23rd Parliament · 3rd Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 1 1 a.m., and read prayers.
– Is the Leader of the Government in the Senate aware that a recent gallup poll showed that more than seven Australians out of ten favour a compulsory contributory national insurance scheme for pensions and sickness and unemployment benefits? Also, is he aware that a subsidiary company of a private bank has established in Western Australia a scheme which will allow members of the public to enjoy the benefits of superannuation? Is it a fact that the Government has now rejected all ideas of setting up a compulsory national insurance scheme? In any event, will the Minister undertake to examine the Western Australian scheme to see whether some means can be devised whereby individuals can be protected from the shocking neglect from which they suffer under this Government?
– Senator Hendrickson, by using that last phrase, ruined what was otherwise quite a good question. In those circumstances, he completely loses any public support that he might otherwise have had for raising such an important matter, which is one of very great public interest. I have noticed the gallup polls on it and I have noticed the trend towards the establishment of superannuation funds on a contributory basis. I am not prepared to canvass the pros and cons of such a big question of policy in reply to a question without notice.
– Has the Leader of the Government in the Senate seen the article in this morning’s “ Sydney Morning Herald “ on the discussions which are stated to have taken place at yesterday’s meeting of the Government parties? If he has, can he say whether the Prime Minister “ replied angrily, saying that Australia’s overseas reserves were improving daily “?
– I read the newspaper report to which the honorable senator referred. Indeed, I read it with great interest. In it there are two references to the Prime Minister which are quite inaccurate. The first statement is that the Prime Minister replied angrily to a question addressed to him. I was present at the meeting and I saw no evidence at all of any such demeanour on the part of the Prim. Minister. The second inaccurate statement in the newspaper was that the Prime Minister said something to the effect that he would hold people responsible and take disciplinary action if there were any leakages to the press. As one who was present at the meeting, I just say that that simply did not happen. The statements are quite incorrect. In truth, as all Government members and senators and the public generally know, the Prime Minister was present for only a comparatively short portion of the meeting. Early in the proceedings he left to confer with our distinguished visitors from Indonesia.
– My question is addressed to the Minister representing the Treasurer. Because of the prevailing degree of unemployment in Queensland, will the Treasurer cause an investigation to be made of the plywood and sawmilling industries in that State for the purpose of deciding whether the average output of each mill could be purchased by the Commonwealth Government during the next six months?
– The honorable senator will know, I am sure, that the Government is aware that in Queensland there are the elements of a situation which in some respects is different from that to be found elsewhere in the Commonwealth at the moment. I think that my colleague, Senator Spooner, during a recent visit to Brisbane, and as the result of a conference that he had with the appropriate Minister in the Queensland Government, was able to announce certain action to be taken to step up home building in Queensland, which will be of considerable assistance in the solution of whatever difficulty the Queensland timber industry may be experiencing. I think it is fair to say that the Government is watching the position quite closely and has indicated its sympathy in a very practical way. It may be taken for granted that the Government will continue to do so in regard not only to Queensland but to all other parts of Australia as well.
– I ask the Minister for National Development whether the Commonwealth Government has received from the Government of Western Australia an application for the development of roads in the Kimberley beef-producing areas, together with a roads plan. If so, is it correct that the amount required will be approximately £7,000,000? Is it the intention of the Commonwealth Government to make available to various States, and also to the Northern Territory, money for the construction of such roads, without any tags attached, or does the Commonwealth expect the States and the Territory also to provide money for this purpose? If tags are to be attached to the provision of money by the Commonwealth, what form will they take?
– I do not know exactly what Senator Scott means by “ tags “. The policy of the Commonwealth Government, which has been announced by the Prime Minister, is to give sympathetic consideration to the construction of such roads, the criterion being whether they will assist the beef industry and thus help to increase our export trade. That is the basis on which the matter is approached. Without doubt, the Commonwealth expects the States to make some contribution to the construction of the roads. The works are primarily the responsibility of the States concerned. In the ordinary course of events, they would have to undertake them. As I understand the attitude of the Commonwealth Government - it is by no means final as yet - we shall try to make arrangements with the States whereby the work will be accelerated and State funds will be supplemented by Commonwealth contributions.
I should prefer not’ to discuss the proposals of the Government of Western Australia. I had a discussion with Mr. Court, while he was in Canberra, concerning the matter that he lodged officially on behalf of his government. Ii have not yet quite caught up with it; ft may be among other papers on my table that I have not yet dealt with. Until I see the papers officially, I should not like to comment on them. I know that arrangements have been made for a discussion between Commonwealth officials and officials from Western Australia, but I do not know the exact date on which the discussion will take place. The preliminary discussions are of tremendous consequence. At them, an attempt is made to reach agreement on the order of priority, the net worth of such roads, their effect on export income, the type of roads to be constructed, and matters of that kind, discussion of which is necessary before the matter can be considered at the ministerial level.
– I direct a question to the Leader of the Government in the Senate. In view of the steeply rising building costs, will the Government consider raising the maximum war service homes loan above the present ceiling limit of £2,750, and also raising the level of other loans for home building over which the Government has any control or influence?
– I direct Senator Sandford’s attention to my recent announcement that the last tender prices for war service homes in Brisbane were about 11 per cent, lower than the prices quoted in the tenders called in 1960. That is an indication that governmental policy is having a beneficial effect. The question of increasing the loan limit above the present level of £2,750 is not as simple as it sounds. There is a long waiting list for war service homes loans. I think that applicants are finding that they can make satisfactory arrangements with loans at the present level. Of course, they would like larger loans; I am not denying that at all. However, we have a great number of applicants who are financing homes satisfactorily. Our resources are not unlimited, and if we increased the loans we would reduce tie number to whom loans could be made. The question is whether we should endeavour to increase the amount of the loan or to reduce the waiting time. If we can reduce the waiting time we shall achieve, in many ways, the same effect as we would achieve by increasing the amount of the loan, because we shall reduce the expense to which applicants are put in arranging temporary finance. The policy that I have maintained up to this stage and the policy that I favour is to keep the loan at the present level, servicing a greater number of applicants and consistently and gradually reducing the waiting time.
– I direct to the Leader of the Government a question that is prompted by Senator Reid’s question and the Minister’s reply to it. Does the Minister agree that the report on page 1 of this morning’s issue of the “ Sydney Morning Herald “, purporting to give an account of yesterday’s joint meeting of the Government parties, is grossly inaccurate? Does the Minister further agree that this garbled report captures neither the substance nor the spirit of what took place? Is it not true that the whole atmosphere of the joint party meeting was that of a thoughtful and intelligent study of the broad canvas of the Australian scene, not of an exhibition of flaring tempers, as reported?
– I have no hesitation in expressing my personal view that the article does give a distorted picture of what occurred at yesterday’s party meeting. Many of those who are reported as having expressed hostility, undoubtedly support the Government’s policy. In my opinion, they were seeking information. If the article leaves the impression that the majority view was against the Government, all I can say is that I disagree. The majority view was very much in favour of Government policy.
– I preface my question, which I direct to the Minister for National Development, by referring to a copy of “Reader’s Digest”, dated March, 1961, containing an article headed “ Instant Everything”, in relation to a food preservation process called accelerated freeze-drying. This states that foodstuffs have been stored for twenty months without refrigeration or the use of preservatives. Has the Minister seen the article? If not, will he obtain a copy of the publication and peruse the article? After perusing the article, will the Minister give favorable consideration to encouraging the establishment of a factory for the treatment of foodstuffs by the process mentioned on either King Island or the north-west coast of Tasmania? Does the Minister agree that the treatment of foodstuffs by such a process would be of great value in areas where refrigeration is difficult to obtain?
– I have not read the article, but two or three people have mentioned it to me, and I have had some preliminary discussion about it. 1 do not pretend to have a grasp of the matter. 1 suggest that Senator Poke put his question on the notice-paper and I shall get my department to express an opinion and discuss the pros and cons of the effectiveness of the scheme. I do not promise that the Government will erect a factory in Senator Poke’s electorate, if I may so describe the areas he has mentioned, but my department will give him an answer which should be of general interest.
– I believe that such a grant is made in respect of exservicemen. I do not think provision exists for the payment of a similar grant in respect of war widows in repatriation hospitals. I shall bring the whole matter to the notice of the Minister who I am sure will examine the request most sympathetically.
– By way of preface to a question directed to the Minister representing the Treasurer, I should like to say that some time ago I asked a question similar to the one I am about to ask, but, to my way of thinking, the answer which I received was not very satisfactory. I ask: In order to assist State education authorities in their efforts to recruit teacher trainees, as one step towards reaching a solution of the present crisis in education in Australia, will the Government reconsider the position and not tax the living allowances paid to teachers-in-training and thus place them in the same category as Commonwealth university scholarship allowances, which are tax free?
– I remember that the honorable senator’s previous question was placed on the notice-paper, and I remember also the answer that was provided. I must say that it appeared to me to be a very commonsense answer to her question. Senator Tangney is requesting that education should be assisted in the way she now suggests. In reply I can only tell her that education falls fairly and squarely within the administration of the States.
– Taxation is a Commonwealth matter.
– I am speaking of education and the honorable senator’s question no doubt relates to education. Indeed, I have always understood that that was her particular interest. If her question does, in fact, fall within the ambit of taxation, and only of taxation, as she now says it does, then I suggest to the honorable senator that she has already been answered. The difference between the two types of grants was clearly drawn by the Treasurer in his previous reply. He showed beyond dispute that the grant in one case was in fact part of an income and that the grant in the other case was not.
– My question is directed to the Minister representing the Postmaster-General. A few weeks ago, I asked the Minister some simple questions concerning the current telephone directory and the complications arising from the extended local service call system. I put forward a few simple suggestions for unravelling those complications.
Evidently he is having difficulty in prising an answer from those responsible for the compilation of this book, so I now ask him: Will the Postmaster-General offer the sug gestion to his officers that they call upon the women members of this Parliament to help in this matter? The result would no doubt be something filled with feminine logic and understandable by even the simplest of men’s minds.
– I readily acknowledge that there has been some delay in furnishing the honorable senator with a reply, but I point out that the question she poses is a very difficult one. To make constructive suggestions for the improvement of the telephone directory entails a good deal of research. That is going on, and I hope to have an answer for the honorable senator ere long. Her suggestion that the department use her services and those of other lady senators makes no appeal to me, for the very good reason that these ladies are blessed with such natural charm that I believe the concentration of the officers would be impaired if they intruded into this field.
– I address a question to the Leader of the Government in the Senate. In answer to questions asked by honorable senators on the Government side relative to a report in the press concerning the Government parties’ caucus meeting, he stated that the report was misleading and, indeed, distorted the facts. Will the Government consider the establishment of a national newspaper having for its purpose, not political support of either the Government or the Opposition, but the presentation of facts to the people of Australia?
– My answer to that question is short, sharp and decisive. The answer is, “ No “. I am quite certain that, whatever may be the complaints that we make about the press now. the position would be worse with a government-owned newspaper. It is very interesting to note that in the controversy this morning, nobody from the Labour side has come forward to support the selfish and sectional attitude of the Chamber of Manufactures in its present propaganda campaign.
– As one who was present during the whole of the party meeting yesterday, will the Leader of the Government agree with me that one common opinion expressed by members was that the Government should not allow itself to be deflected from its course by any pressure group? Does he regard the newspaper report as a part of the tactics of a pressure group?
– I would not go so far as to say that the newspaper report is a part of a pressure-group campaign, but I would go so far as to say that the campaign is a pressure campaign. There is an endeavour by the manufacturers to take all the benefits flowing from the success of our present policy and to let the rest of the community bear all the responsibilities and burdens. I make my position quite clear. I will not be influenced by any pressure campaign directed against the Government on this or any other issue.
– I preface my question, which is addressed to the Minister representing the Minister for Defence, by pointing out that during the last parliamentary session I placed on the noticepaper a question relating to the development of nuclear power in China. A reply to that question has not been furnished. I now ask the Minister whether he has any knowledge of the development of nuclear power for military and industrial purposes in China and Japan,.
– The Japanese atomic energy programme is well known; it is a public matter. Japan has a special Minister in charge of atomic energy, and when I was in that country I discussed the programme with him. Instead of attempting to rely on my recollection, I ask the honorable senator to place his question on the notice-paper. I am sure that I shall be able to furnish him with information about the present situation in relation to Japan’s research reactor and the contemplated programme for the building of an industrial reactor. I do not know what the position is in mainland China. The situation may be that we either cannot answer the question or will not. However, if the honorable senator places his question on the notice-paper as I have suggested, I shall let him know.
– Can the Minister for National Development say whether, in the event of New South Wales and Victoria requiring a share of the waters to be impounded in the proposed Chowilla dam above Renmark, in South Australia, an alteration to the River Murray Waters Agreement will be necessary? Secondly, does he agree with the opinion expressed by the South Australian representative on the commission, Mr. Dridan, that “ good progress in the preliminary testing on the foundations of the dam has been made but that it will take another three months for these investigations to be completed “? Thirdly, is South Australia receiving any technical or scientific aid from officers of the Snowy Mountains Hydro-electric Authority in relation to this matter?
– I did not see Mr.
Dridan’s statement. I know Mr. Dridan, and I am quite certain that whatever he said is correct. He is a very experienced and capable officer. The present situation is that the River Murray Commission is investigating the constructional aspects of the dam - that is, the building of the dam, its site and that sort of thing - and is inquiring into the use of the water. This is not an easy matter to resolve. It involves not only the storing of waters in a particular dam but how they can be interchanged and stored in alternative conditions.
My recollection is that at the meeting of the heads of government which I attended it was decided to refer the matter to the River Murray Commission and ask it to let us know what could be done in varying circumstances, such as whether the dam should be built solely for South Australia or to service New South Wales, Victoria and South Australia. The matter would then be the subject of further discussion. I should think that whatever happens, an alteration of the River Murray Waters Agreement will be required.
To my knowledge, no assistance is being provided by the Snowy Mountains authority. There are very efficient water conservation and irrigation officers in each of the three States. I am quite sure, however, that the Snowy Mountains authority would be willing, and indeed eager, to lend a helping hand. Of course, the authority would provide that assistance only if the States requested it.
– My question is directed to the Minister representing the Postmaster-General. Does the honorable gentleman recollect that over the past two years honorable senators on both sides of the chamber have placed before the PostmasterGeneral questions about the poor radio reception in areas such as Kalgoorlie, Noresman, Coolgardie and the northern areas of Western Australia? I ask the Minister whether he is aware that after giving quite a number of evasive answers the Postmaster-General received correspondence to which he replied that the Australian Broadcasting Control Board had sent an engineer to Western Australia to investigate reception conditions; that the engineer considered that reception was bad; and that the board had approved the following projects: -
When the Postmaster-General gave that answer, which was more than twelve months ago–
– Order! The honorable senator seems to be giving rather a lot of information.
– I ask the Minister: Was the Postmaster-General serious when he gave that reply to me? Has the preliminary work on the projects that were being examined at that time yet been completed or is the work still proceeding? Will the Minister make further inquiries to ascertain why reception in the areas to which. I have referred is particularly bad? If at all possible will the Minister give consider tion to providing people in those areas with a reasonable return for the amount expended on broadcast listeners’ licences?
– I am quite sure that the Postmaster-General was serious when he gave to Senator Cooke and to the people concerned the undertakings to which Senator Cooke has referred. I think we are sometimes prone to forget that Australia is a huge and very sparsely settled continent. Its development creates tremendous communications problems. Indeed, I have heard the Postmaster-General say on more than one occasion, when being pressed to extend television services, that his department has obligations that must be fulfilled to people who are not getting good radio reception. I know that that thought is uppermost in the Postmaster-General’s mind and I know that he is determined to fulfil those obligations. I will again bring the matters raised by Senator Cooke to the notice of the Postmaster-General so that I may be able to furnish the honorable Senator with a report of what is being done in the areas to which he referred.
– Is the Minister representing the Minister for Health aware of a report emanating from. Adelaide that a United States organization has made a grant of 80,000 dollars - that is, approximately £35,700 - to enable basic heart research to be continued in Adelaide for another five years? The grant is from the National Institute of Health, which is a body financed by the United States Government, and has been made to Professor G. Maxwell, Professor of Child Health, University of Adelaide. If the Minister is aware of that grant, does he agree that it is further evidence of the unselfishness of the United States in making large sums of money available to other countries for medical research which is regarded as worth while? I also ask the Minister whether the Commonwealth Government has made any financial contribution to the National Heart Campaign. If so, how much has been contributed?
– The honorable senator is quite correct in saying that the United States of America has poured a great deal of her treasure into many parts of the world for research in many fields. I am sure that the countries that have benefited from those grants appreciate what the United States has done. I am not aware whether the Commonwealth Government has yet made a contribution to the National Heart Campaign. If the honorable senator will place h is question on the notice-paper I will obtain an answer for him.
– My question is addressed to the Minister representing the Postmaster-General, and is prompted by the very large surplus achieved by the PostmasterGeneral’s Department, as indicated in the documents tabled in the Senate yesterday. When the Minister is considering the matters raised by Senator Buttfield, will he also consider using bigger type in the printing of telephone directories than is used at present? I am quite certain that the buoyant state of the postal revenue is due, in a large measure, to the number of wrong numbers that subscribers get because they cannot decipher the numbers in the directories. I will not say whether that is intentional or otherwise.
If the Minister is unable to accede to my request for the use of bigger type in the printing of telephone directories will he agree, in view of the increased postal revenue, to supply a magnifying .glass to each telephone subscriber?
– The honorable senator’s question is based on the false premise that the Postal Department made a huge profit last year. That is the result of a comparison of the accounting methods adopted in 1959-60 with those in use in past years. May I just make this point before I reply to the honorable senator’s question specifically? As she well knows, the present method requires the charging of interest On the capital investment in the Post Office. One can argue at great length that the method is not justified. Ohe can also argue about whether the Post Office should be run as a business undertaking, which would require that the people who use the telephones pay for the telephone system. I suggest to honorable senators opposite that they would readily agree that the people whom they represent are due for consideration on that count. Any improvements to telephone directories must, of necessity, involve additional expense. I concede that sometimes it is difficult to read the print in the directories. I shall ask the Postmaster-General to be specific in giving his reasons for adopting the form of print that he has adopted. I am sure that he has a very good reason for doing so or, if he has not, that he will revise his approach to the matter.
– My question is directed to the Leader of the Government in the Senate. Is it a fact that the Australian Democratic Labour Party has recently announced that it will not give its preference votes to Australian Labour Party candidates in the next federal election because of the alleged pro-Communist or leftist policy of the Australian Labour Party? Does he know whether the Australian Labour Party is now assiduously seeking the continued receipt of Communist Party preference votes in the next election?
– All I can say in reply to Senator Marriott is that the internal arrangements of the Australian Labour Party are so weird and wonderful that it is difficult for anybody outside that organization to be able to answer for it. In this matter I would be very strongly inclined to support the views of the Australian Democratic Labour Party.
– I preface my question, which is directed to the smiling Leader of the Government in the Senate, by stating that he has shown commendable political zeal, toleration and understanding in regard to the distorted report in the capitalist press of a recent meeting of the Liberal-Country Party caucus. In future, will he show the same zeal, toleration and understanding in regard to distorted reports in the capitalist press of Labour caucus meetings?
– I am very glad to have compliments from Senator Brown or from anyone else. This is a pretty important matter. This is election year, and when anybody attacks the Government with which I am associated I will fight back, - and it will be with gloves off, too!
– My question is directed to the Leader of the Government in the Senate. Is the attack launched upon the Government by the Victorian Chamber of Manufactures part of a pressure group campaign to endeavour to maintain some uneconomic industries to the detriment of Australian consumers? Is it not a fact that the emergency tariff procedures are open to any body or association which feels that it is being penalized? Also, is it not a fact that approximately half the number of bodies which have made applications to the Tariff Board for emergency action to be taken, after consultation with Tariff Board officers, have withdrawn their applications, convinced that their troubles have not been due to the lifting of import restrictions?
– I commend Senator McKellar on his question. I have said previously that I will fight back against this campaign. When I say that, I mean that I will fight back not so much against the newspapers but against this campaign which I regard as a pressure group attack on the Government. I should like to point out that the greatest beneficiaries from the national prosperity that we have had in the last decade have been the manufacturers. A sound economy is a condition precedent to prosperity in any business. We want manufacturing industries to increase, prosper and grow because we want to see them provide work opportunities so that Australia can increase its population. But those industries will not achieve, by the procedures that they are now adopting, the result at which we all are aiming. The points Senator McKellar made are well taken. We have a difficult exercise in our endeavour to put the economy on a sound basis. Where we experience difficulties, we do our best to take corrective measures. The people who are subscribing the funds for this sort of campaign are subscribing funds to defeat this Government, and on that ground I will have my say.
– I desire to address a question to you, Mr. President. About twelve months ago I asked you whether it would be possible to produce a booklet for the use of visitors to Parliament House, particularly children, in view of the increasing number of people who are taking an interest in the Federal Parliament. I realize that there is a great wealth of material available in Parliament House. I ask you whether anything has been done by the library committee or by any other means to produce a new booklet for issue or sale to visitors to Parliament House.
– In reply to Senator Tangney, once again I direct attention to the excellent book which is on sale at the front door of this building at a cost of one shilling. That book meets the general requirements in respect of Parliament itself. I think the honorable senator has in mind more specific objects within the building. I quite agree that more material on those matters should be published. Knowing that I have her support, I will be very pleased to take the matter further.
– I ask the Minister for National Development whether the Government is stockpiling uranium from Rum Jungle. If so, can he say what is to done about uranium mines such as that at Radium Hill in South Australia? Will the Government adopt every means to ensure that such mines are kept in full production?
– The present position is that the Rum Jungle mine has an assured outlet for the whole of its production until the end of 1962. The Rum Jungle mine has been quite a profitable undertaking. The Government recently decided to re-invest the profits that it has earned at Rum Jungle, by stockpiling uranium as from the time that the contract finishes until such time as the market revives. It is open for any other organization to re-invest its profits in the same way as has the Commonwealth.
– My question also is addressed to the Minister for National Development. Recently, after references had been made to consultations that had been held between Commonwealth officials and the representatives of certain States regarding laudable projects to construct improved wharf facilities, with the object of increasing exports of coal, and roads in beef -producing areas, the Premier of Tasmania issued a public denunciation of the Commonwealth for not having consulted Tasmania. I now ask: Has the Premier of Tasmania submitted to the Minister particulars of projects for which he desires assistance? If so, can the Minister give the Senate information regarding negotiations that have occurred or conferences that are to take place?
– I know no more than the information given in the newspaper report of Mr. Reece’s comments. I take it that any correspondence in the matter would have been on a Premier to Prime Minister basis. It may be that Mr. Reece has written to the Prime Minister, but I have not seen anything in connexion with the matter other than the report of Mr. Reece’s statement. As I mentioned earlier, the Commonwealth is seeking proposals which it might be prepared to support, the criterion being that such proposals would increase export income. I think that Mr. Reece based his statement on the understanding that a general developmental programme was involved. The primary consideration, as I have said, is whether the works proposed would speedily result in an expansion of our export income.
– I preface my question, which is addressed to the Minister representing the Treasurer, by saying that in the constant consideration of Australia’s problem of balance of payments, references repeatedly are made to the need for expansion of our exports and a cut-back of imports, but very little is ever said about the huge amount expended on what are called “ invisibles “. Is it a fact that invisibles cost the Australian economy no less than £243,000,000 in the financial year 1959-60, a year in which our total adverse trade balance was £252,000,000? Is it correct that the term “ invisibles “ covers expenditure on freight, insurance, travel, interest on loans, and so on? Will the Minister have prepared a document showing, for the financial year 1959-60, a breakdown of invisible items under appropriate headings? Under the heading of “ insurance “ will he draw a distinction between insurance and re-insurance, as I understand that many Australian insurance companies have overseas treaties whereby they transfer a fixed percentage of all insurance policies to overseas companies?
– The honorable senator was good enough to give me an advance indication of the nature of the question that he proposed to ask, and I have had an opportunity to obtain some material for him. The latest estimates in regard to invisible items have been prepared in the form of table. It is as follows: -
I regret that I am unable to comply with the honorable senator’s request to provide statistics relating to insurance and reinsurance payments, as these are not published separately in official balance-of-payments estimates. Marine insurance transactions form part of the item “Transportation - Other “, shown in the table, while other net earnings of overseas fire, marine and general insurance companies are included under the general heading of “Debits - Income from investment “. I am advised, however, that only a relatively small part of total debits for invisible items could be attributed to net payments arising from insurance and re-insurance transactions.
– I direct a question to the Minister representing the Minister for the Interior. I understand that the Department of the Interior uses two methods of calling for tenders for work to be done on its behalf. There is the straightout form of calling for tenders and also, I understand, an invitation to individuals or organizations to register as tenderers. Has the department a set policy which determines the works or services in respect of which individuals or organizations are invited to tender? If so, what is that policy? Why is that form of tendering used instead of the open tender system?
– The honorable senator has raised a valid point. The department invites people or organizations to tender in certain circumstances. In the main, this method of calling for tenders is confined to cases in which the range of persons or organizations that would be interested in tendering is a narrow one, so that if tenders were called in the ordinary way, little interest would be shown except by the few people who were in a position to offer their services or their goods. The department has therefore developed a system whereby, within fairly well-defined channels, invitations are issued to three individuals or firms - if there are three in the particular field - to tender for a specific work. This should not be construed as a general principle. As I have said, this form of calling for tenders is confined to the few organizations or individuals which could supply the special goods or services required.
– In addressing a question to the Minister representing the Minister for Labour and National Service, I remind the Senate that recently on the Fremantle waterfront a strike concerning the newly formed Foremen Stevedores Union occurred, and that the strike cost the State of Western Australia a substantial amount of money. Because the Commonwealth Government came in for a great deal of unjustified criticism, and because conditions in Western Australia appear to be leading to another waterfront strike, will the Minister explain to the Senate and the people of Australia, particularly those of Western Australia, the powers that the Commonwealth has in respect of industrial activity of this kind within the States?
– I understand that there was, on the Fremantle wharfs, a demarkation dispute between the unions concerned, and that the dispute had nothing to do with working conditions, pay, or anything of that nature. I take it that the Waterside Workers Federation of Australia engaged in the dispute because it objected to the formation of a foremen stevedores union. It appears that a campaign is being conducted by the Waterside Workers Federation in Western Australia to involve a number of other unions, such as the transport unions, in some kind of a general federation, with the object of gaining power on the wharfs in that State. No doubt that is being done with the assistance of that eminent Labour leader, Mr. Chamberlain, who last week was denying that any Labour man had stood with a Communist on a unity ticket, at precisely the same time as Mr. Calwell was saying that he wished Labour men would not stand with Communists on unity tickets.
– Why do you not say that outside?
– Of course I will say it outside. However, let me first complete my answer to the original question, which related to the powers of the Commonwealth in regard to this unhappy situation. The answer is that since the dispute is one which does not extend beyond the boundaries of one State, the State Government has the power and the ability to solve the difficulty, if it can be solved, and to make public all the facts concerning it.
Such a dispute is not the responsibility of the Commonwealth Parliament unless and until it extends beyond the boundaries of one State. In reply to what I might regard as a supplementary question from Senator Willesee, suggesting that I would not say outside the Parliament that Mr. Chamberlain denied that any member of the Australian Labour Party stood with a Communist on a unity ticket, I shall be happy to say it outside the Parliament in two minutes’ time.
– As the Minister representing the Minister for the Interior rather misinterpreted my earlier question, I shall repeat it. I preface it by saying that, as I understand the position, there are three types of tenders. The first is the open tender. The second is the tender upon invitation, which the Minister adequately described. The third, which is the type in which I am interested, results when the department publicly requests tenderers to register for a particular job. This type of tender falls between the other two, the open tender and the tender upon invitation. My question is: For what type of jobs are people invited to register as tenderers? What is the purpose of asking people to be registered as tenderers rather than calling open tenders?
– The department has devoted a great deal of time to a study of the United Kingdom system, whereby most public works are done through what are known as trade lists. People in the United Kingdom who have goods or services to supply are registered as suppliers of those requirements. A department in need of those goods or services examines the trade lists and makes an inquiry as to price of those who are in a position to supply. We in Australia have recently had a look at that system. Because of the specialized and confined areas in which departments in this country are obliged to seek their requirements, as compared with departments in the United Kingdom, some consideration has been given to the operation of trade lists. I do not know what stage the examination has reached, but I shall ask my colleague to supply the honorable senator with the specific information that he requires.
Protection for Australian Gramophone
asked the Minister for Customs and Excise, upon notice -
– I now furnish the following answer to the honorable senator’s questions: -
The Tariff Advisory Committee has recently considered the question of the appropriateness of the level of duties, following removal from Customs by-laws, on pick-up heads, tone arms, motor mechanisms and turntables for gramophones and has made certain recommendations. Before taking any further action I will want to discuss the position with my colleague, the Minister for Trade.
asked the Minister representing the Minister for Primary Industry, upon notice -
– The Minister for Primary Industry has supplied the following answers: -
asked the Minister representing the Minister for Primary Industry, upon notice -
What steps are being taken, or are likely to be taken, by the Australian Meat Board to encourage the producers of meat in this country to cater for the requirements of the North American Trade, following on the report of Sir Douglas Copland, on his return from leading the Government-sponsored trade delegation to North America late in 1960?
– The Minister for Primary Industry has supplied the following answer: -
With the development of the Australian export trade in boneless meat to the United States in October, 1958, action was taken from the outset by both the Department of Primary Industry and the Australian Meat Board with the object of ensuring that Australian meat exporters were in the position to take full advantage of this important market outlet. Initially, the Commonwealth Chief Veterinary Officer was sent over to look at the position. In order to meet the American requirements, the Commonwealth veterinary and meat inspection staff was increased, hygiene requirements were intensified at meat export establishments and, in general, export meat inspection was tightened to the maximum physically possible. The Chief Veterinary Officer will again be visiting the United States next month to examine current problems associated with the sale of Australian meat and to bring himself up to date with American requirements. In addition, the Australian Meat Board has sent a number of delegations to the United States to examine the position, and early in 1959 the board appointed its own representative in North America to study and report on the market. A number of personal visits have also been made by Australian meat exporters to study at first hand distribution, market requirements, promotional methods, &c. The end of all these activities is that Australian exporters have been shipping to the American market with considerable effect since October, 1958.
SenatorO’BYRNE. - I present the report of the Public Works Committee on the following subject: -
Erection of a Chemical Physics Laboratory at Clayton, Victoria.
I direct the attention of honorable senators to the important and valuable research that is being undertaken by the Division of Chemical Physics of the Commonwealth Scientific and Industrial Research Organization. The division was established in 1944. It is doing valuable work in the promotion of technical efficiency in established industries, in stimulating the establishment of new industries, in encouraging the use of raw materials of Australian origin, in seeking substitutes for imported materials, in finding uses for by-products not utilized, and in studying national problems to which the research staff can contribute by way of their experience in other fields.
The committee found that the existing accommodation incorporated virtually none of the facilities desirable for the type of research work being undertaken, and it directs attention to the fact that the staff is at present accommodated in a sprawling group of buildings on a site at Fishermen’s Bend which is shared with the Aeronautical Research Laboratories of the Department of Supply. The space occupied by the division comprises part of one floor of a permanent laboratory block, two makeshift factory bays with temporary mezzanine floors, two buildings constructed from disposal Army huts shortly after the war, and one small hut. We found that there was overcrowding and that there was an urgent need for a new laboratory. The site of the proposed building adjoins the Monash University. It is ideally located. The C.S.I.R.O. authorities believe that proximity to the university will encourage young scientists studying there to take a closer interest in this type of work.
The building which is proposed, and which the committee recommends, will meet requirements for approximately ten years. We are finding, in our investigation of many of these very important projects, that even longer planning is necessary. The building will be fully air conditioned. Extra air conditioning will cost £34,000. The committee believes that the expenditure of that additional amount is justified because of the intricate nature of the research. Special assurances were given that the vibration problems associated with the work to be conducted in the building have been met in the design. The estimated cost of the proposed building is £415,000. With the addition of extra air conditioning, which is recommended by the committee, the erection will cost a total of £449,000.
On behalf of the committee, I should like to pay tribute to the great work that is being done by scientists and research workers in the Division of Chemical Physics of the C.S.I.R.O. We hope that the erection of the proposed building will be expedited so that these officers can get on with the magnificent work that they are doing.
Motion (by Senator Spooner) agreed to -
That the Senate, at its rising, adjourn till Tuesday, 2nd May, next.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Spooner) read a first time.
– I move -
That the bill be now read a second time.
This bill will put into effect one of the measures recently announced by the Government designed to encourage Australian exporters. These measures will strengthen both the immediate and longer-term export earning capacity of our primary and secondary industries.
The Export Payments Insurance Corporation itself is a relatively new authority, having been established in 1956. Although it has been in operation for less than four years its worth has been increasingly appreciated by Australian exporters. It has already issued policies with a face value of over £75,000,000, and the number of policies involved has increased year by year. The corporation’s business has included a wide range of Australian primary and secondary exports to over 100 countries. At the present time it has current policies which amount in value to over £24,000,000.
I remind the Senate that the corporation is not in competition with the commercial insurance companies for this business - export payments is a field in which these companies do not operate because of the magnitude and nature of the risks involved.
At present the corporation is charged under the act to conduct its operations on a no profit-no loss basis. This means that over a period of years the corporation must secure sufficient revenue to meet all expenses properly chargeable to revenue. To carry out this policy effectively, the commissioner is obliged to observe orthodox insurance principles where these are applicable. One of these is an acceptable spread of risks between markets. Another is that the payment term involved in a transaction must be such that the risk can be assessed with some confidence.
The purpose of the bill is to enable export payments insurance cover to be extended to transactions which the Corporation would not, or could not, ordinarily cover. Under the bill the Government would be empowered to authorize cover in such cases where it considered that it would be in the “ national interest “ to take such action. Quite deliberately the Government has made no attempt to define what would consitute “ national interest “ in this connexion. However, later I will indicate some broad considerations which could influence the Government’s decision as to whether particular transactions should be offered cover in the national interest.
The bill provides that the commissioner would refer to the Minister for Trade proposals which the corporation would not normally cover but which could merit consideration as “ national interest “ propositions. The responsibility for referring cases to the Government will therefore rest with the corporation. Every case so referred will be considered on its merits by Cabinet Ministers, including, naturally, the Treasurer (Mr. Harold Holt) and the Minister for Trade (Mr. McEwen). It will be for Ministers to approve or otherwise each and every individual proposal referred to them.
The corporation, as I have indicated, must observe orthodox insurance principles in the conduct of its business where these are applicable. However, the Commonwealth, when considering whether cover should be granted on “national interest” grounds could take into account considerations which are wider than those with which the corporation is concerned in the daytoday operations of its business. Examples of such considerations may be stated as follows: -
The corporation will in effect act as the agent of the Government in matters such as the issuing of contracts, collection of premiums and payment of claims where cover is granted in the national interest.
Business written under the “ national interest “ clause will be treated entirely separately from the normal operations of the corporation. Separate accounts will be maintained and presented annually to the Parliament. Such business will not be included within the ceiling on the corporation’s outstanding liabilities, which is at present fixed in the legislation at £50,000,000. It is envisaged that the premiums payable under the national interest provision will vary with the assessment of the risks involved in each case.
In reaching its decision to amend the act the Government was influenced by the fact that similar provisions have operated successfully in countries such as the United Kingdom and Canada. In both cases the claims experience has been satisfactory. In fact, Canada has yet to pay a claim, although business of over 300,000,000 dollars has been written. The United Kingdomis also showing a substantial surplus on its “ national interest “ operations since their inception some ten years ago. During the year ended 31st March, 1960, the United Kingdom wrote business of an approximate value of £47,000,000 sterling under this provision.
I would like to point out to the Senate that export payments insurance cover, because it gives to the exporter a guarantee of payment, can be of considerable assistance to him in arranging finance. This fact has been emphasized by the Australian trading banks. This benefit will, of course, apply equally to transactions insured under the “ national interest “ provision. In examining this matter the Government had before it the recommendations of the Consultative Council of the Export Payments Insurance Corporation and the Export Development Council. Both of these councils are composed of prominent businessmen. They considered that the Commonwealth should insert a “national interest” clause in the legislation. Support for this action also came from the Associated Chambers of Manufactures of Australia, and the Railway Rolling Stock Manufacturers’ Association.
This measure is further proof of the Government’s determination to keep abreast of exporters’ requirements in this increasingly important field of export payments insurance. I commend the bill to the Senate.
Debate (on motion by Senator Kennelly) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Paltridge) read a first time.
– I move -
That the bill be now read a second time.
This bill proposes several amendments to the Defence Forces Retirement Benefits Act 1959, which provided a comprehensive revision of the retiring benefits for members of the Defence Forces. Honorable senators will recall that in 1957 the Government decided to establish a committee, under the chairmanship of Sir John Allison, to review the pay and retirement benefit conditions of members of the services. The act, which commenced on 14th December, 1959, provided new rates of pensions and other retiring benefits which were substantially in excess of the benefits previously payable. The act also provided for amended rates of contributions for the increased benefits. It was necessary to make special provisions to cover members of the forces who were serving at the date of commencement of the act and who had been contributing for the previous benefits.
Two of the proposed amendments provide a further period of time within which members may exercise a right of election granted by the 1959 act, and a third amendment deals with the gratuity entitlement of a limited number of serving officers. These three amendments have been recommended by the Defence Forces Retirement Benefits Board, and the remaining amendments are the product of experience in the administration of the act.
Members of the defence forces who were contributing to the fund at the date of commencement of that act could elect within four months not to contribute for all or part of the additional pension provided by the act. A number of members made an electron but had second thoughts and requested approval to wtihdraw that election and to contribute for an increased pension. This bill grants a further period of two months during which members who elected not to contribute for all or part of the additional pension may revoke that election and become contributors for additional pension.
The 1959 act also provides that a member who had elected in 1948 not to become a contributor to the fund may revoke that election and elect to become a contributor for full benefits as from 2nd July, 1948. Under the act, such a revocation and election had to be made before 14th April, 1960, but because of the large number of men involved it was not possible to complete all administrative action by that date. The bill extends to 1st August, 1960, the period during which an election may be made and will thus permit the Defence Forces Retirement Benefits Board to deal with elections received up to that date.
The bill also preserves the rate of gratuity payable on retirement to officers who were serving at 14th December, 1959.
Previously, the entitlement was at the rate of one and one-half times the amount of their contributions, and the 1959 act provides gratuity at a fixed amount for each year of service. This fixed amount proved, in some cases, to be less than the previous entitlement, and this bill will continue, in those cases, the one and one-half times formula in respect of contributions being paid at 13th December, 1959. It also provides, for officers who were serving as “ other rank” members on 14th December, 1959, the continuation of the one and one-half formula in respect of their service in the ranks if the formula provides a greater benefit than the fixed amount.
A member who is prematurely retired and who is contributing for additional pension for his rank at 14th December, 1959, will not have paid to the fund sufficient to pay for his share of the additional pension. In these circumstances, the 1959 act provides for a lesser pension, or full entitlement on payment of a lump sum. The bill applies this provision to a member who is contributing for additional widow’s pension or for the additional pension due as a result of a promotion.
The 1959 act provides that the reduced pension andthe lump sum payment shall be determined by the board on the advice of the Commonwealth Actuary, and that the board in making a determination and the Commonwealth Actuary in advising the board shall have regard to certain factors. Since it is the actuary who makes the calculation, the bill provides that he only shall have regard to these factors.
Other provisions of the bill are minor drafting amendments, or are consequential to the provisions I have outlined. I commend the bill to honorable senators.
Debate (on motion by Senator Kennelly) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Henry) read a first time.
– I move -
That the bill be now read a second time.
The purpose of this bill is to introduce a number of amendments to the National Health Act. The amendments do not affect the basic principles of the act, but are in the nature of machinery amendments to enable certain aspects of the schemes to operate more smoothly.
The first of the matters dealt with in the bill is the definition of “ contributor “ for medical benefit purposes. The new definition in clause 3 substantially restates the existing definition and adds a further provision to the effect that the eligibility of a person who was a “ contributor “, as previously defined, shall continue unchanged. The effect will be that persons who become contributors after 1st July next will be eligible for Commonwealth benefits provided they contribute for fund benefits equal in range and amounts to the benefits in the First Schedule to the National Health Act. All contributors who are at present eligible for Commonwealth benefits will continue to be eligible provided they continue their present membership of a registered fund.
A further amendment will have the effect of easing a limitation on the payment, of hospital benefits from special accounts. At present special account hospital benefits are limited to the “ gross fees “ charged by the hospital for the accommodation and nursing care of the patient. Hospitals in some cases charge extra amounts by way of theatre fees, drugs, dressings, special nursing and laundry. The amendment effected by clauses 6 and 7 of this bill will allow these extra charges to be covered by benefits paid from the special account in cases where the patients’ insurance coverage is high enough to meet the extra charges as well as the “ gross fees “.
The bill also provides for an amendment of the constitution of the Pharmaceutical Benefits Advisory Committee. This is the expert committee which advises tha Government on what drugs and medicines are to be listed as pharmaceutical benefits. The committee has done valuable work for the Government in a difficult field. The work of the committee has become extremely onerous, more particularly since the range of pharmaceutical benefits was considerably widened a year or so ago. With a view to strengthening the committee, it is proposed to increase by two the representation of medical practitioners nominated by the
Federal Council of the British Medical Association. The panel of names to be submitted by the association for this purpose is proposed to be increased from six to ten.
The remaining clauses of the bill are merely machinery provisions, and I will be pleased to supply any further information desired by honorable senators at the committee stage. I commend the bill to honorable senators.
Debate (on motion by Senator Kennelly) adjourned.
Debate resumed from 19th April (vide page 615), on motion by Senator Paltridge -
That the bill be now read a second time.
.- Before the debate was interrupted last night I had made it clear that the Australian Democratic Labour Party would support the proposal to reduce the rate of sales tax on motor cars from 40 per cent, to 30 per cent. I had also made it clear that we would support an amendment that will be moved at the committee stage and which will be designed to seek a refund of the additional amount of tax paid by persons who bought cars during the period for which the increase operated. Having said that, I was proceeding to make what I described as a plea for the poor motorist. I was pointing out the extent to which the Treasury officials and Ministers are imposing taxes upon the motorist - a practice which proceeds, apparently, from a belief that in these days a motor car is, as it was 40 years ago, a luxury which can be afforded or should be used only by a very small section of the community.
To-day a motor car is a necessity. It is regrettable that governments, both Federal and State, which are in need of finance continually adopt the attitude that they can go to the motorist and take money from him. There is a good deal of truth in a statement that was made at the 1961 annual general meeting of the National Automobile Dealers Association of the United States of America, when the president of the International Office for Motor Trade and
Repairs, Mr. Permeke, made comments which 1 think apply to most countries. This is what he said -
The motor vehicle is overburdened with taxation in every country in the world. The products, including gasoline, trucks, automobiles, motor cycles, and other automotive supplies, draw taxation like a magnet draws iron shavings. Government bureaucrats, seeking a place to tax, seek out our industry like flies swarm to molasses
In some countries one-half of what the customer pays for a new automobile is taxation in some form or another. In your great country-
He was referring to America - at least one-third of every automotive dollar goes to some form of taxation.
I should like to know the amount that is levied by way of taxes in this country. I should say that we are not far behind the practice abroad.
Last night I referred also to the fact that the Democratic Labour Party opposed the increase when it was brought forward last year. We did so on the ground that it would make a very substantial contribution to unemployment, and what we said was true. It has been said that, after three months, the Government was able to remove the increase because it had had the desired effect. In my opinion, the Government lifted the increase for two main reasons. First, it became alarmed at the extent to which unemployment was spreading rn an election year and, secondly, I believe it was stampeded to some degree by the big motor manufacturing firms which determined to “ high-pressure “ the Government. I shall be glad to hear any evidence to the contrary.
One cannot place a great deal of confidence in the statements that have been made by the Government when one considers the abrupt way in which the earlier decision was altered. The decision to remove the increase was announced without warning one evening by the Prime Minister (Mr. Menzies) just after a senior Minister, the Treasurer (Mr. Harold Holt), had made a statement to the contrary. One supporter of the Government in another place was caught in a very difficult situation. He attended a branch meeting of the Liberal Party and, as a loyal supporter of the Government, made a powerful speech in which he emphasized the need to keep the legislation in force. He assured those present that he was most sympathetic with people who wanted the increase to be removed, but he said that the economic well-being of Australia demanded that the legislation be kept in operation. Then he invited questions. The first question he was asked was this: “ Don’t you know that the Prime Minister announced on the 7 o’clock news tonight that the increase was lifted?”
The increase had a bad effect on certain sections of the community with whom I have a lot of sympathy. The farmer, for example, is always hurt by a measure such as that which raised the rate of tax. He must have a new car regularly, because of the nature of the roads over which he travels. The family man is hurt by such an increase. Particularly when the size of his family increases, he must have a car. I do not know that the wealthy business firms were greatly hurt by the increase, because any such increase is passed on by them in the form of increased prices. Increased prices, of course, hurt the family man once again. I believe that 30 per cent, is a vicious rate of tax to place on any article. When the rate is increased to 40 per cent., it is beyond all reason.
– It rs 50 per cent, in the United Kingdom.
– We must realize that the United Kingdom has had very serious responsibilities and has experienced very serious financial difficulties since the last war. I should say that the United Kingdom has responsibilities that have caused it to fix the rate at 50 per cent, and which are far greater than those we in this country shoulder. If the situation in Australia was as serious as the Government said it was, if the Government had to do something to prevent the motor industry from mopping up skilled workers who should be employed in other essential industries, if it was necessary to dampen down this vital industry, and if it was necessary to ensure that the materials being used by the motor trade should not be used to the same degree, it is a mystery to me why this Government, which says that things are going ahead too fast, that there are dangers and that there must be a credit squeeze, should have been prepared to spend so much money upon the introduction of television. What contributed, more to the increase of the hire-purchase debt than did the introduction of television? What contributed more to inflation? What harmed many of our food and clothing industries more than the fact that in many families £3 a week was being paid out for a television set?
– But why forgo television? Why defer the introduction of such a medium as television?
– My answer is this: There are much more important things to be done with the money that is being spent or that was set aside for television. If I had had to spend the money, I would have spent it on such things as the development of the Northern Territory and the northern areas of Australia. I certainly would not have spent it upon a form of amusement which we could very well have done without for another ten or twenty years.
– You are out of line with all other nations.
– I am not concerned about the fact that we would be out of line with other nations. I simply say that in a country such as Australia, where development and increased population are important, you should put first things first. That is what the Government told us when it attacked the motor industry. If you want to put first things first, you ought to spend your money on developing and populating the country and placing it in a position of security, particularly in the kind of world in which we live to-day. It was ridiculous for us to embark upon the expenditure of so much money on television at the same time as the Government was telling .the people that it had not enough money and enough skilled workers for essential industries.
– You would not deny the educational value of television to adults and children, would you?
– I believe that television has an educational value; but when I look at the programmes that are to be seen night after night and which emphasize violence to a degree that demands the taking of some action, I start to wonder whether the educational influence is good or bad and whether it will cause trouble in the years to come. I do not think that the increase of tax was necessary. The Government adopted other measures at the time it increased sales tax on motor cars and it was found that those measures have produced the required result. The increase of the sales tax proved to be a failure. I am glad that the Government has had the courage to admit that it acted wrongly and has introduced this legislation to restore the rate of tax to what it was previously.
– Figures prove that the increase of sales tax had a salutary effect.
– Figures may be produced to prove whatever you want to prove. I have no doubt that in this connexion statistics have shown a decrease over the relevant period in the number of motor car registrations, but I think that the Government could have achieved the desired effect in other ways. To increase sales tax to such a savage extent was entirely unjustified.
Dealing with the submission that the increase of tax should be refunded to those people who bought cars during the relevant period, I have had correspondence from a number of people who were caught by the increase. Within the last few days I received a letter from a Church of England minister who was caught, and caught badly. He is a man who does not receive a very considerable stipend and the increase of tax was a serious matter for him. Other people have been caught. I sympathize with some of them and with others I do not sympathize as much. Dealers have been referred to. I do not have much sympathy for the big dealers who advertise every twelve months that they have made profits of up to 45 per cent, on the capital invested in their firms. It is amazing to me why such firms, which seek sympathy in the community, should advertise that they make profits of 40 and 45 per cent, on their capital investment. Surely they realize that such statements lead people to the conclusion that they are charging extortionate prices for the cars that they sell. The people for whom I have some sympathy are the small dealers - the men in small garages who have not had a very good time in recent years. Many honorable senators know of such people who run small businesses and they know that those people are having a pretty tough time. Many of them were caught by the increase of sales tax because they had bought cars and had them in their showrooms prior to the increase. The Government has declined to do anything to help those people. I remind the Government that those small dealers who held cars just prior to the increase of sales tax were unable to take advantage of the increase. The sales tax legislation prohibits dealers from making a profit on the tax. Very rightly dealers are not allowed to make a profit on the sales tax, but it seems only fair that they should be given some consideration when the tax is reduced and when they are left with cars in their showrooms on which tax was paid at the higher rate. I know that some people will say that motor car dealers do pretty well. Well, a few of the big dealers may do well, but I know that many small dealers are not doing well and I think they are entitled to some consideration.
My leader and I will vote for the second reading of the bill and we will support the amendment.
.- I have, much pleasure in supporting this bill, which abolishes the increased sales tax on motor cars and restores the rate to 30 .per cent. Honorable senators will remember that during the closing stages of the last session the legislation to increase the sales tax on motor cars was strongly debated in this Senate and very strong feelings were expressed about the proposal. It is hardly necessary for me to remind honorable senators that on that occasion I strongly opposed the increase of tax. I congratulate the Government on introducing this legislation to reduce the tax to 30 per cent., not that I think that such a rate is a low one. However, the sales tax position is now as it was prior to the legislation introduced late last year.
When the legislation to increase the tax was before the Senate last year I made certain statements which, I am happy to say, have now borne fruit. It is clear from the statement made by the Prime Minister (Mr. Menzies) when announcing that the rate of tax would be restored to 30 per cent, that the Government is of the, opinion that a mistake was made. It is useless for the Government or anybody else to try to cover up the facts and say that the increase of tax served its purpose. I am gratified that the Government has been big enough to recognize that it made a mistake and has decided to abolish the increase that was applied late last year. It is good not only for individuals but also for governments to acknowledge their mistakes. A government increases its stature in the eyes of the public by admitting its mistakes more than it does by quibbling and trying to cover up.
– Did the Government recognize that it made a mistake?
– The Prime Minister clearly stated that psychological effects had been created and that they had gone further than the Government had anticipated. I do not gloat over what has happened. I am now stating the facts just as calmly as I stated my attitude last year. The sales tax on motor cars is now back to 30 per cent, and we should be happy about that. I congratulate the Government on having the courage to retrace its steps and restore the tax at 30 per cent.
The Opposition has foreshadowed that it will move that the extra 10 per cent, sales tax be refunded to people who bought cars during the relevant period.
– Were you not reported as having advocated that step?
– Yes. I do not quibble over what I said. I stated publicly that I thought the Government should refund the additional tax. If the Government had taken that step it would have been to its credit and possibly to its benefit. I admit frankly that I made a statement advocating a refund of the additional tax. That was possibly the first statement made to that effect. The Government, which is in charge of the finances of the country, has made clear that it is not prepared to refund that tax. In the House of Representatives the Opposition moved an amendment similar to the one that has been foreshadowed in this chamber. In the other place the amendment was soundly defeated, indicating that the Government had no intention of refunding the additional tax. I take the, view that if this chamber passes an amendment to the effect that the extra tax should be refunded, the House of Representatives no doubt will reject the amendment. Therefore I see no good purpose in pursuing this matter further. I do not retract one word of my earlier statements - I have not changed my opinion on this matter - but it would be foolish to think that the Opposition’s proposed amendment would be acceptable to the Government. A very clear decision was given in the other place that it is not acceptable. I have not changed my views on this matter but I take the commonsense approach. In the circumstances I am not prepared to support the proposed amendment.
However, if the Government is not prepared to refund the additional tax to all people who bought cars during the relevant period there is one matter that it should consider. Senator McManus has pointed out that the increase of sales tax inflicted hardship and injustice on some people, though not on all those who purchased motor cars during the relevant period. Probably there were many others who bought cars although they did not need them as urgently as they have suggested they did. Consider the case of the small motor retailer who does not conduct his business in the capital cities or close to the sources of supply. Dealers in the capital cities have a great advantage. They may draw their supplies as they make their sales. They probably would not have paid sales tax on motor cars that were in their showrooms. But that is not the case with dealers in the far flung areas of the Commonwealth. I have in mind particularly dealers in Queensland. They have been at a very great disadvantage. I have copies of a couple of letters that were sent to the Deputy Commissioner of Taxation by firms in the city of Cairns. I will read them in order to let the Senate hear the thoughts of those firms. A letter from F. R. Ireland and Company, of Cairns, reads -
We are retail motor dealers, and for some months prior to February 1st, 1961, we had adopted the practice of purchasing our stock of new vehicles for cash, using our own resources plus bank accommodation, instead of using Hire Purchase companies’ facilities for this purpose.
When the sales tax was increased on November 15th, from 30 per cent, to 40 per cent, on passenger vehicles, any vehicles which we had in stock at that time, and on which we had paid the lower rate, had, rightly, to be sold at the lower rate.
When, a few weeks later, the sales tax was reduced on February 22nd, from 40 per cent, to 30 per cent., we had on hand sixteen new passenger vehicles on which we had paid the 40 per cent, sales tax, and which, of course, we will now have to sell at the 30 per cent. rate.
This letter was written on 28th February. It continues -
This will mean a very considerable loss to us of £1,033 10s. 4d., which we feel is very unfair, and a loss which no business should be expected to bear.
Our method of purchase was the simplest and most accepted method known - that is cash on delivery - and yet we are faced with this tremendous loss through absolutely no fault of our own. There is no possible way in which we could have protected ourselves, and no compensating circumstance was available to us when this tax rate was increased from 30 per cent, to 40 per cent, a few weeks previously.
When the very acceptable reduction in the tax rate was announced after such a short period, we feel sure that it was never envisaged by the Government that firms such as ourselves would be put to such a serious loss.
Sitting suspended from 12.48 to 2.15 p.m.
– I also have a letter, Mr. Deputy President, from McDonald Motor Agencies Proprietary Limited, of Cairns, which indicates that that company is in a similar position to that of the company mentioned by me before the suspension of the sitting. It is stated that the total loss to the company, because of the reduction of sales tax on motor cars from 40 per cent, to 30 per cent., is £398 18s. 5d. A man connected with a Mackay motor company has told me that his firm is in a similar position because of the tax which it had to pay on cars that it had on its showroom floor.
The motor dealers in the areas that I have mentioned are in a different position from that of dealers in the capital cities. As I stated earlier, it is possible for dealers in capital cities to draw their supplies of motor cars direct from the motor manufacturers, but dealers in country towns on the coast of Queensland and in other parts of Australia away from the capital cities, are at a disadvantage in that respect. An increase of sales tax, or the removal of an increase, also places such dealers at a disadvantage. I do not think it is the desire of anybody that people in areas that are remote from the capital cities should be in a less advantageous position than are people in the cities. For that reason, I ask the Government to consider this matter.
I suggest that instead of dealers having to pay sales tax on receipt of cars, the basis of the payment of tax might be that it be paid at the time of sale to the customer. The customer would then pay the tax, instead of the position being as it is at the present time. I believe that my plea in this respect has a lot of merit in it. I understand that the Government is not prepared to refund to the 60,000 individuals who purchased cars during the time that the tax operated, the amount of additional tax that they paid. However, I am of opinion that motor dealers in country areas are in a different category. It may be said that some people will gain and some will lose when sales tax is either increased or reduced, but I point out that in the circumstances to which I have referred, the motor dealers have had to sell cars at the old rate of tax and have received no advantage.
I know that the amounts involved, such as the £1,000 for F. R. Ireland & Company, and the £398 for McDonald Motor Agencies Proprietary Limited, may not be large from the point of view of the big business people in the capital cities, but nevertheless they are considerable sums for relatively small dealers. I make an earnest plea to the Government to consider the position of such motor dealers because I believe that they have a special case which warrants earnest and sympathetic consideration. I support the bill. I am not prepared to support the proposed Opposition amendment for the reasons I have stated.
– 1 shall support the amendment to be moved by the Opposition, calling on the Government to refund to people who purchased motor cars during the currency of the increased rate of sales tax, the additional amount that they were obliged to pay because of the Government’s action. In this debate, Mr. President, a tremendous amount of extraneous matter has been introduced. I am wondering whether you will permit me also to step out of line, and perhaps even to do so to the extent that you permitted ‘Senator Scott. I have read the honorable senator’s speech. The thing that struck me about it was that although he spoke for 32 minutes, he devoted only about six minutes to the subject of sales tax. The remaining period of 26 minutes was devoted to dealing with unity tickets, unemployment in 1949, and a coal strike in that year. Generally speaking, he ignored the subject of sales tax.
– I hope that the honorable senator will make a similar analysis of the speech of his deputy leader.
– I did not notice that the Deputy Leader of the Opposition had trangressed to the extent that Senator Scott did. Had he done so, or had he departed so obviously from the subject before the Senate, I have no doubt that alert honorable senators on the Government side would have taken a point of order and asked that he be brought back to the subject before the chair.
I do not know whether you will permit me, Mr. President, to reply to some of the statements that were made by Senator Scott. Perhaps you will be tolerant. All that 1 wish to do in that regard is to refute again the oft-repeated lie which honorable senators on the Government side like to associate with employment conditions in 1949.. They speak of a certain percentage of unemployment during that year and refuse to face the truth of the matter, which is that the unemployment position to which they refer was created artificially and not as a result of action on the part of the then Labour Government. The position was created artificially as the result of a coal strike which practically paralysed industry in New South Wales. For three months before that eventuality there had been a condition of full employment, under a Labour government, and there was again such a condition three months afterwards. I think that I am entitled to depart from the subject-matter of the debate to that extent, in order to reply to Senator Scott and to point out just how fallacious, unreasonable and untrue was the statement he made in regard to unemployment in 1949.
Returning to the subject of sales tax, Mr. President, we on this side of the chamber have been charged with irresponsibility because we ask that the revenue from the collection of tax at the increased rate should be refunded to persons who purchased cars during the time that the increased rate applied. It is said that such a refund would be without precedent in the legislative history of this country. Apparently, the request must be rejected simply because there is no precedent. I do not think that any honorable senator on the Government side has argued that it would be wrong in principle or unjust to refund the tax. The argument of the Government has been directed to the lack of precedent. It is said that we cannot establish such a precedent.
Without going deeply into the question of the Government taking arbitrary action against the people, action which circumstances subsequently have proved to be wrong, I point out that there are certain judicial bodies which have forced governments to accept responsibility in such matters. Other people have been able to wring justice from governments by using the judicial means at their disposal, and the people who purchased motor cars during the three months’ currency of the increased rate of sales tax have a similar just cause against the Australian Government. It is interesting to go to the very kernel of the matter and to restate the reasons given in another place by the Prime Minister when he first made reference to the increase from 30 per cent, to 40 per cent, of the sales tax on motor vehicles. He dealt with the machinery of the matter, said what the percentage would be, and then continued -
We are doing this, firstly, to cut back the rate of buying of these vehicles, which has become higher than the current condition of our economy can reasonably be expected to support.
That was the reason he gave for the imposition of the additional sales tax. He said, in effect, that it was a matter not so much of cutting back on credit as of pruning the motor body building industry because, in the opinion of the Government - which I think was wrong - the production of motor vehicles was having a serious effect upon the economy. He went on to talk about the possibility of review. This matter becomes important when we remember that the increase had a currency of only three months. Referring to the Government, the Prime Minister said -
It holds itself ready to review the sales tax rate when it feels the situation of the industry and-
This is the important part. the state of the economy looked at together appear to warrant some adjustment.
I say that this removal of the 10 per cent, increase does not fit in with the Prime Minister’s assurance that those two matters should be looked at together. There was no relaxation of the credit squeeze at the time when the Prime Minister, just prior to leaving for overseas, announced out of the blue and obviously without any warning to the rank and file members of the Government parties and possibly - I say advisedly - without any warning to Cabinet, that the increase of 10 per cent, would be rescinded and that the sales tax on motor vehicles would revert to, the 30 per cent, rate applicable before November of last year. When the Prime Minister made that statement, just prior to going abroad, he did not say that the decision had been arrived at against the background of the other measures to which he referred when he originally mentioned the possibility of the increase being removed at some future time.
The Government has shown a high degree of confusion in all its thinking on this matter. The Prime Minister assured the Parliament that the removal of this increase would be effected against a background of the general economic situation of the country. Although the credit squeeze still applies and although industries are being forced, because of the present economic position, to lay off men in such large numbers that chambers of manufactures, in Victoria in particular and. throughout Australia in general, are showing evidence of grave disquiet and fears about the country’s industrial welfare, there is no indication whatever that the Government intends to make credit available to the extent to which it was available when the sales tax was increased last year. Therefore, the Prime Minister has failed to honour the assurance he gave to the Australian people when the increase was imposed - that its removal would be effected against the background of the general economic situation..
I return now to the question: Is it wrong to ask the Government to refund to the people who were unfortunate enough to purchase motor vehicles in those three months the amount of tax that they were in effect fined? I think that we can liken the additional tax to a penalty or fine imposed on one section of the Australian community chosen at random. That section consists of the people who happened to purchase motor vehicles within the three months’ currency of the higher sales tax. In effect, this was a severe penalty inflicted upon a section of the Australian community. Senator Scott sought to justify it by saying that the action resulted in a loss to the Government of £1,000,000 in revenue because of the decrease in the number of new motor vehicles registered when the sales tax was increased I think that that is a pretty poor way of looking at a moral question. All that Senator Scott was concerned about was the fact that the Government had lost £1,000,000 out of the thousands of millions of pounds - that is not an exaggeration - which the Government gathers in taxes in any year. To suggest that the loss of £1,000,000 would worry the Government in any way is absurd. However, the £100 penalty that the Government inflicted on Tom Jones in New South Wales and his counterparts in other States caused far greater hardship and was a much more severe penalty than the loss of a meagre £1,000,000 to the Government. Senator Scott sought to surround the Government with a halo because it was prepared to lose £1,000,000 while at the. same time inflicting hardship on many people.
Senator McManus made a valid point in his contribution to the debate when he said that the Australian motorist was being soaked repeatedly, as a result not only of the Commonwealth Government’s actions but also of the actions of State instrumentalities. When one considers the. multitude of taxes that weigh heavily upon the. Australian motoring community, one wonders sometimes at the hardihood of people who continue to look forward to owning a motor car. It is not a question only of the sales tax. That increases the cost of a vehicle and, as one senator on the Government side has said on more than one occasion, causes a rise in the cost structure. The addition of £300 or £400 to the cost of a motor car is bad enough in itself. It is a heavy burden to be carried by the motorist, but it is only one of his burdens. He has to carry the burden of registration fees, which are about £12 a year for an ordinary vehicle. He has to pay driving licence fees and he has to pay a very high price for the petrol to run his vehicle, because all our petrol is imported from overseas. His running costs are probably two or three times as high as those of a car owner in the United States of America or any other country where petrol is produced. Surely the Australian motorists receive enough kicks in the face from various Commonwealth and State instrumentalities without there being any necessity for those who purchased motor vehicles between November and February last to accept a penalty of about £100 because the situation got out of hand as a result of the whims and vagaries of the Government and its advisers.
Senator Scott said that the value of imports had increased in twelve months from £152,000,000 to £200,000,000 largely because of the activities of the motor body building industry. When such statements are made by Government supporters, it is important that they be related to the situation that is actually under discussion. That is what happened during the three months when the higher sales tax was in force. Then the additional 10 per cent, was dramatically removed by the Prime Minister in a statement just before he left Australia. I think it is encumbent upon those people who make grandiose statements about what the motor body building industry is costing this country in overseas funds to prove what effect the imposition of the additional 10 per cent, sales tax had during the three months on the overseas balances. The Government informed us on 1st December last that in the September quarter of 1960 imports of petroleum products and other items clearly attributable to the motor industry and motor transportation were running at an annual rate of £200,000,000 compared with a rate of £152,000,000 in the corresponding period in 1959. I do not think that the imposition of the increased rate of sales tax had any relation to the position of overseas funds. I suggest that figures of that kind are thrown in by honorable senators only to confuse the situation. The difference between £152,000,000 and £200,000,000 is microscopic compared with the effect of the increase on the purchasers of motor cars during the period under review. Mention of those figures is designed only to cloud the actual position.
So we return to the basic question of whether the increase was just or unjust to the people of Australia. Without seeking to gain any advantage in debate, I think that it can be fairly said that a number of honorable senators on the Government side were just as doubtful as honorable senators on this side of the chamber of the wisdom of this increase of 10 per cent. A number of honorable senators on the Government side had the gravest doubt about the wisdom, or indeed the justice, of the proposal. I do not raise this matter with any desire whatsoever to gain a debating point; I am dealing merely with statements of fact. I do not think that any of those members on the Government side, in this and another place, have changed their minds just because the Prime Minister decided to remove the tax, without any argument whatever, some little time ago. However, they have reviewed their attitude and state now that they believe it was just for the Government to do what it has done notwithstanding that at the time the tax was imposed they were definitely convinced that its imposition was completely wrong and completely unjust.
I do not know what sum would be involved if the people who bought a car during those three months were to have the tax refunded to them, but as a result of a statement made by a Minister in the Senate I understand that the amount involved would be in the vicinity of £3,500,000. I submit, Mr. Deputy President, that if that is all that is involved it is a microscopic amount when measured against doing the decent and fair thing to people who are already overburdened by taxation. I think too, that whatever our views might have been, and whatever ideas we expressed when we were determining whether this tax should have been imposed, it is obvious to anybody who has studied the situation of the motor body building industry that the increase in sales tax had little or nothing to do with the present state of the industry. Irrespective of wrong impressions that any of us might have had when we were debating the matter originally, I think we are all agreed now that the increase of sales tax did nothing but inflict a penalty on one section of the community. The thing which really brought the motor body building industry to its heels, if I might use that term, was the credit squeeze - the fact that people could not obtain credit to purchase new or second-hand cars. I think it will be generally agreed that the increase in sales tax had no effect whatever and that the credit squeeze did the job of depressing the industry more effectively and will continue to reduce the activities of the motor body building industry as long as this Government continues its restrictive credit policy.
I wish to refer briefly to the position of the motor body building industry generally.
I shall restate something I said at the time we debated this issue three months ago. A claim was made by the Government that terrific inroads were being made into overseas reserves by the motor body building industry. I do not think it can be gainsaid that the expansion of the industry must of necessity make some inroads into our overseas reserves in respect of the purchase of petroleum products and rubber. However, I join issue with those who talk about the depredations of the motor body building industry in relation to the importation of steel. Wild statements have been made about the alleged tonnage of steel that is imported to supply the activities of the motor body building industry, but those statements are not related to fact or reason. It seems to me to be highly significant that although General Motors-Holden’s Limited and its brother organization, Chrysler Australia Limited, have built cars almost completely of Australian materials, they have been attacked and accused1 of creating a crisis in this country as the result of the importation of steel. No reference whatever has been made to fly-by-night organizations that have something to do with the motor body building industry in this country. Those bodies bring manufactured steel pressings and other products into this country and with a skeleton organization put their products together in Australia and then sell them. Nobody has mentioned the damage that those people are doing to the economy. It is significant that the attack was directed against Australian organizations where Australians are employed and whose products are almost completely made of Australian materials.
I think the Government ought to have given consideration to these matters and that some explanation should have been made of the difference that exists between the various companies in this country. Whether they are financially controlled from overseas does not concern me so much. Sometimes I disagree with my colleagues on the investment by overseas companies in Australia. I am not so much concerned with what goes out of Australia as I am concerned with what remains in it. I think that is the important matter and one to which we ought to pay some regard. We should encourage to whatever extent we can those organizations which have spent millions of pounds in what is known as the tooling processes required to produce an entirely Australian car. The Government has said that it is attempting to dampen down these industrial organizations, although I think the better word to use would be curtail. I repeat that organizations in Australia which have striven to manufacture wholly Australian products should be encouraged. Their activities should not be dampened1 down, as the Government says it wishes to dampen them down, using that term in an effort to disguise its real intention.
This matter was debated and thrashed out very fully some three months ago. Most of the things that have been said in this debate were said when the Government brought in the measure to increase the sales tax and other measures to deal with the economic situation. We do not want unnecessarily to indulge in a repetition of arguments that were raised at that time. The Opposition, of course, does not disagree with this measure which is designed to reduce the sales tax on motor vehicles to what it was prior to November of last year. I agree with Senator McManus that that occasion might have been an opportunity for the Government, if it wanted to give some relief to the motoring public of Australia, to say, “ We will reduce the rate to 16* per cent.”. That would have given a greater measure of justice to the motoring community of Australia, but apparently that is not the Government’s intention. However, as I have said, we do not disagree with the principle of a bill which is designed to bring the rate of the sales tax back to what it was in November of last year. The only disagreement we have with the Government on this matter is based on the fact that we think that the Government should refund to the people concerned the additional sales tax that was collected from them.
I am not looking at this matter in terms of scoring debating points off the Government. I said that earlier in the piece, and I still say it. I believe that the Government will be acting wrongly if it does not at least explore whatever avenues may be at its disposal to ascertain the number of people who have been affected by the increased sales tax and to see whether they could be treated, not in any way in a privileged manner, not in any way which would give them an advantage over the rest of the motoring com munity, but merely on the same basis and in the same way as people who purchased cars in August of last year and people who are purchasing cars now.
.- This bill for the repeal of the sales tax surcharge of 10 per cent, on motor vehicles, which was imposed by legislation last November, cannot but evoke from me an expression of my great satisfaction that a very short experience of that ill-advised measure convinced the Government that ii was unnecessary and, in the terms of thu announcement by the Prime Minister (Mr. Menzies), of bad effect and undesirable. In my opinion, it was also unwise.
I do not propose to debate an issue which this bill concludes - legislation that was unnecessary, undesirable and unwise. However, the Parliament should not be satisfied with a reduction of the sales tax only to the rate of 30 per cent. In 1956 the sales tax on motor cars and station wagons was increased from 16$ per cent, to 30 per cent. That was declared to be a temporary increase, made in order to adjust the economy at that time, but subsequent experience has shown that it has come to be what can only be called a surcharge which is dangerously inflating the cost structure of this country. I am not saying that this is the time to reduce the sales tax to 161 per cent. The trade is absorbing the sales tax at present and if a reduction of the rate to 161 per cent, were made at this time, that reduction would be a stimulus that would be strangely out of keeping with what I consider to be a well-justified restraint on credit in order to maintain balance in the economy. I am taking this opportunity to remind the Senate that it should require faith to be kept with the undertaking that the increase of the sales tax from 161 per cent, to 30 per cent, would be merely a temporary economic measure, and that it should insist the surcharge be removed at a very early date. When I speak of a very early date, I am speaking in terms of nine months or ten months from now.
This talk by the Treasury to the effect that an increase of prices does not inflate the cost structure is, to me, just stupid. All sorts of terms are used by Treasury officials these days. They say, for example, that to abstain from a field of tax would cost the Treasury so much. Those are words that simply belie the situation. But I must not be drawn into that field, because when we look at the English budget we see how the Chancellor of the Exchequer, in his new proposals, has made the term “pay-roll tax” almost a term of art. Suffice it for us to deal with the Australian scene.
Mr. Acting Deputy President, I am asking the Ministers to underline a claim by the Parliament that the sales tax on cars should be restored to a reasonable level - which never should exceed 16$ per cent. - at the earliest possible moment, and so keep faith with the understanding upon which the Parliament passed the sales tax legislation of 1956. Resentment against non-compliance with that undertaking was one of the strong motivating forces of the resistance that was offered to the increase that was made last November.
The only other thing I want to say concerns a parliamentary matter. There is not in the sales tax legislation any authority for any officer of this country to exact sales tax merely upon the statement of a Minister, nor is there in that legislation any authority for an officer to fail to collect sales tax merely on the statement of a Minister. The suspension power of Ministers went out three centuries ago. Of course, it would have been completely contrary to my view of what is proper in public administration if the granting of relief from this increased tax had to await the assembly of the Parliament even though the Government were convinced that the increase had been ill-advised and was having adverse effects on the community. When adjustments of customs duties became necessary from time to time, the Parliament moulded appropriate provisions authorizing new rates of duties to be applied as from the day when the appropriate Minister made the proposals in the Parliament. It seems to me that if the sales tax is to be used as an economic weapon, the matter should come before the Parliament, which could authorize the imposition of new rates as from the time of the Minister’s announcement and also authorize the officers to abstain from doing their statutory duty, in this case, from 16th or 26th February up to this time. During that period the law has required the payment of the sales tax on motor cars at the rate of 40 per cent, but the tax has been collected at the rate of 30 per cent. That leads the Taxation Branch to a disrespect of the law.
I claim that consideration ought to be given to including in the sales tax legislation proper provisions to enable a more flexible adjustment to be made both upwards and downwards, according to announcements by the Government from time to time. I hope, of course, that if such legislation is introduced we all will be jealous of seeing that proper safeguards are included. The present situation erodes the confidence of those who administer the law of the country. I believe that from 21st February up to the present time an officer of the Taxation Branch would have been in a most invidious position in having to ignore the law. That attitude, creeping through the federal administration, is a weakness that has not been cured during the twelve years that this Government has been in office.
The only other matter to which I wish to advert is the amendment that has been foreshadowed and which will call for a refund of the increase. I shall be interested to hear the reasons that will be advanced to justify such action. My own view is that such action would be anomalous and most unusual. I cannot see any basis for the claim that this tax should be refunded. The tax has been levied by law and has been paid voluntarily by each purchaser of a motor car, and there is no element of mistake in the transaction. Furthermore, I believe that the complexity of the sales tax in its application to all the units of the motor trade is such that you would never do final justice if you refunded the money merely to the individual taxpayer. There are so many purchasers of second-hand cars, so many persons who have traded in cars, and so many agents whose commission has been made to relate to the current rate of tax, that an attempt to refund the money would simply confuse the administration of an important public matter.
– The Government, by its actions, has conceded that the imposition of a 10 per cent, increase of sales tax as a temporary measure was ill-conceived, that it did not achieve the objective desired by the Government and that it brought in its train very many disabilities which affected the industry, the workers and the financial structure of the country. The amendment that has been foreshadowed by the Opposition is quite justified. Its purpose is to erase entirely the Government’s mistake. The Government says that there would be a lot of complications in refunding to the people who have been unjustly taxed the moneys that have been collected, which amount to £3,800,000.- Of course, the Government did not consider the complications that were caused by the severe and swift introduction, against the best possible advice, of the increase. Nor was any consideration given to the complications that were caused when the tax was restored to the former rate by ministerial dictate and without reference to the Parliament. The damaging effect of the Government’s action has been so widespread that it can be clearly seen. No doubt it was clearly seen by the Ministry when it acted swiftly to correct its mistake.
The motor industry was thrown into confusion when it was passing through a period of difficulty. That applies particularly to the workers in the industry. Automation was being introduced, with a consequent change of workers and, in many instances, a reduction of staff. Then the credit squeeze was applied. That alone was adequate to achieve the objective that the Government desired to achieve. When the Government introduced legislation to increase the rate of tax, it was quite obvious that there was decided dissatisfaction on the Government side of the Senate. Two honorable senators made it quite clear that they strongly opposed the measure. One was so sincere and honest that he voted against it. The other honorable senator, in a very good speech delivered to-day, has shown that he disagrees with the Government’s legislation, even though it remains to be seen whether he is prepared to vote against what he believes to be unjust.
The increase of 10 per cent, in the rate of tax severely affected persons who had contracted to buy cars but who were unable to take delivery of them. Persons who had contracted to acquire a car which attracted tax at the rate of 30 per cent., who probably had disposed of their original vehicle on a lower market, but who had not taken delivery of a new vehicle, suddenly discovered, when the Government dropped the chopper, that they were obliged to pay an extra £100 or more for their new vehicle. The Government’s action has affected also a number of small dealers who brought cars while the higher rate of tax was in operation but who were forced to sell them later when the rate of tax was reduced.
Another anomaly exists in relation to persons who bought cars overseas and who returned to Australia with them when the higher rate of tax was in operation. I know of one person who bought a car overseas, who used it there for eight or nine months, who had it delivered at Fremantle, and who then discovered that he was to be charged an extra £127 in ‘sales tax merely because his car was transported to Australia on a ship which arrived during the period of operation of the higher rate of tax. He could have brought in his car at any other time, but he did not know that he would be charged extra tax. An even worse case was that of a person who bought a car overseas and who desired to have it shipped to Australia so that it would arrive late in March. Shipping facilities were not available to enable him to do that, so he had to leave the car in the hands of his agent for shipment. It arrived in January. The owner could not get back to Australia until March, so he was deprived of the use of his car for the latter part of his stay overseas. But because his car arrived in January he was required to pay the additional sales tax.
– Do you suggest that a man who can afford a trip overseas will suffer any hardship by having to pay the increased sales tax?
– A man in that situation should receive the same consideration as anybody else. I am not particularly concerned with individuals who are able to afford trips overseas. I am anxious to see that justice is done to all citizens. The man to whom I have been referring is a professor who went overseas on a post-graduate course to study education. What he learned will be of benefit to Australian education.
– You said that you were not concerned to deal with individuals.
– No, but you have invited me to elaborate on this man’s identity. Senator Paltridge may know the man to whom I am referring.
– What about bis friend, who arrived after 22nd February?
– I do not know about him.
– His friend will have the advantage of the removal of the increase just as the man about whom you have been talking suffered the disadvantage of the application of the increase.
– If the person to whom I have referred had not been the victim of the vagaries of shipping, his car would not have reached Australia until March. He was not able to use his car between the time it arrived here and the time that he himself arrived here. Nevertheless, he was charged the additional sales tax.
I am not making a plea for individuals but I am asking the Government to be reasonable. The Government should grant some right of appeal in cases in which anomalies occur. The Government should be honest and admit that it made a mistake. It should agree to refund the increase of tax wherever possible. The measure that imposed the tax was ill-conceived and did not achieve its objective.
Senator Scott said that the increase of sales tax yielded £3,800,000 and implied that the Government had lost about £1,000,000 as a result of the application of the increase. If the Government has lost about £1,000,000 it may be safely said that the people of Australia have lost considerably more than that. People who bought cars during the relevant period and who use those cars in their business will be able to pass on the cost of the increased tax. The increase must manifest itself somewhere in the cost system. The decision to increase the tax was a mistake and the only w£.y to rectify the mistake is to accept the amendment proposed by the Opposition.
Some honorable senators opposite have claimed that the Government actually lost revenue during the period of the increase, but now that the rate of tax is back to 30 per cent, all those people who deferred buying a car when the rate was 40 per cent, and who felt that the increase was temporary only will buy a car. Obviously, anybody who needs a car will buy one now and whatever revenue the Government lost during the time that the increase applied, will now be recouped by it. The Government has imposed two increases of sales tax in recent years, each of which has been claimed to be temporary. The increase from I6i per cent, to 30 per cent, was said to be a temporary increase, just as last year’s increase from 30 per cent, to 40 per cent, was claimed to be temporary. The Government vacillates in respect of its policies. The effect of the last increase should be removed by accepting the Opposition’s amendment. The Government should admit that it made a mistake - a mistake that has adversely affected motorists, dealers and skilled tradesmen in particular, many of whom have suffered severely as a result of the Government’s action. The amendment proposed by the Opposition has a good deal of merit and should be carried. J appeal to the Minister to make some provision to correct anomalies that have arisen in the application of this unpalatable temporary measure. An appeal should be open to people who have suffered hardship as a result of this increase of tax. Although the increase has been withdrawn quickly, many people have been treated unjustly.
– I wish to traverse one or two points only in relation to this matter, because I made my position clear when this matter was before the Senate late last year. I am convinced, after a good deal of experience and investigation, that the real reason for the effectiveness of the increase of sales tax was the belief held through the length and breadth of Australia that it was a temporary tax only. When the bill to increase sales tax was before the Senate last year a suggestion was made that the increase should apply for a period! of six months only. At that time Senator Wood pointed out that if you really wanted to deal a death blow to the motor industry you would suggest that the tax was temporary. He pointed out that if the tax was declared to be temporary nobody would buy a car because he would know that the tax would be reduced in six months’ time. Yet through the length and breadth of the land a great many dealers and other people associated with the motor industry were convinced by statements made in this Parliament and in the press that the increase was temporary only. Consequently, there was a drop in the purchase of cars until a stage was reached where monthly sales had fallen by 16,000. This showed that the increase of tax had done the job for which it was designed. By removing the increase when sales had declined to a certain figure the Government honoured the undertaking that it gave when it imposed the increase. The widely held belief that this was a temporary tax made it 100 times more effective than would otherwise have been the case. The lesson to be learned from what has happened is this: If after deep and earnest consideration you believe that for the welfare of this land you must impose a tax, then stand up and impose it. Do not try to hide behind any suggestion that it will be of a temporary nature.
I come now to the proposed amendment about which we have heard so much from honorable senators opposite. If I know anything I know something about the practical application of sales tax. I have lived under sales tax for 40 years - but I have been on the wrong end-
– Not quite 40 years.
– I stand corrected - for almost 30 years. The period has sometimes felt like 140 years. The argument has been advanced by the Opposition that the increase of sales tax should1 be refunded to the individuals who bought cars during the relevant period. But the amendment proposed by the Opposition makes no provision for that. The proposed amendment does not make the slightest suggestion that the money would go back to the individuals who bought cars. Its effect would be to give the £3,800,000 to the motor car companies and dealers as a bonus. The Opposition does not realize the effect of the amendment that it proposes to move.
When a motor car company sells a car to a dealer, the dealer pays the sales tax to the company. The dealer does not sell the car to an individual at a price plus tax; he sells it at an overall price which includes the tax and other charges. There is nothing on the invoice the dealer gives to his customer to indicate that the price of the car is, say, £1,000 plus sales tax at the rate of 30 per cent.
– There is, on my invoice.
– There is not, if you bought your car from a dealer. The invoice shows the overall price.
– It shows the sales tax.
– If that is so, you did not buy your car from a dealer; you must have bought it from a registered whole saler. The great bulk of the relevant sales have been made at an overall price including sales tax.
– No, the invoice is itemized.
– Of course they have been made at an overall price.
– They could do anything in Tasmania.
– I am not talking about Tasmania. I have had a lot more experience in business than has Senator O’Flaherty. He may have fossicked around for a bit of gold, but I believe that I have been fossicking around in business for much longer than he has been fossicking around for gold. This proposed amendment does not make the slightest provision - nor is there any suggestion that it does - to enable the individual car purchaser to get a refund of the increased sales tax he paid. Honorable senators opposite have deluded themselves. They do not know what the amendment means.
– Yes, we do.
– No, you do not. To whom could the increased sales tax be refunded by the Taxation Branch? The money could be returned only to the people who paid it, and the people who paid it to the Commonwealth are the motor car companies and dealers. They are the only ones who could get the money back and they are not required to hand it back to their customers if they do not wish. The effect of the amendment which the Labour Party has foreshadowed is that the Government should hand the money back to the motor car companies and registered dealers.
– No, it is not.
– That is all the Government could do. There is no obligation at all on those dealers to hand the money back to the people to whom they sold the cars. That is the amendment that honorable senators opposite want the Senate to accept. I have always understood that the supporters of the Labour Party are not always the men who work with their strong right arms. This suggestion of giving a bonus to the motor car dealers leads me to believe that there is some truth in what I have often heard.
– That is twisting it.
– It may be, but let us be quite calm and gentle about it. Honorable senators opposite do not know what they are suggesting when they say that this amendment should be carried, because the only legal authority we would have, if this amendment was carried, would be to pay the £3,800,000 back to the registered wholesale dealers and motor car companies which paid the sales tax to the Treasury, and they could put it in their back pockets and not give it to a soul.
Santor Tangney. - Do you think they would?
– Suppose they got together and said, “ There will be no refunds. This is a £3,800,000 bonus given to us by the Labour Party. Let us stick to our guns.” What could be done about it?
– We trust people.
– Out of the mouths of babes and sucklings! I completely oppose giving a bonus of £3,800,000 to the wholesale motor car dealers by returning the collections from the additional sales tax, and 1 refuse to support the amendment.
Question resolved in the affirmative.
Bill read a second time.
.- In the few words that I said in the second.reading debate, I advised the Senate that an amendment would be moved in committee on behalf of the Labour Party. I take it that that amendment has been circulated. I refer to clause 2, which reads -
This Act shall be deemed to have come into operation on the twenty-second day of February, One thousand nine hundred and sixty-one. and’ move -
Leave out the words “ the twenty-second day of February, One thousand nine hundred and sixty-one “, insert “ the sixteenth day of November, One thousand nine hundred and sixty “.
Irrespective of what members of the Government have said, we believe that they recognize that they made a mistake. Senator Scott said that this was not a revenueproducing measure at all. Even if that be so, all we are seeking by this amendment is that the additional sales tax be repaid to the people who suffered. It is true, as the
Minister for Customs and Excise (Senator Henty) said, that this amendment alone will not require that the money be refunded to those people. Every one has understood that. There would need to be a further amendment. If that is the only reason- the Minister has for opposing the amendment, I can assure him that he can disabuse his mind of the idea that the Labour Party is concerned only to hand the money back to a very limited number of people who sold the cars. We know full well that if this amendment is carried, it will have to be followed by another amendment. We propose to take the appropriate action.
– Just out of the hat?
– No. If you like, 1 will show it to you. The matter occurs in a speech made by the Leader of the Opposition in another place. I did not foreshadow the consequential amendment last night because I knew that the argument advanced by the Minister would be one of the arguments used against the first amendment. So I thought to myself, “ It may be wise to let people just tumble into that argument “, and the Minister did.
Another argument that has been advanced is that moneys collected by way of sales tax have never been refunded before. Last night the Minister questioned me when I stated that sales tax was refunded to an airline company under legislation passed in 1954 and applied retrospectively to 1946. He asked why the government of the day did not collect the money in 1946. I thought I would let him have his say. Of course, he has not read what the AuditorGeneral said in his report in 1954. Under the heading “ Sales Tax on Aircraft “, the Auditor-General stated -
Recent inquiries revealed that sales tax of approximately £393,750 had not been paid by an airline company on aircraft imported since February, 1946. An investigation by taxation officers disclosed that, in addition to £143,750 payable on two aircraft imported at the end of 1953, for which extension of time to pay had been granted, the company concerned had not paid sales tax of approximately £250,000 on fifteen other aircraft imported in earlier years.
The company secured entry of the aircraft into Australia by quoting the number of his certificate of registration under the Sales Tax Assessment Act but failed to declare when the aircraft were placed in commission and to pay the sales tax involved. The total amount of such tax was still owing to the Commonwealth- on 30th June, 1954, but does not appear in the statement of outstanding taxes hereunder because it had not been assessed by the Commissioner of Taxation at that date. lt is noted that, in the Sales Tax (Exemptions and Classifications) Bill submitted to the Parliament on 18th August, 1954, provision is made that sales tax be not payable upon aeroplanes retrospectively to 1st January, 1946.
On 19th October, 1954, the present Leader of the Government (Senator Spooner), in discussing the bill that had been introduced to validate the non-payment of tax, stated -
During the examination of this question, it was revealed that some aeroplanes had been imported and put into operation without payment of sales tax. This was brought about by an irregular but inadvertent use of registered taxpayers’ certificates, in the belief that the same freedom from sales tax as applied to government airlines would apply also to other commercial transport organizations.
The Government says, in effect, that there are two major airlines and that it wants to place them on an equal footing. But of course it does not do that.
– No, you do not. The Minister for Civil Aviation knows quite well that the Government will not allow Trans-Australia Airlines to operate intrastate in New South Wales. Of course, the refusual to do so confers a great advantage on the competitor of T.A.A. It is of no use for the Minister to thump his chest and say, “ We believe in free enterprise and competition “. The Government simply does not put that belief into practice.
– Order! I remind the honorable senator that the committee is dealing with a bill which relates to sales tax.
– I was alluding to sales tax, Mr. Temporary Chairman. 1 wished to answer my friend, the Minister for Civil Aviation, who had made certain statements. I say that the instance I have given indicates that on that occasion sales tax which should have been collected was not collected by the Government. Indeed, in order to make sure that the tax would riot be collected, the Government introduced a bill to take effect retrospectively. Therefore, the claim of the Government that, if the tax paid on motor cars were to be refunded, that would be the first time that such a refund had been made, is not borne out by the facts.
The Prime Minister (Mr. Menzies) stated that the increased rate of tax would be reviewed when the economic position warranted such action. I have not his speech before me, but I think that was the effect of it. I ask honorable senators opposite whether the economic position of Australia to-day is better than it was in November of last year. Is the Government prepared to say that we are out of the economic maelstrom? Are we now sailing in smoother waters? Are not the waves as huge as they were? If I might completely change the metaphor, the fact is, of course, that the Government wanted to shoot the bird with both barrels.
– And we got him.
– You certainly did not get him by increasing sales tax on motor cars. You got him by means of the credit squeeze. In view of that fact, we are entitled to suggest that the Government should refund to the 50,000 or 60,000 people who purchased cars at the increased rate of tax, the additional amount of tax that they paid.
I do not dispute the statements of the Minister for Customs and Excise regarding the contents of the contracts into which people enter when they purchase motor cars on terms, but I point out that in the newspapers of the principal cities of Australia we see advertisements for cars which state that the price is so much, plus tax. When I am lucky enough to be able to buy a new car I know what I have to pay in the way of tax, registration, and so on. I suggest that the Minister for Customs and Excise was splitting straws. The Government is only fooling itself when it denies that it made a blunder in increasing the tax. It knows very well that it achieved its purpose by means of the credit squeeze. I again say that our request that the additional tax be refunded is a legitimate one.
I think it was in 1952 that the Government gave back to timber merchants £500,000 in duty. At that time, it was not suggested that the money should be repaid to the people who had purchased the imported timber. It was said that the action had been taken to reduce the cost of building houses. Of course, by that time the timber had been sold at so much a hundred super, feet, and I am sure that the individual builders did not benefit. I have given two instances, one relating to sales tax and the other to duty, to indicate that on previous occasions the Government has either refunded or not collected revenue. All that we are asking the Government to do is to acknowledge the mistake that it made, to be fair, and to refund this money. 1 hope that the Government will do so. I assure the Minister for Customs and Excise that if this amendment goes through, there will be something else to follow.
– The peace and quietness of Thursday afternoon has been somewhat shattered by my friend, the Deputy Leader of the Opposition (Senator Kennelly). He has submitted an amendment that has been rejected, we believe for good reasons.
– But it has not been rejected yet.
– If the honorable senator will listen to my argument and then make a judgment^ he may even agree with me. Months ago, the Government said that this payment would not be remitted. When I introduced the bill into this chamber, I anticipated a request of this nature. 1 said then that the payment would not be remitted, and I explained why. My good friend, Senator Henty, stated in no uncertain terms this afternoon that this amendment, even if accepted, would not in any event have the effect of returning to the purchasers of motor vehicles the extra sales tax which they paid during the three months when the rate of 40 per cent, operated. The Deputy Leader of the Opposition, in order to support his amendment, said to the Senate, “ This Government has done this before “, and he went back over ten years to find a case that he thought was parallel.
– It was not over ten years.
– It was, in fact.
– The bill was submitted in 1954.
– The incident started in 1946.
– You made the measure operative retrospectively to 1946.
– The incident started in 1946. I will not be deterred from exposing the weakness in the honorable senator’s argument. He referred to this incident, which began in 1946, and said: “ There you are. You did this for the airlines back in 1946 “. It is as well to have a close look at what did happen between 1946 and 1954. One of the first questions which one would ask oneself is: If this tax was outstanding from 1946, why was it not collected during the administration of the Labour Government from 1946 to 1949? It was not collected from the airline companies. The fact was, as explained in the Auditor-General’s report to which the honorable senator referred, that a claim for exemption was inadvertently used. The honorable senator tried to create the impression that that was something of an advantage to one private enterprise organization concerned in air transport. The fact is that until 1952 Trans-Australia Airlines was not paying sales tax on the aircraft that it purchased. When this Government assumed power in 1949, it looked for some means of achieving parity in the airline industry. In 1952, that provision as applied1 to T.A.A. was removed. In 1954, when the law was amended to provide a general sales tax exemption for aircraft, the situation existing before the war was restored. During the period in which this sales tax had operated, some operators had paid the tax and some had not. What the Government did when it amended the act was merely to put them all on the same footing.
– That is lovely!
– It is true. TransAustralia Airlines, until 1952 and during the time when it was equipping heavily, was free of sales tax and the other major operator was not. In 1954, as a result of a general examination of the whole of the airline industry, a common practice in respect of sales tax was adopted. It applied to all operators. As I have said, when the legislation was before the Parliament, the Government had representations not only from Australian National Airways Limited but also from T.A.A. which, it will be recalled, had purchased and was continuing to purchase Viscount aircraft. If the situation had not been altered, T.A.A. would have been liable for about £340,000 in sales tax. That airline, as well as A.N.A., sought this relief, naturally, and1 it was given.
In a further attempt to find a precedent, the honorable senator, if my memory serves me correctly, went back to about 1952 and referred to the remission of customs duty on timber. The situation was that the Tariff Board had examined the timber industry and had recommended that oregon, I think, should be admitted under the bylaw procedure. At the time, there was in Australia a considerable amount of oregon that had been admitted on payment of customs duty. Had the by-law procedure been allowed in respect of oregon that was imported after that date, there would have been in Australia Oregon in two price categories. There would have been some on which customs duty had been paid and some on which customs duty had not been paid. In his wisdom, the Minister at the time, Senator Sir Neil O’sullivan, said that it was far better to make a remission of customs duty for three months so that all the timber could be sold at a reduced rate.
– Was it?
– True it is that it was administratively quite impossible to refund customs duty to the purchasers of the higher-priced timber, but the effect of the action taken was to lower the price of all Oregon subsequently sold in Australia, which brought a common relief to the building industry and1 to timber purchasers generally. But that is not all the story. Remission of customs duty, as was revealed in the debate in the House of Representatives on a motion by Mr. Calwell, had occurred not once but a dozen times before. Case after case where this had occurred was quoted, the Minister responsible being none other than Senator Courtice. I regret that he is not in the chamber at the moment. Is it not significant that this motion was moved, not in this chamber, where the responsible Minister sat, but in the House of Representatives?
There are two cases upon which the Deputy Leader of the Opposition tried to justify his claims. On examination both cases fail completely to line up with the case under review. I mention these things merely because the Deputy Leader of the Opposition appeared to set so much store upon them. I take the opportunity to tell him that there is no comparison- with what was done in those cases and what he asks the Government to do by this amendment. He is asking the Government to initiate a practice which has never been resorted to before and which, if accepted, would be a precedent for continual claims when sales tax rates were varied. It would be administratively hopeless, and as stated a dozen times already, the amendment is not acceptable to the Government.
– The issue before the committee is the amendment that has been proposed by the Deputy Leader of the Opposition (Senator Kennelly) to alter the operation of the cutting down of sales tax, in the case of non-commercial motor vehicles, from 40 per cent, to 30 per cent, and in the case of motor scooters and motor cycles from 25 per cent, to 161 per cent. The Opposition supports the reduction in sales tax. The bill provides for the reduction to operate from 22nd February, but the Opposition amendment proposes that it should operate as from the date of imposition, namely, 16th November.
One of the main arguments pressed by the Government against the Opposition’s proposal is that it would create a precedent. We of the Opposition completely deny that contention, even in the field of sales tax itself. I am not dealing with any other point. The plain fact is that there is the clearest precedent for a remission of sales tax, firstly where there has been a failure to collect the tax and, secondly, by way of actual repayment where it has been collected. Nothing could be. clearer than that.
The matter to which I refer arose out of a report of the Attorney-General in 1953. I understand that Senator Kennelly read a passage from that report a moment ago. A tax was imposed, and paid, by some small operators of helicopters and other aircraft used for crop-spraying activities and other services of that type. A major airline was also involved. The major airline recognized its liability when it imported aircraft upon which sales tax had been imposed by quoting a registration certificate number, but failed to notify the Taxation Branch, as it was bound to do by law, that the aircraft had been commissioned and were in operation and that it was under an obligation to pay the tax. Everybody in the branch overlooked the. matter and the company did not pay. The Auditor-General directed attention to the matter. Then the Government, for reasons which the Minister for Civil Aviation (Senator Paltridge) has dealt with - they have nothing to do with the points that we are contesting - decided to introduce legislation. The Minister dealt at length with matters concerning TransAustralia Airlines and Australian National Airways, but that has nothing to do with the present issue. The Opposition is pressing the, point that there is a precedent for repaying sales tax. That is the one point that is at issue.
On the occasion to which J have referred the Government introduced the Sales Tax (Exemptions and Classifications) Bill 1954, one provision of which wiped out sales tax in this connexion for an eight-year period. It reads -
Notwithstanding anything contained in any Sales Tax Assessment Act, sales tax is not payable, and shall be deemed not to have been payable, upon the sale value under any Sales Tax Assessment Act of an aeroplane, including a flying boat, seaplane or helicopter if the transaction, act or operation in relation to which the sale value arose was effected or done on or after the first day of January, One thousand nine hundred and forty-six, and before the commencement of this Act.
In other words sales tax, whether paid by the taxpayers liable or whether not paid, was wiped out retrospectively over a period of eight years - a far more significant operation than the Opposition’s proposal that the present tax be wiped out over a period of three months.
If there is any doubt about that position one has to refer only to the second-reading speech of the Minister when the bill I have just mentioned was introduced in 1954. Speaking of the remission of the tax the Minister said -
This was brought about by an irregular but inadvertent use of registered taxpayers’ certificates, in the belief that the same freedom from sales tax as applied to the Government airlines would apply also to other commercial transport organizations.
The Minister continued -
The back dating of the exemption may necessitate certain refunds -
I ask that that point be noted - but these will be comparatively small, and they will be payable mainly to small airline operators and aero clubs.
There is the clearest intention to remit sales tax and to forgive a company liable to pay sales tax. The amendment of the Opposition accordingly creates no precedent, and the argument that the Minister and the Government rest upon is completely baseless. I do not worry about timber or about air charges. I am dealing merely with the argument of the Minister that to accept the Opposition’s amendment would create a precedent. It would do nothing of the kind. In all respects, excepting the total amount involved, it would be completely in line with what the Government did in 1954.
The Minister for Customs and Excise (Senator Henty) contended that there would be untold trouble in refunding the amount to the ultimate purchasers. The Opposition disagrees with that contention entirely. £very dealer would have a complete record of the purchaser of a new vehicle - his name, address, the details of the transaction, the sale price and the amount of sales tax paid. I disagree with Senator Henty when he says that a dealer treats the price as an overall price. I do not know any dealer who does not record the sale price on his sales docket. He records at very plainly in accordance with business practice to-day. Some dealers themselves carried the additional sales tax during the three months period between November and February, and did not pass it on. In that case they would retain the amount of the tax if it were repaid to them. In all other cases dealers would have the work of passing the refund on to the purchasers. I completely reject the argument that refunds could not be made or would be surrounded with impossible difficulties.
– There would be no compulsion on a dealer to pass on a refund.
– As the amendment stands at the moment, that is so. If the Government accepts this amendment the Opposition will very promptly move a further amendment to ensure that the refund is passed on to the purchaser. That can be very easily implemented. In order to ensure that the ultimate purchaser gets the benefit of the remitted sales tax we have only to give the purchaser the right to sue the dealer or the person from whom he bought the car to recover the whole or the moiety of the additional sales tax he paid. We can, leave it to the purchaser to take his own course to get the money back. The buyers would have no difficulty in obtaining the money from the dealers. There would be no difficulty in ensuring by a proper amendment that the money went back to the buyers. That is basic to the intention of the amendment we have moved. We take the view that there is no difficulty about its implementation.
Let me pass to the merits of the case that the Opposition puts. Everybody in this country, apart from the members- of the Government, acknowledges that the Government made a mistake. In his public statement on 22nd March, a part of which was read by Senator Ridley last night, the Prime Minister indicated that this was an undesirable impost, that the psychological reaction to it was bad, and that, having regard to other restraints, it was unnecessary. To-day, Senator Wright, a supporter of the Government, told us that in addition to being undesirable and unnecessary, it was unwise. In short, it was a mistake. If it were a mistake, surely it is proper and just for the Government to rectify the mistake.
This mistake was brought about by the Government itself, through two initial mistakes. First, in February, 1960, by completely abolishing import controls - the abolition was effective as regards cars some time in August - the Government opened the door to all imports. The second mistake was that although the Government imposed bank restrictions through the central bank in February, 1960, it failed to ensure that the restrictions were obeyed. We had the spectacle in November of the Government telling us that between February and August, despite the instruction by the central bank to cut down advances, the trading banks had increased their advances by £150,000,000. So the Government itself precipitated the trouble.
If it is said that the increase of the sales tax was not a mistake, I invite the committee to look at the question of achieving a national purpose at the expense of an unfortunate handful of taxpayers. If a rapid cutting down of the expansion of the motor industry was in the national interest, why should the financial burden, the payment of an additional 10 per cent, tax, fall upon the unhappy people who, in the period while the additional tax operated, either were obliged to or decided to buy a motor car? Surely if there is to be any financial burden, it should be spread equitably over the whole community. That can be done quite well by repaying the additional amount of £3,800,000 that was collected.
Another of the Government’s mistakes was that it imposed too heavy a burden on the motor car industry. This it has acknowledged. My own view is that the restriction of bank credit and - perhaps this is more important - the move to restrict hire-purchase activities tended to cut down production and activity in the motor industry far more than did the additional sales tax. So the Government, without admitting it made a mistake, admits all the circumstances that constitute a mistake.
Even if this were not a mistake, why should the 50,000 or 60,000 persons who bought cars during a period of three months be compelled to bear the financial burden of a control that the Government claims was initiated for the benefit of the whole of the Australian community? Surely that is a consideration that ought to weigh with the Government. I invite the Government to consider what will be the position when presently it eases the other restraints, having indicated that they are temporary. Is it not to be expected that there will be an immediate flooding back of men to the motor industry from the uncongenial and inconvenient employment into which many of them / were forced when they were dismissed from the motor industry? Is it not to be expected that the motor industry will quickly gather impetus again, that it will seek to get ahead with its schedules, and that the men who were dismissed from the industry will flood back to their previous places of employment - places near where they established their homes? Is not that to be expected?
– I suggest that it is. It is quite certain that the motor industry will continue to run downhill for a period even when all controls are lifted, but there will be a turning point and within a relatively short period it will be going full blast again. What does the Government propose to do about that? In the early part of 1959 the Government knew that the capacity of the motor industry was 375,000 cars per annum. That appears plainly in a report from the Department of Trade.
– Order! The honorable senator’s time has expired.
– There were one or two points made by the Leader of the Opposition (Senator McKenna) that call for some comment. I noted with interest that he said it was not the issue that Trans-Australia Airlines and Australian National Airlines Proprietary Limited should have been equated. It was the issue at that time because a part of the plan of the Labour Party was to create a government monopoly and force private enterprise out of the air. That is proved by the fact that the previous Labour Government exempted the government airlines from the payment of sales tax, not only on aircraft, but on all the supplies they bought. This was a part of the socialist plan to drive private enterprise out of the air and to have a government airline monopoly. Thank heaven, the people of Australia had more commonsense than to accept that proposition. They turfed Labour out of office twelve years ago. If Labour places the same proposition before the people again at the end of this year, it will be rejected again. The people of Australia will not stand for that type of discrimination between a government airline and a private airline. The issue when Labour was in office was whether T.A.A. and A.N.A. should be equated. This Government saw that they were equated.
Order! As Senator Kennelly was not allowed to develop that argument, the Minister cannot be permitted to do so.
– Then I shall stick to the strict letter of the law by referring to the amendment moved by the Deputy Leader of the Opposition (Senator Kennelly). I cannot accept that amendment. I know that the Leader of the Opposition has had great experience in the motor industry, both from the point of view of a firm that sells cars and from the point of view of a firm that deals in the hire-purchase side.
– I am not in it.
– I referred to your great experience in that direction. Senator McKenna would be fully aware as a result of that experience, apart from his great legal capacity, of what frequently happens when a dealer sells a car. He passes the matter over to a hire-purchase company and it is no longer in his hands. The hirepurchase company pays the dealer in cash and then makes a contract with the person who is buying the car. Under that contract, the buyer of the car undertakes to pay the hire-purchase company so much a week. As I have said, the matter is no longer in the dealer’s hands. A man buys a car from a dealer, who then passes the matter over to a hire-purchase company, which enters into a perfectly legal contract under which the buyer of the car pays the hire-purchase company so much a week.
It was so glib, so quick, of Senator McKenna to say “ We had a further amendment in mind when we put this one up “. I bow to his debating ability. We would like to see the amendment on paper. All we are discussing at the moment is the amendment the Opposition has proposed. Senator McKenna knows much better than to suggest that the hire-purchase company, which has completed a perfectly legal deal with the purchaser, has the slightest responsibility to refund the tax. If the honorable senator had read the newspapers recently, he would know that one or two of the hire-purchase companies are no longer with us. Having bitten the dust, what would they do? Where would the money come from that they would pay by way of refund of tax?
Senator Kennelly knows as well as I do that the amendment which he has proposed makes provision for the return of £3,800,000 to the motor dealers, and that not the slightest responsibility is cast upon them to return that bonus to the individual purchasers. They could not refund it in some cases, because the hire-purchase company has paid the dealer cash and he is finished with the whole transaction. In those cases the hire-purchase company has made a legal contract with the individual buyers, with not the slightest reference to sales tax in the contract. All the hire-purchase company says, in effect, is: “ You pay a deposit of so much. As long as you continue to pay £2 a week the car is yours.” That is all the hire-purchase company says, and there is no legal responsibility upon the company to refund the increase of tax to the person with whom it has made a proper and legal deal. I repeat that I cannot accept the pseudo-legal advice which Senator McKenna has put forward. All his training and experience tell him that the position is very much different from what it has been represented to be. What he has said is not in accord with the facts of life.
– We had them yesterday
– While you continue to follow the same line of argument you will have them to-day, to-morrow and the next day. Make no mistake about that. I realize that you do not like what I am saying. The weakness of the Opposition’s argument lies in the fact that it has made no provision for the situation that I have mentioned. It is all very well to say, “ We are going to do that “.
– In another place-
– Never mind about what was said in another place. We have before us in black and white the amendment you have proposed in this place. Let me say to Senator Kennelly, who continues to interject, that I listened to him and that I do not intend to let him interrupt me. In the terms of the Opposition’s amendment, this refund would be nothing but a bonus of £3,800,000 to the dealers in the motor trade. It is all very well to talk about good intentions. In this place we do not like good intentions; we like to see words in black and white. All we have before us in this place is an amendment which provides that we should return the increase of sales tax to those from whom we have collected it. We have collected it from the motor car dealers and the wholesalers, and the Commissioner of Taxation could return it to nobody else.
– He could not enforce it, anyhow.
– That is so.
– We agree with you. We shall take the matter further.
– You never thought of it.
– Yes, we did.
– To be quite frank with you, Senator Kennelly, they were a little more clever in the other place, than you have been. In the other House they protected their flanks by mentioning the matter, but you have not done that in this place. It has been very shrewd of you to say what you have said, but I am afraid that the facts are stacked against you.
– That is not so. The amendment is here for you to see.
– There is nothing like that before us here.
Order! 1 ask honorable senators to address their remarks to the Chair.
– I have been listening to the Deputy Leader of the Opposition refer to what was done in another place. I point out that the Opposition protected itself there.
– I knew that you would come in.
– We are not dealing with what was presented to honorable members in another place; we are dealing with what has been presented to us here in black and white. The Labour socialist Opposition in this place has proposed an amendment which is designed to return to the wholesale dealers a bonus of £3,800,000. I do not support the amendment.
– It is a rather pathetic spectacle when we see a member of the Government rise in his place, dodge the issue and seek to create a diversion, knowing quite well that the Australian Labour Party, as he has admitted, considers that this money should go to the purchaser. The Minister for Customs and Excise (Senator Henty), with his legal knowledge, knows that, in giving effect to the Opposition’s proposal, it would be a simple matter to cover the case of an intervening hirepurchase company by providing that the hirer from the hire-purchase company shall be deemed to be the purchaser. A few words would adjust that situation.
– But the hire-purchase company has not paid the sales tax. You could not enforce it against the hirepurchase company.
– I am merely indicating that you could cover that situation. If the Government had the option and the power to refund the money, it would have the power to say to whom it should be directed. The dealers and the intervening hire-purchase companies are merely intermediaries in a transaction in which the purchaser as defined is the ultimate party concerned.
– What about hirepurchase companies that are no longer in business?
– Even that case can be met. The Minister may take the matter further and ask “ What happens if they die?” It would go to the executors of their estate, lt is not difficult in law to cover that situation.
– You know that it would go to the creditors and not to the car owner.
– It is not difficult to cover that situation. It is quite within the Government’s competence, when it pays out money, to say to whom it shall be directed and in what circumstances. It is pathetic to find the Government, in distress as it is, not willing to acknowledge a mistake and resorting to every subterfuge to obscure the real issue, which is this: Is it fair to leave the financial burden on the people who bought cars in a very limited period, when that burden should be spread over the whole community? It may be so spread by making a refund of the £3,800,000.
The honorable senator developed an argument about equity and the remission of sales tax in other circumstances, but what was done was provoked by the equity of the circumstances. He will not find a better situation than the present one in which equity demands that there should be a refund. How can the Minister justify the achievement of a national purpose at the expense of the buyers of cars for a period of three months? How does he justify that inequity, particularly when the remedy is in the Government’s own hands? It could spread the burden over all the taxpayers of Australia. That is where the burden of a situation like this should lie - not on the few unfortunate people who were caught by the Government’s mistake or, if I abandon that position, were unfairly made the instrument of Government policy simply because they bought cars in a particular period. Let us test the position. Let the Government accept this amendment because the Minister knows the difficulty associated with moving amendments in connexion with the’ Sales Tax Bills (Nos. 1 to 9). The clause under discussion deals with date of operation of the bill. It would not be appropriate to move an amendment to that clause providing for the appropria tion of money and the terms of its repayment. We would be in the same difficulty if we sought to move for the insertion of a new clause at this stage. If it so desired, the Government could claim that there was no such provision in the bill. The Government is well aware of the procedural position in the Senate. It knows what our argument is. I deplore the weakness of the Government’s position which forces it to march out on a diversionary track in the hope that it will obscure the real issue. Was the measure providing for the increase of sales tax a proper one? The answer is that it was not. Was it a fair measure? Once again the answer is that it was not. I ask the Government to face the position squarely and1 admit that it made a mistake. If it is not prepared to do that, why does it pursue a course that does not react fairly to all taxpayers? Is the Government prepared to do the right thing? That is the issue.
– The participation in this debate of the Leader of the Opposition (Senator McKenna) has resulted in him doing little service to the amendment proposed by the Deputy Leader of the Opposition (Senator Kennelly). If ever the committee wanted conviction as to the impossibility of this amendment, the Leader of the Opposition has now provided it. He has suggested that an administrative system could be designed under an amendment that has not yet seen the light of day. That system would provide for repayments of this tax to reach purchasers through the tortuous, course of hire-purchase operators and the like. How would the Leader of the Opposition straighten out a situation in which the original purchaser of a car had, during the three months in question, sold it, and the car had been sold a third time? How would he divide the rebate between the cardistributor and the purchaser in the case where the distributor, in order to secure the sale, had allowed a more than liberal tradein? Those are important aspects of the matter to which the Leader of the Opposition has not addressed himself. He has. come here to support a glib political amendment. The Leader of the Opposition proceeds from that point to a further astonishing point. He suggests that the £3,800,000* involved should be spread over the whole- community. He suggests that the wageearner should pay the tax for the person who has purchased a car. That is a proposition that I never thought I would hear emanate from the Opposition, particularly from its leader. I trust that he will not mind if I use his argument against him at any appropriate opportunity.
– I am surprised to hear the Minister for Civil Aviation say that he is concerned to see that the taxpayers of Australia should not bear the burden of errors committed by this Government. The Government did not display any feelings for the welfare of the taxpayers when, it steepened the inflationary spiral by imposing heavier indirect taxes, thus forcing up costs in every section of the economy. These indirect taxes have affected every taxpayer in Australia. The Government has cited hypothetical cases, but I do not suppose that it could produce any evidence-
– Yes, I can.
– Evidence of a car having been sold three times in three months? The number of such cases would be very few and appropriate adjustments could easily be made. The Government has claimed that it did not need the revenue derived from the increased sales tax and that the increase was applied merely to correct a worsening economic situation. The Minister’s argument is very weak.
– In reply to the Minister for Civil Aviation, I submit that the difficulties associated with paying the rebate to the individual purchaser are not as great as he suggests. We are concerned about the original purchaser. We do not propose to carry the rebate beyond the transactions into which he enters. We have referred only to the original purchaser. Once again, the Minister has raised a false issue. We are dealing with people who have been compelled to pay additional tax.
– May I ask you a question?
– Let me finish my remarks first; I will then answer your question if I am able to do so. The Minister for Civil Aviation developed an argument about dealers who had given more than liberal trade-in allowances. The fact remains that when any dealer carried any portion of the additional sales tax himself he made a very clear virtue of that between himself and the purchaser and he would record that aspect very emphatically in the transaction. There can be no doubt about that. The Minister has directed weak arguments on this matter.
Finally, the Minister distorted an argument of mine. He said that I was asking the workers of Australia to bear a community burden. I asked that the burden be spread over all taxpayers in accordance with their income.
– Including workers?
– Of course, if they pay tax, as most of them do. They pay far less than do other sections of the community. It is completely right that in any matter of national importance they should bear their proper share of the burden. I stand on that proposition at all times. Taxpayers pay according to their ability to pay. Nobody in Australia objects to paying income tax as long as the burden is distributed equitably. All Australians are big enough to recognize that they must make a contribution for national purposes. ! think Australians are sufficiently good sportsmen to recognize that no one section of taxpayers should be compelled to bear a burden of this kind by sheer fortuitous circumstances promoted by mistake after mistake on the part of the Government. All Australians, in proportion to their incomes, would be happy to come to the rescue of the people who have suffered from this additional tax. The Minister distorted what I said. When he sees my argument in its proper perspective I am sure that he will not repeat the argument that he presented a while ago. At least, let us hope that he will not do so.
– I think you said that the person to whom you are aiming to give the rebate is the person who paid the sales tax.
– The initial purchaser.
– The person who paid the tax?
– Not necessarily the person who paid the tax.
– You referred to the initial purchaser who paid the tax. The hire-purchase company is the initial purchaser. You cannot deny that.
– The Minister will recall that when he raised the question of the hirer from a hire-purchase company a while ago, I answered that question in these terms: The hirer from a hire-purchase company would be deemed to be the original purchaser. I made that completely clear a little while ago, so I have now answered the question twice.
Question put -
That the words proposed to be left out (Senator Kennelly’s amendment) be left out.
The committee divided. (The Chairman - Senator the Hon. A. D. Reid.)
Majority , . . . 3
Question so resolved in the negative.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
SALES TAX BILLS (Nos. 1 to 9) 1961.
Debate resumed from 11th April (vide page 412), on motion by Senator Paltridge -
That the bills be now read a second time.
– I do not intend to discuss the bills at this juncture as it was understood that the debate on all the sales tax measures would take place on the bill which the Senate has just passed. However, in committee I intend to move an amendment along the lines of the amendment submitted on the previous bill.
Question resolved in the affirmative.
Bills read a second time.
I move -
That the House of Representatives be requested to make the following amendment in each bill: -
In clause 2, leave out the words “ the twentysecond day of February, One thousand nine hundred and sixty one “, insert “ the sixteenth day of November, One thousand nine hundred and sixty “.
All the arguments on this matter were advanced on the previous hill and I have no desire to repeat them now.
– The Government does not accept the request for the amendments for the reasons stated in the discussion on the previous bill.
Question put -
That the House of Representatives be requested to leave out the words proposed to be left out.
The committee divided. (The Chairman - Senator the Hon. A. D. Reid.)
Majority . . . . 3
Question so resolved in the negative.
Bills agreed to.
Bills reported without requests; report adopted.
Bills read a third time.
Senate adjourned at 4.40 p.m.
Cite as: Australia, Senate, Debates, 20 April 1961, viewed 22 October 2017, <http://historichansard.net/senate/1961/19610420_senate_23_s19/>.