22nd Parliament · 1st Session
The President (Senator the Hon. A.M.McMullin) took the chair at 3 p.m., and read prayers.
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Motion (by SenatorO’Sullivan) -by leave - agreed to -
That, in accordance with the provisions of the Parliamentary Retiring Allowances Act 1948-1966, Senator Cooke be appointed a trustee to serve on. the Parliamentary Retiring Allowances Trust, in the place of Senator Brown, resigned.
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– Doubtless, the Leader of the Government in the Senate will recall that on the 20th March I asked him whether he could give a reason which would satisfy the people of’ South Australia why the new aircraft carrier Melbourne did not call at Outer Harbour on its recent maiden voyage to Australia. The Minister promised to look into the matter and inform me of the result of his inquiries in due course. Although Melbourne has now left South Australian waters, I ask him, particularly in view of the fact that he holds the portfolio of Minister for the Navy, whether he can give any information on this matter which will comfort the people ofSouth Australia for the slight that they have received at the hands of the Navy.
– I suspect that the honorable senator’s question has been promptedby our mutual friend and colleague, former Senator Beerworth, who is very interested in this matter. As promised, I have made inquiries about it. Melbourne was running to a very tight schedule, but it is hoped and expected that in the not far distant future Adelaide will have the good fortune to see Melbourne and its complement.
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– Has the Minister for National Development received a reply to a letter that he directed to the Queensland Minister for Housing on the 27th February, in which a request was made for a further inspection of the Zillmere housing project so that the Commonwealth authorities could determine the extent of the discrepancy of French material and the amount of substituted Australian material in the Zillmere houses ?
– I am not certain about the dates involved, but in general terms the position is as follows . - I wrote to the Queensland Minister for Housing pointing out that there was a substantial number of houses in the Zillmere project which were of Australian construction and did not, therefore, qualify for subsidy. He wrote back -I think I have mentioned this matter previously in the Senate - claiming that although the houses had not yet been erected, the Commonwealth was bound to provide the subsidy because the Queensland Government had contracted to purchase the houses. I replied to the effect that surely that contention could not be correct, and I asked him for an opportunity to be provided for Commonwealth officers to inspect the houses that had been erected so that they could satisfy themselves in relation to the deficiency, and the number of houses not yet erected which should have been erected. I received a further letter from the Queensland Minister, in which he traversed some of the issues, but did not reply directly to the request that Commonwealth officers be allowed to inspect in order to ascertain the exact deficiency of houses. As he did not reply to that request, I referred the matter to the Attorney-General in order to obtain legal advice as to what action was available to the ‘Commonwealth. I have received the Attorney General’s legal advice. I have now a letter from the Attorney-General, which he has suggested that I should send to the Queensland Minister setting out the Commonwealth’s views, but I have not yet dealt with that letter. I hope to do so within the next day or two.
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– Is the AttorneyGeneral prepared to make a statement to the Senate regarding the effect of a recent High Court judgment as to the exercise of judicial power.’ by the Commonwealth Court of Conciliation and
Arbitration? Has an appeal been lodged against that judgment to the Privy Council, and, if so, will the Attorney-General indicate to the Senate the likely date of the hearing?
– The High Court of Australia recently delivered a judgment in what is known as the Boilermakers case, in which it held that by reason of the division of power under the Australian Constitution - the judicial power being vested in courts - the provisions of the Commonwealth Conciliation and Arbitration Act, which gave to the Commonwealth Court of Conciliation and Arbitration certain judicial functions, were invalid. The decision, I may say, is one which has implications much wider than its mere application to the subject of arbitration, and in those circumstances the Government has taken the view that it is desirable to obtain the opinion of the Privy Council on this matter. Accordingly, we are taking steps to apply to the Privy Council for leave to appeal to that body from the judgment of the High Court It is anticipated that the application for leave to appeal will be heard some time this month.
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– My ques tion is directed to the Minister representing the Minister for External Affairs. Has the Minister seen a report which was splashed across the front page of the Sydney Sun of the 30th April, in which it is alleged that two secret delegations from Russia and red China have arrived in Sydney, that they will visit every important industrial centre in all States except Western Australia, and that at the end of their tour they will have complete information about our heavy industry potential? It was also stated that the police and federal authorities have a detailed outline of their itinerary. Will the Minister make a statement about this matter?
– I imagine that the press report, which I have not seen, refers to the visit of some trade union delegates who. according to the press, arrived here yesterday or the day before. As far as the itinerary of those people is concerned, I am afraid that I cannot give the honor able senator any information; but I shall bring the honorable senator’s inquiry to the notice of my colleague, the Minister for External Affairs, and ascertain from him whether he can make any more precise statement on the matter.
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– Is the Minister representing the Minister for Tradeaware of a serious shortage of rape seed: in Tasmania? As this seed is used extensively in Tasmania for the purposeof pasturage, will the Minister examine the position as an urgent matter and take steps to alleviate the present shortage?
– I shall bring the honorable senator’s request before my colleague, the Minister for Trade, and ask him to reply direct to the honorable senator.
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– Can the Leader of the Government say whether it is a fact that aborigines who earn sufficient income pay taxes? Is it also a fact that such aborigines have no vote? If this is so, is it not politically and morally wrong to tax Australians and deny them representation? Does the Menzies Government intend to take steps to remedy this anomalous position?
– If the honorable senator does not mind, I shall reply on behalf of the Leader of the Government, because the matter is directly related to the Treasury. The principle involved in levying taxation is. ability to pay taxation. If people within the borders of a country earn income which is of the taxable level, then taxation is levied upon that income. If any other principle were to he applied, such as on the inference to be drawn from the honorable senator’s question, for instance, taxation would not be levied on those under 21 years of age. I do not think that the honorable senator would subscribe to that point of view. On the same basis, taxation would not be levied on new Australians who did not enjoy all the benefits of citizenship. The principle is to levy taxation upon the level of income and the ability of individuals within the community to meet this taxation.
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– Has the attention of the Minister for Shipping and Transport been directed to a statement by the chairman of the Tasmanian Potato Board of the 28th April last, criticizing the claim made by the Minister that he was supplying adequate shipping for the Tasmanian potato trade? Can the Minister give the Senate any . information regarding this matter ?
– Yes, I did see the newspaper report referred to by Senator Wright, and I immediately caused inquiries to be made concerning the position in relation to the shipment of potatoes from Tasmania. The Tasmanian traffic committee has informed’ me that one of the difficulties which it very frequently encounters in respect of the Arrangement of shipping to lift potatoes is that the Tasmanian potato shipping -committee is very often unable to advise shipowners until the last moment concerning the quantity of potatoes that is -available for shipping and the amount, of space that is required. The article, as I remember it, made particular reference to a deficiency of shipping for Brisbane, and in that regard the Tasmanian traffic committee has advised that as soon as a request is made for shipping space for potatoes for Brisbane the committee endeavours to fix a vessel. The last shipment made to Brisbane was 5,500 sacks in Hans P. Carl during mid-April, but this was arranged only at the last moment, due to a short shipment of other cargo, as when this vessel was fixed for Brisbane and right up to loading time, the Tasmanian potato shipping committee could not state definitely what space it wanted. The next shipment of potatoes for Brisbane is in Mundalla, which is due to sail next week.
With regard to general shipping from the north-west coast to the mainland, the programme for the next two or three weeks is as follows: - -For the week ending the 5th May, Kootara will lift up to 15,000 sacks for Sydney. For the week -ending the 12th May, Mundalla will lift up- to 8,000 sacks for Brisbane, Mernoo, up to 15,000 sacks for Sydney, and Enfield, up to 7,000 sacks for Newcastle. For the week ending the 19th May
Wanaka will lift up to 15,000 sacks for Sydney, and Kiwi probably up to 10,000 sacks for Sydney or Newcastle.
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– Having regard to the answer to a previous question given by the Minister representing the Treasurer, in which he said the Government’s policy was to levy taxation according to the level of income and the ability to pay, I ask the Minister, in view of the fact that petrol users throughout the Commonwealth are being asked to pay an additional charge on fuel as a result of the recent sales tax increases, is it true that transport companies, taxis and other public or semi-public organization are carrying the extra charges without an increase of fares. Is it a fact, also, that because Australian National Airways Proprietary Limited is using American air-craft consuming large quantities of petrol, and Trans-Australia Airlines is using kerosene in its highly efficient, British-made Viscount aircraft, no sales tax is charged on petrol sold to Australian National Airways Proprietary Limited ?
– Evidently the honorable senator misunderstood my reply. ‘ 1 was not stating Government policy; I was discussing the principles on which taxation is levied. However, I do not say that the Government’s policy is not in accord with those principles, but I was replying in general terms to Senator Brown’s question. No variation has been made in the principles on which taxation is levied, either by this Government or its predecessor. Senator O’Byrne then directed his question to indirect taxation as against direct taxation, which is a different field of taxation. It is not possible to link the previous question and answer on personal income tax with indirect taxation. The third portion of the honorable senator’s question is one to which I cannot give a detailed reply. It concerns sales tax upon kerosene and aviation spirit. I can only say that aviation spirit is not subject to additional customs or excise duties, so that transport costs may be maintained at as low a level as is practicable. There is no differentiation in the levying of customs or excise duties on the fuel used by Australian National Airways Proprietary Limited and that used by TransAustralia Airlines. If Australian National Airways Proprietary Limited is exempt from tax, so is Trans-Australia Airlines; and conversely, if Trans-Australia Airlines is subject to the charge, so is Australian National Airways Proprietary Limited.
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– My question is directed to the Leader of the Government. Has the attention of the Minister been directed to the fact that Sir Charles Darwin, Professor of Theoretical Physics in the University of Edinburgh, will arrive in Australia to-day for the purpose of visiting Australian universities ? Can the Minister inform the Senate whether the Government proposes to issue an invitation to this distinguished professor to visit Canberra?
– I read a press report of the proposed visit mentioned by the honorable senator. I have no idea of the programme arranged for the professor, but I suggest that the. honorable. senator place her question on the notice-paper and I will have it brought to the notice of the Prime Minister.
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– My question is directed to the Minister representing the Prime Minister. What is the amount of the expense allowance which the Prime Minister has stated is being paid to Mrs. Petrov? Is there any means. test on such allowance ? How much has already been paid to Mrs. Petrov? Ib this Bum additional to expenses incurred for the maintenance of Mr. and Mrs. Petrov? Who is responsible for the maintenance costs of these persons? In view of the Prime Minister’s tacit admission that additional costs are involved in the purchase of personal necessities and clothing, will the Minister consider giving the same allowance to all widows whose pensions are totally inadequate to provide for the needs of themselves and their children?
– When thehonorable senator opened her question I thought she was really looking for information, but the tail of her question is really loaded with political propaganda. In the circumstances, I will give thematter due consideration.
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– I ask the Minister for Shipping and Transport whether he is aware that the 1956 InternationalStudy Week in Traffic Engineering isto be held at Stresa, Italy, from the 1st. to the 6th October and that it is expected: that over 40 experts from ten countrieswill present reports or papers on themesof importance to our national traffic questions, such as traffic control, prediction of future traffic, planning and design of express ways, factors affecting road capacity, losses due to accidents and accident rates. Can he say yet whether Australia is to be represented by either a delegate or an observer at this conference ? Will the Government give some consideration to the question of being: represented by some suitable Australian then on Government duty overseas who could report on this important trafficengineering conference ?
– The conference to which Senator Laught referswill discuss a number of topics in which. the Commonwealth has an interest but over which it has no direct jurisdiction. It is true that through the agency pf the Road Safety .Council it has a particular interest in some of the subjects to be discussed, but, nonetheless, I repeat thaiit has no direct jurisdiction. It has not ‘ been the practice in the past to send Australian representatives to conference? of this nature. It has been considered1 sufficient that a report of the proceedings be received and studied departmentally and by the various government agencies concerned. Arrangements to that end have again been made in connexion with the forthcoming conference at Stresa. T do not. know -whether the Government hae ever considered the possibility of sending to a conference of this type, perhaps one of our diplomatic or consular officer? overseas; but it does occur to mc that generally speaking the subjects are of such a technical nature that the attendance at a conference of this sort of a man untrained or unskilled in the particular subjects discussed might not achieve much beyond what would be achieved by making a close study of the report of conference proceedings. Nonetheless, 1 will have a look at the proposition and see whether there is some merit in having Australia directly represented.
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– I direct a question to the Minister representing the Treasurer. In view of the disturbing situation which is encouraging a loss of confidence in the £5 currency, and in view also of the fact that neither the Commonwealth Rank nor the Australian Government has so far made any statement which would indicate that people who genuinely accept £5 notes which prove to be bad will be compensated, will the Government issue a statement as to its views and so restore faith in the currency and, at the same time, take some positive action which will effectively drive the forged note back to where it belongs?
– From memory, I think that my colleague, the Treasurer, made a statement on this matter in the House of Representatives yesterday. The statement was to the effect that it was considered unwise for the Commonwealth Bank, or the Government, to take any action to protect the holders of forged bank notes that might be circulated. The authorities considered the best protection was for those who handle the currency to exercise diligence to prevent forged notes from being placed in circulation. ‘ The statement also announced that the .Commonwealth Bank had offered a reward of £1,000 for information that would lead to the detection of the instigators of the recent forgeries.
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– Is the Minister representing the Minister for Trade aware that at the annual meeting of Carr’s Milling Industries Limited, the chairman said that, “with Australia, a very keen seller, also saturated with wheat, it is almost impossible for us to obtain this variety (biscuit flour) of wheat at all “ ? Will the Minister inform the Senate why it is almost impossible for that manufacturer to obtain supplies of Australian wheat? If the Minister cannot give the reason, will he endeavour to obtain the information?
– The question relates to wheat for biscuit manufacture, and I ask the honorable senator to put it on the notice-paper. The honorable senator probably knows more than I do about the various qualities of wheat for the manufacture of biscuits. I believe it is a particularly soft type of wheat, and I am not qualified to say whether supplies are available in quantity.
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– I address a question to the Leader of the Government in the Senate. In view of the serious unrest in the tobacco-growing industry because of the unsatisfactory marketing of Australian-grown tobacco leaf, and in view, of the large capital investment, both public and private, in the tobacco-growing industry, and its great importance to the Australian economy, will the Government take the necessary steps to ensure the satisfactory disposal of Australian tobacco?
– I believe the honorable senator is aware that, over the past few years, the Minister for Trade, who was then Minister for. Commerce and Agriculture, and myself, as then Minister for Trade and Customs, have had many conferences and conducted lengthy negotiations with tobaccogrowers and manufacturers. I am happy to say that, as a result of those many conferences, there is a much more amicable and trusting feeling between growers and manufacturers. I understand that negotiations are in progress at present. I am no longer directly connected with the tobacco industry in a ministerial capacity, but I believe that the Minister for Primary Industry has been in consultation with manufacturers and growers. He is hopeful that, as a result, good prices, without violent fluctuations, will be assured to growers, and that the assured market will encourage still further development of this industry, which is important to Australia, and particularly to the State of Queensland in which the honorable senator and I are mutually interested.
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– I direct a question to the Minister representing the Minister for External Affairs, who is iri charge of the Commonwealth Scientific and Industrial Research Organization. Has the Minister any information to give the Senate in connexion with a recent press . statement to the effect that farmers in Australia should take advantage of every known method of destroying rabbits in the next few years? I understand that this step is necessary because myxomatosis i» losing its efficiency, and is now only 90 per cent, effective compared with 99 per cent, when it was introduced. Could the Minister advise me if the Commonwealth Scientific and Industrial Research Organization is still experimenting with the virus in an endeavour to increase its strength so as to restore its original effectiveness of 99 per cent.?
– I have some recollection of having read some papers from the Commonwealth Scientific and Industrial Research Organization which suggested that it was carrying out experiments designed, at any rate, to deal with the menace, of the rabbit, having regard to the lessened efficacy of myxomatosis; but what those experiments are, I am afraid I cannot say. I suggest that the honorable senator place his question on notice, and I shall obtain for him a considered reply.
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– My question is directed to the Minister representing the Minister for External Affairs. Will he obtain for the Senate particulars of the casualties that have been suffered in the recent Mau Mau- disorders in Kenya, giving, first, the number of white people who have been killed; and, secondly, the number of members of the Mau Mau organization who have been killed?
– I shall inquire from my - colleague, the Minister- for External Affairs, to see whether that information is available. ‘
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– I ask the Minister representing the Minister for Supply whether he will consider inviting Professor 0. E. Tilley to Australia. He isa Bachelor of Science of Adelaide and Sydney Universities, a Doctor of Philosophy of Cambridge University and a Fellow of the Royal Society of London. At present he. is Professor of Mineralogy and Petrology at Cambridge University, and is considered to be one of the world’smost eminent authorities in his; field. “Will, the Minister consider inviting Professor Tilley to Australia, in an honorary or consultant capacity, to report on our uranium’ deposits and works ?
– I shall be glad to bring to the notice of my colleague, theMinister for Supply the suggestion that the honorable senator has made and givehim a considered reply.
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– My question is directed to the Leader of the Government in the Senate. Referring tothe forthcoming meetings in London of the Prime Ministers of Commonwealth countries, will the Prime Minister -arrange, before the conclusion of the talks, for an adjournment of the deliberationsand their resumption in Australia after the conclusion of the Olympic Games, when the parliaments of- Commonwealth countries will have- gone into their annual recess ? This would give these Commonwealth leaders an opportunity to see for themselves the magnificent progress- being made in Australia.. Many of them have never yet visited this country, and it would give the people of Australia a chance tomeet these distinguished world leaders.
– I am surewe all agree that the ‘proposition inherent in the honorable senator’s question ishighly desirable, but whether it is within the realm of .practicability is- another matter. However, I shall be happy tomention the matter to the Prime Minister.
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– Is the Minister representing the PostmasterGeneral able to say when the new post office building at Burwood, in Victoria, will be commenced i
– I shall bring the honorable senator’s question to the notice of my colleague, the Postmaster-General, who will furnish a considered reply.
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– I preface a question to the Minister representing the Minister for External Affairs by saying that I understand that the International Labour Organization intends to hold its annual meeting at Geneva during next month, and that it will be attended by representatives of both the trade union movement and employer organizations in Australia. Will the Minister inform the Senate what influence the Government exerts in relation to the selection of representatives, and what financial assistance is provided by the Commonwealth in connexion with their visit?
– I do not think that the Government exercises any influence in the choice of employer and employee representatives. In my. recollection, they are nominees of bodies representing different sections. Normally, the Government would accept the nominee of the particular section concerned. Offhand, I cannot give the honorable senator particulars as to the expense that is incurred by the Government in connexion with these delegations, but I shall make inquiries and let him know the result.
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– Will the AttorneyGeneral state at what centres branches of the Legal Service Bureau are established. Has the Minister, or any other member of the . Cabinet, conferred recently with representatives of returned servicemen’s organizations as to the possibility of improving the legal services that arc made available to ex-servicemen?
– Branches of the Legal Service Bureau are established in the various capital cities, the largest being in Melbourne and Sydney. Smaller offices, which are usually run in conjunction with the Crown Solicitor’s office, are established in the other capital cities. I cannot say offhand whether any discussions along the lines the honorable senator has mentioned have recently taken place with the returned servicemen’s organizations, but I shall keep his suggestion in mind.
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– I preface, a question to the Minister representing the Minister for Social Services by reminding him that some time ago I asked him a question in relation to pensioners above the age of 70 years. Recently, it was reported in the press that the Government had appointed a departmental committee to consider ways and means of abolishing the means test for pensioners in that category. Can the Minister say when it is expected that the report of the departmental committee will be presented to the Senate?
– I do not know that a departmental committee is obliged ‘ to report to the Senate, or for that matter, whether the Senate has any right to expect such a report. As the honorable senator is probably aware, on such important matters departmental work is carried on continuously, and only such reports as relate to an alteration of Government policy would normally come before the Parliament.
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asked the
Minister for Shipping and Transport, upon notice -
-I reply to the honorable senator’s questions in the following terms : -
So far as Australia is concerned, this series of questions involves two distinct matters, namely, control over territorial waters, and control over the sea-bed and sub-soil of the continental shelf,
Australia, like the United Kingdom and the United States, adheres to a 3-mile limit for territorial waters.
With regard to the continental shelf, the Commonwealth, on the 11th September, 1953, issued a proclamation declaring, in respect of Australia and Australian territories, the -existence of sovereign rights for the purpose of exploring and exploiting the natural resources of the sea-bed and sub-soil. A similar proclamation was issued in respect of the trust territory of New Guinea. These -proclamations made it clear that no extension of territorial waters was involved.
Some South American countries, as the honorable senator suggests, have combined claims to the sea-bed and sub-soil with claims to a wide area of territorial waters extending to a distance of 200 miles from the coast.
Specific answers to the honorable senator’s questions are as follows: - 1. (a) To be properly informative, a statement such as that requested should cover both subjects, but, in view of the explanation necessary of the varying claims, would occupy considerable length. Further information will, however, he made available to the honorable senator if he so desires. (6) No. As already explained, Australia has declared the existence of certain sovereign continental shelf rights, but adheres to a 3-mile limit for territorial waters. (c) This question has been answered above.
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asked the Leader of the Government in the Senate, upon notice -
– The answers to the honorable senator’s questions are as follows : -
The secretary-typist is such as is made available to every other honorable senator, whether he is a Minister, a leader of a party or a senator. The only extra employee allowed in this case is the private secretary. (6) (i) one room in Parliament House, Canberra; one room at 31 Steele-street, Devonport, which was made available to Senator Cole when he was a private senator; (ii) no special accommodation has been provided for staff, (c) and (d) Transport for the Leader is made available in accordance with the rules laid down. Official travel for the private secretary provided on same basis as for other private secretaries. The secretary-typist is not eligible [or official travel.
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asked the Leader of the Government in the Senate, upon notice -
– The answers to the honorable senator’s questions are as follows: -
I and 3. The present establishment and salaries of staff of the Leader of the Opposition are - Private secretary, £1,833 per annum; private secretary, £1,733 per annum; press secretary, vacant; assistant private secretary, £929 per annum; typist, £734 per annum; typist, vacant; female assistant, £564 per annum.
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asked the Leader of the Government in the Senate, upon notice -
– The answers to the honorable senator’s questions are as follows: -
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asked the Minister representing the Treasurer, upon notice -
– The Treasurer has supplied the following answers : -
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– On the 20th March, 1956, Senator Critchley asked the following question:-
Will the Minister for Repatriation table a return indicating how many appeals by exservicemen to the Entitlement Appeal Tribunals are outstanding for three months or more since the 3 1 st December, 1955? Is he aware that because of these long, and, in my opinion, unnecessary, delays many ex-servicemen, particularly old diggers, die before their entitlement appeals are heard?
I replied as follows : -
I shall be only too glad to obtain the information sought by the honorable senator, but I should like to know if he is referring to the figures for any particular State.
The honorable senator stated that he would like the figures for the whole of Australia and I stated that I would obtain the information. I now supply the following answer : -
I find that it would be expensive and very difficult to obtain the figures for the period of three months or more prior to the 31st December, 1055, as many appeals which are in that group have since been decided. I have, however, obtained figures relating to appeals to Entitlement Appeal Tribunals which were not decided at the 13th April, I9S6, and which were lodged on or before the 13th January, 1956, and I trust this will meet the honorable senator’s requirements. The number of appeals lodged on or before the 13th January, 1956, which had not been decided by the 13th April, 1956, was 764. This figure of 764 includes a number of appeals which have been part-heard, hut on which decisions have not been given owing to the appellants, or their advocates, submitting further evidence which has to be considered in accordance with sub-section (5.) of section 64 of the Repatriation Act 1920-1955; or because the appellants, or their advocates have requested that decisions be deferred pending submissions of further evidence. At the 13th April, 1956, there were 1,936 undetermined appeals nf which 407 had been part-heard-. I might add that since I became Minister for Repatriation I arranged for the appointment of an additional War Pensions Entitlement Appeal Tribunal, There are now three Entitlement Appeal Tribunals. When the third tribunal commenced operating on the 19th April, 1954, there were 2,294 appeals not determined. During the period the 4th July, 1955, to the 13th April, 1956, there were 4,259 appeals lodged to Entitlement Appeal Tribunals and 4,244 were decided (.the latter figure does not include those part-heard). There are now six Assessment Appeal Tribunals. During the period the 4th July, 1955, to the 13th April, 1956, there were 6,840 appeals lodged and 7,470 determined.
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– On the 20th March, Senator Hendrickson asked the following question : -
I direct a question to the Minister representing the Minister for Health, in continuation of a question I asked recently concerning drug discoveries. Can the Minister say whether any research developments are taking place in Australia in regard to the new tranquilizing drug, promazine; a compound related to sulfa drugs which shows possibilities as a pill that will free diabetes sufferers from dependence on injections nf insulin’; and an injection of viruses that cause many, ailments of the commoncold type, which has proved partly effective in slowing the growth of cervical cancer! These matters have been reported in international scientific circles
The Minister for Health has now furnished the following reply: - .
A considerable amount of work is being carried out in Australia with the drug chlorpromazine. This work is being conducted at the institutions and associated clinics concerned with the treatment of the mentally ill. The’ reports from these centres indicate that chlorpromazine is a drug showing great promise as one that has a place in the treatment of certain types of mental illness. The report on the discovery of a sulphanilamide-like substance which is being investigated as to its role in the control of diabetes emanated from the research laboratories of an American drug manufacturing firm. No further information is available to me on this substance. To my knowledge, there is no research being conducted in Australia on the use of viruses in the control of cervical cancer. If the honorable senator will provide me with the reference to the work he quotes I will have the matter investigated.
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Debate resumed from the 1st May (vide page 417), on motion by Senator SPOONER -
That the bill be now read a second time.
– The measure now before the Senate is the- Sales Tax (Exemptions and Classifications) Act. The ‘bill itself does no more than present a re-arrangement of the schedules to the act. The purpose, of course, is to attract to many manufactured articles the higher rates- of tax that are set out in nine separate taxing bills that are the subjectmatter of Item No. 2 on the notice-paper. I suggest, and I think it will be well understood, that one cannot intelligently discuss the measure now before us, which merely lists goods in various schedules, without adverting to the bills which impose the taxation; and the usual practice in this chamber has been to debate the two of them together, the Opposition offering no debate and no opposition to the taxation measures themselves when they are listed. We- are, however, very strongly opposed, indeed, to this particular measure and to the whole pattern of the ten bills before the Senate that deal with taxation. I wish to put it officially on record that in voting against and expressing our opposition to this particular measure we are in that way expressing our dissent from the other nine bills referred to in Order of the Day No. 2.
The bill before us stems, of course, from the financial statement made in the Parliament by the Prime Minister (Mr. Menzies)’ on the 14th March last, when he announced sales tax - increases to operate from midnight of that day. ‘I think that even supporters of the Government will agree with me when I say that the announcement of the taxation measures on that occasion by the Prime Minister really shocked this nation.
Before we analyse the bill and its effect, taken in conjunction with the other nine bills, let us see what the bill proposes to do. First, it seeks to lift sales tax on passenger motor cars, including taxi -cabs and station wagons, from 16-jj per cent, to the crushing burden of 30 per cent. Next, it proposes to take commercial motor vehicles and motor cycles from the present rate of tax of 12£ per cent, to the rate of 16$ per cent. Then, surprisingly, it makes an attack on parts and accessories for motor vehicles, whether those vehicles are used commercially, privately, or otherwise. There is to be an increase of the rate of tax from 12£ per cent, to 16§ per cent. Then we have a very long list of goods, covering several pages of foolscap, goods which are in common use - I might say in almost daily use - by nearly every person in the community, and here there is to be a very substantial increase of the rates of tax, too. The rise is to be from 16$ per cent, to 25 per cent. The final point covered by this measure, but by no means representing the whole of the taxation measures of the Government, is that, right on the eve of the advent of television in this country, television sets are to be taxable with sales tax, as well as wireless receiving sets, the tax on which is to be lifted from 16f per cent, to 25 per cent.
Over all, the Government expects that, as a result of the imposition of these levies, the revenue of the Federal Government will benefit to the tune of some £30,000,000 per annum. That, of course, represents a part of the additional £115,500,000 taxation imposed by the Government to operate as from March last. We were told by the Minister for National Development (Senator Spooner), in the course of his secondreading speech yesterday, that all of this is part of the Government’s plan to halt inflation by curtailing demand, and to reduce imports. I say that these are savage attacks, and that their savagery is apparent from the fact that whilst they are intended to, and no doubt will to an extent, reduce demand, the Government nevertheless, despite reduced demand, expects quite confidently to draw an additional £30,000,000 per annum from this process of taxation.
The fierce impact of these taxes falls, of course, upon the motor industry, and when I indicate that a motor car which retails on the market at £1,950 bears sales tax of £369, the order of severity of the taxation at once becomes apparent.
– What cars sell at that figure ?
– I do not propose to be tempted into giving an advertisement of the various makes sold at that price, but quite a number of what one might describe as medium-priced cars are being sold at that figure and carry the terrific burden of approximately £400 sales tax. I have stated that in my view the great weight of sales tax imposed by this measure will fall upon the motor industry. I have read - and I believe it to be true - that approximately £22,000,000 out of a total of £30,000,000 will flow to the Government from this source.
If this measure is successful in curtailing sales, it is inevitable that a large measure of unemployment will result in the motor industry, which is of great importance to Australia’s development and defence. Its expansion throughout the past decade has been one of the most outstanding facets of Australia’s industrial performance. Not only will unemployment result directly in the great motor industry, if the measure succeeds in its objective, but also, in a smaller but corresponding measure, unemployment will occur in all the auxiliary industries. Many car manufacturing companies farm out the manufacture and fabrication and assembling of motor car components, and if there is any falling off in the major manufacturing industries, all the subsidiaries on the sidelines, which normally co-operate with them, will also necessarily feel the effects in reduced demand, fewer sales, and unemployment. Already signs of unemployment are apparent in Australia. They emerge very quickly. In the Canberra Times, of the 5th April last, an article appeared under the heading, “ Chrysler lays off 400 men “. I think it proper that I should read the whole of the quotation, because it contains a qualification. The message came from Adelaide, and reads - :< early 400 employees of Chrysler (Australia) Limited in South Australia have been laid off as a direct consequence of the Government’s economic policy, union officials claimed to-night.
The managing director of the company, Mr. W. D. Ferguson, said he felt the dismissals would be a temporary measure.
He said the number dismissed was less than 10 per cent, of the firm’s 4,500 employees and was something that could happen at any time.
That is the qualification to which I felt I should direct attention. But the position has developed since the 5th April, and in the press of the 23rd April an extensive report appeared of a warning to the Government by the motor industry as sales of cars fell. A letter was sent to the Prime Minister, and I propose to read portions of it to the Senate in order to give a picture, as seen through the eyes of the Federal Chamber of Automotive Industries, of how the motor industry will be affected. The first extract reads -
The Government has seen fit to impose an additional sales tax to the already high rate which was applied to commercial motor vehicles and replacement parts.
We believe this action to be wholly inconsistent with any policy designed to check inflationary tendencies.
A further paragraph reads -
The motor industry does not seek favour, nor does it desire to stand in isolation at a time of economic crisis.
We do, however, feel entitled to justice and equity in any Government legislation which has a direct hearing on our affairs, but. for reasons given above, and because of the fact that wholly unessential goods such as furs and imitation jewellery have been granted tax preference over an Australian industry producing vehicles for essential commercial and personal transportation and employing, in that process, hundreds of thousands of men. there appears every reason to believe that the motor industry has, in fact, been subjected to special and punitive tax treatment.
This may not have been intended, but, nevertheless, it remains true.
T am not reading the whole letter, but the last paragraph is as follows: -
Finally, may we point out that the majority of Australia’s vehicle manufacturing plants - which have been developed largely at the behest of succeeding Governments - are dependent for their economic operation upon large-scale production of passenger vehicles.
Any significant reduction of this output must be reflected in costs, which in turn will affect the retail price of commercial as well as passenger vehicles.
That is a proper anticipation of what will happen - a reduction in the quantitative measure, with overhead costs possibly running at the same level, will add to costs, and the motor industry has put up a perfectly valid argument when it suggests that the effect of this reduction in demand, if achieved, will further inflate costs.
– How will the overseas trade balance be affected?
– This will have little effect on the overseas trading position. It would have been infinitely better if the Government had made a direct quantitative approach to the subject of imports of motor cars and spare parts, if something had to be done. No doubt the restriction of imports would have had a similar effect on employment in the Australian motor industry, but at least that approach would not have added to costs. If fewer motor cars and spare parts had to be imported surely the most direct, honest and courageous course for the Government to follow would have been to say, “We will cut supplies .at the source “. Instead, the Government’s approach has been, “ Let them come in and we will then tax them so that people will not want to buy them “. That does not seem to me to be rational.
– “Will it not stop them from coming in?
– I am afraid that it will not have that effect. Motor cars are essential to the people, and there will be no stop to the demand for spare parts and accessories, which constitute a large element in this field of taxation. Cars on the road must be repaired, and spare parts are necessary for the purpose. The policy of the Government is to increase the cost of repairs to motor vehicles. This is certain to increase costs all over Australia, not only in the motor industry, but also in almost every other industry. If people who purchase motor cars have to pay higher capital costs they will have to write off a bigger depreciation. This will mean higher overhead charges, and will build up the cost structure in determining price levels. Increased costs for repairs will also have to be taken into account, and a further item, which lies outside the scope of this bill - the increased cost of petrol - will be a factor in raising the cost of all transport services in Australia. I remind honorable senators that 75 per cent, of the goods transported in Australia are carried by road transport; consequently, the whole range of costs of goods and services will be affected by the imposition of sales tax.
The Government might have approached these various problems in a much more common sense, practical way. [ do not accept the argument that a reduction in demand will steady the heavy pressure on hire-purchase companies because there will be fewer cars to finance, and accordingly more money will be available for the loan market. 1 should say that instead of attempting to achieve the purpose of cutting down hire-purchase activities, attracting deposits to loans, and encouraging people to underspend, if that is what it means, it would have been better again had the Government made a direct approach. This hire-purchase problem posed before the Government and the country at the moment, as outlined by the Prime Minister, is not a new one. It was discussed by the Australian Loan Council a very long time ago. It was recognized then that, the high rates of interest offered by hirepurchase finance companies were attracting money away from the loan market. The whole matter was debated by the Australian Loan Council. There was a report of it in the press at the time, and 1 have no doubt that there are some reports of proceedings at Premiers conferences here which would enable that debate to be read. But again, the direct thing to have done was to say, “Well, if we lack power over the interest charged by hire-purchase organizations, we should ask the States for the necessary power and we should curb it at the source “. If the States would not give it, then this Government should have had the courage to go to the people, and tell them of its economic problems and its doubt as to its power to deal effectively with this phase. i suggest that this whole approach of imposing additional sales tax on all these items will simply send up the cost of every article and every service which has an clement of transport in it; and I wonder how many goods or services in this country lack that element. Transport costs play a part in almost every single service and every single article of manufacture. The whole effect of sales tax is that it becomes one of the costs. It is one tax that is invariably passed on It is unquestionably an addition to the cost level. It forms one of the basic ingredients at which the retailer looks in determining his own level of profits. He includes sales tax as one of his costs, and, whatever his profit margin may be, the tendency is to run it over the whole element of cost, including sales tax. There is always that danger with a tax of this nature.’ Costing £106,000,000, a3 it will, this year, prior to the imposition of the new rates, it’ constitutes a direct charge on costs in the country, but the cumulative effect of the addition of profit on top of that carries it much further still. I would not venture to guess just how far it does carry it, but I would not hesitate to say that it will certainly increase costs by at least £50,000,000 a year, and it might well run to even £100,000,000 a year. It is a pernicious tax from that, viewpoint because it does add to costs.
It is also an embarrassing and irritating tax because every time there is an extensive change like this in the schedule it means that the whole business community has got to put its staff on to an overhaul of its price lists and has to circularize all its customers accordingly. It makes a colossal amount of work for and imposes a tremendous burden upon the business community, and there have been far too many changes in recent years at the hands of this Government. It is an embarrassing tax, too, because, quite apart from the constant changes, it does involve a great deal of clerical work, which also adds to costs. Finally, it is not a fair tax because it does not fall upon people according to their ability to pay, as dues income tax. .It is very interesting to note what has happened in the whole field of sales tax under this Government; and I should like to approach that question from one or two angles. So that honorable senators may see me develop my theme, I shall quote the amounts actually collected in sales tax over the last six or seven years, and in this way show them the extraordinary growth in collections. I admit at once that over that period business has grown and the national income has grown, and for that reason, one might expect even a substantial increase; but the next important phase of the subject is the percentage that sales tax has borne to total taxation collected over that period. That is the real t,st. Has the percentage gone up, or has it gone down? Fortunately, so recently as the 3rd April last, statistics were released by the Bureau of Census and Statistics, and they give us the relevant details. The third and final phase of the argument which I address to honorable senators here is, that over the same period the percentage which income tax plays in the total field of taxation has gone down, and not up. Over the six-year period, there has been an easing of the tax paid by incomeearners while, at the same time, there hae been an increase in the percentage of sales tax taken from the people.
Now. let me go back over the broad outline I have given. In 1948-49, sales tax yielded £39,000,000. The following year, collections from this source amounted to £42,000,000. In the following year, which was the first full year of office of this Government, they rose to £57,000,000. In the next year, the horror budget year, the total jumped to £95,500,000. In 1952-53. it fell to £89,000,000, but in 1953-54 it went up to £95,000,000. Last year yielded £100,000,000 from this source, and this financial year it was estimated that the yield would be £106,000,000 before the imposition of the new rates. So, in those six years of office, this Government has seen sales tax rise from £42,000,000 to more than £106,000,000 a year. Figures do not necessarily tell the whole story, but the next table released by the Statistician does. In the first full year of office of this Government sales tax yielded 8.9 per cent, of total taxation receipt?. That was for the year 1950r51. In 1951-52, it rose to 9.57 per cent. That was a tremendous increase, and that took place in the year of the horror budget. But it did not go down substantially. In 1952-53, it yielded 9.23 per cent, of total taxation receipts, and in 1953-54 it increased to 9.76 per cent. For 1954-55, it was 9.78 per cent., and it is perfectly certain that under the new sales tax increases now proposed in the measures before the Senate, the percentage for the current year will be higher.
– What was it in 1948 ?
– I have not that figure before me, but I make no apology for that because it is not contained in the documents circulated by the Statistician.
Let me repeat the overall picture as it appears under this Government. Sales tax has lifted from 6.9 per cent, of total taxation receipts in its first year of office to almost 10 per cent, at the present time. Over that period, the percentage yield to the Government from income tax was 54.49 in its first year of office. It rose to 55 in 1951-52, the year of the horror budget, and then fell to 51.88, as at present. Although it has fallen from 54 to 51, the point I stress to the Senate is that it is completely wrong that the taxation revenues required by the Commonwealth Government should be taken from the people less and less according to their ability to pay, less a::. 1 !c;c according to their incomes and more and more by the process of indirect unscientific taxes like the sales tax which is a hit-and-miss tax. Some people can avoid sales tax altogether. Some can evade it partly, and some cannot escape from it.
These proposals are directed at articles which are in every-day use. Some time ago, I referred to a long list of goods that was contained in a schedule associated with this measure. In that schedule, I found items such as imitation jewellery and every conceivable sort of toilet requisite, including safety razors and blades, shaving brushes and soaps. The schedule even includes eyebrow brushes. I had never heard of them until I read the schedule. I do not mention them now to be facetious, but to show the extent to which the sales tax proposals penetrate the discs of the people. Wail -some honorable senator on the Government side inform me how the - Government proposes to reduce inflation by taxing eyebrow brushes? Are we ‘to stop .-growing eyebrows? Can we shave .them off-? We should not :do :that., because we would then have to pay /more :for razor blades.
– What about lipstick’?
Senator McKENNA. All women’s requisites are included in the schedule. I should like an ‘honorable senator on the Government side to .tell me more about the sales tax on shaving requisites. ‘The Government proposes to tax sa’fety razor blades and razors. Does the -Government want ‘us to .-grow beards1? ‘That -would possibly :be >one answer to its proposals. Does it want us “to shave less frequently, or to use razor blades until they will cut no more? Will -some supporter .of the Government -.explain its aim in these matters’? Does the Government want tto reduce the ‘demand ? How does it propose to ‘.defeat inflation ‘by increasing the cost of shaving .and -cleanliness;?
– ‘The honorable senator’s beauty might be improved if he. grew a beard.
Senator McKENNA. I fear thai nothing could do that. I propose to revert now to the proposals as they affect the motor car industry. Possibly, it may be conceded that these measures will have, the effect of dampening down the demand and reducing sales of motor vehicles. That would lead to unemployment, and I. am sure that neither ‘the Government nor anybody else wants to see that brought about. The .point is that all these things should have been foreseen. Responsible persons interested in the motor car industry have expressed opinions similar to those .of the Federal Chamber of .Automotive .Industries. A report published in the .Sydney Morning .Herald of the 24bh April included .this .statement -
Motor industry employers yesterday estimated that about 1,000 employees had been dismissed in .New South Wales, Victoria .and South Australia in the last few weeks. “They said “the dismissals were a “.result df ,a decline in -the demand for motor vehicles since sales tax ‘increases ton new vehicles were announced last .month.
That comment is :not:mine. I :am manong s&B Government. A .leading article pub. lished in the .Sydney Morning Herald on the .same day referred ito a letter ;of warning that .had been addressed to the Prime Minister .’(Mi. Menzies!) by the Federal Chamber of Automotive Industries. The ‘editorial stated - “In a ‘letter of ‘commendable dignity and moderation, dme Federal Chamber of .Automotive industries has, .in .effect, warned the Prime Minister .that his mew taxes on the motor industry may go further than he Intended or wished. “ Unemployment”’, a word not used in the Setter, :is -.nevertheless the unspoken theme, .The jFedera-1 .Chamber :shows little desire .to exaggerate.
It is interesting to read the conclusions of the Sydney Morning Her did. Tt is -a very -strong supporter of this Government and is, “by no -means, partial to the A’us.tralian La’bour -party, lit also stated in the editorial -
What can “be said is that there was an unnecessary jerkiness in the .Government’s tactics. “What * Mr. Menzies did in March for political -expediency -was to correct retrospectively his spender^ Budget” df 1’954 and his ‘standstill Budget “’ of 1955 -as >well -as to anticipate ‘the .budgetary .proposals of next September when he will have lost his Senate majority. ‘This is a h’it-or-miss way of ‘guiding an economy, and ‘the ^Government, especially when some of its ,own .statements -have seemed on the flippant side, .may well be reminded .that it is.
That criticism came from one of the ‘public supporters of the ‘Government. I suggest that much -of the difficulty ‘has ‘been due to the fact that there ‘has been a vast expansion .of the motor industry, which is ‘one the most important elements in ‘.the private sector of the economy. Undue profits have been made by some of the companies. Nobody will deny that. ‘Let us .consider General Motors-Holden’s Limited as ‘an example. The company had a paid-up capital of £2,300,000. In u few years, .an amount of £2’7,i0.O0,lOO.O ‘has ‘ been put away to disclosed reserves, according to the balance-sheet that is -now available, apart from the payment of a huge record dividend, and I say ‘that .the profits of that company are unduly high. They hare run year by year, and have attracted ‘enormously wide public attention. They have .gwen companies .of this type power ito exert terrific pressure on supplies of labour ;and materials for their development and expansion. They exert pressure, also, on dollar reserves for plant and .material required ox expansion.
I am not saying that that expansion is not a good thing. It is good. I like to see the motor industry developing because it is important to the development of the nation and to its defence potential. But after nil is said and done, this Government has stood by and watched these companies grow and develop and exert the pressures that are part of our troubles to-day. The Prime Minister knew and announced the remedy himself on the 6th October, 1950, when, in a broadcast to the nation on rising prices, he stated that his Government would introduce immediately an excess profits tax. The accumulation of excess profits in companies such as General Motors-Holden’s Limited is one of the major forces of inflation, and has contributed to the exceedingly strong pressures and demands in the private sector of the economy.
The Government must take full responsibility for that situation. It must answer to the people the charge of deceit in relation to these taxes. In the budget that the Government introduced seven months ago, there was revealed a surplus of £48,500,000, which it had put away into a debt conversion reserve trust in advance. That was revenue surplus to its normal purposes. Obviously, the £48,500,000 was designed to bolster the States’ works programme if the loan market failed. Nobody can deny with truth that, at that time, the Government knew that about £253,000,000 in loans would fall due for conversion next year. I do not believe that that problem was overlooked. A few months later, knowing that these matters would- arise, the Government arranged a premature election. The House of Representatives was spilled out about eighteen months ahead of its time because the Government knew what would happen to it if it disclosed the full facts of the situation. Then when the Parliament met there were two elections imminent, one in South Australia and one in New South Wales, in which Government parties were involved. This Governnent waited until the 14th March, until those elections were over and the fate of the parties were known. It played politics with the economy of the country. Then it announced that it wanted £115,500.0’10 more each year from the people. What a frank admission of utter incompetence, without saying one word about motives and behaviour ! Within a matter of months the Government suddenly found it wanted an additional £115,500,000. Are not the members of the Government parties ashamed of a government so shortsighted, even putting it at that low level, and ought not they to be more ashamed if it is a fact that the Government concealed the matter from the people, if it kept it up its sleeve and played polities with the economy of this country in the interests of its own political parties!? That is my charge against the Government, because that is exactly what it did. I challenge any member of the Government to deny that.
The people of Australia know the facts. They heard the Prime Minister, in December last, say, “ Doctor Evatt, if he is returned, says he will increase taxes, but what have we done? “ He left it at. that. He proceeded to show what taxes his Government had reduced. Oan anybody deny that the only inference the ordinary individual in the street could draw from that statement was that Dr. Evatt, if he won the election, would in crease taxes, but that the Government parties would not? That was a clear and deliberate piece of deceit and misrepresentation to the people, and there is no denying it. I suggest to the Government that it is one piece of misrepresentation for which it will pay the penalty in the minds of the people. The people do not mind the Government making mistakes so long as they are honest mistakes, but they will not stand deceit and what, in my view, amounts to deception and dishonesty.
– Did not the Government say quite distinctly in December that this sort of thing was in thu wind ? Did not the Opposition endeavour to bring that matter up during the general election campaign? Is it not a fact that the people would not take any notice of the Opposition?
– Let me answer a lot of questions in some kind of order. The Prime Minister said in his economic statement that he had had discussions with the captains of industry and that he had asked them to do this and that. If they did not co-operate and conform, his
Government would be obliged to take other measures. That was the context in which he spoke at the time of the general election in 1955. He left the clear and inescapable impression that other fiscal measures - I remember his words quite well - would be necessary, but he did not awaken one note of warning in the minds of the ordinary individual of Australia who has to pay for his car. his toilet and shaving accessories and everything else. I cannot mention the other matters as we are dealing solely with the matters dealt with in this bill. I do nor, want to open up those other things; but 1 repeat that no word of warning was given, and there was deception. What reason was there for the premature election other than that thi; Government knew perfectly well that, the people of Australia would not tolerate, treatment of that kind? After all is said and done, they do not. forget thai ir was this Government, and the Treasurer in particular, who, when last wooing the people in 1949, said, “ The ra tes <‘f taxation can. and will be reduced “. We have seen them soar; we have seen The crushing burden of £209,000,000 of extra taxation imposed in one year. We saw it slightly relieved in the intervening years, but never completely wiped “lit, and now it has been added to to the nine of £115,500,000 per annum.
I draw the Senate’s attention to the Western Australian election, the first that rook place in Australia after the approach of the Liberal-Australian Country party was known to the problems of the country. By that time this deception was apparent and taxation had been imposed which struck right into the lives of the little people of Australia. When the people saw the huge profits of the great companies allowed to run free they knew that that was the source from which the economic pressure and demand was coming. It does not comofrom the little man on the basic wage; he does not exert any pressure.
– The Opposition also was not able to forecast this; it waa as incompetent as the Government.
– In the first place I say to the Minister that tha Opposition had no responsibility in thb matter, but I also say that it did face up to the excessive profits of those companies. We told the people of Australia that there would be more taxation, but this Government did not. We indicated what that taxation would be. We specified an amount of £50,000,000 to be collected in excess profits tax and £6,000,000 in land tax.
– The Leader of the Opposition’s whole complaint is that his party tried to forecast this to the public during the general election campaign, but the public would not take it seriously.
– We are not concerned at the moment whether the public took us seriously. All I can say is it did not take the Government parties very seriously. When the Prime Minister went, to Western Australia to help Ids colleagues over there he received his answer. I do not think that theme is worth developing too far, but I say that the Government will get the same answer the first time the people of this country have the opportunity to do something to it..
I conclude on the note that these proposals will not play a substantial part i,n halting inflation, but will add to costs and increase intiation. They will play a minor part in the other main purpose which the minister indicated in his second-reading speech, namely, to dampen down imports. I should like to refer briefly to the change of face on the part of the Government as to .the reasons for this taxation. When the Prime Minister made his statement on the 14th March last he drew attention to three main problems facing the country - inflation, the high-cost structure, and the overseas balance of trade position. The whole burden and lament of his speech was directed to curing those ills. But the Treasurer (Sir Arthur Fadden), about three weeks later in this Parliament, and outside it as well, spilled the truth. The Prime Minister did not say that the main problem, and the sole problem was a budgetary one, that the Government expected a default on the loan market and would have to find money from revenue for State works programmes of a capital nature. He did not say that the Government would have, perhaps, to meet next year a. colossal failure to convert £ £253,000,000 of loans: tha* w.ould fall due. But. the- Treasurer- acknowledged that.
– I think the Leader of the Opposition, is wrong there. There is reference, to it on page 9 of the Prime Minister’s statement.
– It may he possible: to find a. reference to it at the tail end; of, the statement.
– The honorable senator said there was no reference to it in the statement.
– The- Prime Minister dealt, with- every possible problem and- every possible question, but he highlighted! three- things and the budgetary position was not one of them. If he did refer to it he did so in the -most incidental and passing way. But the Treasurer, three or- four, weeks later in the Parliament, just threw that completely aside and told the; country quite frankly that the whole- problem was. a budgetary one ; that the Government had to find money to, finance State works- programmes-, this year -T that, he had. to. have the money m sight now to meet the loans which perhaps might: not be. converted next year.. He has- acknowledged, it quite frankly,, and apparently he. bas- convinced tha Prime. Minister, because, that ia what that right honorable gentleman: is> now telling the country.
– That is what the Prime Minister said in March.
– He- did not emphasize it in March; he1 put on it no emphasis whatever. I say that- it is: futile to> pretend’ that th-atf aspect of the- problem has’ not a bearing on the- adjustment of* the economy: It. worries’ and distresses- business people1 and’ lead’s- to unemployment. There wass no need! for the Government’ to add to the cost structure in this way. For the- reasons I have given,, and’ in the’ light. o£ the comments I” have expressed, the Opposition opposes this measure. We willi vote; against iri at tha* second-residing: stage, and I indicate that this opposition extends- also to* the- various: bills referred’ tor in Or.der of the L>ay, Nov % - Sales- Tax Bills: CN-os. 1 to. 9)1.
Senator HENTY (Tasmania) [4.4-6).- The bill before- the chamber will confirm measures– that have been in> operation for some time.. I w.as very interested in the remarks that were made: by the Leader of the Oppositions (Senator McKenna.). For the first time in history, he indicated what he considered: - using his own languageto be honest alternatives: which’. apparently,. Labour would- have: adopted if it were in office. He said that aa honest, approach to the problem, as far as the motor industry is concerned, would have been to impose, as an alternative to increasing sales tax,, a quantitative.- restriction on imports of motor cars. This, said the. Leader of the Opposition, would have dampened down the sale of. motor cars. But in the next breath, he. referred to the profits that are being made by the motor industry in Australia. I point out that the quantitative restriction of imports of motor cars would result in increased sales- of Australian-made, motor vehicles with.- consequential, additional profit, to the Australian motor industry. That is elementary.
The Leader of the Opposition also said that the. honest approach to the subject of hire pur-chase would have been-, not to- say that the Commonwealth, had: no jurisdiction’ over hire purchase, but to discuss it with the States-. In fairness,, the Leader of the Opposition did say that: this matter was raised at, the. last meeting, of the Australian Loan Council. But. what happened? When, the Premier of Queensland returned to his home State; at the conclusion of the conference, he reduced the; amount, of. deposit, insisted on in, connexion with, hire-purchase transactions, in that State. His; attitude shows, the degree to which, the; States will cooperate in relation, to hire purchase. That action by the Premier of Queensland, followed discussions in Canberra between the Prime Minister (Mr. Menzies.) and the State Premiers, about the difficulties, that were arising in. the loan market, which supplies money for States’ works programmes..
Senator .Marriott, .in ;a very interesting speech that -he .delivered in this chamber recently, advocated -a -more equitable method of sales taxation in the “outlying parts of Australia. .He pointed out that in Tasmania, for .example, ‘sales tax was calculated on prices which included freight -and other -charges. This is ‘a very important aspect of the matter .as -far .as the outlying parts .of ‘Australia -are concerned. For instance, package, freight, and .wharf charges increase the cost ‘of ;a motor teal* in Tasmania ‘by from £50 to £’60. In other words, -the selling price -.of a (certain make of .motor car in Tasmania is from .-£06 £60 .higher than the price on the ma inland. Sales tax -at the :rat( of 3.0 per ‘.cent, adds another £2.0 to ;£25 to the -cost of the vehicle. This illustration -in -relation to Tasmania applies with equal force to Western Australia ‘and Queensland. -Of :course, this anomaly has existed since the- inception of sales tax, but it now imposes ra -very heavy burden on the people because ‘.of increased ‘costs, particularly freight charges. The ‘additional sales tax collected on the sale ;of an ordinary wireless set in Tasmania amounts to about £2 10s. because of the proportion of freig’ht and other charges included in the price. Successive governments - both Labour and non-Labour - have ‘been unable to solve this problem. As the Leader of the Opposition rightly pointed out, we -must exercise .great care in adopting alternative -measures which could cause an economic “upheaval in the trading community. I have always thought that sales tax would best be levied at -the source of manufacture, and that the tax should be .collected ‘from the manufacturers.
Senator Marriott, whose comment* I value, outlined some of the difficulties associated with sales tax, .and pointed out that profits were made both .at the wholesale and retail levels. I wish to point out that he is quite correct with regard to retail “business, “but not quite so correct about wholesalers. In fact, the position with -regard -to wholesalers is really quite the reverse to that -which ‘the honorable senator put forward. A whole.saler arrives ‘at ‘a -selling price, :and when he sells “‘his ‘goods The pays the ‘appropriate tax on the ‘sale price ‘of “the .article. The Government, therefore. reaps the benefit of a =sales ta.x -on the -wholesale profit, and the wholesalers do not get ‘a profit from the tax -at ‘all. That is ‘because “the selling price of the -wholesalers’ article includes cost plus “profit, -and ‘the sales ‘tax imposed (on that article goes wholly to the Government. However, according to _ normal “business practice, a retail .trader arrives -at lis ‘costs - which include all charges, one of which is sales tax - and then Tie adds his normal margin of profit to the cost -of ‘the goods plus all -costs. “Naturally he -would ‘do that.
– -Wot naturally., dishonestly.
– No. In .reply Jo Senator Kendalls interjection, 1 may ask whether it would not .be better for the consumers if there were no sales tax at all.
– It would be better for them if there were no taxes whatsoever.
– I<do not know how ^Senator ‘Grant could expect this salary every pay-day if the .people paid :no taxes at all, I .suggest that it is not out -of place in this ‘debate to ‘outline the system of sales taxation, and to indicate the immense burden that the sales tax, and its .collection, .places upon the business .community throughout Australia.
– An additional burden is placed on the business community “because of the frequent changes in ‘the sales tax.
Sena*- HENTY. That is so. At present we have five categories of goods, each of whian is taxed differently. We have the 30 per cent., 1?ke 25 per cent., the 16jj- per cent., the “12-£ per ‘Cent, and the 10 per cent. groups, and all those who are in’ business have to be , aware of the articles that fall within those categories and of the sales taxes applicable. Because of continual changes of staff in most offices, businessmen find that dealing with the sales tax and collecting it on behalf of the Government is an immense burden. Moreover, if a wholesaler charges the incorrect rate of tax, however mistakenly it may have been done, he suffers for it. At present the Taxation Branch, because of shortage of staff, checks through the sales tax records of wholesalers about once every three to five years. A great deal of water has flowed under the bridge during the time between checks, and enormous numbers of sales have been made. However, if a sales tax inspector discovers that the tax has been undercharged - even on one item - he says to the wholesaler, “ You, as agent for the Commonwealth, have failed to charge the amount that you should have charged. You should have collected another £50 or so on this particular transaction, and as you have not collected that money you must pay it yourself.” I ask honorable senators who have criticized my argument, to indicate how that additional cost to the wholesaler can be passed on to the consumer. It cannot be passed on because the wholesaler at that “atc stage hr.s ‘o.–t all trace of the item.
The collection of the sales tax is one of the heaviest burdens on the wholesale trade in Australia as wholesalers do not know what their liabilities are because of the constant staff changes that take place. Wholesalers train their staffs with the best will in the world, in the complex matter of the application of the sales tax, but female staff get married, bless them, and the new ones who take their places have to be trained in the work. During the change-over periods mistakes are made, yet if wholesalers do not charge the correct amounts of tax they have to provide the money. Again, if an employee charges more than the wholesaler is entitled to charge, the excess sales tax must be handed over to the Government. Wholesalers are not even allowed to balance overcharges against undercharges. Sales taxes are not collected until the end of the month, so that the wholesale trade has to finance the sales tax for a whole month. That is another burden to be carried. Staff has to be found and trained to do the work and there is a contingent liability on the wholesale trade in respect of any errors made by the staff.
I suggest that the wholesale trade makes a very considerable contribution towards the cost of government. The sales tax must be cheaper to collect than any other tax that has ever been imposed. The Government gets everybody else to do its work, and then fines a person if he or his employee does not do it correctly - even though the errors have been made quite innocently and through lack of trained staff. I know that the Taxation Branch does the best that it can, and that because of the constant public agitation to keep the Public Service at a low level, the branch is understaffed. Nevertheless, the burden on private individuals is very great. I suggest that sufficient staff should be made available to make proper checks at frequent intervals, because I do not think that any one would suggest that a trader should not know the liabilities that he may have to incur. Of course, traders do not always make honest errors, and there have been some glaring cases of dishonesty with which the Taxation Branch has dealt very severely indeed. Those who set out to beat the Taxation Branch receive short shrift. However, one prolific source of errors, quite honestly made, can be overcome by more frequent inspections.
In reviewing the sales tax the Government has acted very soundly in various ways. One such action was in maintaining the tax rate of 10 per cent, on household furniture. Apparently the Government has realized that in these days of high costs, any increase of tax in this category would place heavy burdens on young people who wish to get married. I notice also that the Government has maintained the exemption on Braille watches and watch parts, as a concession to the blind. That is a very sound move, and the Government is to be commended for it. The fact that the tax on some items has been increased from 16$ per cent, to 25 per cent, will not weigh very heavily on the community because most of the items upon which the tax has been increased are not necessaries. Jewellery and imitation jewellery, although, pretty baubles, are not necessaries. On the other hand the Government has exempted knives, forks, spoons, scissors and other utilitarian goods that, come within category A. Again the Government should . be commended for realizing that articles necessary for ordinary living should be exempted, or taxed lightly. Of course we all would like to see everybody have all that he wants, but in these schedules the Government has carefully kept necessary goods in mind, and has ensured that they shall not be taxed heavily.
Next, I wish to comment on what 1 consider to be rather a novel alteration of our outlook on sales tax, and that is that for the first time, as I see it, sales tax has intruded into the fiscal policy of our country. The increases of sales tax that have been applied to the motor industry - and they are high and heavy - are necessary because motor cars and motor spirit, if my memory is correct, account for £140,000,000 of the value of our total annual imports from overseas. Although it is regrettable that this industry has to be singled out, it represents such a huge proportion of our imports from overseas which, incidentally, our exports are no longer paying for, that this course has had to be taken. Therefore, the sales tax rate of 30 per cent, on motor cars forms a part of the Government’s plan to check inflation and to reduce demand for imports.
Although the matter to which I am about to refer is not strictly relevant to the bill, it was commented upon this afternoon by the Leader of the Opposition (Senator McKenna), and, perhaps, I may be permitted to do the same. There is another great drain on our overseas funds, particularly our dollar funds, and that is in respect of profits which are sent out of the motor industry to the United States of America. T join with the Leader of the Opposition in saying that I think it is a grand thing to see this great motor industry developing in Australia, but we cannot overlook the fact that, in these days of a shortage of dollars, the remittance of dividends from Australia represents a serious drain on our dollar resources. I should have thought that, as these profits have been made behind our protection wall - and I think that that is worth repeating - perhaps the best way to deal with the position, would be for our fiscal policy to be looked at and for us then to say, “ Bight. Now we can reduce the duties to create greater competition within Australia “. I think that that would be far better than allowing a socialist government to get its grimy hands on the earnings of these industries. We should say, “ We must examine our fiscal policy and reduce our duties on imports, and thus bring down the costs of those commodities in Australia “. I think that too much reliance is being placed on the protectionist policy of Australia for revenue purposes. Surely, we impose these duties to protect our industries in order to allow them to get on their feet. Once they are established and making good profits, or it’, in the opinion of many people in the community, they are making excess profits, surely the right thing is to say, “ These goods are being made under protection. We shall reduce our duties and allow keener competition to come from overseas “. Prices would then come down and there would be more active competition, within Australia. As I have said, this matter is not very relevant to the sales tax legislation before the Senate, but as it was traversed by the Leader of the Opposition I thought it worth while to put forward my views.
There is only one other point to which I want to refer, and that also was mentioned by the Leader of the Opposition. The honorable senator said that only now are we making it clear to the people of Australia that it is because of the lack of loan funds needed for State works that these measures have been introduced. I do not think that that is either a fair or a just charge, because anybody who reads the three main speeches made by the Prime Minister (Mr. Menzies) - that of September last, his policy speech at the recent general election, and that of March last - will see clearly the pattern that the Government’s policy is taking. .Furthermore, it will be more than clear that these are only temporary measures, to operate from now to the 30th June, and that when the next budget is introduced the position will be re-examined in the light of the financial situation in Australia. I am confident that an examination of the financial position! at that, date will- lead’ the. Government in the forthcoming, budget,, to take whatever steps it thinks proper, foi; the protection- of the finances of the: Commonwealth/.. The. people were, told plainly,, in September, last,, during the general-, election* campaign, in March last, and. again as recently as yesterday, tha* these-, things were: ahead of. them and’ that there- was more to: come. I. do- not think, that, the Government, need, worry about, any- hollow charge that it did not. inform the people, because the fact, that it did so is: there for all to see: I am confident that the Government will take: proper steps to protect at all times, the currency and the economic position of Australia.
.- I am sure that Senator Henty is a very happy man indeed now that his speechhas; concluded, for the reason that during the last quarter of. an. ho.ua- he did. not know, where his words, were, leading him. He was* hopelessly lost in his theories and statements.. However,, -he had. one. complaint, tor make during his. discourse-,, and that was. in respect of the methods that have been adapted. By the. Government, regarding the collection of sales tax. May r point out to. the. honorable, senator and to other Government, supporters, that if they wish to seek redness in regard, to that matter they have the remedy in their own hands. They may approach the Government, and those in. charge of the: Treasury and’ say te them,. “ We; are- not satisfied about, the- method’s; that, ha ve.- been- adopted over, the- years in respect of the- collection of. sales tax, and we would’ like you to alter- the. system so> that the - Government itself can collect ali the tax “. I suggest” to Senator- Henty that- instead, of coming into, tibia chamber and- voicing his* corn- plaint about-, that matter,, he- should; take: the complain.* into the: pasty room and; endeavour- to obtain redress there-..
I asn not- in the least astonished’ that this; legislation is before the Senate to-day, because I am- one’ of many- people in Australia who are of the opinion that’ theGovernment’ is merely running- true tff form in bringing’ down a- measure relating to> indirect’ taxation. The Menzies* Government is the champion- of indirect’ taxation, and later I shall tell honorable senators just why it stand’s- for indirect taxation, particularly Chair form of vo- dia;ect: taxation known as sales tas. The record of the Government in’ respect of sales, tax; isi deplorable, taken over the yearns:. In the. fieldi of sales1 tax it has danced about like a- will-o’-the-wisp. It has. changed; the categories’ several times,and it has. amended the. rates of sales, tax.. Tit: has; reviewed ite work, and then goneahead. It has- not been satisfied, with, the classifications, and. has introduced additional classifications.. It has- lowered therates and- then raised- them, and it has gone on like that as a kind- of royal game. I propose to indicate- just what the Government has done in regard to rates of sales- tax over the’ years.
Ti mention;,, by way of interest, that sales tax was fi-E3t introduced in 1930. It appeared that when, the government, of. that day introduced, the. tax it did so- for tha purpose of getting Australia, out. of the economic, depression in which the- country had lived- for saver al years-. Therefore, sales tax must be a very versatile form, of. taxation indeed. It can be used by one. government for the purpose, of: getting Australia out. of- a. depression,, and by another government, as at> the- presenttime, to alleviate, the effect’s: of inflation.. To-day, we. have the Government coming along, and saying,, “ We have inflation in Australia., We. have to; increase the. rates’ of sales, tax so that, we may,, in some way or. other, allay inflation “.. There,, we have the contrast. When this form of taxation was introduced initially, years: ago, the government of the day said, really at the request of a’ very notable visitor- to- Australia, “We have, to do something’ about depression, and the- bestthing to do is- to- introduce sales* tax “. It was introduced,, audi it has* functioned ever sinGe. In 19-30-31, the rate of. sales tax was; only 2£ per cent., and) ifr operated from August, 1-930, to July; 19.33!. Then ifr was increased to1- 6’ per cent., and that rate operated from1 July; 1931, fro October, 1933.. The rate was then reduced” from per cent, to 5 per: cent, and’ operated until September,. 1’93’6. Actually, that was- the longest term that any rate of sales tax applied. It was then- reduced to 4 per cent, and that- rate operated* from September,, 1936, to September, 1938. Then it was* increased to 5 per cent, and that”- rate obtained until 1939. The- war years then came and an increase in any form of taxation during that period was fully justified by whatever government imposed it. Early in 1940 the rate was increased to 8^ per cent., and that rate applied until November of that year.
Then, for the first time in the history of Australia three classifications of goods were introduced and various rates of sales tax applied to them. Respectively, those rates were 5 per cent., 10 per cent., and 15 per cent., and they operated until 1941. A variation was then made, the 15 per cent, rate being increased to 20 per cent., that rate remaining until 1942. Subsequently, the three categories were reduced to two, one of which attracted sales tax pf 12^ per cent, and the other of 25 per cent. In 1943, three classes of goods were again introduced, and the rates of sales tax on them were, respectively, li per cent., 12^ per cent, and 25 per cent. Those rates operated until 1946, when the categories were again reduced to two, bearing rates of sales tax of 10 per cent, and 25 per cent.
I wish to direct particular attention to the period commencing in the year 1949, because of the remarks made by Senator Henty. In that year the two classes of goods attracted sales tax at the rate of 8^ per cent, and 25 per cent., and those rates obtained until 1950. In that year the Government introduced, for the first time, four categories of goods, the respective rates of tax being 8^ per cent., 1.0 per cent., 25 per cent, and 33^ per cent., all of which operated until 1951. Then, the Government not being satisfied, extended the categories and the respective rates of sales tax were 12£ per cent., 20 per cent., 25 per cent., 33-J per cent., 50 per cent, and 66& per cent. Those rates operated until 1952. Unquestionably, the Government has had a picnic in the field of sales tax. In 1952, it reduced the number of categories to four and fixed the rates of sales tax at 12-J per cent., 20 per cent., 33^ per cent, and 50 per cent. Over the years that the Government has been in office it has filched from the people, in sales tax, -no less than £480,000,000. No government in Australia is likely to eclipse that record of this Government.
Senator Henty said that certainly the sums the Government has collected in sales tax during the past five or six years have exceeded the amounts previously collected, and he attributed that fact, to the prosperity in the community, the greater sales effected and the high level of prosperity now existing. It is always a ease of prosperity having occurred yesterday and prosperity which will occur to-morrow, but never present prosperity for the people of Australia. The Government’s collection of sales tax has been high because of the high rate which the Government has made applicable to necessary and essential goods in the daily lives of the people. Can any one say that ladies to-day could do without powder for their noses, or other commodities to which people have become accustomed over the years? They cannot be put aside immediately and disregarded. Senator McKenna mentioned the sales tax payable on safety razors, tooth-brushes, shaving soap, toilet soap and articles of that nature. I know that the Government does not wish the males of Australia, to shave their faces or get their hair cut. It wants them to let the wool fall down over their eyes and grow into their ears so that they cannot see what is going on or hear what is being said.
I shall not discuss the various classes of goods which attract sales tax, because they have been dealt with on many occasions and I do not wish to weary honorable senators. However, I shall mention one or two items which attract sales tax, but the fact that they do so may be unknown to many people. Are honorable senators or the general public aware that table salt attracts sales tax? It must be classed as a food. On the other hand, stock licks, with are made of salt, do not attract any form of sales tax.
– How much does the Government collect in sales tax from table salt?
-If Senator Scott has the interests of the fruit-growers of Australia at heart I ask him why do fruit pies attract sales tax when meat pies do not? He might try to find the answer to that conundrum before he makes his speech. It is not difficult to understand why the Menzies Government prefers indirect taxation to direct taxation. It knows that indirect taxation can be applied in a moderate way without the people being fully conscious of its existence. They do not know when it actually applies, and consequently the Government willingly uses this form of indirect taxation whenever possible. How many honorable senators know what rate of sales tax they pay on goods they use daily? I am certain that neither many honorable senators nor many members of the public know, when they go to an hotel bar to have a drink, what they pay in excise. How many people know how much they pay in customs and primage duty when they purchase a car manufactured in another country? They are quoted the sale price, but they do not know how much indirect taxation by way of sales tax is included in it. Sales tax can best be described as a “ middleofthenight “ form of taxation. When people go into a retail shop they do not know how much sales tax is included in the price of the article they buy. They simply pay the price and take the goods and use them. Income tax is in an altogether different category. The taxpayer knows how much he is paying. The great army of wage and salary earners in Australia have the amount shown on their weekly or fortnightly pay envelopes.
I mentioned a while ago that when people habitually use certain goods they forget what sales tax they have to pay, and it i3 for that reason that this Government welcomes hidden forms of taxation. Everybody knows that at certain times any government might want additional revenue, but instead of acting in a forthright manner towards the people of Australia, this Government, when it wants a few more million pounds, surreptitiously increases sales tax, excise and customs duties. Because the people do not realize what they are paying, the Government goes along merrily extorting this extra revenue and then, when election time comes around, it plays about with sales tax. One can almost bank on it- that just prior to an election this Government will reduce the categories on which sale? tax is to be charged. This enables it to say to the people of Australia, “We have reduced indirect taxation”; but, immediately upon being re-elected to office, to use a mechanical expression, it jacks up the rates of sales tax once more and jacks up the price of beer by increasing excise duty and other taxes. The people have become so confused about what indirect taxes they pay that the Government enjoys a certain amount of immunity. I have no doubt that if the rates of sales tax were moderate very few people would know they were paying it at all ; but this Government is acting immoderately by increasing the rates of sales tax at a time when it is dangerous to play about with any form of indirect taxation at all.
Of course, the full effects of these proposals have not been brought home to the people yet but I have no doubt that within the next month or two they will be felt. High rates of sales tax must have a serious effect upon the sales of manufactured goods, as can be borne out by reference to a report furnished to the Parliament by the Attorney-General and setting out the true position with relation to the number of sequestration orders and orders for the administration of deceased estates in Australia. I should say that the increasing number of sequestration orders is due primarily to this Government’s indirect taxation policy. The report I have mentioned sets out that in 1945-46 the number of sequestration orders and orders for the administration of deceased estates totalled 114. By 1946-47 they had increased to 206. In 1947-48 they had jumped to 271, and in 1948-49 to 302. It will be noticed that the number is increasing each year. In 1949-50 it increased to 333, and that, I remind honorable senators, wa3 the year in which, according to the Government, we started upon an era of prosperity in Australia. In 1950-51, the year of our greatest prosperity, according to the Government, 308 sequestration orders were granted. By 1951-52 the total had increased to 382, and by 1952-53 we were getting into real trouble. In that year, 636 orders were granted. And, as sales tax goes on the rampage, manufacturers are finding it move and more difficult to sell their goods. In 1953-54, 6S7 sequestration orders were granted and that number increased to 769 by 1954-55. I repeat that these amazing increases took place during an era of alleged prosperity about which the Government never tires of speaking. I leave it to the people to judge for themselves the serious effects that sales tax and other forms of indirect taxation must have upon the incomes of all people, particularly the wage-earning masses of Australia.
There are occasions upon which I like ito be kind to the Government. I admit that at times the Menzies Government is generous. I am thinking now of its liberality in connexion with the Commonwealth oil refineries, and of how it wiped off approximately £500,000 in sales tax overnight to benefit Australian National Airways. That was an extremely generous act on the part of the Government, but honorable senators will notice that whenever the Menzies Government is in a generous frame of mind it always thinks of its best supporters. Then the whaling station established by the Australian Whaling Commission in Western Australia comes to mind ; but I get away from that quickly because, having inspected whaling stations during my lifetime, I know how they smell. I pass on to the agreement made between the Commonwealth and the New Guinea goldmining company in connexion with the harvesting of unexploited timber fields in the Bulolo Valley. The full contents of that agreement have never been brought to light, but it was another generous act on the part of the Menzies Government. I mention these matters now because I propose contrasting them shortly with the application of sales tax to goods purchased by salary and wage earners. We all know how generous the Government was to the overseas shipping interests and the interstate shipping companies of Australia, in allowing them, willy-nilly, to increase freights and fares to whatever level they wished.
I come now to its treatment of the wage:earners who are worst hit by these high rates of sales tax. In the first place, the wage-earner employed in manufacturing goods is threatened with unemployment because of reduced sales brought about by higher rates of sales tax. The Government merely says that if such a person loses his employment he can move to another job; but there is a limit to this moving from one class of industry t<> another. It is all gobbledegook to say that sales tax is being increased in ord;;’ to curb inflation. Why, it is simply part, and parcel of the Government’s financial policy, as is proved by the fact that from the time it came into office it started *io increase sales taxi It has kept sales tax at a high level and will continue to do so while it is in office. As I mentioned earlier, these high rates of sales tax strike at the living standards of the people, and that is the feature of the operation thai gives me so much concern. The Australian Labour party, to which I belong, believes that sales tax should be abolished, but I am a man of reason. I know that if a Labour government were elected to office within the next three years, ii would have difficulty in abolishing the sales tax within a year or two because of the financial structure of the Australian economy. However, the aspiration of the Labour party is to abolish sales ta.x because of its inherent inequality. In the final analysis, the poorest person has to pay the same rate of sales tax as doe> the wealthy person.
The proposals of the Government strike at our living standards, lt proposes to tax essential goods, but thi’ Government will not be deeply concerned about that. The tax is fixed on many categories of goods which the people must have, and upon which they must pay this impost. It is time the Government considered how it could get off the backs of the people. It has been on them long enough, and it should now allow the. people to live a freer and easier life. Honorable senators might ask how the Government’s proposals will affect the living standards of the people. If we look around, we can see how people buy goods they want. Senator Henty has said that Australia is enjoying s great period of prosperity, and that, the people are able to go into shops and buy what they want. He indicated that money was no object. I invite honorable senators to consider the course that people adopt w!:en they go into a shop to buy something they want. I do not 1’now selling conditions in all States, but T know the position in Queensland, and particularly in Brisbane.
At present. Brisbane is being flooded with hire-purchase sales. “Retail stores arn advertising goods of all descriptions vhich can he obtained under the hi repurchase system. They do not even ask i’nr a deposit on some of the goods. People ‘>f standing, or those who have some sound form of employment, can take the goods away without paying any deposit. Many of the .goods they buy are subject to sales tax, and that is added to the debt they owe to the seller of the goods. That is a serious aspect of the hire-purchase system. .Some of the big retail stoves .conduct their own hirepurchase companies. They have a store where they sell goode by retail and, in another portion of the city, perhaps not far away, they conduct a credit or Gash order business. The customers go to the cash order houses .and negotiate for an advance. They have to pay the rates of interest that, are applicable to the loan, and they take the cash orders to the retail store of the company to make a purchase. They have to pay interest on the sum borrowed and on sales tax as well, because the sales tax is included in the purchase price.
This matter is becoming so serious that we cn.11n.ot sit idly by and view it with complacency. This is not merely another aspect of the Government’s responsibility. It is something we must consider seriously, because young people in the community, who wish to establish homes and furnish them properly, have difficulty in leading normal lives. They are being forced into the greedy clutches of the hire-purchase companies. These traders are the greediest in the community. Young married couples are being forced into their clutches while the Government reaches out its sticky fingers ro collect all it can by way of sales tax. Last year, the Government collected £100,000,000 in sales tax. That was t’8,000,000 more than its estimate. This year, because of the increased rates of sales tax, the Government will collect, mere than £100,000,000.
When we hear the Government’s fantastic claims that sales tax will help to quell inflation, we are listening to something that borders upon the humour of n Gilbert and Sullivan opera. The Govern mont proposes to force money into its coffers by means of higher sales tax rate.?. Then the Government will spend the money. It proposes merely to transfer the money from one spending agency to another and, meanwhile, the people are becoming poorer and poorer. The Government’s expectations in connexion with sales tax and other forms of taxation will not materialize. It is merely reverting ito the old riddle : If one carpenter -can build a house in six weeks, can six carpenters build the same house in one week? The spending power of the people has already been reduced. The moderate drinker feels that the Government is getting at him every time he goes into a public bar to buy a drink. If many persons realized fully how much sales tax they were being called upon to pay, they would not buy many goods, no matter how essential they were. I look forward to the day when the sales tax will be one instrument that will be used by the people of Australia to vaporize this Government.
– It has become almost the acknowledged attitude of the Opposition in the Parliament to do nothing but criticize any legislation that is designed to raise revenue. During the discussion on the sales tax proposals, we have seen a sorry spectacle on the Opposition side. The Opposition, disunited as it is, has no constructive policy to replace that of the Government. No honorable senator on the Opposition side has produced a sound theme to develop while he has been decrying the Government’s proposals and its actions. The people of Australia must be thankful that the Opposition is not occupying the treasury bench. Senator Benn has accused the Government of changing the incidence of the sales tax from time to time. He gave his version of the history of the sales tax, but it was entirely inappropriate to the current Australian scene. Any government that is worthy of its salt will change the incidence of taxation. “Lt will alter the categories, into which the taxes fall, to suit changing times. We know that Senator Benn remembers the days when a Labour government was in office. Australia, during part of that time, was passing from (he war years into peace. We bad black markets, restraints and restrictions and class hatred was preached. In 1949, the period of stagnation ended and this Government was elected to office. It had to change some forms of taxation to suit the times and the rapid development of the nation.
– 1 rise to take part in this important debate on the series of sales tax bills before the Senate, the passing or non-passing of which will either confirm or reject the actions proposed by the Government in its supplementary budget of the 15th March. Since the announcement om that day of the Government’s intentions a lot has been said and written ou the subject, particularly in respect of the increased taxation imposed. The questions we should ask ourselves when we are about to confirm or reject these measures should be on a plane above the level of party politics. We should view the situation and decide whether the Government’s policy is right. If it is, it should be acceptable to the Senate; and if it is wrong and we can suggest a better alternative, it should be rejected.
I suggest that the first question that, should be asked is why the supplementary budget was introduced. A precise answer to that question is that the economic situation of the Commonwealth of Australia demands certain action in the interest of the people and of their future prosperity. Another question that can rightly bc asked is why the Government should increase sales tax, well knowing that any form of taxation increase will bc unpopular with the people and will be most unpopular with those whose pockets a r<? touched. However, the sales tax imposed by these measures will hit the pocket of every tax-payer in Australia. Why should the Government do that? My own view is that the first reason is that the Government requires additional revenue. It does not require it altogether for its own particular purposes, but in this era of uniform taxation when the Commonwealth has practically the solo responsibility for raising revenue, the Government needs revenue for the States. The increasing cost structure, which we are all bound to admit exists, was bitting lbc Statu Governments hard and it was inevitable that they would finish up tine year with deficits. Budgeting for deficits has an inflationary effect upon the economy and, therefore, this Government has decided that it must obtain more revenue so that these deficits will not arise at the end of the financial year.
Secondly, the States have embarked upon a programme of public works, and as is well known, the loan market is not providing the funds necessary to continue those works. That is no fault of the Australian Government ; it is inherent in the economic climate which we are experiencing. The money which should be available for Commonwealth loan funds is being gathered in for other developmental purposes, for private enterprise and other such organizations which are paying a higher interest rate than it would be economically sound for the Government to pay on the bond market. In order to avoid the cessation of public works during the last part of the financial year, and in order that State Governments will not have to break contracts into which they have entered, the Government has decided to provide the money from revenue in lieu of loan funds. Having decided that, I think every one will agree that the quickest method of obtaining revenue during the last few months of a financial year is to impose a tax on the items that the Government proposes to tax in these measures.
Again, one of the economic problems facing Australia is the balance of payments. When people criticize the increased sales tax on motor vehicles, spare parts and tyres, they forget the undeniable fact that Australia is spending a terrific sum of money on those goods which are imported from abroad. During the last financial year, out of a total imports value of ‘ £ S84,000,000, £152,000,000 was spent on those goods. That rnakes it clear that cars, oil, petrol, tyres and spare parts comprise a largo proportion of our import costs. The Government has increased taxation on those articles. It has increased the excise duty on petrol, in order to dampen down expenditure on the importation of those things in an effort to balance our overyeas payments. Of course, wc all know that the only long-term real cure for the balance of payments problem is to increase exports. The Government, having taken short-term action, has a great duty on its shoulders to do all it. can - and I understand it has very good plans laid - to help our export trade. Only by increasing our export trade will we get out ©f our troubles.
Another reason why we should support these sales tax measures is because the Prime Minister, in his economic statement, assured us that they are also anti.inflationary ; and well-informed authority holds that taxation which diverts the expenditure of money from non-essentials to productive works is anti-inflationary We need more production, and if we can raise the revenue from a tax on nonessential items and put it into productive works, we shall help to solve one of our really urgent problems, namely the need for increased productivity. If revenue is not raised by way of these extra taxation meaures, and the loan market will not supply the funds necessary to continue the public works programmes of the State governments, I suggest that the only way to provide the requisite money is by what I call the Labour way, which is, I presume, to inject inflationary money, in the form of treasury-bills, into the economy. Eather than do that, this Government, I am glad to say, is prepared to bear the stigma of increasing taxation two-thirds of the way through the financial year. It is prepared to do that for the good of the people at the risk of its own popularity.
If it is agreed that revenue is needed before the end of this financial year, then an increase in sales tax is the obvious method of obtaining that money before the 30th June. It could not be obtained through income tax, because that would not be paid until the next financial year; and sales tax, in the field of Commonwealth revenue, as far as being a revenue spinner for the Government, ranks third with income tax and excise duties. So the Government has chosen the second and third ways - that is, excise and sales tax - in order to obtain the additional revenue that it requires. When the last budget was brought down, the Government expected that it would collect £126,000,000 in sales tax in this financial year. By the measures now before the chamber, it expects to collect an additional £30,000,000, which is a goodly sum even in terms of Commonwealth finance.
I admit readily that the Senate, by approving this and allied legislation, will place collective responsibility on the Cabinet and the various departments of the Public Service. It will also place a great deal of responsibility on the State governments, whose departments will expend some of the revenue to be raised by these measures. By passing this legislation, the Senate will say, in effect, to the several governments, “ It is now your responsibility to do all you can, first, to increase production - that is, to expend the additional money you receive for productive purposes - and, secondly, to cut out all wasteful expenditure. You should examine the position carefully and save money wherever it is possible to do so. We, the Parliament of the Commonwealth of Australia, are raising extra money, by hitting the people fairly harshly, but we say to you that you must see that it is spent on productive items and you must ensure that waste is eliminated “. Without issuing any threat, but merely expressing my own views on this matter, I say that I. cannot conceive that this Senate will agree, when the next budget is introduced - probably in August - to increase direct or indirect taxation unless in the intervening months production is increased and every form of governmental waste eliminated.
Furthermore, the Government must exert every effort to increase exports in order to correct our adverse balance of trade. I believe that if, in the next few months, the Government acts courageously and wisely, the people will concede that the distasteful taxation measures, which have been introduced in order to remedy our economic ills, were justified. Of course, they are not happy about them now, but they have a certain amount of faith in this Government. Economic medicine was given to them in 1951, when they were just as worried and hurt as they ave to-day, but the people acknowledged subsequently that the Government had acted wisely in the interests of national security and prosperity. The Government should one more prove by wise and courageous administration that it is justified in introduring the? p distasteful taxation men 911-p T .°ay quite openly and without any equivocation that, although I have faith in the Government, it must prove to the people that the faith they reposed in it was well founded.
The introduction of sales tax bills affords to honorable senators an opportunity to discuss the higher aspects of Government policy, as well as to deal with specific items mentioned in the legislation. I often wonder whether, when Ministers, departmental officers and the Parliamentary Draftsman prepare measures to increase taxation, they devote any time to considering whether it is possible to tidy up the legislation for the benefit of the people who will have to abide by it, and to make it easier for the taxpayers to pay the taxes that the measures impose. I believe - although I have no proof of what I am about to say - that not enough attention is given to the wishes or the wellbeing of the taxpayers. I wonder whether taxation officers listen to oft-repeated and justified complaints by business people who have to pay the taxes, and whether they take steps to improve the taxation law by making it easier to administer.
This afternoon, Senator Henty gave the Senate a very wise discourse on this subject. The honorable senator has had considerable experience in business life as well as in politics. I do not propose to go over the ground that he covered, but I hope that the Minister and the departmental officers concerned will take heed of his remarks, and see whether things can be made easier for the people who collect sales tax for the Government. At present, the collection of sales tax by the bur mesa community is a difficult and costly matter. The Government obtain-“ their services free as tax collectors. I am unable to advance a constructive thought on this aspect of the matter, but I commend it to the earnest attention of the Government.
The nine bills before the chamber increase the various categories of sales tax by certain amounts. I believe that if really solid and sincere work were put into this subject, sales tax legislation could be reduced to one measure. Heads may be shaken and nodded, but I am convinced that if this were done the administration of our sales taxation would be simplified, and the cost of administering it reduced. If there is one thing we should do, it is to cut down the cost of administering legislation enacted by this Parliament. Care must bc taken to ensure that the legislation is watertight, so that no one will be able lawfully to evade payment of tax. In order to simplify the sales tax legislation, I commend to the Government consideration of a suggestion that 1 shall make. At present, there are five categories of sales tax, namely, 10 per cent., 12-A per cent., 16§ per cent., 25 per cent., and 30 per cent. I suggest that the metric system be adopted, so that if it is necessary to impose sales tax at various rates on different categories of goods, rates of 10 per cent., 15 per cent., 25 per cent, and so on would be levied. I believe that this would simplify the work of those who collect sales tax on behalf of the Government, and it would also reduce the cost of administering the legislation. After all, the countries of the continent of Europe have adopted the metric system, and they have had far more experience in this field than we have had. I honestly believe that that suggestion should be given careful consideration by the Government.
Only yesterday we were debating in this chamber the economic statement of the Prime Minister (Mr. Menzies), and during the course of the debate those of us who spoke had to refer to various aspects of the statement. Among the Government’s proposals is an increase of the sales tax, and that proposal was debated last night by myself as well as other honorable senators. Therefore, I shall not weary the Senate with a repetition of what I have already said, but I do want to emphasize that, as Senator Henty pointed out to-day, the consumers in Tasmania are labouring under a great disadvantage because of the increased sales tax. I am quite certain that it costs the average Tasmanian consumer comparatively much more every time the sales tax is increased, than it costs other Australians in our mainland towns and cities.
I am of the opinion that there should be some means of overcoming the disabilities of businessmen caused by the uncertainty that arises on account of sudden and unexpected increases, or decreases of the sales tax. I fully realize that the Government cannot give warning in advance when it intends to increase the sales tax, and that all such increases have to be announced suddenly one evening so that they may be put into effect at the opening, of business the following day. But where the Government and the public servants are in error, is that they do not realize how hundreds of thousands of small business people, are affected by sudden announcements of sales tax variations. Shopkeepers throughout the country wake up one morning and hear an announcement made during the news session of the Australian Broadcasting Commission that sales tax and excise have been increased. Many of them open up their businesses, and in the belief that they are acting quite legally and are being completely honest, they charge their customers from then on the increased prices. If they have good stocks they will gain quite considerably from the increases. But’ there are others who believe that they will not have to pay the increased charges until their current stocks are used up, and so they do not increase the price of their goods.
In that way uncertainty develops among the traders. Some people fear that they may be acting dishonestly, and others worry because they have lost out on making a little extra profit that they have not anticipated. There should be some means of informing the business community of the right way to act. For example, if the excise on tobacco is increased on a given date, the retailers should be notified when they are to charge the increased price. As many people do not know what to do, it is up to the Government, which imposes the taxes, to let them know the right way to act.
I am prepared to support the legislation that will increase the sales tax, but I re-iterate that the Parliament, by passing this legislation, will put a grave responsibility on the Government. It is the bounden duty of the Government in the months that lie ahead to govern wisely; to spend its increased revenue - if it must spend it - wisely ; to encourage the increased export of our goods to overseas markets, and to abolish waste in every way possible.
– In my opinion the sales tax is vicious and unjust because it is what may be called a flat-rate tax. The poorest member of the community pays the same flat .rate of tax as the richest member. For example, Senator Marriott will not be called upon to pay a higher rate of sales tax on any goods that he purchases than is paid by the poorest pensioners.. Therefore, when Government supporters talk about equality of sacrifice,, and about doing the ‘beat they can for the community, it is all so much hypocrisy. In fact,, it is. deliberate lying. It is not true, because the poorest people in the community will have to pay the same flat-rate tax as the richest people. It is a vicious and unjust tax, and is not based upon the principle of ability to pay. I challenge any supporter of the Government to prove that that is not so. The reason why the Government is taxing the poor is because it is afraid to tax the rich. If the Government really wanted to stabilize the Australian economy and decided to take the correct action, all its rich supporters would become, almost overnight, its worst enemies. The sales tax is paid by the community and not by those who control businesses because they are in a position to increase the prices of the goods they sell. The sales tax cannot be passed on by pensioners or others on fixed incomes, but it can be passed on - and indeed it is passed on together with as much more as they can get - by those who arbitrarily increase prices with the blessing and consent of this Government.
The sales tax is paid entirely by purchasers including pensioners, superannuatants, and others on small fixed incomes. It is not a tax on rich people or on wealthy monopolies, because they can always pass the tax on to some one else. It is a tax which is making the poor poorer and the rich richer. Of course I am not surprised about that situation, because that is the declared policy of the Government and it always has been and will continue to be as long as a majority of the people are prepared to tolerate it. ‘ When they realize, as sooner or later they must, the injustice of indirect taxes- not only sales tax but also excise and other taxes - then there will be a complete reversal of form. The Government expects to raise £30,000,000. As I have said, those millions will come from the pockets of the people who are least able to provide them. Senator Marriott and other honorable senators opposite have referred to our wonderful democracy and to our system: of justice. As a matter of fact, political democracy actually begins and ends on election day. After that, we have an unavowed dictatorship. The increase of sales tax contemplated by this bill is evidence of the truth of that statement.
This increased taxation will have the effect of increasing prices generally, not only in connexion with motor transport, but also in every direction in which the taxes can be passed on, so that the effect will be that wage and small salary -earners will be fleeced. Their purchasing power will be reduced. If the workers appreciate the position, as they could Appreciate it, and ceased work as a protest, then I have no doubt that the supporters of the Government would say that their action was communistically inspired. If the workers were advised by me, they would take immediate action in, that direction and force the incidence of taxation to be placed where it should be placed: on those who are best able to bear it. In addition, the increased taxes will add to unemployment. It has already been stated that unemployment is increasing. Unemployment begins and extends in a situation in which purchasing power is not available to the people, so that they cannot purchase the goods that are offered for sale. On the one hand, we ( have increasing surpluses, of primary and secondary products, and on the other hand, we have a community that is unable to purchase those products. That is where we have the vicious unbalance in the economy which this Government is- either too ignorant or too afraid to tackle. The Government will not face the task of stabilizing the economy or of establishing what is known technically by the mathematical economists as an economic equilibrium. The Government, instead, has created what is termed an economic disequilibrium. Yet nothing has been. done to correct that position. As I have said, nothing has been done because the Government is either too ignorant or too afraid to tackle the task that has to be performed. But that task will have to be done ultimately - there is not the slightest doubt about that. The only way of avoiding it would be if there were another war. bat provided that there is no war, the victims of indirect taxation and an unstable economy will challenge the Government on this issue.
Reference has been made to profits in the; motor industry. Let us consider profits generally. What are they? They are simply the difference between prices and costs. In this semi-automatic age, costs are automatically reduced. When I speak of costs, I mean commodity wages in all forms : Food, clothing, housing and social services for workers and their families. Those things represent the actual costs of production. To the extent that labour time constitutes a. diminishing factor in production, the cost is automatically reduced, quite independently of what the Commonwealth Arbitration Court may do. To the extent that costs are reduced, profits are automatically increased. On the one hand, we have profits increasing to the maximum, and on the other, we have costs being reduced to the irreducible minimum, or the lowest level to which the workers are prepared to submit or on which they can exist.
Profits, in the form of privately-owned capital of all. kinds - land, buildings, machinery, enormous stocks of primary and secondary products, and money capital. - are being increased as never before in. the history of this country and other countries overseas. Profits to-day are colossal. That is not merely my opinion; the; declared anti-Labour press also says that that is so. In fact, the Sydney Financial Review of Thursday last made a survey, for the year 1954-55, of 1,070 public companies. It regarded that year as a very prosperous one, and this is what it said-
Net profits rose by 17 per cent., to lift the earning rate of capital from 17.6 per cent, to 18.6 per cent. One in every three companies increased its paid’ capital during the year, raising the aggregate paid capital by 10 per cent. One in three lifted its rate of dividend pay-out, with the aggregate distribution going up to 20 .per cent. But one in every 36 companies reported losses.
Now, those losses were gains for the bigger companies, because there is no loss in the real or full sense of the word. What is a loss on the one hand is a gain on the other. The article went on-
One in every twelve companies did not pay an ordinary dividend (probably for the same reason ) .
Commenting on the results of its survey, the Financial Review stated that -
Finance companies reported a profits rise of J’i per cent.- that is, the profits of privately owned banks and financial institutions rose by 37 per cent. -
While companies were more liberal with their dividend payments than in the previous year, they nevertheless maintained a continuous policy of strengthening their reserves (undisclosed or secret profits) very substantially.
I remind honorable senators that the Financial Review is a leading financial publication. The article went on to say that an - unfortunate feature of the figures is the continued reluctance (continued fear of publicity )- of companies - to reveal their taxation and depreciation provisions. There were 182 such companies who did not reveal their taxation provisions and 111 their depreciation allowances.
That indicates quite clearly that the Taxation. Branch, for which the Government is responsible, is not doing its job. I am in a position to speak from practical experience, because during the war, I was privileged to occupy the position of Minister for Aircraft Production. Under the National Security Act, power was given to examine the books of manufacturing firms supplying goods to the department. I had the able assistance of a Treasury official, the late Mr. Harris, and we found that in almost every instance costs were loaded against the Government and the Aircraft Production Department alone recovered more than £1,000,000. Similar action could have been taken by the Munitions Department and other departments controlling war-time production. The firms concerned were deliberately faking their books. That is being done still, according to this article, but the Taxation Branch is apparently doing nothing about it. I am not blaming officers of the branch, because they are paid to apply Government policy. The possibilities are that if there were a few officers possessed of the necessary initiative to do the job, very good reason- would be found to replace them with others.
On the 26th April last, the Melbourne Age and other daily newspapers reported that, the disclosed profit of General
Motors-Holden’s Limited in 1955 was £9,876,975. I am quite certain that if some costing experts were to examine the books of that company they would find that the undisclosed profits were more than those revealed. But it is not the intention of this Government to tax those profits. Its policy is to tax the pensioners, the poor and those least able to pay. Government senators will say that the Government is doing a wonderful job. It is true that the Government is doing a wonderful job for the very rich, at the expense of the poor, unfortunate people who are least able to pay, but the press says nothing about that. The financial editors are singing a duet with the Government on this subject, the reason being that the press to-day is not so forthright as it was when it was individually owned. The press is becoming more and more subject to monopoly. Competition has been superseded by combination, and combination means collective control of the press, where previously individual control was exercised.
The Prime Minister (Mr. Menzies) has given as his excuse for introducing these economic measures that he wants to halt inflation. How will an increase of sales tax halt inflation? I challenge the Government and its supporters to answer that question. I challenge them to define what they mean by inflation. I am certain that the Government’s proposals will not have the slightest effect, and, consequently, the Prime Minister’s speech, and those of his supporters, are so much political eye-wash. The Government has talked about inflation since 1949, but it has made no attempt to explain what inflation is, or what action should be taken to halt it and to stabilize the value of the currency.
The Prime Minister referred to the high cost structure. I have said previously in this chamber that when the Government speaks about a high cost structure it is speaking only a half truth, and a half truth is a deliberate lie. The fact is that actual costs, assessed in terms of labour time or in terms of gold, as a measure of value, were never lower. In any job that the average workman is called upon to do to-day, whether it is erecting a building, laying a railway line or any other work, the labour time is a diminishing factor. To the extent that it is a diminishing factor and wages are based upon the cost of subsistence, then, relatively, the correct cost or wage has been reduced. Consequently, real costs were never lower and inflated costs were never higher. The only difference between a gentleman issuing counterfeit £5 notes and those in control of the Treasury and private banks, is that the first does his job illegally and if he is detected he is sent to gaol, but the others do their work legally and come to Parliament for approval of their work. It is a colossal racket. A leading English authority on banking- in 1954, and another in England in 1948, and the Governor of the Bank of England in 1919 have all said that to the extent to which the currency is inflated so the unfortunate people, and particularly the workers, are being robbed of the value of their money. That is the reason why the Arbitration Court says that labour costs are so high as to be prohibitive. In fact, labour costs were never lower, but because the unfortunate workers do not know any different they acquiesce in the court’s findings. They acquiesce, and one of the reasons why they do so is that the education given in schools, universities and so on consists merely of teaching the workers how to be useful in the interests of the employers. This was pointed out by John Stuart Mill as far back as 1873 when the compulsory education system of England, which became law in 1876. was being discussed. He said that the compulsory education system controls the mind and to the extent that the mind is controlled the body is controlled ; and his words have been proved to be true ever since.
We have had periods of so-called prosperity for the very rich and of poverty for the very poor. We are on the threshold of another such period to-day. The Government’s reason for having an early election was to avoid the resentment of the people at this legislation. But if the workers and others do not understand the causes, they certainly understand the effects. They are suffering from those effects to-day as the result of arbitrary increases in prices and the fixation of wages while employers’ associations and boards of directors have the power and privilege of determining the purchasing power of those wages or salaries. Then, honorable senators on the Government side suggest that Communist influence is the cause of strikes. They make thar suggestion because they believe that an appeal to prejudice and to fear will protect them from the penalty which they deserve and which they will pay ultimately.
The other day, 1 spoke to the waterside workers at Fremantle. I pointed out to them that I had worked on the waterside there from 1910 to 1912, and explained that whereas they receive 8s. lOd. an hour we received only ls. 3d. an hour. 1 was able to prove that with our ls. 3d. we could purchase more than they can purchase with their 8s. lOd. In 191(1, before World War 1., it was possible to buy a three-course meal for 6d., the equivalent of half-an hour’s work. In those days, the best meal in the town cost only ls. 3d., the equivalent of one hour’s pay. To-day, a two-course meal costs 6s., or something more than thu equivalent of a half hour’s pay. A first-class meal costs 10s., or more than one hour’s pay. So, in terms of commodities, the value of the 8s. lOd. paid to-day is lower than ls. 3d. was in 1910. Another factor to be considered is that to-day men work faster and longer. With the up-to-date equipment they now have, they do twice the work we did in the early days. So, in effect, they work longer for their food, clothing, housing and other essentials than we did. The effective commodity worth of the present wage is lower than it was in those earlier days, but, because of the -manipulations of those persons whom I cali the mathematical economists - the gentlemen who produce all these graphs and masses of figures to prove anything at all - the people do not realize this, and these mathematical economists are assisted in their deception by the ladies and gentlemen opposite who speak so eloquently about what the Government has put over the people of Australia.
I repeat with emphasis that indirect taxation is vicious, unjust, cowardly and contemptible. The Government should bo ashamed of itself for compelling the unfortunate pensioners and others to pay this iniquitous tax at .the same rate as others who can .afford it, after telling them that its endeavours are directed always towards governing tine country in their” interests. The only difference that I can see between the confidence men who are behind prison walls and the confidence men in this Parliament is that thi confidence men who are behind prison walls are mere amateurs compared with those whom we have here.
Senator ANDERSON (New South Wales) [8.571.- This Sales Tax (Exemptions and Classifications) Bill is complementary to the economic statement made by the Prime Minister (Mr. Menzies) on the 14th March last. It validates the increased sales tax which came into force on that date, and under it the Government proposes to raise the sum of £30,000,000. This afternoon and to-night we have heard contributions from Opposition senators, but they dealt more with the details of the bill and lost sight of its main principles. We have heard some rather remarkable statements to which I hope to make some reference later if time permits. But since Senator Cameron used some fairly violent language and spoke of the proposed increases in sales tax as being scandalous and so on, perhaps it is appropriate that I should mention here, especially after all his vilifications, that sales tax was, in fact, first introduced^ by a Labour government under Prime Minister Scullin in 1932. As the honorable senator is the oldest member of this chamber no doubt he was here when that legislation was introduced.
– He loyally supported it.
– And loyally supported and voted for it. It is necessary that I should refer briefly to the main economic reasons prompting this complementary legislation; and, to find those reasons, we have to go back to the PrimeMinister’s economic statement. When speaking on that economic statement yesterday, I referred to the three cardinal facts emerging from it. They were theneed for the balancing of our overseas funds, the need to provide adequate loan fluids for the States and the need for some dampening down of inflation. As the arguments in favour of all three points have been canvassed, both here and m another place, -already, I think it sufficient simply to show how they fit into this legislation which seeks to take a further £30,000,000 in sales taxi Taking the last point first, I think it is accepted - and, indeed, it is elementary - that the present inflation has been caused by the fact that goods have not been in sufficient supply to meet the demand. There has been competition for goods. A demand has been created, and prices have increased. ‘The sales tax proposed in the measure before the ‘chamber is directed at non-essential goods, and it must tend to lessen the demand. To that extent, this legislation must tend to check inflation.
The Leader of the Opposition (Senator McKenna) said that sales tax, in itself, was inflationary because it raised the price of goods. With the greatest respect to the honorable senator, I say that that is not true. Demand is inflationary. Taxes in themselves are not inflation arv and, to the degree that taxes tend to dampen down demand, they are deflationary.
I direct my attention now to the need foi- raising loan funds to help the States* works programmes. I do not, think that we need to go very far to link that subject with this legislation. The Government proposes to raise £30,000,000 more as a result of this measure, and out of that increased revenue it will be able to provide. more money for the States.
Obviously, this legislation must have an effect upon hire purchase business, because it is directed largely at privatelyowned motor cars, 70 per cent: of which
Are bought under hire purchase agreements. This bill should have a steadying influence, and. as hire purchase companies “will be seeking less capital than during the past two or three years, more loan money should be available. Much of it will go to the States.
I do not wish to discuss now the need to balance our overseas expenditure with our receipts, because- 1 spoke at length on that matter during the debate on the Government’s economic measures. This Treasure must have an effect in that direction, however, because the sales tax on private motor vehicles is to be increased from 16$ per cent, to 30- per cent., and statistics indicate that that will have a far-reaching effect. Honorable senators should remember that the registration of new motor vehicles in Australia rose from 156,99b in 1952-53 to 245,271 in 1954-55. Imports attributable to the motor industry were- valued1 at £152,000,000 in the last financial year, out of total- imports amounting to £844,000,000. In his economic statement, the Prime Minister (Mr. Menzies) said -
Not only do motor vehicles and. tHeir components constitute: a substantial item in our imports, but. they also represent tile bulk, in value,, of hire, purchase, transactions and they have,, in fact, generated a vast capital demand inside Australia.
As. to our overseas balance of payments^ this legislation will’ help to solve that section of our economic, problems. All honorable senators, will agree that the economy of Australia is very complex, and wei cannot get results- by a simple wave of the hand., All sorts of stresses and- strains are likely to be set up when we.- seek to solve our economic problems. We are passing through a period of prosperity, and the Government is. trying to maintain it. in the. face of difficulties, which include such major problems as- excessive demand,, inflation and an adverse balance of overseas, payments. Action is. needed in connexion with particular goods, and that is the purpose of this legislation. The problem is complex., and should, be studied in that light.
I wish, to direct attention maw to some o£ the arguments that have been advanced hy honorable senators- on the Opposition side. X have already said that, in. my opinion, the Leader of the Opposition was in error when he stated that the- sales tax. in itself was inflationary. The honorable senator also referred to the profits made by private companies. He- suggested that they were unduly high, and should, be subject to an excess profits tax. I found it difficult to reconcile his statements with those of .Senator Benn, one of his supporters, who spoke of the many insolvencies that had been registered since this Government was elected to office. Senator Benn said we. were heading for disaster and unemployment, and that companies were going bankrupt. Earlier, the Leader of the Opposition had referred to the huge, profits of private enterprise, and the need to reduce them. Them Senator Cameron, another supporter of the Australian Labour party, used rather violent language in. attacking, the wicked and vicious- system of indirect, taxation, including sales. tax,, that was first introduced by the- Australian Labour party.
– Senator Cameron voted for it, and justified it at the time.
– If he did not vote for the original measure, he certainly voted for sales tax measures when Mr. Chifley placed an impost on motor cars in 1941. The piece de resistance was Senator Benn’s development of an attack on indirect taxation. It is only fair to say that the Leader of the Opposition did not go all’ the way in criticizing sales tax, but Senator Benn said that one of the aspirations of the Labour party waa the. abolition of sales tax in favour of direct taxation.. In fact he advocated it and made it the hurden of his whole speech. I think that wants looking at, too.. It should be. remembered that sales tax, in the last budget,, yielded something of the order of £100,000,000 and with the additional impost proposed it will yield £13’6.,.000,,000 which, by the way, is something like 11 per cent., of total tax collections. If the Labour party ever comes into power again it says it intends to abolish sales, tax. Obviously, it will have to- obtain: this £13.g,000-,000 from some other source.. I. do not think members of that party appreciate what they are saying which, is that they will abolish this indirect taxation and will collect their revenue m the farm of. direct taxation which-,, obviously,, must be placed ora the working community of Australia.
That is an odd argument to come from members of the Opposition because if we take it to its logical conclusion it means a reduction in the wages of the great working community of Australia. T would remind honorable senators opposite that the yield from ordinary income tax in one year is something like £300,000,000. If they are going to abolish sales tax to the tune of £136,000,000 and substitute direct taxation it will mean that every worker in the community will be required to pay in taxation something like 25 per cent, more than at present.
We have the spectacle of the Labour party, which repeatedly sheds crocodile; tears on behalf of the workers, advocating an increase in income taxation on the working community which, in effect, although I feel bound to say I do not think honorable senators opposite appreciate the fact, will bring about a reduction in the income of the working community. I find it a rather odd experience to listen to such an argument, and I suggest to honorable senators opposite that their traditional approach to these things wants examining. I do not desire to say much more, other than to sum up the point I made at the outset, that, this sales tax bill must be examined and appreciated in its relation to the whole economic problem. It cannot be looked at in isolation. It must be appreciated that it forms an integral part of the preservation of our prosperity, and in its turn, along with all the other complementary bills we shall be dealing with during the next few days, it will play its part in solving the three problems which the Prime Minister referred to in his economic statement, namely the problem in relation to overseas balances, the problem of providing finance for the loan programmes of the States, and the problem of dampening down inflation which has become a threat, to our continued prosperity.
– I have listened very carefully to Senator Anderson giving us, with his head in the clouds, a dissertation on economics. It was lacking in reason and ignored the actual facts that apply to the proposed increases in the taxation measures with which we are dealing. The honorable senator has given us two or three reasons why these measures have been brought in and he said that we have to go> back to the statement of the PrimeMinister (Mr. Menzies) to find thosereasons. The Minister for National. Development (Senator Spooner), in introducing the bill, of course, gave us no reason for the introduction of thismeasure; he just treated the members of the Senate disdainfully and left hiscolleagues to carry on.
If we go back to the economic statement of the Prime Minister - I understand Senator Anderson referred to theone made in March last - we find that, thePrime Minister, when giving his reasons for the necessity for bringing down legislation to increase purchase tax, and, asa matter of fact, to increase any tax at all, made one statement which he absolutely contradicted later. First of all, hu said that purchasing power and demand had reached record levels and that themost effective way to relieve the pressureis to reduce the volume of purchasing power. Apparently, these taxation proposals are supposed to do that. If that is so, the standard of living of the P’:01’leof Australia, will be further reduced. J’* that is the method the Government think.is necessary to overcome the ecouom.ii- difficulties of the country, well, it has thi* majority and can put it into operation. But that is not all the Prime Minister said. In that economic statement he did not deal in any shape or form with tinnecessity of getting funds for the purpose of meeting loan commitments nexT year. Some time later, he said that ir was necessary to build up a reserve for the purpose of meeting loan commitments falling due in 1956-57.
We have the Prime Minister making, first, the statement that it is necessary, in effect, to reduce the standard of living of the people of Australia in order . to stabilize the economy. At the time hemade that statement he must have known that there were loan redemption commitments to be met during 1956-57, but hfnever said a word about that. However, later, he gave that as the reason for introducing this measure and other complementary measures. It is utterly irresponsible for a Prime Minister tomake conflicting statements in order to justify increases in sales tax and the other imposts that are to be brought in. This bill deals only with sales tax.
Honorable senators opposite continually harp on the fact that the Labour party voted for the introduction of sales tax, or something of that kind, in years gone by; but that has no relation at all to the bill we are dealing with to-day. This bill does not implement sales tax, but increases it and the goods on which it is to be levied. The Prime Minister himself bas said that it is necessary to build up a reserve fund to meet commitments next year. Behind it all was his first statement, which meant that it was necessary to reduce the standard of living of the people of Australia in order to balance the economy. The Treasurer made another statement, which has been referred to all over the place by people who support this Government. It was to the effect that the workers of this country had to work longer hours and produce more in order to obtain a better standard of living. But these increases of taxation will further reduce their standard of living, notwithstanding the fact that, during the last two years, the workers in secondary industries have increased production overall by IS per cent., when all factors are taken into consideration. During the same period, the primary producers increased production by 5 per cent. Yet the workers, in both primary and secondary industries, are to be mulct in increased taxation, despite the fact that they are not even now receiving the full reward for their labours. They have produced more, but because all of the commodities available for export cannot be sold overseas, their standard of living has been reduced. It is evident that the Government set out to reduce the standard of living of the people who produce the ordinary commodities in Australia in both the primary and secondary industries, and it has done so fairly effectively. The Government has displayed gross incompetency in its handling of our economic problems. Within the last four years there have been three separate crises, and now the country is faced with another. The only remedy that the Government proposes is to increase taxation, interest rates and so on, and to restrict imports.
Senator Anderson said that, in addition to increasing the sales tax, the Government was endeavouring to restore our overseas trade balance. The honorable senator said that most of the additional revenue from sales tax would come from the tax on motor vehicles. But if sales tax is increased on Holden cars, what effect can that have on our overseas trade, balance ?
– It will make no difference to the standard of living.
– I cannot see that it will make any difference to the balance of payments.
– Why?
– Because the Holden car is manufactured in Australia. This afternoon, . the Leader of the Opposition (Senator McKenna) directed attention to several of the articles on which sales tax has been increased. I cannot see that the increases will affect our trade balance overseas.
– Indirectly, they will do so.
– 1 cannot agree with the honorable senator.
– We need money with which to buy goods overseas.
– But this country needs population. The Government has brought out many immigrants - more than ever before - but the Prime Minister said last year - again after the Treasurer had introduced the budget - that every increase of population brought in its train certain difficulties. I think that was quite right. Again, in contradiction of the statement that the Treasurer made six weeks before, the Prime Minister said that we were not facing a crisis, but that we were suffering from growing pains which, he went on to explain, were caused in part by immigration.
I direct the attention of honorable senators to the last-mentioned items on page 3 of statement A that has been circulated in connexion with the measures before the chamber. .1 suppose that the Government’s purpose in increasing sales tax on those items is to increase Australia’s population. This, according to the
Prime Minister, -will involve further economic difficulties. I fail to see how an increase of sales tax on those items will affect our overseas trade balance. Therefore, we must have .regard to the .Prime Minister’s first statement, that it is necessary for the workers to produce more. As I have said, ‘they have increased production. I have before me figures that were compiled by the Taxpayers Association. Nobody could convince me that that association has any affinity with the Labour party.
– Nor with any government.
– Nor can it be suggested that it is ever satisfied.
– The association certainly holds no brief for the Labour party. Eoi* that matter, it may not hold a brief for any political party. I concede that it represents a section of the people of independent thought. From time to time, the Taxpayers Association issues bulletins containing facts and figures, particularly in relation to taxation. In to-day’s issue, the Melbourne Herald - has re-published the following statement that appeared in the last of the association’s bulletins : -
The Taxpayers’ Bulletin has an interesting table, showing what you should have been earning at the end of last financial year (1054-53) to give you the same purchasing power as you had before the war in 1937-38, worked out by experts after adjusting the value of money in accordance with the “ C “ series retail price index.
I shall not cite all of the figures mentioned in the newspaper article, but it includes a Te-print of the following statement made in the Taxpayers’ Bulletin -
If you -were earning £.1,000 a year in 1937-3S (after taxi), you should have been getting £3,565 to give yon the .same standard of living.
That is, the standard of living enjoyed in 1937-38. It will be recalled that the basic wage at that time was about £330 a year. 0,n that basis, a worker who was receiving £330 a year in 1937-38 v/ould now need an income of £1,155 a year, after payment of tax, in order to enjoy a similar standard of living. But he has mot that income, so his purchasing power has been reduced, and consequently his standard of living has been reduced’.
I could give similar figures to prove* that the primary producer is in exactly the same position as the worker to whom I have just been referring. After paying taxes and all expenses, he would need a return at least three and a half times his pre-war income in order to enjoy the standard of living that he then had. It is true that there might be an odd individual here or there whose income hasincreased in such a proportion as toenable him to retain his standard of Jiving, but the majority of people havenot been so fortunate. Therefore, I say that the real reason why the Government has increased the sales tax is toreduce the standard of living of the people of Australia, and all other issues, are merely side issues.
It has been pointed out by a number of honorable senators, and by a number of members in another place, that some of the Government’s proposals will in no way tend to improve our overseas balance of payments. Increases of sales tax on some items will have no effect on our overseas balance, and the only action taken by the Government which will improve those balances is the restriction of imports. Import restrictions will do it, but increased sales taxes certainly will not. On the other hand, all the increases of the sales tax, particularly increases on items used in the transport industry, will have a serious effect on our production ira general. An increase of sales tax on commercial motor vehicles will certainly increase the cost of transport in this* country.
– The sales tax on commercial vehicles has not been increased.
– It certainly has, and the honorable senator who interjected would know that if he had read the Prime Minister’s statement. The rate ‘of sales tax on commercial motor vehicles has been increased from 12£ per cent. 4o 16f per cent. I can find nothing in the Government’s economic statement to indicate that earth-moving vehicles, and other vehicles ©f that type, have been exempted from the increased taxes, and so I must assume that the prices of those vehicles will also increase. That being so, it is quite obvious that transport costs in. general will increase. Surely no honorable senator on the Government side will have the temerity to say that transport operators will pay the increased sales taxes, and not pass them on by way of increased prices for their services. Indeed, I suggest that the whole of the costs of our transport industry will increase in proportion to the increase of the sales tax.
It has been i said from the Government side that traders do not increase the prices of their goods only by the additional amount of sales tax, but that they also make a little out of the increase. Consider a packet of cigarettes, for example. The increased excise is 3d. on a packet of twenty cigarettes, but the consumer has to pay an additional 4d. Therefore, the traders get an extra penny a packet over and above the additional sales tax. That transaction is quite open, but what will take place in the transport industry is hidden. The primary producers, who are even now not getting sufficient for their products to maintain a decent standard of living, will lose further because of the additional sales tax imposed on the transport industry.
Honorable senators should also remember that the primary producer cannot pass on such charges because his goods are sold on the open world market. In fact, the gross incompetence and bungling displayed by this Government in handling the sale overseas of our primary products is a standing disgrace. It is all of a piece with the Government’s record of irresponsibility in handling our economy. It is of no use to say that the additional sales taxes will not be passed on. They will be passed on until they get to the working man and the primary producer, who will, be unable to pass them any further. Therefore, those two classes of the community will pay practically the whole of the increased sales taxes, plus some extra profit that the manipulators will get out of the transaction. However, that appears to be the policy of the Government.
I do not quarrel with the principle of the sales tax, but I do quarrel with the heavy increases made by this Government on some articles. When the last Labour Government left office, I think the sales tax rates were Si per cent, and 12£ per cent. When this Government faced its first crisis in 1951-52 it imposed an enormous increase of sales tax on some items, of up to 50 per cent, and more. Just before the ensuing general election, the Government reduced the sales tax and made much of that action. Perhaps the Government will again reduce the sales tax just before the next general election. Nevertheless, increased sales tax can never help to combat inflation, because the working man will have to pay more for his goods. That being so the workers will have to ask for more wages in order to maintain their present standard of living. For the reasons that I have given, 1 intend to vote against the proposals of the Government on every opportunity that is available to me.
.– I have listened closely to this debate and to the contributions of honorable senators opposite. The last two speakers from the Opposition side have not told the Senate what the Labour party would do, if it were in office, to combat the inflationary condition that exists in Australia at the present time.
– But honorable senators opposite are in government!
– Yes, we are the Government and we have taken, and will continue to take, full responsibility for our actions. The Prime Minister (Mr. Menzies), on -the 27th September last, stated that capital expenditure in Australia was twice as much as our savings and that, therefore, because we were spending so much internally, and because our export income had fallen and our imports were far exceeding our exports, the Government would have to take severe action to restrain and restore the economy. Honorable senators opposite have stated that the Prime Minister, in his statements in September and March, made no reference to the action that the Government proposed to take during this financial year. I wish to read to the Senate a part of the statement which the right honorable gentleman delivered in the Parliament on the 14th March last. He said -
Tlic.ru is one circumstance also of special significance for any forecasting of possibilities in 1956-57. In that year … a very large amount of public debt, comprising three major loans and totalling some £253,000,000, will reach maturity at intervals throughout the year. We shall, of course, do our utmost to convert as much as possible of this debt into new securities. The amount, however, is extremely large in relation to the market. It would, moreover, be sheer folly to fail to recognize that borrowing conditions in 1950-57 may be more than usually difficult. That must affect both the prospect for converting old loans and the prospect for raising new loans such as may be required for finance of the works programmes of the States.
These ave the broad considerations which we face in trying to form a judgment of what additional resources in the shape of revenue we may require if we are now to preserve a condition of balance in our public accounts in terms of cash receipts and outlay. Our carefully considered judgment . . has been that the amount we require will be somewhere between £100,000,000 and £120,000,000, the details of which I have set before the House.
Of the £120,000,000 that we intend to take from the people of Australia to conserve our economy, £30,000,000 is to be raised from increased sales tas. Having decided to increase the rates of sales tax, we have looked through all the items in the sales tax schedules in order to see which items could bear further tax, so that we might be able to meet the external payments that we have to face, and we have found that, of a total annual import expenditure of £K44.000,000, motor cars, tyres, replacement parts and petrol accounted for £152,000,000. Having looked, at the position in relation to the importation of motor cars, we found that the number of motor vehicles brought into the country during the last two years increased by approximately 100 per cent. In 1952, there were 156,000 new motor cars registered in Australia, whereas in 1954 the number was 245,000, or an increase of nearly 100,000 in two years.
We say that our economy and our earning capacity outside Australia cannot alford to allow us, as a nation, to spend £152,000,000 per annum on the items I have just mentioned. To restrict the purchase of motor cars and to conserve the economy, we say that it is necessary to increase sales tax on motor vehicles used for the transportation of passengers from I6f per cent, to 30 per cent. That means that the increase of sales tax on motor cars will cost purchasers amounts ranging from £100 on the lighter motor vehicles to £200 on the heavier and more expensive vehicles. A motor car which cost approximately £2,000 before the increased sales tax became operative will now cost approximately £200 more, and the motor car that cost £1,000 will cost approximately £100 more. It may be said that this is placing a burden on transport and adding to the problems of transportation in Australia, but it must be remembered that the relatively large increase of sales tax on motor cars applies only to vehicles used for the transportation of passengers. The schedule states that the increase refers to sedans, coupes, tourers, roadsters, racing cars, taxi cabs, station wagons, estate cars and vehicles similar in design to station wagons and estate cars, but does not include panel vans, delivery vans, utilities, ambulances, hearses, jeeps, trucks, lorries or motor buses. It will therefore be seen that most of the vehicles that are to bear this high rate of sales tax are used for pleasure purposes.
In respect of vehicles used for commercial purposes, the rate has not been increased on the same pattern. The increase is not from 1.(3* Pei” cent, to 30 per cent., but from 12£ per cent, to 16f per cent., which is a vor y small item in the purchase price of a. motor truck for business use. I doubt whether a carrier who transports goods could work out the additional fraction of a penny a mile that he would have to charge to recoup himself for this extra payment. Therefore, I do not expect that there will be any increase of transport costs because of the increase of sales tax on commercial vehicles such as heavy trucks and trailers.
Honorable senators opposite, both this afternoon and this evening, have stressed the point that these increases of sales tax represent a wicked action by the Government and that, indeed, the imposition of sales tax by any government really amounts to a criminal offence. No doubt they are trying to gain some political favour by their remarks, but if we examine the history of sales tax we find that this great party known as the Australian Labour party, which is here today in opposition, was in government in the year 1930, led by no other than the late Mr. Scullin. It was in that year that sales tax legislation was introduced by the Australian Labour party as a means of raising revenue. I refer to the
Hansard report of proceedings when the sales tax assessment bills were introduced on the 30th July, 1930. The motion by Mr. Scullin was agreed to that he should have leave to bring them in. That was the first time that a sales tax measure was ever introduced into the Australian Parliament. Mr. Scullin, as Prime Minister, moved -
That lie have leave to bring in a bill for an act relating to the imposition, assessment and collection of tax upon the sale value of goods manufactured in Australia . . .
Several other similar motions are recorded, relating to sales tax, and involving nine measures in all, but I shall not read them now. This evening, Senator Cameron described sales tax as a wicked tax upon the poor people of Australia. On the 5th August, 1930. during the debate on the sales tax bills, the late Mr. Chifley had something to say on how this tax would affect the poor workers of Australia, who, Senator Cameron suggests, will be hardest hit by the proposed increase. The late Mr. Chifley, speaking in favour of an increase in the sales tax assessment, said -
This is a time, as the 1’riuiu Minister Iia* sui.!, when all sections of the community must assist to get Australia out of the existing financial difficulty. I do not deny that a large portion of this tax will finally ‘be borne liv thi- great masses of the people; but the proportion that will fall on the very poor people, whose expenditure is mainly upon foodstuffs and the other necessaries of life, will not he so great as that which will be paid by the people with big incomes, who have a great deal to spend upon luxuries and highpriced clothes.
The increases which this Government has made will not, according to the late Mr. Chifley, affect the poor people of Australia but will be felt most by the people with higher incomes. Most of our foodstuffs attract no sales tax, and the Government has taken particular care in this measure to see that proper protection is given to those in need of it. For example, blind people will not be asked to pay any more in sales tax. In the statement which enumerates the goods on which sales tax is increased from 16$ per cent, to 25 per cent., watches, fancy goods, serviette rings, field glasses, studs, and pewter pots are mentioned, but it is interesting to notice that when watches are mentioned the qualification appears, “ but not including Braille- watches “. They are exempt. The schedule goes on -
Movements and parts for watches other than Braille watches, clocks, but not including alarm clocks, Braille clocks or business time recording apparatus or machinery.
It will be seen that people suffering the disability of blindness will not be affected by the increase of sales tax. That action of the Government deserves the commendation of the Parliament, and I am sure meets with the approval of the Opposition.
In Australia there is inflation, and a responsible government must take action to rectify the economy. As for the charge by some honorable senators opposite that the Government has refrained, for political reasons, from taking proper action to control inflation, I remind them that the Government brought down this measure at the earliest opportunity, notwithstanding the fact that it was well aware that if action were delayed the government parties in States where elections were about to be held, such as Western Australia, would be more likely to win. However, the Government considered that the welfare of the nation must come first and before the Western Australian elections were held it brought down to Parliament its proposals to increase sales tax and the excise on beer. Had the Government, not taken that action until after the 7th April, the unpopular Labour Government of Western Australia would have been defeated. However, this Government does not play politics, but considers that the welfare of the Australian people is its first duty. These measures were brought, down although the Government knew that its party in Western Australia would be defeated as a result. To-night, honorable senators opposite suggested that we were not prepared to impose an excess profits tax on such firms as General Motors-Holden’s Limited and others that are making large profits. We were told that the firm of General Motors-Holden’s Limited had a capital of something like £2,000,000.
– Under £2,000,000.
– That was its original capital, and its profit was in the vicinity of £9,000,000 last year. General
Motors-Holden’s Limited has been operating in Australia for many years and during that time has ploughed its profits back into the enterprise. Until last year it was not that company’s practice to declare large dividends at all;” its policy was to plough back profits into capital expansion. I believe that the Australian assets of General Motors-Holden’s Limited would be worth something over £100,000,000 to-day and, although I believe even Senator Critchley and others of his party would lend money out at up to 9 per cent., they are squealing to-day because General Motors-Holden’s Limited is asking for only 9 per cent, on the £100,000,000 it has invested here. They’ ask why we do not introduce an excess profits tax. I remind them that we do not want to hurt those of their members who are receiving 9 per cent, or 10 per cent, any more than we want to hurt such companies as General Motors-Holden’s Limited, which have rendered great service to Australia in establishing the motor-car industry in this country.
– The employees have rendered great service on a fixed wage.
– The employees are happy to be working there, and I remind the honorable senator that in this country those employees have the right to work for somebody else if they wish, but they choose to stay with General MotorsHolden’s Limited. I venture the opinion that if the honorable senator offered them jobs none of them would accept his offer.
We want more capital development in Australia, and I suggest that the Government has been at least 100 per cent, more generous than its predecessors were between 1941 and 1949 in helping the States with their developmental programmes.
– What has that got to do with the sales tax?
– The only reason why we have increased sales tax to get an extra £30,000,000, as part of the £120,000,000 we seek, is to give the States a little more for developmental works. And the honorable senator asks what State development has to do with the tax! Although this Government in the last five years has provided Western Australia with three times as much in loan money as the Labour
Government did during its last five years of office, the Labour party of that State used our proposals to increase sales tax, petrol tax, company tax and so on against us during the recent election campaign there. The Premier, Mr. Hawke, and the Deputy Premier, Mr. Tonkin, looked upon the measures introduced by this Government as manna from heaven; and the State election campaign in Western Australia was conducted not on what the Hawke Government had done for that State, but on what this Government had done to raise money from the taxpayers of Australia so that we could give more to Premier Hawke, his deputy and the Labour party there to spend on their developmental programme. Actually, that election campaign had its amusing aspects in that, on the one hand, we were hit right and left by the Labour party there, a lot harder than honorable senators have hit us to-night, whilst, on the other hand, the very measures that we had introduced were designed to help the developmental programme of that State. In fact, the Premier of Western Australia bit the hand that was feeding him.
– And the honorable senator knows with what result.
– I am not crying about the result, just as I shall not be crying in 1959 when the Labour party in this Parliament will still be sitting where it is now. If, by any chance, the Labour party defeats this Government in 1969, or 1970, I still will not cry. The Government has been very courageous in introducing these financial measures, and 1 should like to compare its action with what I think the Labour party would have done. Certainly, honorable senators opposite have not said what they would do because they do not know; but we on this side can think, and we have a fair idea. After indulging in a delightful conspiracy, the Labour party would decide to increase taxation. It would probably also increase company tax by far more than this Government has done and it would introduce an excess profits tax, land tax, entertainment tax and so on. It would drive capital from this country, as it has done in the past. We all know that the Labour party opposed every proposal introduced into this Parliament by this Government for borrowing dollars from overseas to finance capital and developmental works.
I have stated that sales tax on private motor cars has been increased from 16f per cent, to 30 per cent, and on commercial vehicles of all kinds from 12^ per cent, to 16§ per cent. I stated that sales tax on jewellery and plate-ware has been increased from 16§ per cent, to 25 per cent., and I repeat that these measures are designed to raise approximately £30,000,000 extra revenue in a full year. It is my firm belief that this method of taxation, will stop the present inflationary spiral. I believe that the sales tax on motor cars, which is expected to yield £22,000,000, will help to stop people from buying motor vehicles. About 250,000 new motor cars are registered in Australia every year. Throughout the capital cities, there are car parks full of second-hand motor cars. As a nation, we could do without a few new motor cars in the next year or two until we correct inflation.
Senator COOKE (Western Australia) fl0.ll]. - The measure that is before the Senate is supplementary to the economic statement of the Prime Minister (Mr. Menzies) which has been described as the “little budget”. The Government has prepared this legislation with hypocrisy and deceit. When the budget was presented, the Prime Minister had an opportunity to tell the people that he would have to take some action to correct the economic situation, and to solve the problems which have been created by the vacillating policy of the Government. When the Prime Minister spoke to the people during the last election campaign, he did not say that he intended to increase taxes immediately. Previously, he promised to put value back into the Australian currency. Senator Scott has challenged the Australian Labour party on its advocacy of an excess profits tax, but that was once part of the policy of the present Prime Minister.
It is evident now that the measure before the Senate was contemplated, in some form, long ago, but the Prime Minister and his supporters are not prepared to admit that the increases provided for will force up production costs.
Every section of the community will have to pay the tax without regard to their ability to do so. Senator Scott has said that sales tax was introduced by a Labour government, and he made capital of that fact. Let us examine the position in which the Labour government of thatday found itself when it introduced the sales tax. A government similar in political colour to the present Government had been in office, and the nation was suffering from economic ills. The Bruce-Page “ boom and bust “ Government had forced Australia into a bad economic situation.
– It was worse then than it is now.
– That is true. The Prime Minister claims now that he is trying to overcome the difficulties of prosperity. At that time, the. country was suffering from dire poverty. Many people were on the dole, or working for only two or three days a week. They were receiving much less than the basic wage. There was money in the country, but it was in the hands of a minority. Goods were cheap, but the people did not have enough money to buy them. In such circumstances, a Labour government had to assume office.
Later, Sir Otto Niemeyer and other economic advisers dictated financial policy to a United Australia party government, which placed the nation in pawn, and we are fast going into pawn again under the administration of this Government. The Government did not tell the people honestly that it was trying to correct the effects of excess prosperity. Supporters of the Government in this chamber have made heavy weather of their attempts to justify the measure before the chamber. Let us look behind the scenes. Long before the Prime Minister told the Parliament that the position was desperate, a meeting of economists took place. No mention was made of that meeting in the Governor-General’s Speech, but this is what the economists had to say -
In addition, the internal boom with its weeping inflation of expenditure, prices, wages and profits had been fed in the past six months by a Commonwealth cash deficit of £105,000,000 and a. considerable expansion of central bank credit to support the bond market.
Does that spell excess prosperity? i believe that it proves the maladministration of this Government. The people have lost confidence in the Government, and the bottom has fallen out of the bond market. The proposals that are contained in this measure will not correct the situation. If honorable senators on the Government side were honest, they would admit that this measure will break down the standard of living of the Australian people, and will add to the costs of primary producers and other sections of the community. It will undermine the prosperity that was established by the previous Labour Government.
Can any reasonable person honestly believe that sales tax increases, which must increase prices and affect cost of production, will curb inflation? Does anybody accept the argument advanced by Senator Scott that the application of sales tax will stop people from buying articles that they need for business purposes? It will not do so. Those goods will be bought, and the higher prices will pass into the cost structure. Senator Scott applauded the increase of the sales tax to 30 per cent, on private motor cars, tie said that it would stop people from buying motor cars, and that they WeT, not entitled to such a standard of living.
– Senator Scott did not say that.
– He did. He said that the people could do without motor cars. He said that there were too many motor cars. The imposition of a new sales tax on commercial vehicles will have a bad effect on primary producers, who will not be able to pass on the higher costs. Costs of production will be increased. In addition, farmers will have to meet higher bank interest charges. Does the Government expect that such measures will cure our economic ills? The economists to whom 1 have referred said that there was a cash deficit in the Commonwealth administration of £105.000.000. The real truth of this matter is that the Government has no intention of stopping inflation, nor does it believe that these measures will do so. Neither does it believe that they will help to re-establish Australia’s primary or secondary industries. They are just 8 straight-out impost of taxation, with out exemption, on all sections of the Australian people. The administration of this Government has resulted in a cash deficit of £105,000,000. The statement to which I have referred is signed by Professors H. W. Arndt, Canberra University College; H. D. Black, University of Sydney; D. Cochrane, R. I. Downing and Wilfred Prest, University of Melbourne; G. G. Firth, University of Tasmania; P. H. Karmel, University of Adelaide; and P. W. Swan, Australian National University. They were brought together by this Government to give advice from an economist’s point of view. They did not say that Australia was suffering from, excess prosperity; they painted a doleful picture of what had bren brought about by poor administration.
If the Government is successful in placing this taxation on the Australian population, what is going to be the result? The economists and advisers of the Government were quite open in saying that every field of taxation had reached saturation point. As far as personal exertion taxation is concerned, it has never been more severe than it is at the present time. Inflation has forced wages up, but the real purchasing power of those wages is only equal, if not a. little less, to the value of wages before inflation in this country commenced. In 1949, the basic wage was £330 per annum, or £6 7s. a week. Now, despite the promise of this Government to put value back in the £1 and to reduce production costs, the basic wage is £610 per annum, or £11 16s. a week. In 1949, a single man in receipt of the basic wage paid £16 income tax on the £330 he received during the year. Now, a single man in receipt of £6.14 per annum pays £41 lis. in tax. On a single unit basic-wage earner this Government has imposed additional personal exertion taxation of £25 lis. Honorable senators opposite might reply that the single man is on a good wicket as he has no dependants for whom to provide. Let me now take the case of a man with four dependants - a wife and three children. In 1949, on a basic wage of £330 he paid no taxation and made no social service payments. At the present time, under this Government, he pays £8 2s. per year in taxation. What 1 have been saying proves that the taxation field has been exhausted; the ceiling has been reached, and the working people with families who really create the wealth of this country cannot afford to pay any more.
The Government is not approaching tins matter with a view to correcting any excess prosperity. Quite foolishly, it argues that the measures it is introducing will stop inflation; but it is well known that when sales tax is imposed on industry, with the exception of the small business man who has to keep his output up to maintain his stocks, it is passed on to the consumer. Senator Henty pointed out the disabilities of sales tax and how it can be evaded. He is more versed in that field of commerce than I am. I agree that that can be done, but the point I w ish to make is that it is passed on to the consumer and is sometimes multiplied in the process by wholesalers and retailers. Eventually, it ‘has its full effect on the basic wage-earner who has to pay this impost in addition to £8 2s. in direct taxation.
Senator Scott said that the position has been greatly relieved because the Government does not propose to tax braille watches. The Government has not gone to the extent of robbing the blind, but I venture to say that that would entail a very small amount of revenue. The Government has imposed a tax on washing baskets. I suppose it thinks the woman of the household can get a box in which to carry clothes. That is only one of the so-called luxury items that have been taxed, items which are for personal and household use. Others include shaving cream, shaving sticks, shaving powders and shaving tablets. They are regarded as luxuries, but, in fact, they are necessities. Then, toilet and beauty preparations are taxed and also powder compacts, powder puffs, powder sprays, powder bowls, lipstick containers and perfume sprays. The Government argues that those are non-essential lines, but we all know that it has become necessary for women in industry, and those who go to work, to use such articles. As a matter of fact, the whole of our female population buy such articles and they have now become part of their standard of living.
It would be wrong to say that women should do without such things. In many cases, they would prejudice their chances of employment by doing so. Sales tax should not be increased on such items as they do not come within the category of luxury spending. Numerous other items are contained in the schedule, but there is no need to enumerate them. We know that in the last analysis this is just another tax which is being passed on to the people at a time when we are enjoying a standard of prosperity which has been built up over the years, and a standard of living to which Australian men and women are thoroughly entitled. The imposition of this extra taxation will have the result of lowering the standard of living of the Australian people.
The Government says that it has been brave in imposing these taxes. What has it been brave about ? It is the Australian people who need to be brave in order to stand up to the imposition of these taxes. It has also been said by honorable senators opposite that the Government acted bravely in not making a political football of this measure. I have read an extract from the recommendation of the economists whom the Government called in to advise it. That recommendation was made to the Government before the recent State election in New South Wales took place, but the Government found it expedient to withhold its publication until a more appropriate time. It must have been evident that the position was fast becoming desperate. I understand that Sir Ross McLarty was warned by this Government, that the Western Australian State election should be held as soon as possible because the tide was fast running out.
– Who told the honorable senator that?
– It was very obvious. If it had not been for a few members of his own party who stood out against such political deceit there would have been an election before these measures were announced by the Prime Minister. The people of Western Australia, irrespective of what Senator Scott has said, have shown what they think of this absolutely vicious taxation and interference with the living standards of the Australian people.
– This measure does not touch the living standard at all. There is not a single foodstuffs item or any other necessity included.
– An interjector says that it does not affect the standard of living of the Australian people. I remind the Senate that the basic wage has been frozen for three years, and that every basic wage-earner has to buy the articles on which sales tax is levied. If he does not do so, his standard of living is lowered.
In view of the fact that land tax has been abolished, I cannot believe that the state of our economy is such that it is necessary for the Government to increase sales tax. Why has this Government changed the system that operated during war-time, under a Labour administration, whereby profits from industry were shared with the workers who produced the wealth? The system that has been adopted does not keep inflation in check. I remind supporters of the Government that if their policy to curb inflation is based on the people having insufficient money with which to buy the goods that they need, that policy will not be half so successful in combating inflation as has been the Government’s policy during the last six years in stimulating inflation in this country.
One after another, honorable senators opposite who have sought to justify the increases of sales tax in the light of what the Prime Minister has said, have sat clown exhausted by the effort. I cannot see that the Australian economy will benefit from the measures now before the chamber, although they will enable the Government to obtain additional revenue in order to meet the liability of £105,000,000 that it has incurred. Labour will oppose at every stage the introduction of unfair taxation. The circumstances to-day are quite different from those that existed in 1930 when sales tax. was introduced. The present increases will reduce the standard of living that the people of Australia now enjoy, and to which they are entitled.
– I support the measures now before the chamber, which will increase revenue from sales tax by £30,000,000 in this financial year. Senator Cooke said that in 1949 a basic wage-earner with a wife and three children paid no income tax. I think that was correct. The honorable senator then said that to-day a similar wage-earner paid income tax of £8 2s. a year.
– I cited the statistician’s figures.
– I do not quibble about the figures, but I remind the honorable senator that whereas in 1949 the Labour Government paid to that wage-earner an amount of £26 a year as child endowment, this Government pays him £65 a year, or £39 more.
– In inflated currency.
– He is precisely £30 18s. a year better off to-day. I was particularly interested in the figures that were cited by the Leader of the Opposition (Senator McKenna) this afternoon in relation to what he described as the people’s car. He said that, by the Government’s proposals, the price of a Holden car would be increased by £400. According to the schedule, sales tax on certain types of motor vehicles has been increased from 16J per cent, to 30 per cent. Therefore, apparently the Leader of the Opposition based his estimate of increased price on a motor car worth £3,000. I have yet to learn that the ordinary people in this country can afford to pay £3,000 for a motor car, although I have no doubt that many labour senators own such vehicles. Honorable senators opposite have said that the increase of sales tax is unpopular with the people. I point out that that fact alone does not prove that the increases are not justified. Of course, the Opposition is doing its utmost to raise a storm of public protest against the Government’s measures.
– What does the honorable senator think we are here for?
– If I thought that honorable senators opposite were here to advance constructive criticism, I would have been sadly disappointed. I do not consider that any government which shirks an unpopular duty is worth its salt, and right down history it has been shown time and again that government measures thought at the time by the multitude to be unjust, and which were unpopular for that reason, proved subsequently to be blessings.
Honorable senators opposite have said that they oppose these measures because they do not consider that the Government should seek additional revenue of £30,000,000 in this financial year; yet they have not pointed to one item of public expenditure which could be reduced. In the past, honorable senators opposite have accused this Government of being niggardly and of depriving the people of all sorts of benefits. I invite them to indicate any item of public expenditure on which a saving could be effected. As has been pointed out by other honorable senators on this side of the chamber, the Government considered that, in order to balance the budget and maintain solvency, it was necessary to obtain additional revenue. I consider that the Government is doing the correct thing by raising these additional taxes in order to keep this country solvent. Also, if these measures are causing our people to give some consideration to our economic situation, the actions of the Government are to be applauded. For some time past all the signs have been apparent, for those who wished to see them, that the economy of Australia needs very careful handling.
Let us now pay some attention to our overseas funds, about which we have heard so much from honorable senators opposite. They have told us of the way in which Labour governments bandied those funds, hut have not explained their present state. Our overseas funds are built up by the prices that we receive for our exports. In the past we have been accustomed to build up those reserves by the sale of wool, wheat, barley, sugar, dried fruits, meat, dairy produce, lead, tin and other minerals. All the sales of those products that we have made at good prices during the past years have been a great boon to the community as well as to the Treasurer of Australia, whoever he may have been. Until about twenty years ago we did not manufacture a great proportion of the goods that we needed in this country, but during the last twenty years our industries have made enormous strides and are now supplying a large proportion of all the goods that we require. However, those industries have always needed raw materials, plant and equipment from overseas, and, consequently, they have drawn most heavily upon our overseas funds. Even governments, both State and Federal, have used Large sums from our overseas reserves for the purchase of rolling stock for their railways, plant for the mechanization of the mining industry and other equipment for public purposes.
I was rather interested to-night to hear so much from Senator O’Flaherty and other honorable senators about their great love for the primary producer. While listening to them I wondered whether they were really sincere because of their attitude to the shearers’ strike, having regard to the fact that the wool industry is the greatest exporting industry in this country. If they were so concerned about the welfare of our primary industry, they would - as all rightthinking people in the country do - support the arbitration system by opposing the shearers’ strike and trying to get our sheep shorn so that our wool may be sold as quickly as possible and to our best advantage. The shearers’ strike, which is supported by the Opposition, is a blow at our arbitration system. The Australian Workers Union has stated that it will spend up to £2,000,000 to defeat the award of the arbitration tribunal, but nothing has been said by honorable senators opposite to the effect that the union should uphold the decision of the court. If members of the Opposition are not prepared to uphold the arbitration system in this particular case, surely they have not the interests of the primary producers, or of the country, at heart.
The shearer’s strike means much to this country, because nothing will bring us to our knees, economically speaking, more quickly than a strike in the shearing industry. The increase of the price of petrol by 3d. a gallon and the increased sales tax of 4 1/6 per cent, on motor lorries, will be small items to the farmers if they cannot get .their wool to market. Therefore, there has been a copious flow of crocodile tears from honorable senators opposite about the increase of the petrol tax and the increase of the sales tax on motor vehicles. The primary producer can quite well sustain all those charges provided he can sell his wool.
Another matter that has entered into the consideration of this Government, because it must plan for the year ahead, is the fact that we have experienced great floods from Queensland to Victoria. Those floods have caused enormous losses of stock, plant, equipment and crops to the primary producers, and no one in his right senses will say that the incomes of primary producers in 1955-56 will be comparable with what they were two or three years ago. That factor must be taken into consideration by the Government, and the Government realizes that it will not derive nearly as much revenue from income tax in the ensuing twelve months as it has been accustomed to collect. The Labour party would be the first to chide the Government on its lack of foresight if it did not take those things into consideration and proceed now to collect the revenue that the country needs to remain solvent.
I was much interested in the figures given by the Leader of the Opposition (Senator McKenna). He said that the proceeds of the sales tax will increase from £39,000,000 a year to £106,000,000 a year. He also said that in 1950-51 sales tax collections represented 6.9 per cent, of the total amount of tax collections. This year, he said, it will represent 9.78 per cent. The honorable senator went on to explain that income tax receipts had fallen from 54.49 per cent, of the total income that the Treasury receives to 51.88 per cent. That is true. Because revenue from income tax is falling, the Government has been compelled to raise additional revenue by way of taxation in order to provide the services that the people of Australia demand. That is the reason why taxation is being increased. I should like honorable senators opposite to indicate to the Senate a fairer means of raising funds. I remind them that the schedules contain not one item that is included in the C series index. Sales tax on household furniture and household utensils has not been increased. There is practically no sales tax on foodstuffs, or perhaps I should say that there is no sales tax on the foodstuffs that are included in the C series index. After all, the public is free to choose whether or not it buys the commodities that are subject to the additional tax.
I am intrigued by the increased sales tax on motor cars, because we so frequently bear members of the Opposition claiming that no supporter of the Australian Labour party or person who works for an employer can afford to purchase a motor car. I have heard them make that statement many times, and I accept their word. But . if those people cannot afford to purchase motor cars and do not own motor cars, then the increased sales tax in this respect will not affect them in the slightest degree. For once, the silver-tails, as honorable senators opposite sometimes refer to people who are a little better off than they are, will have to pay this tax. The Opposition should welcome the fact that the silvertails, whoever they may be, are to suffer increased taxation. If their claim is to be accepted, the man on the basic wage will not be affected by the increased sales tax on motor cars and the increased duty on petrol.
I support the bill because it proposes to raise an additional £30,000,000 by means of taxes that are spread over the whole community and which do not fall unfairly on any section of the people, least of all the working people.
– I oppose the bill. I think that honorable senators opposite will agree with me when I say that E have opposed legislation of this kind on every occasion that it has been- introduced. My attitude to sales tax has not varied, whether a Labour government or a Liberal government has been in office. 1 consider that sales tax is the most iniquitous form of taxation that can be forced on the people by a government.
Having listened to the supporters of the Government speaking in this debate to-night, I have been forced to the conclusion that they have been very hard pur to it to express themselves with complete sincerity regarding the actions of the Government. We have not heard one speech that has had the ring of sincerity which usually characterizes the remarks of honorable senators opposite to the achievements of the Government.
– They are all opposed to the measure.
– Of course they are. Two or three honorable senators opposite actually found fault with the administration of sales tax legislation. Some honorable senators opposite have said that the people may please themselves whether or not they buy commodities that bear the increased rates of tax. Let us accept that statement at face value. It cannot be denied that an overwhelming majority of Australians will not be able to please themselves for much longer whether or not they purchase commodities which, according to the Government, may be termed luxuries. But, of course, there are some people in the community whom the increased rates of sales tax will not deter from purchasing the commodities they desire, whether they be luxuries or otherwise. It is unfair to approach this matter from the angle that people may please themselves whether or not they purchase commodities that bear the increased rates of tax.
Senator Mattner rightly referred to the fact, that there is no sales tax on foodstuffs that are included in the C series index. I intend to say something in that regard. A good deal has been said by the supporters of the Government concerning the fact that sales tax was first introduced by a Labour government, and reference has been made also to the sums that have been collected by this Government and other governments from sales tax and other taxes. However, nothing has been said by honorable senators oppo site about the number of times that the Government has appealed unsuccessfully to the Australian people to fill loans. Honorable senators opposite know very well that the economic conditions in Australia during the period that this Government has been in office are vastly different from those that obtained when the Labour party was in office between 194.1 and 1.949, and even earlier than that. The conditions in which sales tax was foisted on the Australian people originally were entirely different from the conditions of to-day.
– Sales tax was introduced by a Labour government.
– That is not denied. It is a tax that I have always opposed. I hate it. Knowing the Leader of the Government (Senator O’sullivan) as I do, I have a feeling that he too has not much time for it. It annoys me that the Opposition should be twitted for criticizing the Government or for not bringing forward constructive suggestions in relation to measures that are before the Senate.
Debate interrupted.
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The PRESIDENT (Senator the Hon. A. M. McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question resolved in the affirmative.
Senate adjourned at 11 p.m.
Cite as: Australia, Senate, Debates, 2 May 1956, viewed 22 October 2017, <http://historichansard.net/senate/1956/19560502_senate_22_s7/>.