduced it.
– For the benefit of Senator Scott, I shall explain the Government’s theory. It was that different rates of sales tax should be applied to various classes of goods, because if the rate imposed on some commodities was very high, people would be discouraged from buying them or, if they insisted on buying them, they would have to pay a considerable amount of tax. But the Government had something else in mind. We know that during the period when it went berserk in fixing the rates of sales tax, there was a shortage of the materials required by some industries. The Government took the view that it would be able to regulate the industries operating in Australia through the instrument of the sales tax. It more or less classified industries by imposing the highest rates of tax on the goods produced by some industries. We know that, as a result of high rates of sales tax, some Australian industries were compelled to close down. The Government’s action had the effect of preventing many Australian industries from expanding.
– Luxury industries.
– I am speaking on behalf of people who have few luxuries. They could not afford to buy many of the things on which the high rates of tax were imposed. But the so-called luxuries included wireless sets, wristlet watches, clocks, pictures and musical instruments - things that are really essentials. What is a luxury commodity, and what is an essential commodity? A thing becomes essential by its very use. If we become accustomed to using certain things, those things become essentials. It is very difficult to distinguish between luxury industries and essential industries. The effect of imposing high rates of sales tax on certain commodities was that many industries that otherwise would have been able to expand and would now be able to offer employment to thousands of good Australians were handicapped. No relief has been given to them yet. In the final analysis, all the high rates of sales tax were charged to the consumers.
Let us consider whether, in the light of the history of the sales tax, there is anything in the Government’s theory. I recall that there was no sales tax until 1930, when Australia was visited by an expert in high finance. After his visit, at a time when about 25 per cent, of our population was unemployed, sales tax was introduced in this country for the first time. It is hard to reconcile the fact that the present Government is imposing high rates of sales tax during an inflationary period with the fact that this form of tax was first imposed during a period of depression. We all know that a government must impose taxation in order to obtain revenue, but sales tax is a most unfair tax. This Government has imposed a heavy burden on the people by indirect taxation. In its first year of office, it collected £42,425,000 in sales tax. Being still not satisfied, it increased the severity of sales tax in 1950-51 in order to collect £57,173,000 in that year. In the following year, 1951-52, the Government collected £95,458,000 by this means. Having gone to the limit, the Government granted remissions in 1952-53, when the yield for the year was £89,067,000. That was quite good, in view of the fact that the Government set out to reduce sales tax in that year. For 1953-54, in the knowledge that large collections would not start coming in until after the general election, the Government imposed rates of sales tax to yield £95,688,559.
Since this Government has been in office, it has taken from the people of this country in sales tax not less than £379,811,000, and so has reduced their spending power by that amount. This huge tax impost has severely affected the standard of living of the people. As the Government expects to collect £92,000,000 in sales tax in this financial year, once again, it will not do so badly. I challenge supporters of the Government who are so steadfast in their advocacy of sales tax to prove that it is not a grossly unfair tax. The Opposition considers it is unfair, because it ignores the principle of capacity to pay. It bears very heavily on the family units of the community.
– All taxes do.
– Although I do not like citing the case of the single man, it is necessary for me to do so in order to prove my contention. As a single man’s requirements are much fewer than those of a family man, sales tax does not bear so heavily on- him, and as a family man’s range of necessities is much wider than that of the single man, obviously he pays more sales tax.
The wages system in this country has been based for many years on the C series index. Very few items in the regimen are exempt from sales tax. Therefore, the wage-earners bear the brunt of the sales tax burden. Indeed, about onetenth of a basic wage earner’s income is extracted from him in sales tax, because the majority of items that he requires for himself, his wife and children are subject to this tax. Supporters of the Government are well aware that the amount of revenue from sales tax is directly proportionate .to the amount of money spent on purchases. Senator Henty admitted that the volume of retail sales determines the .amount of sales tax revenue. He endeavoured to ridicule the Opposition’s criticism of the imposition of sales tax on ice-cream. I point out that ice-cream is a favorite food of children. Having left his childhood days far behind, he assumed the r.ole <of a chronic nark. It is comforting to realize that, in the future., as a result of the reduction of sales tax ou this .commodity, the children of the community wall not have to lick up the last particle from their ice-cream (containers in order to get their money’s worth.
The industrial unrest in the com.munity is due, in no small measure, to the fact that the spending power <o£ the workers has been reduced considerably, and that it has become harder for them to maintain .a decent standard of living. Unless indirect taxation is reduced appreciably, I am convinced that industrial unrest will increase. It is well known that the various trade unions were impelled to press their margins application, which is now before the Commonwealth Court of Conciliation and Arbitration, because the workers were not receiving .’sufficient money with which to maintain a decent standard of living. The Government’s sales tax juggernaut is designed to extract as much as possible from the wages of the workers. The present wages system has been in operation since 1908. Nothing was taken from the earnings of the workers by indirect taxation until 1930, when sales tax was introduced. Up to that time, a worker was able to spend all of his wages on the purchase of necessaries. By the imposition of sales tax at the rate of 12£ per cent., the Treasury gains revenue of 2s. 6d. in respect of every fi spent. The basic wage in Queensland is £11 5s. a week. On the assumption that it is necessary for a basic wage earner to spend all of his wages on necessaries,, ‘his wages purchase only slightly less than £10 worth of commodities. :The remainder is absorbed by sales tax.
Senator Henty was greatly concerned about the attitude of the Opposition to the proposed remission of sales tax to a certain airline operating company. I have no doubt that the views that the honorable senator expressed were those of the airline company. I wish to state the views of the average Australian citizen on the matter. “The man in the street knows that these things do not happen by magic. The remission of £300,000 of sales tax to the airline company was, doubtlessly, the result of numerous conferences between representatives of the Government and the company. The Opposition would, perhaps, have .been less critical of the Government if, at the time that the decision was taken to remit that huge amount of sales tax, the Prime Minister (Mr. Menzies) had made a clear .statement about the matter. That would have obviated the murkiness that now surrounds the transaction.
– - There w.as nothing murky about it.
– If there w-as nothing murky -about it, .can any supporter of the Government tell me why both the debt and the name of the company were -omitted from the list -of persons who owed income tax? Obviously, they were omitted from the report .of the Commissioner of Taxation for the purpose <of -deliberately concealing the facts from the public. The Commissioner of Taxation furnished his last report on the ‘30th June, 1953. I -challenge honorable senators opposite to show me, in that report, either the name of the airline company *or the amount of the debt for .sales tax. But the names of the proprietors <of little corner shops who had .not paid their income tax were shown. Remission was announced in the middle of the night, when the Government surreptitiously stated that it had decided to exempt aeroplanes from .sales tax, retrospectively to 194-6, and to waive the debt of the airline company. As a result, the company will not have to pay even one penny of the debt. I take this opportunity to inform .supporters of the Government that the average citizen of this country, who is prepared to pay ‘his income tax, expects all other sections of the community to meet their tax liabilities.
Sitting suspended from 5.45 to 8 p.m.
Senator MARRIOTT (Tasmania) 1 8.0]. - In discussing the bill before the Senate, Senator Benn seemed inclined to ridicule Senator Henty because Senator Henty had commended the Government for reducing sales tax and thereby reducing costs of production. Senator Benn suggested that, by reducing the costs of production, the Government was helping only the manufacturers or capitalists, and that its action would not lower the cost of living. Surely the most simple-minded person knows that the first action necessary to stop inflation is to reduce costs of production, the effects of which are felt by seller and consumer. In reply to Senator Benn, I say that, by reducing sales tax by about £10,000,000, the Government has taken another .step forward in its obviously sincere attempt to lower the costs of production in Australia. Eminent bankers, economists, trade union leaders and State treasurers, most of whom are Labour men, have admitted with some pride and satisfaction that the spiral of inflation has been stopped and that it is now in reverse. I consider that the Opposition is indulging in empty criticism because it is wondering what will be its next catch-cry, now that the spiral of inflation is in reverse. For years, the catch-cry of the Opposition was “depression”. When it found that the public no longer .blamed the non-Labour parties for depression, it adopted the catch-cry of “ inflation “ which has been its cry since 1949. Senator Benn said that the abolition of sales tax was a plank in the platform of the Labour party. The Labour party was in office from 1942 to 1949.
– There was a war on. Did the honorable senator know?
– Yes. I happened to see some of it. The Labour party was in power until 1949, but it did not abolish the sales tax.’ When I hear a member of the Labour party say that abolition of the sales tax is a plank of his party’s platform I think that it must be one of those newly imported planks which are so badly needed to rebuild the platform of the Labour party, according to what we have read in the press. I think that Senator Benn implied that whereas the Government claimed to have reduced sales tax, the receipts from sales tax had increased. There is a simple explanation of that fact. While the country was ruled by a Labour Government, from 1942 to 1949, there were shortages. There was no prosperity. Therefore, the purchasing power of the public was not as great as it is now. The Government has reduced the rate of sales tax on the majority of items; but the population of Australia has increased to nearly 9,000,000 people, more goods are for sale, and there is more prosperity. Consequently, the Government is receiving an increased income from sales tax.
– The Government removed sales tax from aeroplanes.
– Yes, because of the encouragement that was given by the Government, Australia has two of the finest airline companies in the world.
– It has the best airline company in the world in TransAustralia Airlines.
– TransAustralia Airlines is an excellent company. I travel by that airline whenever I leave this city. But, to return to the subject of sales tax, there is an obvious reason why that tax must be charged at present. Possibly the greatest development that this country has known has taken place since 1949. If we are spared the ravages of another war, the progress that Australia will make under sound government in the next ten years will be more than we can imagine. If the Government is to develop the nation it must have revenue. That is the main reason why sales tax is charged. I should like to hear any honorable senator opposite explain how the Government would raise the revenue that it now collects from sales tax if this new plank in the Labour party’s platform were put into operation. Would the Opposition economize by refusing to pay public servants, by discontinuing the payment of pensions, or by refusing to develop the country? When
Senator Benn was speaking, I received the impression that he was issuing a warning to single men that, under a Labour government, they could expect, higher taxation. He implied that they did not have as much responsibility as married men.
– The honorable senator’s imagination is warped.
– It is not as bent as was Senator Benn’s speech. I suggest that many single men and women are saving in order to provide themselves with homes when they marry. Many have the responsibility of caring for their parents, and I do not agree that they should be taxed out of existence. The bill before the Senate follows the general trend of Government policy in that it will reduce taxation. The Government has followed this trend since 1949. It is a trend that the public have appreciated and the people have expressed their satisfaction by returning the Government at the recent election. The people know that this is a tax reduction Government. They remember the abolition of entertainment tax and land tax. They know that when the next budget is introduced, the rate of sales tax will be further reduced if the Government considers that such a reduction would be for the good of Australia. Senator Armstrong may even find that ice-cream will be free of sales tax.
I am not, completely satisfied with the administration of the sales tax legislation, which I suggest has at least three faults. The first fault is that sales tax proposals are part of the Treasurer’s budget speech. The second fault is that sales tax reductions are used as an election bait. The third fault lies in the administration of the act. I should like sales tax proposals to be divorced completely from the budget, as are the Government’s proposals concerning customs and excise duty. A great disservice is being done both to retailers and purchasers by announcing sales tax proposals in the budget speech. The budget is usually introduced in August or September and, when a Labour government is in power, as late as October. It is during those months, just after the winter, that it is normal to expect, a recession in business. If trad ing conditions are going to be difficult, they will be difficult at that time of the year. Yet, it is at that very time that people stop purchasing because they expect a reduction of sales tax to be announced when the budget is introduced. They expect it for one of three reasons. The press, as is its right and happy fashion, may have suggested that sales tax will be reduced. Because a public servant may have remarked to a pressman that there might be a reduction of sales tax on motor cars, for instance, the sale of motor cars at this lean time of the year is stifled. Who is going to buy a motor car if he believes that, by waiting a couple of months, he will have to pay less in sales tax? Because sales tax proposals are part of the budget, speculation is rife and business slows down. The practice is a deterrent to trade.
A similar state of affairs exists in connexion with general elections. During the last election campaign, one party promised to abolish the sales tax on furniture. It thought that, the public would respond enthusiastically to that promise. But those engaged in the furniture trade, including employees, cursed the notification of this aspect of party policy. Sales of furniture fell to an absolute minimum at the very time of the year when everything should be done to pep up business. There were many worried people in business because of the promise of the abolition of sales tax on furniture should a certain party be returned to power. In Australia, we have two election baits, social services and repatriation benefits. We should do everything possible to stop a third bait, sales tax reductions, being used in election campaigns.
My third criticism of the sales tax is that I do not believe there has been sufficient research into the simplification of administrative procedure. This Government has, in some directions, led the way in easing the burden of complying with tax legislation. Income tax forms are much more readily understood to-day than they were some years ago. The wage or salary earner can easily prepare his own assessment because of the simplified procedure. But I do not think the same progress has been made in respect of sales tax. It is true that the number of classifications has been reduced. The only rates of tax now applying are 10 per cent., 121/2 per cent., and162/3 per cent. But I believe that the classifications could be reduced still further. Let us have one rate of sales tax and a complete exemption of other goods. That would make the task of businessmen much easier. Anything that can be done to make the administration of a tax easier must lessen production costs - the goal which this Government has so obviously sought to attain. I invite the Government to study this aspect of our sales tax legislation with the object of providing business people with a simpler and less expensive way of carrying out the law.
I support the bill before the Senate, and I commend the Government for making the reductions provided for in the measure. I believe they have been made wisely, and with clue regard for the needs of the community, without favoring any pressure groups. However, I ask very sincerely that consideration be given to simplifying the administration of sales tax in the interests of business people and, equally important, that something be done to apply sales tax variations overnight to avoid the restraint of trade that inevitably occurs when the sales tax proposals are part and parcel of the budget-
– Senator Marriott has extolled the Government for the sales tax reductions proposed in this measure. It is true that this Government did not introduce the sales tax. It was introduced as an emergency measure at a time when there was an urgent need to obtain all possible revenue, and it has remained on the statute-book through a depression and through the greatest war in our history. It has become, apparently, an essential revenue-producing tax, and it has been used also at times to restrict the manufacture and purchase of non-essential commodities. At the end of the war the maximum rate of sales tax was reduced to 331/3 per cent. In 1949, the then Labour Government, realizing that high rates of sales tax should only be imposed as an emergency, reduced the classifications to two, and exempted many items from the tax. The maximum rate was fixed at 25 per cent. and the items on which this rate was imposed were few. The general rate was81/3 per cent. This Government has played a very shoddy trick on the Australian people in relation to indirect taxation. Since Senator Marriott has been quoting Labour’s attitude to the sales tax, I shall quote something that the Prime Minister (Mr. Menzies) said on this subject. The right honorable gentleman said -
No policy can bea workers’ policy unless it has sought justice for all, employers, employees and housewives - the hardest workers of them all-
Note the tears - and those self-employed in shop, office or farm.
Presumably the right honorable gentleman was referring to indirect taxation which bears most heavily upon families. Sales tax is hard, too, on the single woman who has to buy cosmetics and so on, but it is felt mostby the housewife, who has to keep a large family on the basic wage or a little more. Such a family is not taxable at all by direct methods. The breadwinner does not pay income tax or social services contributions, but a family of four, which is living on the basic wage, pays more in indirect taxation than is paid in income tax by a taxpayer without dependants whose income is twice the basic wage. The sales tax is a vicious impost, and this Government has shown little consideration for families in the low income group. In 1950, this Government retained the 81/3 per cent. general rate, and the 25 per cent. rate, and added 10 per cent. and 331/3 per cent. classifications. Of course, we were a long way from an election at that time. The Government had just been elected to office on a promise to reduce taxes, and the people had three years to get over the Government’s actions. In 1951, this Government which had promised to relieve the burden on the family man raised the general rate to 121/2 per cent., inserted a 20 per cent. classification, retained the 25 per cent. and 331/3 per cent. categories, and then added two new ones, 50 per cent. and 662/3 per cent. In that year, the sales tax was more vicious than it had ever been before in war or peace.
– Why not talk about this bill ?
– I am dealing with the hypocrisy of Government supporters who talk, as the honorable senator talked to-night. The honorable senator said that the Government wanted to reduce industrial costs and stop inflation. But what has been the effect of its administration of the sales tax? After the record impositions to which I have referred were imposed, I received the following letter from the Wholesale Jewellers and Watch Importers Association: -
I am writing to tell you of the drastic effect on retail and wholesale business that was caused by the recent announcement about sales tax.
It was predicted that sales tax will be lowered when the. Budget is brought down.
They had a right to expect a reduction of tax because of what the Prime Minister himself had said. The letter further stated -
Following the general cancellation of orders by the retailers, wholesale distributors have stopped buying from manufacturers. Many machinists, metal’ workers and other highly specialized trades have already closed down because there are no orders; all are in an extremely distressed condition.
For instance, I would like to quote the case of Mr. Whiting, of Albion-street, Sydney, a silversmith of the old school. Mr. Whiting is not a young man. He was apprenticed to his trade in Birmingham 50 years ago. He is a hand craftsman of the highest accomplishment, one of the few in this country who is able to teach the younger generation the skill and techniques that are required in the precision manipulation of sheet metal.
Mr. Whiting has a small factory that has employed 30 men. During the war he made pocket compasses for the Forces and similar important war essentials. If trades of this type go out of business, this country will be in difficult straits if war breaks out. Mr. Whiting has closed his factory, and broken up his highly skilled team of experts.
– The honorable senator is not referring to the bill now before the Senate.
– I am showing that the bill means nothing in relation to a reduction of taxation.
– It does.
– If the honorable senator will listen quietly she will know more’ when I have finished than she knows now. The letter continued -
When- a small branch of a big industry closes down, everyone knows about, it.
But when Mr. Whiting closes down the result is just as serious, but few know of the distress that is caused or of the harmful repercussions on iudustry in general. This position applies particularly to the high schedules of sales tax - cosmetics, fancy goods, jewellery, radio equipment and so on.
The letter was written by an association of manufacturers of those goods. Serious damage was done at that time. Small industries were closed down and they have never re-opened. But for this Government’s repressive sales tax legislation those industries would have become established. The result is that no young men are being trained in these skilled trades. The closing of the Crown Crystal Glass Works was typical of the pattern of events at the time. The cessation of Australian production of these items is one of the main reasons for the high rate of imports at present. In 1952, the Government tinkered with the sales tax rates again. An election was coming closer and the sales tax classifications were -reduced to four, namely, 12i per cent., 20 per cent., 33’i per cent, and 50 per cent. However, the impositions were still higher than they had been during the greatest emergency through which this country has ever passed. In 1953, the year before an election year, the categories were reduced to two, namely 16§ per cent, and 12J per cent. Honorable senators opposite talk about tax reductions, but this bill fixes a minimum rate of 10 per cent, compared with 8^ per cent, in 1949. This Government has not reduced taxes. It has varied the sales tax rate and caused uncertainty. Retailers do not know where they stand. I do not say that retailers have lost by it. Indeed some of them, have probably charged sales tax when they had no right to do so. But there has been no stability of policy or administration, and no honest effort by the Government to reduce the sales tax. It increased sales tax to extortionate limits and gradually reduced it in order to achieve the best possible position immediately prior to the election. Sales tax has been a political football. The Government says, that it is now making an attempt to give something back to the people of Australia, but I suggest that it is merely relieving the taxpayers of some of the burden which it previously placed on them..
The exemption in respect, of aircraft and aircraft parts will cost; revenue £800;pQ0. How will that, help- the woman in? the home who,, according, to tha? Prime
Minister; is the- hardest– worker of them, all? How many aircraft parts. does; she bay? Sales tas is to remain on. the- in> gredients she needs to maker cakes, and on. other- . items’ for the home- and. ‘thefamily, such, as slothing- and furniture.. Yet,, title- Government proposes– to give: the outlines big’ rebates, by- writing oM large amounts of: sales tax- which, should have been, paid by them. Similarly, theimporters of newsprint are- to he givenconcessions; which wilh amount to. a loss- to revenue o£ ££50,000. during-: the remainder of the current: financial: year..
-. - Does- the honorable senator suggest that air fares shouldbe increased?’
– Yes,, if it is economically necessary that tha* should be done. If” it is necessary for- air fares to be increased because the airlines have to pay sales tax, let them be increased, but do not impose sales tax on furniture,, food, clothing and other household’ needs. Labour, of course, does not’ want sales tax. in any shape or form. We think that it should be removed.
The. rate of tax. on household, furniture has been reduced by 2.£ per cent, or 6d. in the £1,. but the tax will still be at the rate of 2s.. in. the £1. The reduction of 6d. in the £1 will cost revenue? £4,676,000, but the. Government will’ still be. collecting 2 s. in the £1 .by way of sales tax on furniture.. That is what it. is taking from young home-builders and the family men who- haze, to providefurniture. The rate, of tax. on. toys is to be reduced from 1.6§ per cent., to. per Gent,, which, represents a loss to revenue of £280,000. Sales, tax on toys is a vicious impost, because it falls only On. the family mam As I. have already
Said’, the man with a decent-sized family and” a moderate, income would- not pay. tax at all if it were not for the operation of indirect taxes, such: as sales tax.. The. rate of. tax on confectionery is to, be 12$ per cent., and the rate on ice cream is. to be reduced from 16& per cent, to 12- per cent. Of course,, it was this. Government which imposed the. rates which are being, reduced-,, so that, in. f act,, the Government is giving nothing, to the people-. It loaded them with-, high rates of sales tax and. now wishes to her considered magnanimous because it is removing- soma of the- excessive-, burden.
The. remission of sales- tax in respect of the- airlines- has- Been: made retrospective: X contend- that;, if those organizations were legally obliged to pay sales tax, they should have paid1 ifr in the sameway as- the- age pensioner and the housewife nave- to pay it. Those members of the community da not- receive any retrospective remissions’. If the- airlines haveto be given concessions because- they arenot capable of operating economically, let it be done- by straight-out government loan, not by writing off a tax- which the rest of the community must pay. Not only- are the airlines’ to be exempt from sales tax; but the exemption is also to be made- retrospective; so that they will not be- obliged1 to pay debts- incurred in respect of sales tax ins the past. I> think that that is entirely wrong, and calls for investigation.
In my opinion, before- direct- taxation is; reduced, indirect taxation should be removed to the- greatest degree possible: If the economy will permit of the- total elimination of indirect taxation, I thinkthat it- should be eliminated. It. addsgreatly to- costs in. industry, not only because its- assessment involves; a great dealof work (but also- because- it overlaps. Very often it is passed on from’ wholesaler- toretailer and, in the result, is collected over and over again-. It hits every person in the community, regardless of whether he is the poorest, or the wealthiest person. Because- 1’ Believe that indirect taxation isvicious, I think that the- Governmentshould at least attempt to carry out its pre-election promise and remove sales: tax from items which affect the: family man, the person in the community who is obliged to buy the necessaries of life.
– I have a personal axe- to grind, to-night. It is not a very big axe ; in fact it might alm ost be called a half-axe.. However, before T deal with that subject-,. I think that a couple of statements made by Senator Cooke, should be answered. The. honorable senator’ referred to the high rate of sales tax which waa imposed by this Government in 1951. That was done as a matter of economic, necessity at the time. Demand was so much greater than production that the Government was obliged to use sales tax as a lever to stop buying, to a large degree, and to enable production to catch up. As the years have gone by and production has increased, so sales tax progressively has been decreased, until to-day we are getting down towards pre-war percentages. No doubt, next year, we shall see still further falls in the percentages of sales tax. Justification for the Government’s policy is provided by the stability of the economy and the prosperity of the country. The fact that our production has gone up by leaps and bounds and has, in respect of most commodities, caught up with demand, is also a vindication. Senator Cooke also made two references to sales tax on clothes. There is no sales tax on clothes. If I remember correctly, of the goods covered by the C series index sales tax is paid only on crockery, kitchenware, and things of that nature.
I propose to speak for only about five minutes on this subject, but it is a matter on which I have been working for approximately three years. I have already spoken to the Treasurer (Sir Arthur Fadden) several times about it, and my efforts have done some good. I do not like sales tax, in general, any more than do my colleagues or the majority of the people of Australia, but when sales tax is worked out on the basis of how much it costs each individual in Australia, it will be found that it amounts to roughly fi a month for everybody here, or approximately £100,000,000 a year, which is half the defence vote. Looking at it in a fair way, I should say that if the people of Australia, through that contribution of sales tax, are contributing half the defence vote, that is a very equitable way of assessing the matter. However, as I have said, we do not like that form of taxation, and I, in common with my colleagues, will be very glad when it is reduced considerably, or done away with altogether.
Senator Henty told us that he had discovered, in the course of sitting on a parliamentary committee, that our Taxation Branch goes very thoroughly into suggestions that are made in this chamber, and also in the House of Representatives. Therefore, I was heartened to speak of my particular subject in the hope that the Taxation Branch would look at this matter before next year. Sales tax frequently has been referred to to-night as a political football. I do not know whether I can score a goal to-night, but at least I can have a try. I refer tothe sales tax that has been imposed over the years on small boats. I do not refer to ships, which are built by shipwrights,, but to boats, pleasure yachts, rowingboats, skiffs and that type of vessel. I have been particularly interested in thismatter because, when the very high rate of sales tax was placed on such boats in 1951, our small boatbuilding yardsthroughout Australia suffered a tremendous depression.” People such as Halvorsen’s, in -Sydney, who had been, conducting their yards for over 50 years,, were obliged to shut down. In Brisbane, four small yards shut down, and by 1952, we had only one yard working. That wasWright’s, of Bulimba, who were able to keep going because they had two or three Fairmiles to repair for the Royal Australian Air Force, and a couple of mission vessels to build for the islands, which were exempt from sales tax. At that time, tha rate of sales tax was 50’ per cent., and people could not afford to build pleasure boats. It is not well known amongst laymen that a shipwright is not a boat builder. The man who buildslarge ships has nothing whatever to do with the building of small wooden boats. The period of apprenticeship in that trade is seven years, and the men werebeing gradually taken away from the boatbuilding industry in this country. They were going to other trades, with, the consequence that, by 1952, we had very few of our previous tradesmen left,, and no apprentices were coming along. Perhaps it will be said, “ That is all right. They aa-e only pleasure boats. What does it matter if we do not haveany more pleasure boats and yachts for the rich ? “ I have often heard that said, but that is not the point. The peoplewho build these yachts and skiffs are also the people who build the life-boats for ourmerchant ships, the pinnaces for our Navy, the cutters and the various otherboats, such as fishing vessels and trawlers. Once they are allowed to go toother trades, where they are paid just as well or even better, it will not be- possible to get them back. Add to that the fact that no apprentices have entered the trade for many years, and honorable senators will begin to see something of the seriousness, as far as Australia is concerned, of the position in this industry.
Vessels under 500 tons which are imported from overseas, in the first instance, are subject to duty of 17£ per cent, if “they come from the United Kingdom, plus 5 per cent, primage. If they come from other parts of the world, they pay 37^ per cent, duty on coming into the country, and 10 per cent, primage. Those rates were imposed to protect our industries, but if, at the same time, we are going to destroy our internal industries by imposing heavy sales tax also, we shall be worse off than before we protected the industry. On the one hand, we seek to protect it, and on the other we try to destroy it. At the present time, I am pleased to see that the rate of sales tax on vessels is to come back to 12£ per cent., but the reduction is still not great enough. We still have the carry-over from the bad years of 1950, 1951, 1952 and most of 1953 to get over. I hope very much that, when the next sales tax legislation comes before this Senate, there will be either complete abolition of sales tax on boats or, at least, a very big reduction of the rates.
The tax is killing the industry and we are losing the people who worked in it, and there are two other aspects of the matter, both on the defence side. As honorable senators know, many of our small vessels did Trojan service during the last war. If there were another war, we should have insufficient small boats to carry out our patrol work, and insufficient men on whom to call for the Naval Volunteer Reserve. Nearly all of our voluntary reserve consists of yachtsmen and people who spend their recreation in small boats. We have cut down tremendously the number of people on whom we could call, men who are really good seamen and who take very little time to train to become efficient members of the Navy or the merchant service, in time of war. From those two angles alone, we should try to look after what might be termed a dying industry, by still further reducing the 12£ per cent. rate of sales tax that will apply when this legislation becomes law. I rose to take part in this debate only to direct attention to that matter. If it is true that the taxation branch takes cognizance of the speeches that are made in the Parliament on taxation matters, I hope that the officers of the branch will inquire further into this matter.
– I rise to support the bill. This Government has set its face against anything but a balanced budget, and if sales tax were abolished, about £95,000,000 that is obtained from that source would have to be raised from other taxes. I belie.ve that that is not a practicable proposition at present.
– What about cutting down expenditure?
– When the Estimates were before honorable senators recently, expenditure was closely examined. By and large, the Estimates were found to be satisfactory. It is rather interesting to read some .Labour propaganda about sales tax. Honorable senators on the Opposition side who have spoken to-day have admitted that a Labour government introduced the sales tax. I direct attention to a political commentary that was published in the Adelaide Advertiser on the 9th October. The commentary in the column to which I refer is contributed by political parties, and the Advertiser accepts no responsibility for it. The commentary that was submitted by the Australian Labour party contained this astounding statement-
Firstly, it must not be forgotten that sales tax was a war-time measure, brought into being to assist the war effort. Money and materials were needed to equip our fighting forces - they were first consideration - and therefore heavy sales tax on ordinary consumer goods was imposed. Had Labour remained in office after the rehabilitation period, sales tax would have been almost entirely eliminated.
That is an example of Australian Labour party propaganda in South Australia. When sales tax was introduced in 1930, the rate of tax was 2$ per cent., and the tax covered practically every known item of human consumption. The next year the rate had risen to 6 per cent. In the years 1931-32, 15.6 per cent, of all tax collections came from sales tax. Now sales tax collections form 10.1 per cent, of all taxation revenue. So the percentage of tax collections that this Government obtains from sales tax is less now than the percentage when the tax was introduced by a Labour government. The fact that about £95,000,000 is raised by sales tax compared with £30,000,000 to £40,000,000 a few years ago does not indicate directly a heavier burden of sales tax. Eather, it is indicative of a good business turnover. The matter of rates of sales tax is important, however. Honorable senators should keep in mind that when this Government was elected to office in 1949, the maximum rate of sales tax was 25 per cent. It covered a large number of items. The maximum rate of sales tax now is 16§- per cent., and it covers considerably fewer items than it did five years ago. Therefore, progress has been made in three ways. Sales tax now take3 a smaller percentage of all tax collections, and the highest rate of sales tax is lower, while exemptions are wider.
– What is the percentage of sales tax to the national income?
– I have dealt with the percentage of tax collections. I have not applied my research to the percentage of the national income. I believe that it would be less now because the national income is about £4,000,000,000 whereas national income about five years ago, speaking from memory, was about *2,300,000,000. Honorable senators should also consider the cost of collecting sales tax. I am indebted to the Public Accounts Committee for research into that matter. In the case of sales tax, about .36 per cent, of total collections goes towards the cost of collection. In the last year of operation of the land tax, 3.94 peT cent, was absorbed in the cost of collection. This Government abolished the land tax, and I believe that that was a good move, if only because the cost of collection was high. In the case of entertainment tax, 1.09 per cent, was absorbed in the cost of collection. At present, .91 per cent, of income tax payments goes towards the collection of the tax. Those figures indicate that the cost of collection of sales tax is less than half the cost of collection of income tax. The Government has not been extravagant in this regard.
I point out to the Minister, however, that it cannot be profitable to levy sales tax on a large number of items. Two years ago, I made some inquiries with regard to ice-blocks. I found that the cost of collecting sales tax on ice-blocks, that are sold principally to school children, was far higher than the revenue warranted. Since then, the Government has exempted ice-blocks from sales tax. I believe that the sales tax on a number of small items, particularly foodstuffs, could profitably be eliminated. I am indebted to Senator Henty for his explanation of the incidence of sales tax on a number of bakers’ lines. I am not concerned so much about the cost of wages and salaries of departmental officers in this connexion, but the cost to the baker, the confectioner and other tradesmen in man-hours of sorting out the items that are taxable and preparing forms for statements to the taxation branch and so on. The time involved affects production and prices in return for a small amount of tax revenue. I suggest to the Government that this matter is worthy of inquiry. I refer in particular to the cost of collection of sales tax on thousands of small items costing 3d., 6d. or ls., particularly foodstuffs.
I direct the attention of honorable senators now to what this Government has done since 1949 in connexion with sales tax because honorable senators on the Opposition side have suggested that the Government has been unmindful of the impact of the sales tax on the family man. As I have said, the maximum rate of sales tax has been reduced from 25 per cent, to 16f per cent., and the field of exemptions has been considerably widened. Since 1949, the Government has exempted such items as builders’ hardware, goods and equipment for schools, colleges and convents, cots and cradles, earth-moving equipment purchased by public authorities, matches and water softeners. This year, the Government has exempted mining machinery and, particularly, machinery used for repairing equipment, refrigerators used in connexion with the fishing industry, tools of trade and tools of the kind that are used in millions of homes in Australia. I congratulate the Government upon its imaginative step.
I pay a tribute also to the officers of the Taxation Branch for their administration of the rather difficult legislation under which they work in collecting the sales tax. My approaches to taxation officers on behalf of persons in my State have been received with every courtesy. I know, however, that many interpretations of the legislation vary from one place to another, and from State to State. I congratulate the officers of the Taxation Branch upon their endeavour to obtain uniform interpretations. I suggest that each year, an endeavour should be made to exempt more items from sales tax, until eventually the tax is abolished.
.- 1 commend the Government upon its policy of gradually reducing sales tax. Since it was necessary for the Government to impose heavier sales tax to divert certain materials and labour, the Government has gradually been reducing the high rate of sales tax that was imposed about three years ago. The trend i3 in the right direction, but I shall never be satisfied until the sales tax is abolished. It is a cost factor affecting industry in many ways. I believe that both pay-roll tax and sales tax have some effect on the cost of production. I think the Government has done a very good job in reducing the sales tax, but I make a plea for the motor industry. It is an industry which, through the years, irrespective of the government in power, has paid large sums in petrol tax and sales tax on new vehicles and spare parts. I am speaking not so much about pleasure vehicles as about vehicles used for the transport of goods and passengers. Local authorities that run passenger transport services do not pay sales tax on the vehicles they use, but the vehicles used by private firms are subject to the tax, and the amount of tax paid is reflected in the fares charged. Sales tax is charged on vehicles used by firms engaged in the transport of raw materials and manufactured articles, and in that case the tax has the effect of increasing production costs and prices.
The motor industry is heavily taxed in many ways. By reducing the sales tax charged on new vehicles and spare parts, the Government could help to reduce production costs in industry. The motor industry deserves some consideration from the Government, and I am disappointed that something has not been done to help it this year. When the sales tax was reduced last year, the industry was overlooked. It has been overlooked again this year. Therefore, I suggest that the Government bear the claims of the industry in mind when it is considering further tax reductions next year.
.- As Senator Laught has said, the sales tax was imposed originally on the widestpossible range of articles, apparently on a uniform basis. That indicates that, at any rate initially, it was purely a revenueraising device. But over the years, the tax, although retained primarily with that objective in view, has been used for other purposes. We have seen it used as an economic weapon. When consumer goods were scarce, it was imposed at high rates on non-consumer goods. It was used in that way as an instrument of economic policy. Some reductions of the tax are proposed in this bill. The point that intrigues me is, if the tax is being used as an economic instrument, to what extent is there any guarantee that the remissions that are intended to contribute to a reduction of production costs will actually have that effect? I should like to know what machinery and techniques are available to ensure that manufacturers who will get the benefit of the tax reductions will pass those reductions on, either to ultimate consumers or to people who use the articles concerned in the production of other goods. In the absence of an effective system of prices control, there is, as far as I can see, no technique available by which the Government can insist that that shall be done. In those circumstances, the only interpretation we can place on the measure is that it is designed purely to relieve the pressure of taxation on certain groups or individuals, and that it will fail completely as an economic instrument.
That seems to me to follow logically. Doubtless honorable senators opposite will talk about competition, and say that if one manufacturer is relieved of sales tax but does not intend to pass the benefit on to the consumers, and if another manufacturer receives a similar concession and passes it on immediately to the consumers, the first manufacturer will be forced to do so also in order to compete with his rival. But there is no guarantee that that will happen. There is no machinery by which the Government can insist that it shall happen. Therefore, to the extent to which these reductions of tax are intended to be used as an economic instrument, there is no guarantee that they will be successful. I assume that the sales tax on certain goods was increased for economic reasons, and that it is to be reduced for the same reasons. I say that the government that was able to wield the economic bludgeon one way should have some machinery available to enable it to wield the bludgeon the other way. But, unfortunately, this Government has set its face against any system of prices control. By opposing a referendum proposal designed to give the Commonwealth power to control prices, the Government parties took that very important economic weapon from the hands of the Commonwealth. To-day we are faced with high production costs and a general rise of our price and cost level which threatens the economic security and stability of the country. Therefore, I strongly urge the Government to avail itself of all the machinery at its disposal to ensure that the reductions of tax will serve the purpose intended.
Another point to which I wish to refer briefly is the area covered by the sales tax. I believe that the rates of the tax and the range of articles to which it applies highlight a fundamental difference of opinion between the Government and the Opposition. As the Government postulates a certain standard of living, so will it classify certain articles from the viewpoint of the sales tax. Over the years, especially since the horror budget of some years ago, Labour resisted the high rates of sales tax imposed rather indiscriminately on a series of articles which the Government was pleased to regard as articles in the luxury class or unnecessary articles. We resisted those high rates of tax, not only because they were high and because we regarded them as cruel and unnecessary, or, if necessary at all, as due to the neglect of the Government during the preceding eighteen months, but also because of the way in which the Government classified the articles on which it imposed the cruel and exacting rates. That classification indicated to us and to the country generally that the Government’s conception of the standard of living of the Australian people was much lower than the standard of living that we postulated. The Government has not entirely eliminated either from our minds or from ‘the minds of the people the suspicion that that is still so. We know that high rates of tax are still being imposed on articles which, in the view of the Government, are luxury or semi-luxury articles, but. which we regard as necessary for a reasonable standard of living in a modern society. ‘
– What are they?
– The honorable senator should know that better than I do. I do not propose to go through the schedules. They show that the Government is still prepared to say that, in its view, the Australian people are entitled to a standard of living much lower than the standard that we consider to be reasonable. For those reasons, whilst supporting the proposed reductions in principle, I urge the Government to do everything in its power to make them a really effective economic instrument, and ensure that those who are entitled to the benefits of the reductions will obtain them. I urge the Government to ensure that the reductions will be passed on through the whole of the economic structure, so that no person or manufacturer will be able to profit, at the expense of the general public, from reductions to which he will become entitled under the provisions of this measure.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
SALES TAX BILLS (Nos. 1 to 9) 1954.
Debate resumed from the 19th October (vide page 806), on motion by Senator Spooner -
That the bills be now read a second time.
– The Opposition does not intend to debate these measures, which a re complementary to the bill just passed. The Opposition expressed its views on the sales tax during the debate on that bill.
Question resolved in the affirmative.
Bills read a second time, and passed through their remaining stages without requests or debate.
Debate resumed from the 21st October (vide page 906), on motion by Senator
That the bill be now read a second time.
– The bill beforethe Senate is a simple administrative measure affecting the excise laws of the country. The second-reading speech of the Minister (Senator Spooner) quite adequately explained the three main purposes of the bill. As I indicated, they are largely administrative. They will facilitate the work of both the Department of Trade and Customs and the excise officers. The Opposition has no objection to the passage of the measure. I shall merely refresh the minds of honorable senators regarding its three main purposes. The first one is to eliminate the need for the owners of stills incapable of manufacturing spirits to lodge security with the Department of Trade and Customs. That will no longer be necessary, nor will it in future be necessary for the proprietors of stills of a 1-gallon capacity or less to seek registration. The second purpose is to abolish the 10-gallon limitation in relation to deliveries of spirits from distilleries. In future, with the permission of the Department of Trade and Customs, smaller quantitiesthan 10 gallons may be delivered at the one time. The third purpose relates to the location of spirits stores in relation to distilleries. Hitherto, they could not be established within 100 yards of a registered distillery, but now that the excise officers will exercise very close supervision over the functioning of the distilleries, it matters little whether the stores are nearby or some groat distance away. Of those purposes the Opposition approves, and will facilitate the passage of the measure.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 21st October (vide page 958), on motion by Senator McLeay -
That the bill be now read a second time.
SenatorMcKENNA (Tasmania - Leader of the Opposition) [9.18]. - This bill affects the financial fortunes of the applicant States - Western Australia, South Australia and Tasmania. It seeks to provide the sum of £12,300,000 for distribution amongst those three States in accordance with the recommendations of the Commonwealth Grants Commission in its twenty-first report, which was recently circulated to the Senate. The report was prepared by the chairman, Mr. A. A. Fitzgerald, Mr. J. J. Kenneally and Professor W. Prest. However, within nine days of his retirement on the 30th September last, Mr. Kenneally died. I take this opportunity of paying a tribute to the extraordinarily good work that was done by Mr. Kenneally as a member of the commission. He was chairman of the State Lotteries Commission in Western Australia since 1936, was a very prominent member of the’ Australian Labour party, and, in fact, served as a Minister in the Collier Government in the early 30’s. Professor Prest is a recent appointee to the commission; he took the place of Professor Wood, who died on the 29th June last year. The report is in the usual excellent form, style, and presentation of the Commonwealth Grants Commission. It contains a mass of information for those who are interested in the fundamental and vital question of Commonwealth and State relationships, and would repay study by any honorable senator. When I comment favorably on the form and presentation of this document, I must pay tribute to the part that the small, but very effective staff of the commission played in achieving “that result. The commission adhered to the principle that has guided its activities since it first sat. It re-affirmed that principle at page 15 of the report, in these words -
Special grants are justified when a State through financial stress from any cause is unable efficiently to discharge its functions as a member of the Federation and should bc determined by the amount of help found necessary to make it possible for that State b3’ reasonable effort to function at a standard not appreciably below that of the other States.
There never has been any fundamental dispute regarding that principle, to which the commission has adhered down the years. Its methods have varied, with the passage of time, and there has been a great deal of variation in the methods of the commission as a result of criticism by both the State treasuries and the Commonwealth Treasury. The main change was effected in recent years, when the grants recommended by the commission were divided into two parts: The second part - which I shall deal with first - is the commission’s appraisement of the amount required to give a decent budgetary standard to a State in the year in which the grant is made. And then, going back two years to the last audited statement of accounts, the commission looks at the grant made in that past period in the light of those audited figures, and determines whether the grant then made was either too little or too much to give to the State budgetary stability in the year under review. According as it finds, the commission either adds an amount to the second part of the grant, or subtracts something from it. That is the new method, which I think is much more satisfactory than that previously applied. In determining the second part of the grant, the commission allows for a margin of safety, so that unexpected events will not result in the grant being too little or too much. On this occasion, there was one very interesting departure from the methods hitherto adopted by the commission, under which special allowances in favour of the applicant States have been made because of their greater difficulty in providing social services. Scarcity of population, the incidence of age groups in the community and other factors have been taken into account from time to time. There has been a great deal of criticism by the applicant States in that connexion, and pressure has been exerted to ensure a more generous approach by the commission. That has been successful, to a certain extent. Whereas, in the sixteenth report of the commission, which was made in 1949, the percentage granted in favour of Western Australia was 10 per cent., pursuant to this report it will be 11 per cent; and whereas, in 1949, the percentage above the average of the nonclaimant States, for social services, was 4 per cent., it will be in future 5 per cent. But a more generous provision is made for Tasmania. Whereas, in 1949, the accretion to the calculation was 6 per cent., it is now 9 per cent. The commissioners indicated that that was not the final word on that matter, and that they were awaiting the outcome of the census that was conducted on the 30th June last, when they will have a better appreciation of the distribution, of the various age groups of the population of each of the applicant States.
It is rather interesting to see, on page 11, the comment by the commission that none of the claimant States had expressed disagreement with the statement of principle and methods which was set out in chapter IV. of the twentieth report. It is extraordinary to find the States concerned in agreement on many points, but here the phenomenon is visible. I know that the commission, down the years, has been subject to very much criticism and misunderstanding in relation to its methods. I certainly subjected it, myself, to a good deal of criticism at one time, and I and a number of my colleagues argued out every detail of the methods that it employed. I have lived to see changes of the methods that the commission employs. Looking at the grants for this year, we find that they total £12,300,000 to the three States of South Australia, Western Australia and Tasmania. The details are as follow: In this financial year, South Australia will get £3,350,000, less a sum of £1,100,000 overpaid in respect of the normal year of review, 1952-53. That brings the actual grant for this current financial year to £2,250,000. By contrast, the grant that it got on the recommendation of the commission last year was £6,100,000. So that there will be a drop of almost £4,000,000 in the grant to South Australia for this financial year. As the commission points out in its report, that is due to a number of factors. The first is that the very large surplus the State had in the last financial year, of about £800,000, was due to its very buoyant finances.
– I am not saying how that came about. I am not expressing my own opinion, but merely stating the views that were expressed in the report of .the Commonwealth Grants Commission. It is a most excellent thing to see grants payable under section 96 of the Constitution gradually dwindling. It is very much to the furtherance of the self-respect of a State if it can obviate the need to make application for financial assistance. I am sure that it must be a matter of pride to South Australia that it has achieved a greater degree of independence in this matter.
There is very little variation in relation to Western Australia. There has been added to the second part of the grant of £7,100,000 for this financial year, an amount of £350,000 from the year of review, 1952-53, making a total grant of £450,000, in contrast to last year’s grant of £7,S00,000. The amount that will be given to Tasmania in this financial year, by means of the second part of the grant, will be £3,200,000. From that amount will be deducted £600,000 in respect of 1952-53; leaving an actual payment in this financial year of £2,600,000. That is a distinct advance on the grant of last year which amounted to £1,500,000. It is true that something special had to be done for Tasmania this year because of the expected loss of revenue from lotteries in the current financial .year. Whilst it is good that that gap will be made up by means of the second part of the commission’s grant for the year, the day of reckoning will come for Tasmania in two years’ time. When 1954-55 becomes the year of review, the Commonwealth Grants Commission will tell the Tasmanian Government that the severity of its taxation has fallen in comparison with taxation in non-claimant States. Whilst, this year, Tasmania will receive a payment which will take into account the loss of its revenue from lotteries, it will pay the piper in two years’ time when it is safe to expect that a large reduction will be made in its grant.
– What was Tattersalls worth to Tasmania?
– About £1,500,000 a year. Apparently, the Treasurer of Tasmania was given information that the Commonwealth grant for this year would be £3,200,000, and somebody forgot to tell him about the deduction of £600,000 in respect of the financial year 1952-53 because, in the course of his budget speech, the Treasurer said -
Thi; special grant for 1954-55 is £3,200,000. The grant will, of course, be subject to review two years hence in accordance with the Commission’s present method. However, the full amount of £3,200,000 will be available to be taken to the credit of the consolidated revenue fund during the present financial year.
It turns out that that will not be the case. The Treasurer continued -
On past occasions, I have expressed surprise and disappointment at the amount of the Special Grant recommended by the Commission. In til is occasion, I am pleased to say that I consider the amount of the grant is a fair and reasonable assessment of the needs of the State for 1954-55.
Apparently the Treasurer did not have full information on this subject. It is unfortunate that the report of the Commonwealth Grants Commission cannot be made available to the State Treasuries earlier than it is made available. I appreciate the difficulties that face the commission, but I suggest that it should expedite the issue of its report so that State Treasurers may know the amount of grant for which they may budget. I do not know how calamitious the oversight in this instance may be to Tasmania, even in the current financial year.
Perhaps the .Senate may be interested to learn the vast part that is played by federal subventions in the finances of Tasmania. There are three main heads of contribution from the Commonwealth. The first is the contribution whereby, under the financial agreement, the Commonwealth makes a contribution to the interest bill of the States on State debts contracted prior to the first July, 1927. The second head is the income tax reimbursement grant. The third head is the type of grant that the Senate is now considering. In the year 1952-53 these three amounts, in the case of Tasmania, totalled £6,351,000 out of a total revenue of £12,061,000. In 1953-54 Commonwealth subventions totalled £6,700,000 whereas the total receipts of Tasmania were £13,400,000. Substantially more than half the State’s income will be provided in this financial year by the Commonwealth which will provide £8,600,000 of the State’s total receipts of £15,079,000.
I say again, as I have said each year when speaking on this legislation, that we of the applicant States are appreciative of the attitude of the representatives of other States in this Parliament in relation to these grants. Queensland, New South Wales and Victoria make a subvention to the other States in the national interest so that there will be a relative level of standards in social services, law, order and public safety throughout the Commonwealth. Just as we have one language, we have, by and large, an equality of standards. As scientific an approach as can be made to achieving that result is made by the Commonwealth Grants Commission. The commission plays its part with a small staff. I like to call States which receive grants the applicant States “. That is the term that is used in section 96 of the Constitution. I resent very much the use of the term “ mendicant States “ and I do not even favour the term “ claimant States “ which is used by the commission. I recommend that the commission should consider using the term “ applicant States “ in accordance with the wording of section 96 of the Constitution. I conclude by expressing my appreciation to the representatives of the non-applicant States for their invariable support of this legislation.
– As I represent one of the applicant States, this bill is of some importance to me and other honorable senators from those States. The bill authorizes payment, in accordance with the recommendation of the Commonwealth Grants Commission, of £7,450,000 to Western Australia, £2,600,000 to Tasmania, and £2,250,000 to South Australia, making a total of £12,300,000 which it is proposed should be appropriated from the Consolidated Revenue of the Commonwealth. As has been stated by the Leader of the Opposition (Senator McKenna), payments of this nature are made under section 96 of the Constitution which provides that any State may apply to the Commonwealth for financial assistance. It empowers the Commonwealth to extend that assistance with or without conditions. The nature of these payments is now well known. It is interesting to recall that in the early years of its existence of the Commonwealth Grants Commission considered as a basis for the payment of grants, the disabilities that the various States suffered as a result of federation. In 1936, the commission adopted as the basis of its allocations the standard that has been used continuously since that time. The principle is stated as follows: -
Special grants are justified when a State through financial stress from any cause is unable efficiently to discharge its functions as a member of the Federation and should be determined by the amount of help found necessary to make it possible for that State by reasonable effort to function at a standard not appreciably below that of the other States.
In recent years, the commission has adopted the balanced budget as the standard budget. In calculating the amount of grant that each State is to receive, the commission makes a detailed examination of the budgets of all States, claimant and nonclaimant, in order to ensure that there is a general pattern of conformity throughout all budgets. The necessity for such a measure is immediately apparent. If administrative expenditure in a claimant State was considerably higher than in other States, it might be claimed that the commission was unnecessarily financing that expenditure. The commission examines social service expenditure in each State. Allowance is made for the greater difficulties that arise from sparsity of population and the consequentially higher overhead costs in the administration of social services. Senator McKenna mentioned that the commission has made various adjustments in these proportional allowances this year which are taken into consideration when the amount of the grant is being worked out. The commission also examines the severity of State taxation in its various forms and makes adjustments in its calculations for the varying results of State business undertakings and the- charges that are imposed for State services. It makes adjustments of accounts of a State to provide for a type of revenue or expenditure which is not generally found in the Consolidated Revenue of other States; or if the Consolidated Revenue of a State contains an item of revenue or expenditure which does not arise from the activities of the year under review or which has been taken into account by the commission in a previous year; or if the Consolidated Revenue Fund of a State shows revenue or expenditure of an abnormal nature. It is not until the commission has taken all these factors into consideration that it recommends the amount of the grant that the claimant State should receive. As a result, it recommends an amount which should balance the budget of the claimant State. Invaluable as that assistance is, when a balanced budget is adopted as the standard budget, all that happens is that a claimant State receives sufficient to balance its budget. That does not remove or decrease the differing standard of development that has existed in the States even since federation and since the commencement of the payment of annual amounts to the claimant States. The comparative advantage which has always been enjoyed by the non-claimant States is preserved. It is history now that the Australian policy of protection did, for many years, operate to the detriment of the claimant States, and to the great advantage of the non-claimant States. “When Australia adopted the development of secondary industries as a matter of national policy, that was most severely felt by the claimant States, and whilst admitting that it was desirable that secondary industry should be encouraged, it must also be conceded that the very development that was occurring in the non-claimant States hung like a dead weight for many years around the neck of the claimant States which had not the advantages of industrialization. With industrialization slowly finding its way into the claimant States now, that disparity in development is gradually being broken down. We see evidence of that on every hand. For instance, for many years, South Australia received the largest grant from the Commonwealth. This year, South Australia is in the happy position of receiving, for the first time, a grant smaller than that of any other claimant State. This indicates the improvement of the South Australian economy as the result of industrialization, and the consequent spread of prosperity to that State.
– It has had a Liberal government, too.
– I do not propose to conclude my comments without making some reference to the fact that South Australia has, for many years, enjoyed the blessing of a Liberal government. That has been a very material factor in the vast improvement that has occurred there. Judging by the progress that has been made in recent years, it is reasonable to assume that, within the foreseeable future, South Australia will cease to be a claimant State. Indeed, if I may project my mind a little further into the future, the discovery of oil in Western Australia, and its production in commercial quantities, may conceivably mean that that State, too, will eventually become a non-claimant State. We shall then be in the very happy position that there will remain only one claimant State in the Commonwealth. That is something that we can look forward to with pleasurable thoughts. I suggest to the Senate that, should the day come when both South Australia and Western Australia cease to be claimant States; when they can balance their budgets and function as integral parts of the Commonwealth, enjoying a standard of living not appreciably less than that of the standard States, there will still be a great gap between the development of some parts of Australia compared with that of other parts. I believe that, as the years roll on and as conditions alter, we should have a look at the purpose of the Commonwealth Grants Commission, and see whether it could turn itself, or whether we, as a Parliament, could turn it, into a Commonwealth developmentcommission to provide an element that has always been lacking - a level standard of development throughout the whole of the Commonwealth. “With great respect to the work that has been done by the commission, I think it will be admitted at once that it has not achieved a level standard of development. To have brought that about, it would have been necessary to provide sufficient finance to make possible in the claimant States a much faster rate of development than existed in the non-claimant States. Under the method by which the grants have been calculated, that, of course, has been impossible. I have risen to speak in this debate mainly to pay a tribute to the work of the commission. I am sure it is recognized by every one that, while the commission has done good work in- a limited way, it has not been able to bring about that happy state of even development that is necessary within the Australian economy to-day, and which is accepted, I believe, as being necessary by people all over the Commonwealth. T trust that as the years pass, and we reach the stage at which there will be only one claimant State, the commission’s functions will be broadened to make it a development commission in every sense of the word.
I support the bill with enthusiasm, but before I conclude I should like to take this opportunity to pay a tribute to the late Mr. J. J. Kenneally, of Western Australia, who served as a member of the Commonwealth Grants Commission for many years. Prior to his appointment to the commission, he was a member of the Western Australian Parliament and was at one time a Minister of the Crown. Upon his retirement from the Parliament, he was appointed to the commission, and he also occupied other public posts of importance in Western Australia, including the chairmanship of the Lotteries Commission. Mr. Kenneally passed away recently, and I take this opportunity to pay my tribute to the work of this great Western Australian public man. His place in the commission has been taken by Mr. A. J. Reid, who, until recently, was under-Treasurer in Western Australia. Mr. Reid brings to the commission a vast knowledge of the finances of all the States, but particularly, of course, those of Western Australia and I have no doubt that he will make a very worthy contribution to the work of the commission and will prove himself a most able successor to Mr. Kenneally.
– I, too, support the bill. This measure has shown once again that many proposals that come before us are of a non-party nature and can be supported by all honorable senators, particularly those who come from what are known as the claimant States. I express my gratitude to the Commonwealth Grants Commission and to the other States which provide the funds for the development of the States which suffer by comparison because of their size, population, or isolation. Before going any further, I should like to add my tribute to the work of the late Mr. J. J. Kenneally. As a member of the Commonwealth Grants Commission he brought to his work a vast understanding of the problems that beset Western Australia He was well fitted for the task he performed so well for so long. He was Minister for Labour in Western Australia during the depression period and the administration of that portfolio opened up to him a full vista of the possibilities and also the difficulties of a State of the size of Western Australia. Whilst he was able to give his expert attention to the problems of that State, he was a sufficiently great Australian to view the requirements of Western Australia in perspective with what Australia itself could afford to provide for the development of that State. We all regret Mr. Kenneally’s passing, particularly those of us who appreciate the wisdom of his work, not only as a member of the Commonwealth Grants Commission, but also in the interests of the sick and needy in Western Australia as a member of the Lotteries Commission and of very many charitable bodies. Whilst we regret his passing, we as Western Australians are consoled a little by the fact that his place on the commission is being taken by another very fine public man, Mr. Reid who, as under-Treasurer, knows perhaps better than any one else the vast problems that beset Western Australia.
The principles on which the Commonwealth Grants Commission works could well be applied to many aspects of public life and of government. There are two principles. The first is that the amount of a grant recommended should be limited to what is necessary to enable a claimant State to provide services not appreciably below those provided in the non-claimant States. The second - and it is most important - is that the amounts should depend on the efforts made by a claimant State to help itself by reasonable effort in raising revenue and in controlling expenditure. There are some critics who think that the claimant States will not do enough to help themselves so long as they can get what they want through the Commonwealth Grants Commission. I repeat that the second principle on which the Commonwealth Grants Commission works is that assistance should be given to those States which have done their best to help themselves and can give a good account of their stewardship, and which show, by the way in which they have worked out their problems, that they will not make fantastic claims on the commission.
In Western Australia, the main difficulties relate to distance and smallness of population. As honorable senators may be aware, Western Australia covers a third of the total area of Australia, whilst its population is approximately a third of that of Sydney or Melbourne. There are vast developmental projects which must be put in hand, but which are beyond the financial capacity of the people of the State to finance. I look forward to the time, in common with Senator Paltridge, when the vast industrial expansion, which is beginning in Western Australia, will be so developed that we shall be no longer a claimant State but able to help ourselves. Before then, however, a great deal of work will lie necessary. That is why, of this £7,000,000 which the bill proposes to earmark for Western Australia, a large percentage must go towards railway expansion. The problems of the railways in Western Australia are very acute, as Senator Seward well knows. Because of the geographical features of the State, our railways are, to a large degree, uneconomical. There are many miles of dead running. A large proportion of the rolling-stock has to be renewed, and much track laying has to be done. It is, of course, difficult to obtain labour for those projects. All of these things have to be taken into account when the vast railway system of Western Australia is being considered. It must not be forgotten that quite a large proportion of the State is not served by railways at all. The major part of the railways system is in the southern part of the State. We have an enormous job to do in that regard. Fares and freights were increased recently because of the desire of the State to help itself. But fares and freights cannot be increased to the stage where they become prohibitive for people who use the railways. Despite economies and the fact that fares and freights have been raised, deficits still occur in railway accounts. Because of the introduction of diesel locomotives, and the abolition of quite a lot of competition from road transport, the leeway very gradually is being made up.-
With regard to social services, here again geographical factors come into the picture. I wish to pay a tribute to those who control social services in Western Australia, particularly to the officers of our Child Welfare Department, from whom we have received co-operation and sympathy in all the problems we take to them. They have helped the Commonwealth a great deal by assisting widows and children to eke our their pensions, and in that way they are doing a service not only to those pensioners, but also to the nation as a whole.
The difficulties of our small country hospitals are numerous. When honorable senators consider that Victoria, Tasmania and New South Wales could all fit into Western Australia and still leave almost, sufficient room for Queensland, they will be able to appreciate our difficulties concerning the vast network of countryhospitals and why our expend turfon such services is relatively very much greater than that of other States. In this connexion, the Commonwealth Grants Commission comes to our aid by enabling us to level out the costs a little more than we should be able to do otherwise.
It is true that Western Australia receives revenue from motor registration fees and other taxes of that nature, but I submit that those taxes cannot be regarded in the same way as can general taxation. The field, of course, is very restricted because of the small population of Western Australia. Moreover, taxes, such as taxes on motor vehicles, which can be raised by the States are applied to specific purposes. However, the State has done what it can in that respect. Western Australia is large and the population small, but, as I have said, when this vast industrial expansion gets under way, now that oil has been struck in payable quantities, and large secondary industries have been established in the metropolitan area and elsewhere, we hope that the increased population and industrial wealth will help to remove the disabilities from which we suffer.
In relation to the miscellaneous services which the grant to the States will help to cover, the Commonwealth Grants Commission acts not only as a watchdog over expenditure, which is a good thing, but also in an advisory capacity. It is able to assist the authorities in the State in the allocation of the money to various projects. In that way, it is assured that close examination of every item of expenditure by a claimant State is made, and that is a vital part of the commission’s functions. Particular attention is given to items of a miscellaneous nature, because it is more difficult to make interstate comparisons of items in this category than it is of other items. The commission must know the circumstances which exist in the various States before it can pass judgment on the proposals of the States regarding expenditure. Consequently, the application of the concept of reasonable effort is not merely a process of statistical comparison, because great differences among the States in natural endowment make unreal any attempt to compare State activities which are only nominally identical. In these circumstances, the commission must rely to a considerable extent on judgment formed, not solely from statistical data, but also from impressions gained in its whole range of discussions and inspections. If the commission is to function properly, its members must be men of integrity and understanding, experts who know their job thoroughly. I think that Australia has been very well served indeed by the men who have been appointed to the Commonwealth Grants Commission since its inception. I am certain that as long as the present high standard of personnel is maintained, the people of Australia need not fear that the commission will do anything detrimental to the financial and social development of this country.
.- I could not let this bill go through the Senate without expressing my appreciation of the work of the late Mr. J. J. Kenneally, and my regret at his passing. I was associated with him in the Parliament of Western Australia between 1934 and 1937, during which time he was a Minister. I knew him to be a most enthusiastic, capable and conscientious man in all his activities. As has been pointed out by both Senator Tangney and Senator Paltridge, after leaving the Parliament of Western Australia, he was appointed chairman of the Lotteries Commission, and, subsequently, he was appointed to the Commonwealth Grants Commission. In those and other circles in which he was active, particularly those of a charitable nature, he proved his worth as a citizen of Western Australia. Because of his death the Commonwealth Grants Commission and the people of Australia have suffered a severe loss. I had the pleasure to be associated with his successor on the Commonwealth Grants Commission, Mr. A. J. Reid, who was under-Treasurer in Western Australia for many years, and who also did very valuable work at the meetings of the Australian Loan Council by advising Premiers of Western Australia. He will be a decided acquisition to the commission, and I sincerely and cordially welcome his appointment. Prior to being under-Treasurer, he was, I believe, Professor of Economics at the University of Western Australia. His knowledge will be of great benefit to the commission.
Most of the things that I might have said during this debate have already been said by Senator Paltridge and Senator Tangney, and I shall not weary the Senate by repeating them. However, I propose to point out the severe handicaps under which we in Western Australia operate, compared with those of the eastern States. This was very forcibly “brought to my notice during the week-end, when I had the opportunity to re-visit my birth town of Rochester, in Victoria. I then saw something of the immense advantages which Victoria enjoys, compared with those of Western Australia. For instance, I saw big channels running all through that country to water the lush pastures. When I was there before the beginning of the century, it was possible to drive for 20 miles and not pass more than ten homesteads. Last Sunday, when I went through there, I passed through a town and saw also hundreds of prosperous looking homesteads, and wellpastured stock. When I compare that with the immense disabilities from which we suffer in Western Australia, I can readily see the necessity for a Commonwealth Grants Commission to assist us to develop our country. As I have stated on other occasions in the Senate, I recollect only one country town in Western Australia - and that is dying rapidly - which has a water supply. I refer to Wiluna, which is 600 miles from Perth. Every other town has to have water taken to it or provided artificially. In last Saturday’s press, I read that the town of Narrogin, which is one of the main towns on the great southern line, has been obliged to ration water to twelve gallons a day for each household for the rest of the summer. That quantity has to cover washing, garden use and everything else. In Katanning, which is a bigger town, an even smaller ration will be necessary. Immense difficulties in the way of development arise because of the fact that we have so few rivers. All of our water supply has to be piped from the hills in the vicinity of Perth. The water for Albany has to be brought from the Collie Dam, which is 250 miles away. It is taken to Kalgoorlie which is 300 miles away, and I have heard it said that the only possible water supply for the city of Geraldton will have to be piped a distance of 300 miles. Those are some of the difficulties with which we have to contend.
As Senator Tangney pointed out, the land in Western Australia is nothing like as productive as it is in the eastern States. When I contemplate the volume of production in Western Australia, however, I have no hestitation in saying that the methods employed in the eastern States are no better. It is not possible to get a better lamb than a Western Australian Swandown lamb. The quality of our wheat and cereals is equal to that in any other part of Australia. Of course, our yields are not as great as those of the Wimmera, or other districts of that kind, but it must be remembered that our soil is not nearly as good. I am sorry that the Minister for Shipping and Transport (Senator McLeay) is not in the chamber, because recently I took him through a. certain area of Western Australia. At one stage, I asked him to get out of the motor car and look at the soil. He found that it was just sand. By means of treatment with trace elements, and in other ways, we are managing to produce profitable crops, but under immense difficulties.
The whole of Victoria, as I have pointed out on other occasions, would fit in the area between Albany and Narrogin, which is 170 miles from Albany. When honorable senators remember that that is only a small part of the agricultural area, they will be able to appreciate some of our difficulties. We have tracts of very good country separated by large areas of poor country throughout the State. The calls on rail transport are, therefore, particularly heavy. For that reason, I appreciate the grants which the Commonwealth Grants Commission is making available to us. However, I am afraid that I must differ from both Senator Paltridge and Senator Tangney concerning our status as an applicant State. We shall not cease to be an applicant State while the present financial relationships between the Commonwealth and the States continue. There will have to be a change, so that we may obtain a just share of the revenue.
– More for Victoria?
– Victoria can look after itself. If the authorities in that State turned their attention to improvements, they could increase the
State’s productivity. Between Melbourne and Albury, there is fine countrythat is not being used to the bestadvantage. Ifit were ploughed, sown topasture and top-dressed regularly, its carrying capacity couldbe increasedthreefold. As I have said,however, moreattention should be given tothe financialrelations between the Commonwealth andthe States. I believe that Western Australia would be betteroff if its taxing powers werereturnedtoit.
-Why does it not get them back,then?
-In myopinion, no Australiangovernment would return them to Western Australia. I support the bill andcommend theCommonwealth Grants Commission upon its realization of the disabilitiesof Western Australia, and the recommendations it has made for relieving them.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stageswithout amendment or debate.
Bill received from theHouse of Representatives.
Standing Orders suspended.
Bill (on motionby Senator Spooner) read a first time.
– I move-
That the bill be now read a second time.
The purpose of this bill is to authorize loan raisings totalling £32,000,000 to finance further advances to the States under the Commonwealth and State Housing Agreement Act 1945. The borrowing programme approved by the Australian Loan Council for the financial year 1954-55 included £32,000,000 for housing under the agreement, to be distributed amongst the States as follows: -
Tasmania does not sharein the distributionofagreement advancesasthat State withdrew fromthe agreement in August, 1950. Atthe 30th June,1954, atotal of , £178,209,000had been advanced totheStates undertheCommonwealth and State Housing Agreementsince its inception. Annualadvanceshave risen from£6,795,000in 1945-46to £37,200,000 in 1953-54. The allocation for 1954-55 of £32,000,000, is the amountnominated by the Statesfor housingout of approved borrowing programmesfor 1 954-55 totalling £200,000,000. It is £5,200,000 less than the 1953-54 allocation of £37,200,000, the highest figure reached in the course of theagreement.
The amount allocated for agreement purposes during 1954-55, while less than last year, is considered to be sufficient, in conjunction with finance available to home-builders from other sources, to maintain house construction at the highest possible level that theavailable resources of men and materials permit. Tothe end of June, 1954, 63,773dwellings had been completed under the agreement. Of those, 12,683 houses were completed during 1953-54, representing 16 percent. of all houses completed in that year. I commend the bill to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Spooner) read a first time.
.- I move-
That the bill he now read a second time.
The purpose of this bill is to provide for the raising of loan moneys amounting to £5,000,000 required for the acquisition, development and improvement of properties and for advances to settlers for stock, plant and working expenses in the States of South Australia, Western Australia and Tasmania. The moneys will be advanced to those States under conditions determined by the Minister for the Interior in accordance with the provisions of the States Grants (War Service Land Settlement) Act 1952-1953. This money will be used solely by the States of South Australia, Western Australia and Tasmania. Under existing arrangements for war service land settlement, the other States are responsible for providing themselves the necessary capital moneys. In addition to the amount of £5,000,000 provided for in this bill, it is estimated that about £1,744,000 arising from repayments of advances, &c, by settlers will become available for the same purposes. As a result the total expenditure by the Commonwealth in the three States mentioned is estimated at about £6,744,000 for the financial year 1954-55.
In 1953-54, total Commonwealth expenditure of a capital nature on war service land settlement in the three States was slightly more than £5,500,000 of which £4,200,000 represented new money. From the inception of the scheme to the 30th June, 1954, total Commonwealth expenditure of this kind amounted to £18,865,000. In addition to the proposed expenditure of £6,744,000 during 1954-55 for the purposes I have mentioned, an amount of £1,750,000 will be made available from Consolidated Revenue in respect of all States to provide mainly for Commonwealth contributions to writing off excess costs of acquisition and development, payment of living allowances and remission of settlers’ rent and interest during their assistance period. The amount of £1,750,000 compares with an actual expenditure of just over £1,300,000 in 1953-54.
Debate (on motion by Senator Critchley) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator McLeay) read a first dme.
Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate in this bill.
Bill returned from the House of Representatives without amendment.
Motion (by Senator McLeay) proposed -
That the Senate do now adjourn.
– Some time ago, Senator Henty asked a question in the Senate to which I direct the attention of honorable senators. Senator Henty asked the following question of the Minister representing the Acting Treasurer ; -
What was (a-) the cost of land, (6) the cost of a’ building, and (c) the cost of furniture and fittings of a new Commonwealth Bank at Hobart?
The reply that was given was as follows : -
The question .concerns the internal administration of the bank, which is a matter for the bank to determine. However, the Governor of the bank has informed me that the total cost of the bank’s new Hobart ‘premises, including the land, building, furniture and fittings, was about £1,000,000.
The answer that was given to the question and the way it was given cause me considerable concern. The reply appears to me to be an arrogant and uninformative answer, and raises an important principle. I repeat that the first line of the answer -
The question concerns the internal administration of the bank which is a matter for the bank to determine.
If that is purely a statement of fact I have no quarrel with it, but if it is intended to convey, as I believe, tha’t, honorable senators and members of the House of Representatives have no right to ask a question concerning the administration of some statutory authority, or to ger. information concerning it, I disagree with the principle entirely. Statutory authorities such as the Commonwealth Bank use taxpayers’ funds. What they do with those funds affects the taxpayers. Therefore, it is competent for members of either House of the Parliament to ask questions about those authorities and to expect to receive answers to the questions they ask.
The second part of the answer is, in my opinion, equally arrogant. It does not give the information for which the honorable senator asked. He asked -
What was (a) the cost of the land, (6) of the building, (c) of the fittings?
The reply was that the total cost was about £1,000,000. One would expect that the Commonwealth Bank would know precisely the cost of its buildings, land and fittings, especially when the sum of public money involved approaches the figure of £1,000,000. One would expect that a member of a House of the Parliament who asked a question of that nature would receive a specific, detailed and informative answer, explaining exactly what the cost was. The question related quite definitely to the funds of the Australian Government, because sections 3 and 4 of the Commonwealth Bank Bill state quite clearly that, whether the profits of the Commonwealth Bank come from the general banking division or from the central banking division, a half of the profits shall be paid into the national sinking fund. Therefore, if the statutory authority is conducted in an expensive and wasteful manner, less money will be paid into the national sinking fund than if it were conducted efficiently, and the taxpayers will have a larger burden to bear.
I raised this matter on the adjournment because it appeared to be quite clear that if I sought to raise it as the preamble to a question, I should be ruled out of order. However, I propose to ask the detailed question again next question time. I give notice now that if a detailed, specific and informative answer is not provided to the question, I shall move that the Governor of the Commonwealth Bank be called before the bar of the House to answer a detailed and specific question asked by a representative of the people, in this House of the people here assembled, about the funds of the people. I shall do so in order to establish clearly the principle that these matters are within the function of either House of the Parliament, and that such a question asked in either House of the Parliament is deserving of a clear, specific and informative answer.
Senator LAUGHT (South Australia) 1 10.34]. - I desire to refer to a matter arising from an answer given to a question that I addressed to the Acting Leader of the Government in the Senate. I do not want to cast any blame upon the honorable senator, but I desire to draw the attention of the Senate to the very unsatisfactory state of the law in a certain respect. The final decision in the Poulton case is of great national importance, because many hundreds of small woolgrowers who grew wool during the last war have not yet received a dividend from the joint organization funds. I believe that wool-growers who sent their wool to the larger firms have already received three dividends from those funds. The answer that was given to me to-day was as follows : -
As the honorable senator knows, in the Poulton case certain wool dealers claimed that they were entitled, as against the growers, to the profits of the joint wool scheme. They failed in the High Court, but intimated that they were considering a petition to the Privy Council for special leave to appeal. The High Court gave its decision as long ago as the 16th December last, but the Privy Council rules do not ‘fix any time limit for seeking leave to appeal. Unfortunately, it appears that the plaintiff has still not decided whether or not to seek leave.
Honorable senators will understand that until the case has been disposed of one way or the other, the Government cannot safely make a final distribution of the wool profits. Large sums are being withheld from small wool-growers. The answer continued -
The Commonwealth has taken every step it can to get this business through to finality, including action to have taxed the costs arising out of the High Court proceedings. The urgency of the matter has on a number of occasions been brought to the notice of the plaintiff’s solicitor, but he has stated that until he receives counsel’s advice on the question of an appeal, he cannot indicate whether his client is prepared to abide by the decision of the High Court. The matter is in the plaintiff’s hands, and I am advised that, up to the present at any rate, there is no further action which the Government can take. At the moment, therefore, I cannot say when it will be possible to make a final distribution, but the Government’s desire is to make the distribution at the earliest possible moment.
I submit that this is an amazing stalemate. A man by the name of Poulton, by failing to prosecute his appeal, is holding up the distribution of many hundreds of thousands of pounds. He has already been considering an appeal for., ten months, but there appears to be no time limit fixed for lodging an appeal.
I direct the attention of the Senate to this matter, because it seems to me to affect the judicial power of the Commonwealth. According to the answer given to me to-day, there appears to be nothing that the Parliament can do to get this question resolved. Doubtless the Minister would have indicated some way by which the Government intended to bring the matter to finality, if that were possible. 1 suggest that the Government raise this question with the authorities in London. The Privy Council is an organization that comes under the jurisdiction of the Parliament in Westminster. Since 1833, the Parliament at Westminster has passed a series of acts relating to the constitution of the Privy Council. In turn, that body has made certain rules .and orders governing its procedure. From the research that I have been able to carry out, it appears that the Privy Council has not fixed any time limit during which appellants must do certain things. In Halsbury^ Laws of England, volume 8, it is stated that a petition for special leave to appeal to the Privy Council may be lodged at any time after the date of the judgment sought to be appealed from, but with the least possible delay. One can understand that, 50 or 60 years ago, it would have been unfair to suggest that appeals to the Privy Council from courts in the colonies or the dominions should be lodged within, say, 28 days or two months, but I suggest that now the Privy Council should be invited to amend the rules governing its procedure and fix a definite time within which an appeal to it must be lodged. The laws of this country provide that an appeal to a higher court from the decision of a lower court must be lodged within a certain number of days from the date on which judgment was given in the lower court, but in the case of an appeal to the highest court in the
British Commonwealth, the Privy Council, it appears to be possible for a stalemate to develop.
I submit that the Minister for National Development (Senator Spooner) should give some consideration to this matter. I ask him to consider whether it would be proper to approach the Parliament in Westminster and point out the predicament in which the Australian Government is placed in relation to this appeal from a decision of the High Court of Australia. In all the replies that I have received so far to questions on this subject, I have been given no indication when the case will be decided. It seems to be a pity that a gentleman by the name of Poulton, by his dallying, can withhold from the rightful owners a sum of money that they earned many years ago.
, - I shall convey to the acting leader of the Government in the Senate the interesting observations made by Senator Laught. As I represent the Treasurer (Sir Arthur Fadden) in the Senate, I think I should make some reply to the comments made by Senator Gorton. Questions are placed on the notice-paper in order to give Ministers an opportunity to provide reasonable answers to reasonable questions. The Commonwealth Bank in Hobart is a trading bank. It was established as a trading bank there by us as a parliament. Let us assume for a moment that, as Senator Gorton claims, every question asked in the Parliament about the hank and about moneys that we, as a parliament, make available to it, must be answered by the board of the bank. If the honorable senator were a director of the Commonwealth Bank, what would be say if he were bound to answer a question such as, “Who are the clients of the Commonwealth Bank at Hobart f “ If he were a client of the Commonwealth Bank in Hobart, how would he feel if the board of the bank were bound to answer the question, “ What is the amount owing by a particular customer to the bank?”. How would he feel if the board were bound to answer the question, “What securities are held by the bank for a specific customer ? “
He wants to know the value of the furniture in the hank’s building at Hobart. Surely it would be equally reasonable to ask, “ Who was the furniture bought from? Was any special discount given on the purchase of the furniture? Was the furniture purchased for cash, or were other arrangements made ? “
I submit that all these matters must be dealt with in a reasonable way. I put to the honorable senator the question : Would the directors of any of the private trading banks answer such a question as that which appeared on the notice-paper if it were put to them by one of their shareholders?
– They are not using government funds.
– I do not understand the fine distinction drawn by the honorable senator. If we entrust the Commonwealth Bank with capital to enable it to. carry out banking functions, I do not see that that creates a situation that entitles us to inquire into every transaction of the bank. On that, however; I express a personal view. The Commonwealth Bank is in the same position as any other bank, in that it publishes its balance-sheets and final accounts, and gives to everyone as much information as other banks give to their shareholders. But, as the honorable senator attaches such importance to the matter, I shall certainly convey his views to the Minister who is acting for the Treasurer. I could not allow the opinion that he expressed to go unchallenged, because there is a contrary point of view.
Question resolved in the affirmative.
The following papers were pre sented : -
Explosives Act - Regulations - Order directing the berthing of a vessel.
Meat Export Control Act - Nineteenth Annual Report of the Australian Meat Board, for year 1953-54.
Public Service Act - Appointments - Department -
Department of the Interior - M. R. Wills.
Department of Supply - R. W. Hynes.
Scat of Government Acceptance Act and Seat of Government (Administration) Act-
Regulations - 1954 - No. 13 (Canberra Community Hospital Ordinance).
Royal Commission on Espionage - Interim Report, dated 21st October, 1954.
Senate adjourned at 10.45 p.m.
Cite as: Australia, Senate, Debates, 26 October 1954, viewed 22 October 2017, <http://historichansard.net/senate/1954/19541026_senate_21_s4/>.