27th Parliament · 2nd Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at ] 1 a.m., and read prayers.
– I give notice that on the next day of sitting 1 shall move:
That (here be referred to the Standing Committee on Primary and Secondary Industry and Trade the following matter: The problems of the rural industries of Australia now and in the foreseeable future; and [hat the Committee be requested ro recommend as soon as possible what immediate steps should be taken to meet the existing crisis in the rural industries and what long term measures should be taken to restructure and achieve the utmost efficiency in the rural industries in order to ensure as far as possible the prosperity of rural industries and of the community based on them.
– I direct a question to the Minister for Education and Science. What is the cause of the abnormal delay associated with the availability of forms for the continuation of Commonwealth scholarships at universities? The deadline for the lodgment of renewal forms is 31st October and 1 understand that forms or letters of explanation will not be available until 23rd October, which leaves a margin of only 8 days.
– I am not aware of the abnormal delay to which the honourable senator has referred in his question. 1 shall have inquiries made immediately. I hope to provide the honourable senator with detailed information tomorrow.
– My question is directed to the Leader of the Government in the Senate. Do the recent statements by Mr McEwen, the Minister for Trade and Industry, that the Australia to Europe shipping conference has abandoned negotiations in respect to a 10 per cent increase in freight and the announcement that it remains up to the various shipper groups representing the meat, dairy and canned fruit industries to decide on the 10 per cent increase mean that the Government has given up any hope of using the Trade Practices Act to subvert this action or to use the Government’s interests in the Australian Coastal Shipping Commission to resist such increases?
I believe that the honourable senator’s question should be directed to the Minister for Shipping and Transport to obtain a reply in the context of the Minister’s statement and the conclusions which the honourable senator has drawn from it. Therefore. / would ask the honourable senator to put his question on notice.
– 1 desire to ask a question of the Leader of the Government in the Senate, who represents the Treasurer in this chamber. Is it a fact that the financial assistance which is provided by the Commonwealth to the States for drought relief is provided under a blanket arrangement whereby an initial outlay of SI. 5m on relief must be made by a Stale before Commonwealth funds are made available to it? As this presents an anomalous situation insofar as no credence is given to the varying economic and financial capacities of the various States, will consideration be given to reviewing the minimum cut-in point for Federal aid to South Australia in its present drought problems?
Basically as we all know - and the Government has said so many times in this place - the first ingredient in this problem is for representations to be made in relation to what is considered to be a situation which is beyond the capacity or the reasonable ability of a State to meet in terms of drought, disaster or something of that nature. I have no doubt that in that context there is a start line. I think the more appropriate thing to do is to have a close examination made of the point of view expressed by the honourable senator, f will have his question referred to the Treasurer. lt must always be understood thai intervention by the Commonwealth starts at the level of representations by the Premier of a State to the Prime Minister. The intervention is on the basis- that there is a situation of disaster, drought, storm or other calamity which is in the nature of a national disaster and that it is beyond the capacity of the State concerned to meet it through its normal channels and normal sovereignty. The honourable dilator will understand that there must be some start J inc. otherwise the Commonwealth could be called upon from time to time to meet circumstances which the State could meet in the normal course of its responsibilities. That is the reason for it. As to the particularity of South Australia, I will have the honourable senator’s question referred to the Treasurer for a reply.
– My question is directed to the Minister representing the Minister for External Affairs. How long is the nonsense of Australia’s trading heavily with mainland China and yet refusing to recognise the existence of its government to go on? ls it not a fact that many years ago the Government of Great Britain under Prime Minister Sir Winston Churchill recognised the existence of the Government of mainland China? Is it not correct that the recognition of such a government does not mean approval or disapproval but means simply the recognition of a fact of life when a government has established itself? How long are we to defy common sense by saying that the Government of mainland China is not the Government in Peking but is actually the Government in Taiwan? Will not the Australian Government, for the sake of its citizens and to maintain any kind of dignity, follow the example of Canada and recognise the Government of mainland China?
– I took my pencil out to record the question asked by the Leader of the Opposition. In fact he has asked me 8 questions all of which are designed as a vehicle for him to make an exposition of his views in relation to Australia’s recognition or nonrecognition of Red China. I leave his intention to the judgment of everybody who heard the series of questions. Australia’s attitude in relation to the recognition of Red China has been clearly stated and is well known to all. In fact, it was reiterated yesterday in the other place by the Minister for External Affairs. I commend the remarks of the Minister for External Affairs to the honourable senator.
– Will the Minister-: -
Senator Sir KENNETH ANDERSONNot only has Senator Murphy asked me 8 questions but he is trying to help me give the answers.
– The Minister needs some help sometimes.
Senator Sir KENNETH ANDERSON - I do not give the answers that honourable senators want and they cannot obtain any political mileage out of them. That is why they do not like them. The fact of the matter is that Australia’s attitude to the recognition of Communist China has been clearly stated. Senator Keeffe is still interjecting even though on his own say-so he does not believe in the Senate. Yet he is No. 1 candidate for the Labor Party in Queensland. If he wants to make things rough, then J can help. The fact is that what Canada has done is Canada’s affair. Australia’s attitude is determined in accordance with our own views, desires and interests and in the best interests of Australia.
– I ask the Minister representing the Minister for External Affairs: ls it a fact that although Great Britain recognised Communist China in 1949, in the 21 years since then Communist China has refused to receive an ambassador from the United Kingdom on the ground that no ambassador will be received until the United Kingdom breaks off relations with Taiwan? Does the Minister consider that that represents an attitude which should be endorsed by the Australian Government? Does he believe that in those circumstances the Australian Government could possibly consider destroying our relations with Taiwan and establishing relations with Communist China, which has treated the British diplomatic representative, the charge d’affaires, as a second class diplomatic representative and has refused under any circumstances to receive an ambassador?
The views expressed by Senator McManns about the United Kingdom’s affairs with Red China are in accordance with my understanding of the position. Australia has an ambassadorial establishment with the Taiwan Government. Taiwan has an ambassador in Australia and we have an ambassador there. This is quite good and proper. As for relations between the United Kingdom Government and Red China, that is a matter for those 2 governments. As 1 said in response to the series of questions by Senator Murphy, there can be no doubt that even though the United Kingdom Government and Red China do have an understanding, this does not appear to have had any significant influence on the relationships between those 2 countries in the context of what Senator McManus said.
– I ask the Minister representing the Minister for External Affairs: Is it not the fact that the Australian Government is adopting the international attitude that the Government on the island of Taiwan is actually the Government not only of Taiwan but also of the whole of mainland China?
Again the Leader of the Opposition is seeking to put words into my mouth. I have been here too long to fall for that schoolboy practice. I would say lo him that the Australian attitude to the Taiwan Government has been quite clear. Our relationship with Red China has been quite clear. We trade with Red China in certain commodities and under certain conditions in accordance with United Nations provisions. There is nothing new about that.
– It was a simple question that 1 asked.
The question was not so simple and Senator Murphy knows it. It was like the simple question that a lawyer puts to a person in the witness box. The short answer is, as I said earlier, that the Minister for External Affairs made a statement yesterday in the other place about Australia’s attitude to mainland China and I invite the Leader of the Opposition to read it.
– I direct a question to the Minister representing the Minister for Shipping and Transport. In view of the deliberations that will take place in the very near future, or are supposed to take place, can anything be done to hurry up the presentation of the annual report of the Australian National Line for the year ended 30vh June last? Does not the Minister thinkthat it should have been in the hands of honourable senators long before this?
– I have been waitingto see this report. We are now in the” middle of October; so July, August, September and half of October have passed. Normally, that would be a period of time in which the report could be issued. Sometimes there are problems with regard to Auditor-General’s Office qualifications and credit certificates and reports. Other than, that, J do not have anything that I can usefully contribute. 1 shall find out about this matter for the honourable senator this afternoon.
– My question is addressed to the Minister-in-Charge of Tourist Activities. He is aware that a positive proposal to establish a Geelong regional tourist committee has been made by local municipal authorities and other interested organisations. If this is successful - I am confident that it will be - can the Australian Tourist Commission give assistance to the committee with overseas, promotion and publicity?
– I am very grateful to Senator Poyser for reminding me of the delightful 2 days that I had in Geelong during the latter part of last week, when at his invitation I had the opportunity to meet many of the people who are working energetically in the formation of a regional tourist committee for Geelong and its environs. The outstanding attractions that the area has make great appeal. Senator Poyser can be assured that in the overseas promotional efforts of the Australian Tourist Commission this regional committee will be focused in its proper perspective. I have no doubt that if the Geelong regional committee examines the publications of the Commission it will be assured that they will be of great advantage not only to Geelong but also to Victoria.
– Can the
Minister representing the Minister for Immigration advise when the immigration agreement discussed by the Australian
Minister for immigration and the Maltese Government some months ago will be made available to this Parliament? Can she also advise whether the agreement with Malta will embrace the reciprocal social service benefits that are now granted to people from Britain and New Zealand who intend to reside permanently in Australia as they, like Maltese citizens, are members, of the British Commonwealth? The Minister will recall that T have asked this question many times in the last 3 years since the visit of Mr Mintoff, the former Prime Minister of Malta, who came to Australia for the purpose of having discussions with the Australian Government on this matter.
– I am aware of the interest Senator Fitzgerald has taken in this matter over a period of time. I cannot give him the latest information he requires; but i shall obtain it from the Minister for Immigration and give it to him as soon as possible.
– My question is addressed to the Minister-in-Charge of Tourist Activities. . Now that Melbourne has an international airport, has any consideration been given to encouraging the American authorities to bring American servicemen on rest and recreation leave to Melbourne rather than maintaining the flow into Sydney where the choice is between Sydney and Kings Cross, whereas if they were landed at Tullamarine they would be in close proximity to the lovely city of Melbourne and also would be able to visit South Australia and Tasmania?
– My colleague from Tasmania would know assuredly that consideration has been given to this proposition, but it is not practicable. Sustained negotiations were had with the American Army authorities on the destination of the rest and recreation leave personnel, first of all, in an endeavour to get some of them to go to the Gold Coast as an alternative destination. Somebody is referring to Mackay. It was not included in those negotiations, but it would have been quite appropriate. The American authorities were unwilling to change the destination. In the present circumstances of the projec tion of the rest and recreation programme I would not consider it practicable to suggest dividing the destinations between Mascot and Tullamarine.
– Will the Minister representing the Minister for the Army inform the Parliament how many Australians of all Services have been killed in the Vietnam war to date, either in action, as a result of wounds, or accidentally?
– I gave the figures, which were then up to date, to the honourable senator in the last sessional period. I shall have them brought up to date and given to him.
– My question, which 1 address to the Minister for Civil Aviation, refers to an award won by the summer air patrol belonging to radio station 5AD in Adelaide. As the citation accompanying the award states that the patrol works under the control of the Department of Civil Aviation, can the Minister advise the numbers of such patrol aircraft operating under the control of his Department, in what way they operate under that control, and how far the control extends to other light aircraft engaged in public duty or business operations, especially as the control relates to air worthiness and safety?
– I am aware that we take a tremendous interest in all these activities. J know of the award to the 5AD radio station safety patrol. I do not have at hand the details required to answer the questions that the honourable senator has addressed to me. However, T can say generally that it is a most worthy operation for my Department to support. Wherever we can support such activities we do so, in the interests of using the instrumentality for the greatest public benefit. After all, it belongs to the Australian people and should be used as widely as possible. We equally encourage an interest in flying and air safety. All in all, we are glad to be associated with the safety patrol. The honourable senator will need to put the balance of his question on notice so that I can obtain for him the information he seeks.
– I address my question to the Minister representing the Minister for Shipping and Transport. Am I correct in my belief that the Australian National Line became an international shipper for the purpose of controlling freight rates, particularly those applicable to our primary products for trans-shipment overseas? If my understanding is correct, I ask: What gains in respect of freight rates may our primary producers expect to receive now that the Australian National Line has joined with the Conference Lines and therefore has to charge the same freights as those shipping lines? Has Australia gained any benefit from the entry of the Australian National Line into international shipping now that it has become part and parcel of the world’s main shipping line and will have to follow the pattern of freight rises adopted by that line?
– Earlier I observed that Senator Kennelly was writing studiously and carefully for some time. I rather thought that a question would be aimed in my direction. It seems to me that the Opposition in the Senate is seeking answers to questions in 2 divisions. One group of questions is genuinely designed to elicit information in what might be described as the general public interest. However, another group of questions is designed merely to cause trouble and to provide election campaign cannon fodder. I regard Senator Kennelly’s question as falling within the first division. It seems to me to be a question which I might have been disposed to ask had I been in his position. It involves a question of policy and details within the administration of my colleague, the Minister for Shipping and Transport. I think it would be wrong for me to answer policy questions on his behalf. Equally, I think Senator Kennelly is entitled to have the best resume* available of the situation in response to his question. Accordingly I shall direct the question to the appropriate Minister this afternoon in an attempt to obtain for Senator Kennelly an answer that I can give to him tomorrow.
– My question is directed to the Leader of the Government in the Senate. Did the Australian Minister for Externa] Affairs state that the present Australian Government would not change its attitude to the recognition of Red China whilst the Government of that country would not recognise the Declaration of Human Rights and whilst Red China continued to assert that it intends to pursue its political policies by the use of force? Can the apparent intense interest of and the several questions asked by the Leader of the Opposition in this place indicate that, in the remote possibility of a change of political control of this Parliament, a government of Labor complexion would support Red China in its rejection of the Declaration of Human Rights and would also support a policy of force to achieve its political ends?
The possibility of the Opposition being in government is so remote that one has to look at that suggestion with some scepticism. It is true that, speaking in another place yesterday, the Minister for External Affairs referred to this matter. He said:
We have stated - the Prime Minister has recently confirmed this and I now confirm it again - that of course we would like Red China to be in the United Nations provided only that it accepted the Declaration of Human Rights and abided by it and provided it was willing to abide by the principles of the Charter itself.
That is the point that the honourable senator made. The Minister continued:
The condition would be that Red China renounced the use of violence and force in an attempt to ensure its political objectives. Secondly, we have stated that if Red China does live up to its obligations we would be prepared to reconsider our position.
Those were the conditions that the Minister for External Affairs mentioned in the other place yesterday. They are consistent with the framing of the question put to me by Senator Webster.
– How does the Minister interpret Labor’s attitude?
– Who can interpret Labor’s attitude?
– I rise to order. This is hardly a proper use of question time. It is inconsistent with standing order 99 that Government backbenchers, private senators, should seek to put a question to the Leader of their Party asking not merely about matters which affect the administration but also about the Labor Party’s attitude to those matters. That is making nonsense of question time, especially when the honourable senator asks what the Labor Party would do at some time in the future. This is ridiculous. If it is important that a question about Labor Party policy be asked, the honourable senator should ask me and not the Leader of the Government. This is making a joke of question time as I have said and it also conflicts with standing order 99.
– One would have thought that question time today, as Senator Cant remarked, was not for the purpose of asking questions but was for the purpose of giving information. Questions are not being asked, but information is being given. A lot of information has been given. That applies to both sides. In my keenness, I keep a note of what happens. As I have said previously, what the Minister says in his reply is his responsibility not mine. I do not uphold the point of order.
Senator Sir KENNETH ANDERSONI did not reply, to that part of the question about which the honourable senator complained in his point of order.
– I will permit the Minister to speak to the point of order if be wishes although I have ruled against it. Has the Minister finished his answer?
Senator Sir KENNETH ANDERSONYes.
– Is the Minister representing Minister for External Affairs aware that there is already a form of relationship between Australia and Communist China in that Mr Ted Hill, the head of the pro-Chinese Australian Communist Party Marxist-Leninist is received, on his regular visits to China, with the honours normally accorded an Australian ambassador or head of state, with full red carpet treatment and with a member of Cabinet to receive him? Also he is publicly announced as the close personal friend of Mao Tse Tung and Chou En-Lai. Does this not indicate the attitude of Red China to Australia and the forum of diplomatic association with us that Red China prefers?
– I am not aware of the circumstances to which the honourable senator referred. I accept them as being information which I am happy to receive.
– My question is directed to the Leader of the Government in the Senate. By way of brief preface, 1 refer to a question asked by me on 23rd September 1970 inquiring as to when a decision may be made in relation to the Tasmanian Premier’s request for assistance to construct the Launceston to Bell Bay rail link. At the time the Minister said he would seek information for me. On 30th September 1970 I again asked a question in relation to that matter. Now, bearing in mind the importance of this project to the development of the huge wood chip export industry in northern Tasmania and to the development of better facilities for transport for interstate trade, I ask again: Can the Leader of the Government in the Senate give any further information as to the progress of the consideration of this request and as to when any decision may be given?
My understanding is that the position I stated in reply to the honourable senator’s previous question has not changed. T shall make some inquiries during question time, and if there is any variation to be made to the answer I gave previously I shall intercede to give a supplementary answer.
– My question refers to the answer given by the Leader of the Government in the Senate in the first instance to the question asked by Senator McManus. I think his answer was taken by everybody to be a criticism of the United Kingdom representation in Peking and whether it is performing a useful function. I ask the Minister: Is it not a fact that the Australian Government and the Australian Department of Trade and Industry have frequently used United Kingdom representation in Peking to facilitate the present trading arrangements of the Australian Government with Red China, by which various officials of the Commonwealth Trading Bank and the Commonwealth Department of Trade and Industry have visited Red China, been welcomed there and arranged certain trade deals in respect of wheat and other commodities? Is it also a fact that most recently the Australian Government used the United Kingdom representation in Peking to ascertain the whereabouts of an Australian, Francis James, and sought the good offices of the United Kingdom for Australian purposes?
– What was the answer they got?
– That does not matter.
– 1 do not think that my answer was interpreted to be a criticism of the United Kingdom Government at all. What I did say, as I recall it, was that this is a matter between the United Kingdom Government and the Government of Red China. It is equally true to say, as Senator Bishop has indicated, that it is normal diplomatic procedure for a country which does not have an ambassadorial establishment in a country to use the representation of some other country. There is nothing, odd or unique in that. It is just normal procedure in the language of foreign affairs, it is equally true also that representations were sought to try to identify the whereabouts of one Mr Francis James who is reported to be held in Red China. Because Australia does not have diplomatic representation there it is the normal procedure to make representations through the good offices of some other country. Quite frequently we do that in places where we do not have a post of our own. We have posts in many countries, but where we have not we use the good offices of some other country that has. This is normal procedure.
– I direct my question to the Leader of the Government in the Senate. Has he noted the rejection by Peking and Hanoi of President Nixon’s latest peace offer as a hoax and a deception? Will the Minister seek from the Leader of the Opposition in the Senate as a matter of public interest enlightenment as to whether the Labor Party agrees with this rejection? If it does not agree, will he inquire whether the Labor Party will organise a moratorium to protest against the rejection?
I have seen, as we all have seen, Hanoi’s reaction to and rejection of the Nixon proposals. As to the Australian Labor Parly, it will have to accept responsibility for its own behaviour. The people will be the judges.
– I ask the Minister representing the Minister for External Affairs whether, if the Australian Labor Party were to organise a moratorium, we could be sure that Senator Sim and other Government senators would participate in it. That might make it a very tempting offer.
– Against Peking and Hanoi, yes.
– Is there anything to prevent Senator Sim from organising his own moratorium at any time? The other part of my question is this: Is it correct that in recent times Australia has sold to the Government of Red China many hundreds of millions of dollars worth of wheat and other rural commodities, that it has permitted the sale to the Government of Red China of steel, zinc and other strategic materials in appreciable quantities and that it intends to continue trading with the Government of Red China and to continue permitting Australian persons and companies also to trade with the Government of Red China?
Bypassing the light hearted approach at the commencement of Senator Murphy’s question, it is true that Australia sells wheat and other commodities to Red China. It does so in accordance with the rulings of the United Nations on what are regarded as nonstrategic materials.
– I address my question to the Minister representing the Minister for Health, although it has implications for the Minister representing the Minister for the Interior. 1 refer to Senator Dame Annabelle Rankin’s lengthy statement on the incidence of hydatids in the Australian Capital Territory and corroboration of the facts contained in that statement at last night’s seminar in the Australian Capital Territory on the same subject. On behalf of the dog owners of New South Wales I ask: Will the Government consider instituting a policy of confining to barracks, as it were, dogs in the Australian Capital Territory until this disease is eradicated, thereby avoiding the perpetuation of the disease cycle in adjacent State?
– As the honourable senator rather hinted at the beginning of his question, I think this concerns both the Department of Health and the Department of the Interior. I shall place bis comments before the Minister for Health.
– As a fellow dog lover and one who is conscious of the problem of confining dogs to barracks, I too will aid the honourale senator.
– Can the Leader of the Government in the Senate ascertain from the Leader of the Opposition in the Senate whether the Australian Labor Party is in favour of selling wheat to Red China?
– That is a fair question. I will direct it in due course to Senator Murphy and invite him to reply.
– I address a question to the Leader of the Government. Does the Government seriously suggest that if China has aggressive aims which must be resisted by Australia, these aggressive aims would be advanced more by Australia having an embassy in Peking than they are by the extensive sales of Australian goods to that country?
Senator Sir KENNETH ANDERSONI have made the Australian attitude abundantly clear. There has been no change in the Government’s attitude in relation to the establishment of diplomatic relations with Red China.
- Mr President, my question is directed io you. I refer to the question addressed by me to the Leader of the Government in the Senate relating to the inference which a reasonable person might draw from the question raised by the Leader of the Opposition regarding the apparent desire of the Opposition to recognise Red China and its present external policies. Will the effect of the raising of a point of order by the Leader of the Opposition be to exclude my question from the rebroadcast by the Australian Broadcasting Commission this evening?
– I have no knowledge of what the intention of the Leader of the Opposition might bc.
– I address a question to the Leader of the Government who represents the Minister for Trade and Industry in this place. Is the Minister aware that a Western Australian company which developed a revolutionary pneumatic shearing handpiece was denied a grant under the provisions of the federal industries research and development grants scheme on the specific ground that the research and development programme had not been directed by a person with a university degree or diploma? As technical advancement in many Australian industries has not been confined to the work of academically qualified persons, will steps be taken to remove this undesirable anomaly which denies practical and experienced technicians and engineers the benefits of federal research grants?
I am not aware of the circumstances to which the honourable senator is drawing our attention but I shall seek information from the Minister for Trade and Industry. I hope to be in a position at an early date to provide the honourable senator with a reply to this question. It is true, as he says, that special grants are provided, but I do not know what conditions are specified in relation to the grants! [ gather from his question - I want to be sure of this - that he is saying in categorical terms that the grant was not approved for the reason that he mentioned.
– That being so, I shall have the question referred to the Minister for Trade and Industry.
– The Minister for Air was asked a couple of weeks ago about the records of trie use of VIP aircraft and he was requested to tabic the documents relating to their use since the last time such documents were tabled. Will the Minister tell the Senate now whether he will do so?
Leader of the Opposition asked me last week whether I would table in the Senate details of the VIP flight. I said then that I would look at the matter and endeavour to do so, if I could. I have looked at the matter. I have the manifest records and I am in the process of rechecking every individual who has travelled on the various flights. As soon as I have completed that task I shall table the flight information in the Senate.
– Is the Leader of the
Government aware that in the past 12 months 1,000 items of groceries have been increased in price by manufacturers, that increases are taking place at the rateat 50 items a week and that meat and groceries have shown the greatest rise? Has the Government made any move for a Commonwealth and State arrangement to reach an agreement that the States shall introduce some form of price control to counter this daily robbery of the wage and salary earner and those on fixed incomes?
– The honourable senator has referred to increases in prices of commodities over the last 12 months and has suggested that the Commonwealth should seek an arrangement with the States to introduce a form of price control. A few weeks ago in response to a similar question asked by the honourable senator I pointed out that price control as such has never proved to be the answer to variations of this nature. This has been the experience of the State governments, including a Labor government in New South Wales which abolished price control because it found that it was not successful. About the only commodities of which I am aware cm which price control is applied are petroleum products. The price of petrol determined in South Australia is used as a guideline by the other States. I do not believe that the solution which the honourable senator has suggested has any merit in it at all. Experience in Australia in the post-war years has completely demonstrated this to be the position.
(Question No. 584)
asked the Minister for
Supply, upon notice:
Senator Sir KENNETH ANDERSONThe answer to the honourable senator’s question is as follows:
However, it is already apparent that overall the fallout will be less than from the 1968 series of tests and I repeat that there is no reason to expect otherwise than that the National Radiation Advisory Committee will be able to reach the conclusion that there is no danger to health either for the population of Australia as a whole or for anybody living anywhere in Queensland.
(Question No. 586)
asked the Minister for Supply, upon notice:
Will the Minister supply to the Parliament exact and up-to-date details of the measurements of the nuclear fallout elements: caesium 137, strontium 90 and iodine 131 for the areas of Launceston and the Atherton Tablelands.
– The answer to the honourable senator’s question is as follows:
The Atomic Weapons Tests Safety Committee conducts two complementary monitoring programmes for radioactive fallout in Australia. One is for long-lived radioisotopes- particularly caesium 137 and strontium 90; the other is for short-lived radioisotopes - particularly iodine 131. These are the radioisotopes which, in each category, are considered to be potentially the most hazardous to life. The monitoring is carried out at 26 stations throughout Australia and New Guinea. For long-lived radioisotopes it is on a continuous basis; for short-lived radioisotopes it is related to specific nuclear tests or series of tests and includes monitoring of all major milk supplies for iodine 131 whenever it is present in fallout.
The monitoring of caesium 137 and strontium 90 has been in progress since 1957. Although fallout from the USSR and US tests in the early 1960s is still occurringin Australia and the more recent tests by France have meant some small addition, the annual deposit of these two longlived radioisotopes in 1968 was less than a fifth of the deposit in 1964. This annual downward trend has continued. The annual rate of deposition of caesium il37 and strontium 90 is well below the value which the National Radiation Advisory Committee accepted in November 1965 as constituting no significant hazard to the health of the Australian population then or in the future. This would embrace all locations, including the areas of Launceston and the Atherton Tablelands.
The monitoring of short-lived iodine 131 has operated for all nuclear weapons tests by France in Polynesia, namely those in 1966, 1967, 1968 and 1970. Monitoring for fallout from the 1970 series of tests is still in progress. However, it is already apparent that overall fallout will be less than from the 1968 tests and there is no reason to expect otherwise than that the National Radiation Advisory , Committee will be able to reach the same conclusion as for the1968 tests, namely that the fallout is of no significance as a hazard to the health of the Australian population. This, too, would embrace all locations, including the areas of Launceston and the Atherton Tablelands.
The most recent complete set of data on fallout of caesium 137 and strontium 90 in Australia, appeared in the Australian Journal of Science of December 1969. This was in respect of the calendar year 1968. The data from the 1969 survey are still being finalised and will be reported later this year.
Complete results from monitoring iodine131 fallout from the 1968 series of nuclear tests by France were published in the Australian Journal of Science of May 1969. The data from the 1970 series are still being gathered as abovememioned and are expected to be published in 1971.
Experience over more than 15 years of these monitoring operations confirms that it is not possible to make meaningful statements, day-to-day, on fallout-levels as the measurements proceed. It is necessary for all data from an operation to be collected, and analysed as a whole, before final conclusions can be drawn.
(Question No. 689)
asked the Minister representing the Postmaster-General, upon notice:
– The Postmaster-General has provided the following answer to the honourable senator’s question:
(Question No. 709)
asked the Minister representing the Minister for Education and Science, upon notice:
– The Minister for Education and Science has provided the following answer to the honourable senator’s question:
The information requested relates to matters that are administered exclusively by the States. Detailed information regarding this administration is not accessibleto the Commonwealth. As a result of recent revisions to the regulation of the kangaroo industry, all Slates now administer, or will soon administer, a system of licences or permits.
(Question No. (31)
asked the Minis- ter for Civil Aviation, upon notice:
– The answer to the honourable senator’s question is as follows:
(Question No. 658)
Minister for Civil Aviation, upon notice:
– The answer to the honourable senator’s question is as follows:
Building in the vicinity of remaining Commonwealthowned airports is presently controlled to a limited extent under Regulation 92 of the Air Navigation Regulations.
The Air Navigation (Buildings Control) Regula tions will be progressively applied to these remaining Commonwealth-owned airports as soon as sufficient details of theforward planning requirements of each of the airports is available.
At present, the height of such buildings or other structures, which could be a hazard to aircraft flying in the vicinity of a licensed aerodrome, can be controlled to a limited extent under Regulation 92 of the Air Navigation Regulations.
In the case of aerodromes owned by a Local Authority, however, it has proved to be more satisfactory and expedient for the relevant Local Authority to create a By-Law to appropriately zone the various areas, and thereby prevent the building of structures which would infringe D.C.A. safety requirements. Private owners have no such powers and must rely on Regulation 92 of the Air Navigation Regulations.
(Question No. 660)
asked the Minister representing the Minister for External Affairs, upon notice:
Senator Sir KENNETH ANDERSONThe answer to the honourable senator’s question is as follows:
A number of Government departments and instrumentalities are involved in Australia’s cultural exchanges with other countries. The principal exchanges for which the Department of External Affairs was responsible or with which it was associated in conjunction with other Government Departments or other organisations have, in the last four financial years, been as follows:
A sculpture exhibition toured New Zealand in 1968;
The Marionette Theatre of Australia toured a number of Asian countries in 1967.
(Question No. 667)
asked the Minister representing the PostmasterGeneral, upon notice:
– The Postmaster-General has provided the following answer to the honourable senator’s question:
(Question No. 671)
asked the Minister reprsenting the PostmasterGeneral, upon notice:
– The Postmaster-General has provided the following answer to the honourable senators question:
Has the Minister seen a report that a commercial television station in Melbourne intends producing an Australian amateur dramatic programme styled ‘Acid Test’ in which it is intended to use amateur actors, show them in unedited performaces and then let a panel of adjudicators tell the amateurs where they went wrong? How much longer are Australian viewers to be allowed by the Australian Broadcasting Control Board to be regarded as guinea pigs when there is so much professional talent available in Australia which is unable to obtain continuity of work in the professions of its calling on Australian Television? Does the Minister agree that the sort of programme which is envisaged is a deliberate skirting of the spirit of section 114 of the Broadcasting and Television Act, which stipulates that Australians will be used as far as possible in the production and presentation of programmes, and that this approach is likely to lead to a lowering of Australian dramatic standards? Will the Minister ask the Board to insist that this sort of programme will not be recognised as Australian drama under the Australian content provisions? If necessary, will the Government consider amending the Act to protect the employment rights and opportunities of professional Australian actors and dramatists?
The Postmaster-General has now furnished me with the following information in reply:
Although I have no specific details, I have been informed that a programme of the nature described is contemplated by a commercial television station. If and when such a programme is presented, the Australian Broadcasting Control Board will, in accordance with normal practice, determine the category into which it is appropriate for it to be placed for the purposes of calculating Australian content requirements. I do not perceive any need to amend the Act as suggested by the Honourable Senator - ample authority is already vested in the Board to deal with matters relating to Australian programmes.
Will the Postmaster-General give close attention to establishing a uniform telephone charge throughout Australia as a further incentive towards decentralisation, especially as communication costs are second only to transport costs?
The Postmaster-General has now furnished me with the following information in reply:
Theidea of a uniform or flat rate charge for all telephone calls, irrespective of distance,is one which has been considered by the Post Office on a number of occasions.
If a flat rate charge were adopted for all trunk calls, a rate of at least 60c per 3 minutes would be required to obtain the present level of revenue from this class of traffic. This estimate assumes that the present trunk call traffic pattern would remain unchanged. However, itis considered that almost certainly there would be a heavy reduction in the volume of shorter distance trunk calls which cost less than 60c at present, accompanied by a substantial increase in calls over the longer distances.This in turn would upset the whole balance of the telephone trunk line network which has been structured to cater for a traffic pattern which has remained fairly stable over a number of years. For example, circuits on the longer distance trunk routes would have to be augmented appreciably to cope with the additional traffic and, as the cost of this would have to be taken into account, the flat rate charge may need to be considerably higher than the amount of 60c already mentioned.
If a flat rale charge were introduced for all calls, whether local or trunk, a charge of about 10c per call would be necessary in order to maintain the present level of call revenue. Here again, this estimate assumes that subscribers would continue to originate thesame number of calls. The present ratio of local calls to trunk calls is about 14 to 1 and the effect on the telephone network of a flat rate for all calls is difficult to predict.It is likely, however, that the volume of local calls would be reduced substantially while trunk call trafficwould rise appreciably. The end result could bethat an appreciable proportion of the equipment and lines provided for present local call traffic would become surplus to requirement whilst substantial additional capital investment would be necessary on trunk routes to increase the capacity of those routes. These factors would, of course, have to be taken into consideration in determining a flat rate charge for all calls and the amount of 10c indicated could be understated to quite a degree.
Although a system of flat rate call charging would benefit subscribers who make a preponderance of trunk calls, particularly over the longer distances, it would severely penalise those whose calls are mainly local. Having regardto the ratio of local calls to trunk calls, it has been concluded that a flat rate call charging system would be inequitable to the majority of telephone subscribers.
I might add that, on information available, there are no overseas telephone administrations which have adopted a flat rate charge throughout the country for all telephone calls.
– Pursuant to section 82 of the Repatriation Act 1920-1970, 1 present the reports of War
Pensions Entitlement Appeal Tribunals Nos. 1, 2, 3, 4 and 5 for the year ended 30th June 1970.
The bells will be rung at 2.10 p.m. for the committees to assemble.
Question resolved in the affirmative.
Motion (by Senator Sir Kenneth Anderson) proposed:
That today the Senate at its rising adjourn till tomorrow at 10.30 a.m.
– Can the Leader of the Government in the Senate (Senator Sir Kenneth Anderson) give us any .idea of what time the Senate will finish tomorrow? I am not objecting to meeting tomorrow, but I would like to know what time we will conclude.
– We will finish at 4.30 p.m.
Question resolved in the affirmative.
(11.57) - I move:
That unless otherwise ordered the Senate at its rising tomorrow adjourn until 3 p.m. Monday, 19th October. 1 included the words otherwise ordered’ pending the progress that we can make.
– I think we would be better off if we waited until tomorrow before doing this. There is no necessity to do this today. If we wait until tomorrow we can see what the position is at that time. I ask him to defer or withdraw his motion in that respect. I do not want to say that we would oppose the sitting but why should we decide it now instead of tomorrow? Let us see how we get on. Is it not more logical to make the decision tomorrow rather than today? I. suggest that he accede to our request to let the matter stand over until tomorrow in order to see what progress we make.
Senator Sir KENNETH ANDERSON (New South Wales - Minister for Supply) - by leave - In response to the comment made by the Leader of the Opposition (Senator Murphy), I purposely framed the motion that way in order to give every honourable senator a fair indication of what is happening. I included the words unless otherwise ordered’ because I recognised the point made by the Leader of the Opposition. Tomorrow will be devoted to Bills. As I said earlier, we have to keep as close to what is happening in the other place as possible because of our anticipated rising at the end of the month. I think it is better to dispose of this motion now in accordance with the words I used. This gives us some flexibility. The Senate is master of its own affairs and, with the cooperation of honourable senators, if we can maintain progress on the messages that come through, we may not need to sit on Monday. I have no more desire than anybody else to sit on Monday.
– I think the proposition advanced by the Leader of the Government in the Senate (Senator Anderson) has a lot to commend it. It is a holding proposition and will depend upon the progress we make. Our progress will depend on the business discussed tonight. This may involve consultation. Actually we should discuss general business. However, whether we discuss general business is a matter which is in the hands of those who would wish to proceed with those matters. They might be prepared to vacate their position in order to enable Bills to proceed. In those circumstances it looks as if the matter can best be decided according to the progress made, and the motion moved by Senator Sir Kenneth Anderson seems to be appropriate to accommodate that situation.
Question resolved in the affirmative.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Dame Annabelle Rankin) read a first time.
(12.2) - I move:
That the Bill be now read a second time.
The Bill which I now introduce seeks to give effect to the Government’s intention to increase the licence fees for radio-communication stations. It is necessary to define clearly the types of stations which require a licence and to amend the present station definitions in accordance with modern concepts to give effect to the proposed fee structure. Land, mobile, fixed, amateur and receiving are the 5 basic categories of radiocommunication stations. For mobile stations, usually installed in aircraft, ships or motor vehicles, land stations are the key or base stations. Those stations operated by hobbyists, sometimes referred to as ‘radio hams’, are defined as amateur stations. Those land and fixed stations not licensed to provide transmitting capabilities are termed receiving stations. The types of licences to be issued are set out in the schedule to the regulations. They all fall within one of the broad categories approved.
Since 1924, when it was set at $2, there has been no change in the level of the licence fee. The disparity between costs and revenues was not large enough, until about 1950, to cause concern since stations were few in number and were primarily provided as a means of emergency communication. Since 1950 there has been a rapid change in the situation, and the number of licences issued has risen from 5,115 to the present total of 136,000 by increasingly large annual increments. This growth has added greatly to the administrative and technical supervision costs. Because of a persistent deterioration which has led to the present annual deficit of $0.8m, it is proposed that licence fees be adjusted to a more appropriate level which will return an extra $460,000 in 1970-71 and $620,000 in a full year. These new fees do not seek to cover costs associated with Commonwealth Government services and certain services deserving of special consideration as a result of the community interests involved.
The fee for land and fixed stations will be $10. Receiving stations and mobile and amateur stations will pay a fee of $6. The variation in administrative and technical effort involved is reflected in the different fee levels. Stations operating as outpost services will continue to pay the existing fee of $2. In the outback areas of the Commonwealth, 5,000 such stations provide services associated with ‘schools of the Air’ or the Flying Doctor and aerial ambulances or are providing the only means of public communication and thus are required to handle telegraph traffic. Australian outback missions come within this group.
As the regulations apply in Papua and New Guinea, it is felt that missions in that Territory should be given similar treatment and be licensed for the present fee of $2. There are approximately 500 such stations. The present licence fee of $2. will also continue to be applied to ambulance services which are not included as outpost stations and rural fire brigades.It is proposed that stations established to provide speech connection to the public telephone system both in Australia and Papua and New Guinea will be licensed free of charge since the operators are required to pay the appropriate telephone tariffs. The issue of special licences will achieve this. They are already provided for in the regulations and may be issued without charge. The date from which the proposed fees will operate is 1st November 1970. I commend the Bill to the honourable senators.
Debate (on motion by Senator Willesee) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Cotton) read a first time.
– I move:
That the Bill be now read a second time.
The purpose of this Bill is to provide temporary assistance to local manufacturers currently producing bountiable tractors additional to the normal assistance provided by the Agricultural Tractors Bounty
Act 1966. The decision to introduce amending legislation was taken after an urgent review by the Government of the Australian -tractor manufacturing industry during which evidence was received from the two registered manufacturers - Chamberlain Industries Pty Ltd of Western Australia and International Harvester Co. of Australia in Victoria - that the industry was facing serious damage from import competition. Since the Special Advisory Authority is not empowered to recommend on variations in bounty assistance, it was not appropriate for the problem to be referred to him for consideration. The assistance now proposed will be additional to and at rates equal to those now paid on production under the present Act.
The assistance will be paid only in respect of bountiable tractors produced at premises registered under the Agricultural Tractors Bounty Act 1966 as at 1st July 1970. The amendment extends the bounty to 30th June 1972 subject to earlier termination by proclamation if appropriate. It is estimated that this additional assistance will cost the Government $ 1.25m to the end of the 1970-71 financial year, an amount which it is considered will sustain the industry in the current situation. The Government will review the situation before the 1971-72 Budget to determine the effect of this additional assistance and if necessary adjust the rate of payment. In addition, the Tariff Board will be asked to report on the question of longer term assistance to the industry. Without this further assistance it is possible that the country could lose an important industry involving a large capital outlay and directly employing some 1,400 persons, many of whom are highly skilled. Some reduction in the normal labour force has already occurred. I commend the Bill to honourable senators.
Debate (on motion by Senator Cant) adjourned.
Consideration resumed from 14 October (vide page 1131).
-(Senator Lawrie) - Is it the wish of the Committee that the Bill be taken as a whole?
– I have circulated a proposed amendment to clause 4. That is the only clause to which I wish to direct a particular amendment. As far as I am concerned, that would be consistent with the Bill being taken as a whole. I shall direct an amendment to clause 4.
– There being no objection, it is so ordered.
– The Democratic Labor Party proposes an amendment to clause 4. Copies of the amendment have been circulated. I move:
The 2 tables in the Bill, both of which relate to the proposed new increases, refer one to the domestic airlines and one to the international airlines. The tables set out the appropriate charges for each. There is an increase, in terms of the Bill, in both, but there is a margin of existing difference between the rates charged to domestic airlines and those charged to international airlines using our airport facilities. During the debate on the second reading of the Bill the Democratic Labor Party suggested, and in the amendment we propose, that there should be parity in these 2 charges - the domestic and international charges. That parity could be accommodated in 2 ways: Either by bringing the domestic charges down to the international level or by raising the international charges to the domestic level.
It is worthwhile contemplating the consequence, in the present context, of either of those processes. If we were to do the latter - that is, if we were to reduce the domestic charges to the international charge level - that may be the most satisfactory process. But we have to recognise that this Bill is associated with the annual Budget. The Budget proposed certain financial propositions, culminating in a certain financial situation after expenditure and receipts had been determined. It has been found necessary, at the instance of this Parliament, to introduce propositions which have affected balanced financial position of the Budget and which have received the approval of the Government. Steps are being taken in relation to the receipts tax. There was also some interference with the Budget in relation to the health scheme when additional charges were imposed by amendments moved in this place and carried. There are other propositions in the Budget that might well have attracted a similar interference with the structure. More particularly might that have been so in the case of the distribution of 50c a week extra to pensioners. Nevertheless, it was not thought proper in this Parliament, and no substantial formal amendment was carried, to increase the payments to pensioners.
However, the Budget has been interfered with. We consider it unwise to attempt further to prune the revenue which has already been rather severely truncated by the deliberations and the decisions of the Parliament. Therefore, consistent with that belief, we chose the first proposition 1 have mentioned to preserve equality, as far as possible, between the domestic and the international airlines. As we think it would be imprudent to reduce further the Budget revenue by reducing the charges to domestic airlines to the international level and in order to preserve such equity as we can command, it has been considered that, the best thing to do would be to suggest, in equity and in fairness, an increase in the rale charged to international operators to bring them up to parity wilh the domestic operators.
All those matters have been contemplated against the background of the investigation of the interdepartmental committee which is studying the whole structure of air navigation charges - at what charges should be levied, to what extent they should be levied against the operators and to what extent they should be legitimately charged against national development, the national economy, the national revenue and national self-interest. Without unduly prolonging the discussion on this matter, we move this amendment in those terms. It will not have the effect of reducing the revenue available to the Government in circumstances m which that may be imprudent because of what has been done. It will have the effect - this is not its real intention - of increasing to some extent the revenue available to the Government. Its more important consequence is to restore equity or produce equity to this extent between the domestic and the international airlines. It is in that context that we propose, pursuant to the general principle we enunciated in the amendment we moved at the second reading stage, that there should be parity between the 2 types of operators. It is in pursuance of this objective that we now put forward our amendment to this clause. We commend it to the Senate.
Yesterday the Australian Labor Party did not find it possible to support our amendment moved at the second reading stage, ft said that our amendment lacked specification. We are now producing an amendment that has the specification in the direction T have said and for the reasons I have given. In those circumstances we would look to the Opposition to support this amendment. If it does not reduce the level of charges on the domestic operators at least it does introduce the principle of equity, lt does not further truncate the Budget but in fact will assist by some increase in revenue the financial position of the Government, which has been made no easier by the operations of this Parliament in matters that we thought it proper to do so. In those circumstances. 1 commend the amendment to the Senate.
– One did not sit quietly last night listening to a spirited debate that at times seemed to range fairly widely and not understand and realise that morning could dawn wilh’ a new formula for overcoming the problem. Therefore I took some trouble last night and this morning in looking at the situation in case what has now been proposed were in fact proposed. After looking at it very, very carefully 1 can assure my honourable colleagues in the Senate that the Government’s view that it cannot accept this amendment has not been arrived at lightly or without some consideration. This seems to be the broad position which may aid honourable senators.
The effect of such a proposal is to increase the air navigation charges paid by the international airlines by 20 per cent with effect from 1st January 1971. The Bill proposes a 10 per cent increase in these charges which will generate additional revenue of some $900,000 in a full year. The amendment would bring in an additional $900,000 annually from the international airlines. So one might say in response to Senator Byrne who suggested that it is in the interests of us all to support this amendment: ‘Why should the amendment be opposed?’ I again assure honourable senators that the Department of Civil Aviation does not enter into this kind of debate in the Senate without a consciousness of its responsibilities and the great interest that has been displayed in its affairs by the honourable senator both in this chamber and in the Estimates Committee.
But there are reasons why we believe it would be sensible and proper to oppose this amendment. The first is its adverse effect on Qantas Airways Ltd. If honourable senators would care to pursue this matter further, they will find on page 102 of the annual report under appendix 10 - I will not table the paper because it is available to honourable senators - the air navigation charges payable in the last 3 years by the various operators, both international and domestic. The amount of air navigation charges in the international field paid by Qantas will also be found in this report. We oppose the amendment because of its adverse effect on Qantas, first of all, which is the Australian people’s airline. It would cost the company about $400,000 per annum. Qantas is facing strong competition on its routes. Its mail revenue has been reduced by 25 per cent as a result of a decision made by the Universal Postal Union. It was not an Australian decision. Many other cost pressures are affecting the profitability of Qantas, not the least of which is the immense growth in the number of aircraft available. If honourable senators read this week’s issue of ‘Newsweek’ they will find a general article on the problem of the international airlines - too manyseats and not enough bottoms. The further rise in charges proposed here would affect Qantas and be a serious financial burden to the company.
We also oppose the amendment because of its adverse effect on other international airlines. They would be called upon to find an additional $500,000 per annum. Already these airlines have complained bitterly to me privately, to the Government, to various agencies, to all their friends privately, to newspapers publicly, and they have gone on television and really made their point that they think they are paying too much at the present time. I do not share this view but they have been very vociferous about it. They complained bitterly about the level of our charges and for some time refused to pay the increases introduced on 1st January 1969. It can be expected that there will be a similar reaction to such a drastic increase on this occasion. It will affect Australia’s relations with other countries whose carriers provide services to Australia.
Then there is the third point. Australia has observed consistently the recommended policies of the International Civil Aviation Organisation on charges. One of these is to the effect that caution be adopted in introducing or increasing charges. It implies gradualism in the approach to charging. In effect, as I said earlier, this represents a 20 per cent increase at this time, and it is hardly a gradual increase. It would be a flagrant departure, as far as we in ICAO are concerned, from the recommended policy.
There is another point. Such a move could be followed by other countries which may be persuaded to follow suit and, as a result, charges all over the world could rise substantially. This would affect Qantas Airways Ltd in its round the world services and the huge amount of money that it pays to the Australian taxpayer for its Australian rights to land and take off. The consequential increase in cost to the airlines would flow through the fare structure and would adversely affect tourist and business travel to Australia, not by a tremendous amount it is true, but by sufficient to produce some problems. One is always conscious of that factor. The cost of air freight would rise and that would have some effect on the economy. This could be regarded by us as an act to discourage tourism and perhaps throughout the world bring some inflationary trend into the air commodity market.
The proposal in effect prejudges the Government’s decision on the general level of charges and how they should best be apportioned and arrived at in the light of the activities of theworking group - this has been referred to earlier - which has yetto study this question. I am pressing the working group to get on with its work as fast as is possible. The working group will certainly take note of this recommendation. It will be given the Senate Hansard report of last night’s proceedings as well as the Hansard report of Estimates Committee D to study. It will take note of any suggestions that the international and domestic air charges should be equated, but until the matter has been examined very carefully and the Government has considered the views of the working group it would be premature, in our view, and unreasonable to upset the status quo. I suggest that the basic objective of the amendment is not sound. As far as one can judge - I think this is a genuine intent - it does intend some relief for domestic airlines, but all it really does is place additional burdens on international carriers. The domestic airlines will not pay a single cent less if this amendment is carried.
The final point is that international and domestic airlines generally do not operate similar aircraft, so in practical terms it is not meaningful, to have identical scales of charges, ft will be seen, from the scales in clause 4 of the Bill that international airlines will pay 20.57c per 1000 lb for aircraft weighing over 200.000 lb. This is approximately equivalent to the rate to he paid by domestic airlines for the heaviest aircraft that they now operate, that is 20.62c per 1,000 lb for the Boeing 727 aircraft which weigh about 1.60,000 lb.
For the reasons that I have mentioned the Government feels that it cannot accept the amendment. As I have said, it has done a study of what could be the effect if this were ultimately put as a proposal m the Senate. T have stated the Government’s reasons in this brief summary.
Senator MURPHY (New South WalesLeader of the Opposition) (12.191 - This is a very important subject. Various charges will be imposed by the Bill. I think it is fair to state that the Opposition’s attitude is much the same as that of many honourable senators on the Government side who are not very happy about the proposed charges. We are bearing in mind that a special committee has been set up and is now investigating the matter. I understand that it will submit a report fairly soon.
– When you have finished I can perhaps give you that information.
– 1 am proceeding on the assumption that the working group is investigating these various matters and that this working group is composed of representatives or persons who would be knowledgeable and interested in the matter. In one sense the Australian Labor Party is deferring its conclusive altitude on these matters until we know the full facts, until we have a cost analysis and know how the impact will fall on these matters. The proposal by Senator Byrne on behalf of the Australian Democractic Labor Party is an important one. I should like to indicate a preliminary attitude to this proposal and then indicate what 1 think should be done about it. I put these considerations forward as ideas emanating from myself rather than from others in my Party who are expert in this field. These considerations do not necessarily represent a concluded attitude.
Firstly, I am concerned at a further increase in the charges. Although it has not been possible to have an exhaustive consideration or anything more than a superficial consideration, I am concerned as to whether the amendment which has been, proposed is in accordance with the Constitution. I do not want- to be taken to be dogmatic in any sense, but it occurred to me when I saw the amendment and after speaking to Senator Byrne on the matter that it might not be in accord with the Constitution. Section 53 of the Constitution which deals with taxes prompted me to take this view. That section says that charges for services are not to be taken to be an appropriation of revenue or moneys, or the imposition of taxation. That is to say, fees for services under the proposed law are not taxation and they do not appropriate revenue. But further on in the section there is a provision which states:
The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people.
The question is whether something which is a charge for services may not be taxation and may not be an appropriation but may be of such a nature that the Senate is not able to amend a law in such a way as to increase that charge. That is a matter which perhaps we could discuss. As I say, T do not put that in any dogmatic way, but I raise the question so that some consideration might be given to whether this law comes within that concept Another point is that it might have been preferable, if some equity were to be arrived at, to reduce the domestic or international charges. When we speak of international charges we know that companies are involved, but as 1 understand the situation when the constitutional provision speaks of people, although the provision does not specify companies as such, it nevertheless would apply to ail persons who might be engaged in that business. The law applies to everyone. It is conceivable that some syndicate might be involved and that the provision would apply in future, even though actual people were engaged. I suppose that they would have to be people of Australia. I have raised that matter for consideration by honourable senators. Because of the pressure of other matters we have not had an opportunity really to consider this matter. In order to enable the Opposition to give full consideration to the proposal I seek a deferment of the debate. If the debate is not deferred the Opposition will have to vote against the proposal.
– For how long does the Opposition want it deferred?
– Last night I suggested that the debate be deferred until next Wednesday. I really had in mind the next meeting of the Australian Labor Party. I am sure honourable senators appreciate that a lot of matters are under consideration by my Party at present. There is a lot of pressure on my Party because of the activities which are going on in both Houses of the Parliament. It may be that a meeting of my colleagues will be held before next Wednesday. A meeting could be held on Monday or even tomorrow. However, for the sake of safety, I would suggest that further consideration by honourable senators of the proposal be deferred until next Wednesday. I remind honourable senators that there is no real urgency about this matter. The legislation will not come into effect until 1st January of next year. Accordingly, I move: That the clause be postponed.
I do so with a view to having the consequential motions put. I do not think that the chamber should really decide upon this issue today. I think it should stand over until the Opposition has an opportunity fully to consider it. Such a move would also give the Government an opportunity to look into the aspect which I have suggested might need some consideration.
– Is the Leader of the Opposition going to move that progress be reported?
– I thought the Minister for Civil Aviation was going to give some indication of the Government’s intentions. Perhaps he will throw some light on the matter of the special duty as this may have some effect on the course which is taken.
– I think I should point out that no-one is the master of time and no-one has any more time than anybody else in this exercise. Therefore the time argument, while it is interesting, is irrelevant. After all, the work of running the country must proceed and it must proceed in accordance with a programme. It would npt necessarily follow that this programme would be agreeable to everybody at any given point of time. If this programme is not adhered to and pursued the result could be a state of suspended animation of all legislation. The Leader of the Opposition (Senator Murphy) raised an interesting constitutional question. I do not think that I am qualified to speak on it, nor do I think that it would impede our progress at the present point of time. However, I shall refer the Leader of the Opposition’s question to my colleague, the Attorney-General (Mr Hughes), for study by him.
There are a number of things which I should point out to honourable senators. Firstly, one should have regard to the Second Schedule of the Airlines Agreements Act, which contains the provision under which this whole process has been going on for quite a number of years. It is no new blush on the cheek of a new Minister. It has been going on for a long time. It has been sanctified by this Parliament, accepted by this Parliament, passed by this Parliament and is being worked to. Perhaps I should quote the relevant part of the Airlines Agreements Act 1952-1961. Section 8 of the Second Schedule states:
In implementing its policy of full recovery of the cost of facilities properly attributable to civil air transport, the Commonwealth will take into account the level of air fares, the rate of growth of the industry and the requirement of the airlines to provide a reasonable return on capital, and will not:
Through time this has produced a set of circumstances which, let us remember, originated in and was sanctified by this Parliament and which has placed upon the Department of Civil Aviation and those who operate within its broad area a responsibility to recover the cost of operating the business from those who use the domestic airlines. One has some sort of general consideration like this: One works to the Airlines Agreement Act, which says that one has to make some attempt to recover these costs fully if possible. One does this through time and one asks the operators to pay. At the same time one tries to have an efficient and very safe airline which people will use. One tries to see that the operators make a profit; otherwise you do not recover costs because they do not have a business and, in effect, there is no safety because the operators cannot afford it. This is all part of the picture.
In the Department of Civil Aviation this produces a rather unique responsibility, because the Minister is administering a facility which belongs to the Australian people. It embraces Qantas Airways Ltd, Trans-Australia Airlines and the Department of Civil Aviation. The private operator, Ansett Transport Industries Ltd, operates under the same umbrella. It often calls for the Government to assist with capital and things like that. So the air transport industry is a public utility which is operated in two divisions, but it places upon the Department the unique responsibility of being accountable to this Parliament and the people for what it expends from revenue each year and how it recovers that expenditure. Honourable senators who have been involved in this exercise are aware that the Department presents what might be called an income and expenditure account which is looked at year by year. It endeavours to improve its position year by year while still being fair. I suggest to all honourable senators that this is an exercise in financial responsibility which is worth encouraging. I say no more than that.
Earlier reference was made to the fact that we were involved in a committee exercise. We certainly are. Reference has been made to the working group which has been studying several aspects of the cost and revenue of the Department of Civil Aviation. This working group was established by my predecessor, the honourable R. W. C. Swartz, following representations by the airlines in 1969. Its terms of reference are as follows:
The working group is comprised of representatives of the Department of Civil Aviation, the Treasury and domestic and international airlines. It has completed its terms of reference up to part 3 (a). We have a report on those items, which now need to be up-dated with new sets of figures. The group has yet to report on the charging structure as required in terms of paragraph 3 (b). This report is very comprehensive. It covers many aspects of partners’ costs and revenues. It contains airlines views, valid for themselves, both domestic and international. But this is not necessarily the last word to be accepted by the Australian community through its Government.
Sentor Webster - Will the honourable senator take a question on that?
– Judging by the words that the Minister has used, I take it that there will not be a reference to the excise duty or the tax which is being utilised by the airways?
– Following points raised by the honourable senator I am see* ing that that matter is taken into account for study.
– But it is not in that context.
– In effect it will be. There would be a divergence of view as to what proportion, if any, of certain costs and certain revenues belong to whom. This is a nice argument for the people who are involved 24 hours a day for 7 days a week. The Government will give very careful consideration, I assure you- we are going to do so and that is the one thing I undertake - to the report of the working group and to the airline submission, both international and domestic, and equally to what cost and revenues are attributable to civil aviation. We have appreciated the airlines participation in the working group. We look forward to their continued co-operation during the course of further studies.
There is just one point 1 want to raise. There is a lot to be done and we do not have much time. However 1 think it is important that the Senate is aware of this: In the broad, we have heard a lot from people about how savage Australia is in respect of air navigation charges. We have heard a lot and we have read a lot in newspapers - some directly sponsored, some generated and some obviously prompted, but all quite valid. However I have the responsibility, as indeed, we all do, of representing the public benefit in the broad in the Australian community. I think this is what all of us seek to do. The average cost of air navigation charges in relation to the Australian domestic airline revenue is 3i per cent. In the United States of America, a country often referred to in newspapers, the Government imposes a transportation tax of 8 per cent on all domestic airline tickets. Under the circumstances I have referred to and in view of the facts I have given, I think all honourable senators will readily understand that I would not be prepared or be able to accept deferment of this measure. I believe it should proceed. Equally, as the Minister responsible - and I will continue with this view while I am Minister - I would be very anxious to see a resolution of this matter. I want to see it studied, as it has been studied, fairly fully. It may well be that another method of doing this could come out of such a study. At the present stage I must deal with the situation as it now exists.
– The motion for deferment proposed by the Leader of the Opposition (Senator
Murphy) will receive the support of the Democratic Labor Party. When be proposed a similar deferment in respect of the amendment moved by our Party to the second reading of the Bui we did not support it. That was a statement of general principle and the Australian Labor Party was unable to support it because it did not particularise. As I said in my earlier speech, this motion does particularise and the situation boils down to this: Allowing for the continuation of the operations of the investigating committee, the question arises as to whether the present position should be maintained or should be disturbed in the interests of further equity.
If no alteration at all was proposed to the existing charges, in the light of the deliberations of the committee and its hoped-for early recommendations, I do not think it would be proper for as to have interposed any suggestion of determining a re-altering of the rates. But as it is proposed by this increase to alter the status quo in spite of the continuing deliberations of the committee, I think it is equally justifiable at least to inject the element of equity at this stage.
In our opinion it would be desirable therefore that this proposition be accepted. Senator Murphy finds himself in the position with his party that he is unable at this stage to declare their attitude on this particularisation which now emerges in the proposed amendment, but given time, his Party, upon consideration, may bc disposed to support it. Therefore in those circumstances I think we should give the Australian Labor Party the opportunity to do so. For that purpose 1 think deferment of the Bill is condign and warranted.
I think I should tell Senator Murphy and the Opposition that the proposition which we suggest should be deferred is the one we put forward: That is merely bringing to parity, at the domestic level, the 2 charge rates. I do not think we would find it possible to support, for the reasons I detailed in my earlier speech, any alteration to reduce the domestic charges to the international level. T do not think it is competent to expect that because, as I said, it would impose an undue burden on the Budget.
As for the constitutional difficulty that may lie in the way of this amendment, I thought of this before proposing the amendment and took some advice upon it. My advice was to the effect that the term charges’ usually has been interpreted traditionally as a charge imposing something of the nature of a tax, whereas a charge of this nature, although the same term is used, is really a fee for services. This has not been considered a charge in the sense that the Constitution precludes it from being included in the Senate. That was the advice I received at that time and in pursuance of it I was prepared to propose the amendment. Senator Murphy, though speaking dogmatically, on a deeper analysis of the situation conceivably may be right. For those reasons we support the proposal for deferment of this Bill. We trust that after that deferment this proposal might find acceptance on all sides of the chamber.
– Mr Chairman. I want to make quite clear that I am not indicating the attitude of the Opposition. In accordance with the advice I have received as to the proper method of doing this, and for the reasons already stated,I move:
Question put. The Committee divided. (The Chairman - Senator T. L. Bull)
Majority . . . . 4
Question so resolved in the affirmative.
In the Senate
Motion (by Senator Cotton) proposed:
That the Committee have leave to sit again on the next day of sitting.
– I will communicate with Senator Cotton and indicate what the position is, as soon as I can do so. The understanding is that the Committee defer this matter for a certain reason. I think it would be preferable in the interests of the Senate if it were dealt with without the necessity for a further vote. I will indicate to Senator Cotton as soon as possible what my Party intends to do.
– We would welcome that approach by Senator Murphy. This is not a matter to be unduly deferred. Consonant with the difficulty in which Senator Murphy finds himself, if he can obtain his guidance and conduct discussions as early as possible we would certainly welcome that approach as would, I should think, the Minister.
Question resolved in the affirmative.
Sitting suspended from 12.53 to 8 p.m.
Motion (by Senator Sir Kenneth
Anderson) agreed to:
That Government Business take precedence of General Business this sitting.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Sir Kenneth Anderson) read a first time.
(8.1) - I move:
With the concurrence of .honourable senators I incorporate in Hansard my second reading speech.
This Bill proposes amendments to the income tax law which will have the effect of reinstating income tax deductions for interest on borrowings convertible into share capital, if the borrowings meet specified tests. The income tax law relating to convertible notes was amended in 1960 to withdraw deductions for interest on borrowings convertible into share capital. This was done to protect the revenue against legal tax avoidance. Tn the majority of pre- 1960 issues, companies were using convertible notes simply as a means of reducing their tax payments. On the terms on which convertible issues were commonly being made in Australia before the deduction was withdrawn they amounted to no more than deferred equity issues. Tax deductible interest payments were, in effect, being substituted for non-deductible dividend payments.
Last year the income tax law on convertible borrowings was reviewed by the Government with a view to restoring tax deductions for interest in certain circumstances. The objective was to revive the use of convertible securities in corporate financing, where that, class of security met the needs of borrowers and lenders and consequently enable companies to raise finance on favourable terms but without, at the same time, reopening the opportunities for exploiting the convertiblity technique purely for tax saving purposes.
In making this review the Government had in mind that convertible borrowings that replace what would otherwise be straight fixed interest borrowings are not in any way objectionable from a revenue standpoint. We also took into account the fact, that this type of borrowing could be a particularly appropriate means of financing development and expansion of Australian resources. During periods of development or expansion a company may not be in a position to declare attractive dividends and, although it may have undeniable prospects, it is at a disadvantage in seeking to raise equity capital and must, therefore, rely upon debt finance. If by appropriate use of the convertible type of security, it can lower the cost of servicing capital until profits are at a level where attractive divi dends can be paid, it might be able to obtain its capital requirements more readily. Under this type of security, Australian investors would not be restricted to fixed interest investment but would have access to equity in the companies concerned.
From an investor’s standpoint, convertible borrowings couple the advantages of a fixed-interest borrowing, in terms of income and security, with the sweetener of being able to convert the borrowing into share capital if the company performs successfully. They can, therefore, be a particularly suitable means of investing in developing companies with good but, to some extent, uncertain prospects for future growth. This feature of them could well provide an opportunity for Australians to acquire equity holdings in overseas-owned ventures, for. example in the extractive industries.
On completion of the Government’s review of the matter last year, it was announced by the Prime Minister on 16th September 1969 that interest on convertible issues made after the law was amended would be deductible for income tax purposes if the terms of the borrowing satisfied a series of tests outlined in his statement. These tests for determining eligibility for the deduction of interest were designed with convertible borrowings raised in Australia, rather than convertible borrowings raised overseas, foremost in mind. Subsequently and particularly in view of the establishment of the Australian Industry Development Corporation - the Government reviewed these tests to ensure that they were also appropriate for overseas convertible borrowings. In order to cater appropriately for convertible borrowings raised overseas, it was found desirable to modify some features of the original plan. We also found it desirable, mainly as a consequence of the revised tests applicable to overseas borrowings, to make some minor changes to the tests as they related to Australian borrowings.
I turn now to the basic conditions specified in the bill. All of these must be met by a convertible borrowing if interest on it is to be deductible for tax purpose’s. The first test is that the option to take up shares which may be shares in the capital of the borrowing company or another company - must rest solely with the lender and not with the company. A normal characteristic of fixed interest finance is, of course, that a lender has the right to receive repayment in cash. This test recognises this feature. At the same time, it will serve to impede legal tax avoidance by companies through their adoption of arrangements calculated to give a deferred share issue the semblance and guise of a fixed interest borrowing.
The shares that are the subject of this option may be fully paid shares of the company making the convertible issue or of an associated company, such as, for example, a subsidiary or parent company. It will be of no significance whether the shares into which the securities may be converted are issued to, and owned by. a Third Party, or are to be specially allotted to satisfy the exercise of the option to convert.
Another basic test to be satisfied is that any period of time in which the lender is precluded by the terms of a borrowing from exercising an option to take up shares must not extend for longer than 2 years from the date on which the convertible securities are offered for subscription. The terms of an issue may thus stay the exercise of the option to convert during the first 2 years of the borrowing, but after that initial period the option must be exercisable up to the 12 month period preceding the date of maturity of the borrowing. I mention that the tax consequences will be the same if the option is exercisable at all times during the option period, or at times during that period no more than 12 months apart. In this, we have had in mind to strike a balance between the financial needs and administrative convenience of borrowing companies and the interests of lenders to them.
Linked with the option provisions I have mentioned is a test that the last date for exercise of the option must in all cases be no later than 10 years after the date of offer of the convertible securities. This span of time is judged sufficient for investment by a company in a development or expansion project to become profitable enough to justify a share issue.
A further basic condition - but only as to borrowings on the Australian market - is that the borrowing is to have a currency of not less than 7 years. This test is designed to ensure that companies, particularly foreign controlled companies, that issue convertibles on the Australian market, do not prematurely close off a borrowing, and thus the lender’s option to acquire shares, before a project’s development has reached the point where its future profitability is generally known to Australian investors. Overseas raisings in foreign currency will not, however be subject to this minimum borrowing period condition. The considerations that are felt to make the test appropriate for local convertible borrowings have no relevance to overseas borrowings.
Of a corresponding nature is the further test that, for convertible notes issued in Australia, the terms and conditions of the borrowing must not vary, but must remain fixed as to interest rates and general conversion terms throughout the period of the borrowing. But for this test, terms and conditions of the borrowing could be manipulated so as to induce Australian lenders to exercise conversion rights earlier or later than might otherwise have been the case. The test is designed to make the lender’s choice of whether and when to exercise his option to convert real and not merely illusory.
This condition has, however, been thought not to be an appropriate one to impose without modification for overseas raisings in foreign currency. It is a feature of certain types of overseas borrowings that provision is made for interest rates payable on the borrowing to vary by reference to identifiable movements in particular international money markets. The Bill provides that changes in interest rates on a convertible borrowing under a provision of this nature will not have adverse taxation consequences in respect of overseas raisings in foreign currency. The Bill also provides that deductibility of interest on such an issue will not be affected if the terms of the borrowing contain features designed to make the conversion terms more attractive the earlier conversion takes place. From a revenue viewpoint, the sooner non-deductible dividends are substituted for deductible interest payments, the better - both the lender’s and the borrower’s Australian tax payments increase when this happens.
The final basic condition is common to both local and overseas raisings. This test specifies that the price payable for shares that may be acquired by the lender on the exercise of his option to convert must not be less than either the nominal, that is, the par, value of the shares or 90 per cent of the market price of the same kind of fully paid shares at a prescribed valuation date, whichever is the greater. It is to be noted that this is a floor price and, subject only to the prescribed minimum, the price payable for shares on the exercise of the conversion option is a matter for the company making the convertible issue.
The Bill sets out the. basis of valuation of shares for the purposes of the conversion price test both for shares quoted on Australian capital city stock exchange and those not so quoted. For quoted shares, the valuation period will ordinarily be the month that ends on the prescribed valuation date, that is, the date that is 6 weeks before the date of offer of the securities for subscription. If the shares were not traded in the month ending on the prescribed valuation date, but were traded in either of the 2 preceding months, the later of the months in which trading took place Will be the valuation period. The value of the shares will be determined as their weighted average market prices on all capital city stock exchanges in the valuation period.
For unquoted shares, and for quoted shares which have not been traded, the Bill provides that the valuation for purposes of the conversion price test is to be made by a registered company auditor in accordance with criteria specified in the Bill.
The amendments proposed by the Bill will apply to convertible securities to which subscriptions are made after the legislation receives assent, whether the convertible borrowing is an entirely new one or made to supplant an existing fixed interest-fixed term borrowing.
Explanations of the technical provisions of the Bill are contained in a comprehensive explanatory memorandum being made available to honourable senators. The conditions proposed for restoring the income tax deduction for interest on convertible borrowings correspond to a large degree with the terms on which convertible securities have in recent times been issued on international markets. The Government feels that the plan resulting from its review of the income tax law as it applies to convertible borrowings will offer worthwhile assistance to new and developing companies and, at the same time, present a barrier . to unwarranted tax savings through companies issuing convertible securities in plain substitution for share issues. I commend the Bill to the Senate.
Debate (on motion by Senator Wilkinson) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Sir Kenneth Anderson) read a first time.
(8.2) - I move:
That the Bill be now read a second time. With the concurrence of honourable senators I incorporate in Hansard my second reading speech.
This Bill will declare me general rates of tax for the current financial year 1970-71. As honourable senators know, a Bill of this nature comes before the Senate each year.
The general rates of tax payable by individuals for the current financial year, as proposed in this Bill, will result in tax reductions - substantial in the lower and middle income ranges - for most taxpayers. As mentioned by the Treasurer in his Budget Speech, the Government has been concerned at the way in which the present graduated rates scale has’ operated in a period of rising incomes. One effect has been to shift a growing share of the weight of taxation on to personal income taxpayers. The proposed reduction in personal income tax is one of several measures announced by the Treasurer to alleviate this effect. Another cause for concern was that the increase in the burden of personal income tax was not equally heavy at all income levels. By their nature, the proposed reductions - greater on a percentage basis at the lower end of the scale, tapering off to nil at the higher end of the scale - are aimed at a more equitable distribution of the burden of personal income tax.
The Bill proposes the retention of the present system, under which the tax payable is the sum of the amount calculated at the general rates and a 2.5 per cent levy. By comparison with the present rates scale, the proposed general rates scale provides reductions of some 10 per cent in tax payable on taxable incomes up to $10,000. On taxable income above $10,000 the percentage reductions in tax taper off, reaching 4.4 per cent at $20,000 and cutting out altogether at $32,000. Since the 2.5 per cent levy is based on the tax otherwise payable, the amount of this levy will be reduced by the same percentage as the reduction in tax at the general rates.
The proposed reductions in tax payable under the general rates will, of course, also be fully reflected in the tax payable by primary producers to whom the averaging provisions apply and by taxpayers whose rate of tax is based on a notional income.
The Bill also proposes to liberalise the age allowance provisions in 2 ways. Firstly, the level of taxable income which is completely exempt from income tax, is to be raised. Single aged persons - that is, residents of Australia aged 65 or more for men and 60 or . over for women - previously paid no tax if their taxable income did not exceed $1,300. For 1970-71 the exemption level will be $1,326. A married aged person did not pay tax last year unless the combined taxable income of husband and wife exceeded $2,262. This exemption level will now become $2,314. These increases are in line with the increase in maximum pension rates.
The second benefit arises from adjustments to the ‘shading-in’ arrangements, which are designed to ease the change from complete exemption to tax at normal rates. Details of the proposed ‘shading-in’ rates for those to whom the single person provisions apply are set out in the Sixth Schedule to the Bill and for those to whom the married provisions apply, in the Seventh Schedule. The broad overall effect will be to reduce tax payable by aged persons for 1970-71 with taxable income in the ‘shading-in’ range by approximately 10 per cent or more as compared with the previous year.
The proposed reductions in personal income taxation are estimated to have a value to the taxpayers concerned of $289m in a full financial year and $228m in 1970-71. They are reflected in revised scales of tax instalment deductions to be made by employers from salaries or wages paid to employees, with effect from 1st October this year. As a result, many taxpayers will already have received the benefit of greater take-home pay. The reduced rates will also be reflected in amounts of provisional tax payable in respect of the income year ending on 30th June 1971. The changes to the age allowance are estimated to have a value to aged taxpayers of $2m in 1970-71 and $3m in a full year.
I turn now to the rates of tax payable by companies. The rates of primary tax payable by all companies for the 1970-71 financial year are to be increased by 2.5c in the dollar. In line with the practice that has been followed since the inception of the Commonwealth income tax in 1915, these rates will be imposed in respect of income of the preceding year. As companies are. not on a pay-as-you-earn basis, they pay tax in the year following the year in which the income is derived. Public companies will accordingly pay 42.5c in the dollar on the first $10,000 of taxable income for 1969-70 and 47.5c in the dollar on the balance. Private companies will pay 32.5c in the dollar on the first $10,000 and 42.5c in the dollar on the balance. The rates of tax payable by life assurance companies, co-operative companies and nonprofit companies will also increase by 2.5c in the dollar. The rate of additional tax payable by private companies, which have not distributed sufficient profits as dividends, will remain at 50 per cent.
In line with the increase in the rates of tax payable by mutual life assurance companies and other life assurance companies in respect of mutual income, the rates of tax payable on the investment income of a superannuation fund that does not invest a sufficient proportion of its assets in public securities, but which would otherwise be exempt from tax, are being increased by 2.5c in the dollar. This change will have effect for the 1970-71 income year of funds affected.
Apart from the features I have mentioned, the provisions of the Bill generally follow the pattern of previous legislation, and further explanations do not seem necessary at this stage. Technical features of the Bill are explained in the explanatory memorandum which is being circulated. I commend the Bill to the Senate.
Debate (on motion by Senator Wilkinson) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Sir Kenneth Anderson) read a first time.
(8.3) - I move:
That the Bill be now read a second time.
With the concurrence of honourable senatorsI incorporate in Hansard my second reading speech.
The purpose of this Bill is to declare the rates of income tax for the financial year 1970-71 on income of certain superannuation funds, trust estates and members of partnerships.
These are special rates for the purposes of certain anti-avoidance legislation enacted in 1964. Apart from minor changes connected with the increase in the exemption levels of the age allowance proposed by the Income Tax Bill 1970, the Bill follows the same pattern, and declares the same rates, as in recent years.
A rate of 50 per cent is declared in respect of the income of a trust estate, other than a deceased estate, to which no beneficiary is presently entitled and which is not taxed as if it were the income of one individual.
A similar rate of 50 per cent is declared for the taxable income of a superannuation fund that is not exempt from tax. This rate does not apply to the investment income of a superannuation fund that is subject to tax only because of the fund’s failure to comply with the ‘30/20’ rule concerning investments in public securities. The rates for the latter class or fund are declared in the Income Tax Bill 1970.
In relation to income from a partnership over which a person lacks, or is deemed to lack, real and effective control and disposal, a rate of further tax sufficient to bring the aggregate rate on the income up to 50 per cent is declared by this Bill. This further tax will not be payable by aged persons whose taxable income does not exceed the new upper limits of the range of income within which the age allowance provides partial relief and which I explained in my speech upon the Income Tax Bill 1970. I commend the Bill to the Senate.
Debate (on motion by Senator Wilkinson) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Dame Annabelle Rankin) read a first time.
(8.5) - I move:
That the Bill be now read asecond time. With the concurrence of honourable senators I incorporate in Hansard my second reading speech.
The purpose of this Bill is to extend and make more effective the Government’s program of assistance to sheltered workshops. It is the sort of assistance the Prime Minister had in mind when in his policy speech of October last year he said:
During the next Parliament we shall pay special attention to … the positive rehabilitation of the handicapped and the invalid so that they may return to normal life. . . .
The Bill gives effect to three specific proposals contained in the Budget Speech - namely, a subsidy towards the capital cost of accommodation for disabled persons working in normal industry; payment of a training fee in respect of persons placed in normal employment by a sheltered workshop organisation; and a subsidy towards the salaries of certain sheltered workshop staff.
At this stage of the development of sheltered workshops, these items have been selected as the forms of assistance which will meet their most immediate needs, and will help them to attain their objective of improving their services for the increasing number of handicapped people who look to them for help in overcoming the many problems they encounter.
Under the Sheltered Employment (Assistance) Act, introduced in 1967, capital subsidy of 2:1 is available towards the capital cost of sheltered workshops, workshop equipment, and residential accommodation for workshop employees. Subsidy is also available, for up to 3 years, towards the cost of rent for workshop premises. in the 3 years that this legislation has been in force sheltered workshops have become a vital force in tackling the social, vocational and economic problems of the handicapped.
The effectiveness of the Government’s assistance can be gauged by the fact that more than 100 sheltered workshops - employing an estimated 5,000 handicapped people - have been approved for assistance and are now producing goods worth $5m a year. This figure is rising at the rate of approximately Sim each year. The wages paid to their handicapped employees, most of whom are invalid pensioners, are also increasing steadily.
Government assistance to the extent of almost $5m has been granted to workshop organisations during the past 3 years. To this must be added the money, amounting to more than $2m, contributed by organisations and other groups conducting workshops. To these organisations also goes the credit of organising the workshops, of endeavouring to make them viable economic establishments, while at the same time administering them sympathetically and in the interests of their physically and intellectually handicapped employees. Credit is due too, perhaps most of all, to the handicapped people themselves whose courage and determination has been the greatest single factor contributing to the marked success of the sheltered workshops.
The Bill now before the Senate represents the second stage of Commonwealth assistance. It is calculated to provide aid in specific areas where financial help is needed and to recognise the community service which workshop organisations are providing at their expense.
The capital subsidy of $2 for $1 which is at present available for the accommodation of persons working in sheltered workshops, most of whom have been assessed as 85 per cent incapacitated for work, will be extended to include subsidy for hostels for disabled people who are working in normal industry.
The need for ‘half-way houses’ for the physically and mentally handicapped is something that few will dispute. There are many disabled people who are able to hold a job in commerce or industry, but who need special facilities or supervision to enable them to cope with the ordinary acts of daily living - accommodation designed for wheelchairs, or help in building confidence and adjusting to a way of life that we take for granted.
For some people accommodation of this type will be a permanent requirement, for others it will provide a stepping stone to their complete social and vocational rehabilitation.
The proposed amendment of Section 9 of the Principal Act means that all existing and future subsidised hostels will be able to offer accommodation to eligible disabled persons regardless of whether they are working in a sheltered workshop or in normal employment.
The second feature of the Bill is that it provides for a training fee of $500 to be paid to a sheltered workshop organisation where a former employee who is disabled to the extent required for invalid pension purposes, graduates to normal employment and is able to retain such employment for a period of twelve months.
A considerable amount of time is spent by many sheltered workshops training their disabled employees until they reach a degree of proficiency which enables them to accept outside employment. Sheltered workshops are, therefore, continually losing their most proficient workers with resultant loss of their productive capacity. Because of this there has been an understandable reluctance on the part of many workshops to encourage their best workers to attempt the step to open employment. Nevertheless, last year, workshops placed in outside employment almost 500 disabled people, a majority of whom were or had been invalid pensioners. I am sure (hat the
Senate will agree with me that this is a magnificent effort, which deserves reward and merits stimulus.
The proposed training fee of $500 is a recognition of this valuable secondary function of sheltered workshops. It will be paid in respect of disabled people who complete their period of twelve months normal employment on or after the date on which the legislation comes into effect. The fee will generally be only payable once in respect of an individual and then only if that person has been undergoing a period of training of at least six months in the sheltered workshop.
Payment of a $1 for $1 subsidy towards the salary costs incurred by sheltered workshop organisations in the employment of persons to provide special supervision, or medical guidance, counselling, social work or other services for their disabled workers is the final provision contained in the Bill.
Because sheltered workshops are business enterprises, they must have regard to their overhead costs the same as any other commercial organisation. But business firms, as a rule, do not have to employ staff on a full-time or part-time basis to provide medical guidance, counselling, or training to the same extent, or to attend to the personal needs of severely handicapped people. Sheltered workshops have to provide more staff for purposes of supervision and training than is normally expected in industry, and to this extent are financially disadvantaged by comparison.
The subsidy of $1 for.$l will assist sheltered workshop organisations to meet these additional expenses and by reducing the amount of money, obtained either from outside sources or from their own business activities, which they are required to use for these purposes, will permit them to apply a greater proportion of their income towards improving their operational efficiency and by this means providing a better service and higher remuneration for their disabled workers.
The 3 new provisions contained in the Bill will enable sheltered workshops to assume a more important role in catering for those people, who notwithstanding their physical and mental disadvantages, want to work to the best of their ability; some to augment their invalid pensions, others with the objective of achieving full economic independence by entering or reentering the normal workforce.
The measures are designed to provide encouragement and to give the workshops an incentive to do these things.
It is expected that sheltered workshops will play an ever increasing role, in collaboration with the Commonwealth Rehabilitation Service, in serving the needs of those who are physically or mentally handicapped. The Bill is designed to provide the assistance that is required at this stage for their continued development. I am confident that it will receive the support of all honourable senators. I commend the Bill to the Senate.
Debate (on motion by Senator O’Byrne) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Dame Annabelle Rankin) read a first time.
(8.4) - 1 move:
That the Bill be now read a second time.
With the concurrence of honourable senators I incorporate in Hansard my second reading speech.
The purpose of the Bill before the Senate is to extend the operation of the States Grants (Mental Health Institutions) Act 1964-1967 for a further period of 3 years from 1st July 1970 to 30th June 1973.
Under the States Grants (Mental Health Institutions) Act 1964-1967, capital assistance grants have been provided to the States in respect of mental health institutions, on the basis of $1 from the Commonwealth for each $2 expended by the States.
The 1964-1967 Act, which is being extended by this Bill, applies in respect of mental health institutions’ which are defined as being institutions ‘carried on exclusively or principally for the care and treatment of mentally ill or mentally defective persons’ and which are conducted by or are in receipt of maintenance grants from a State. Assistance is made available by the Commonwealth in connection with expenditure made for the acquisition of land and buildings to be used as mental health institutions, the construction and alteration of buildings used for this purpose and the acquisition of equipment for use in mental health institutions.
Under the 1964-1967 Act it was necessary for the States to obtain prior approval, before 30th June 1969 for expenditure to be incurred up to 30th June 1970. Because of this time factor, no approvals have been given to any State since 30th June 1969.
In order to ensure continuation of assistance over the next 3 years, it is necessary to provide machinery for approval to be given for expenditure incurred between 30th June 1969 and the date the new legislation receives Royal Assent, in cases where prior approval for the expenditure had not been obtained before 30th June 1969. A provision has therefore been included in the Bill which allows the Minister, or a person authorised by the Minister, to approve expenditure incurred during that period. Any such approvals will be deemed to have been given before the expenditure was incurred.
In addition to new projects commenced between 30th June 1969 and the date of Royal Assent, this provision will also cover cases where final expenditure on projects already approved exceeds the amount previously approved.It is anticipated that in practice it will apply mainly in these latter cases.
Once the new legislation receives Royal Assent, the established procedure of obtaining prior approval to expenditure will apply. It will be necessary in all cases for expenditure to be approved before 30th June 1972 if it is to attract Commonwealth assistance.
It will be noted that Section 6 of the 1964-1967 Act has been repealed. The purpose of this Section had been to ensure continuation of a provision in the earlier 1955 Act which specified certain amounts as the level of the respective States’ entitlement. When amending legislation was enacted in 1964 and again in 1967 not all the States had reached the level of entitlement specified in the 1955 Act and Section 6 was necessary to preserve that entitlement. However, all States have now received their entitlement under the 1955 Act and continuation of Section 6 is therefore no longer necessary.
The Commonwealth has provided material assistance to the States under this legislation, and the 1955 Act, amounting in aggregate to just on $44m. There is no doubt that the States have derived great benefit over the past 15 years, as a result of the Commonwealth’s participation in this particular area of mental health, which has in turn enabled the States to provide greatly improved facilities for mental patients.
However, the Government is aware that the various States are now placing more emphasis on expenditure on community mental health projects, such as early treatment psychiatric centres, day centres and hostels and on integrated services. It also recognises that the emphasis on capital expenditure in traditional mental health institutions is declining in favour of such projects, a large proportion of which qualify for Commonwealth assistance under the legislation which this Bill proposes to continue.
It is evident, from an examination made of the States’ proposed capital works programmes over the next 3 years, that there is still a significant amount of capital works to be done to warrant continuation of the Commonwealth’s participation in the form of capita) assistance grants.
The development by the States of community and integrated mental health services will be kept under observation by the Commonwealth so that at the end of the 3 year period, the Government will be in a position to consider what future role the Commonwealth should play in the mental health field. I commend the Bill to honourable senators.
Debate (on motion by Senator O’Byrne) adjourned.
SALES TAX BILLS (Nos 1 to 9) 1970
Debate resumed from 13 October (vide page 1067), on motion by Senator Sir Kenneth Anderson:
Thar the Bills be now read a secondtime.
– These Bills, which are being taken together by consent of the Senate, are part of the budgetary provisions which provide for some cuts in income tax - and trivial cuts they were for the majority of people. By its Budget proposals the Government proposes to take far more in indirect measures such as the ones we have before us tonight - the Sales Tax Bills - than will have been remitted by the income tax cuts. These Bills will increase the sales tax on certain items from 25 per cent to 27½ per cent. The main item on which the sales tax is proposed to be increased is motor cars and similar vehicles. One would have thought that the Government, after burning its fingers in 1961 and 1962, would have stayed clear of an attempt to increase sales tax on vehicles and associated commodities. One cannot predict with certainty what effect such an increase will have. As we know, the Government was extremely confident that the sales tax increases in those years would have been all right. The Government believed that such increases were necessary for the community. What happened was disastrous. Hundreds of thousands of people and all kinds of businesses were thrown into the confusion. The resultant unemployed people who could not be fitted into other positions numbered over 100,000.
– The worst catastrophe of all was that it almost put the Labor Party into office.
– Senator Greenwood makes a facetious observation.
– That is consistent with his usual form.
– Yes, it is but it really shows how far reaching can be the effects of such changes in sales tax when one blithely increases such amounts. One does not know what the effect is going to be. We do know what happened those few years ago. We know what a disaster it was to the community. Here again is an interference which is not calculated to help the industry. It is not calculated to help the other industries which are affected by these proposed sales tax increases. Most importantly of all, it is inflationary. It is absolutely undeniable that these increases in sales tax will be passed on because, as we know, the various persons along the chain - the intermediaries, the retailers - charge so much extra.
– Not in regard to sales tax. It is charged on the last wholesale sale, is it not?
– Senator Greenwood makes a very important point. It is an extremely important point, especially to some of us on this side of the chamber, that there is only one sales tax and that it is really improper for any person to allege that the sales tax is increased more than once. But the reality of the matter is that sales tax is added into costs. For instance, retailers charge a certain margin on a particular item and in practice often this margin is imposed on the whole of the price, including the sales tax. Of course, it is quite illegal, quite wrong, for anyone to allege and state that sales tax can be imposed more than once. There is and can be only one imposition of sales tax. Is that a sufficient answer for you, Senator Greenwood?
– It is, but you were not saying that before I interjected.
– Yes, I was. I was saying that inevitably this increase adds to the cost of the commodities, and the honourable senator knows very well that that is what happens along the line. It is inescapable that not only is the sales tax added but also that in the course of events it becomes multiplied along the line. Even if the commodity concerned is not sold separately but becomes part of something else which is sold, the tax becomes multiplied as costs and charges are passed on. This is usual in industry. Here is a tax which is clearly inflationary and which runs against the feeling of this community. We want to stem the inflation, not to encourage it, and yet this will be the effect of this measure, which is one of a series of measures proposed by the Government. The Government proposes tax increases on diesel fuel, petrol, wine and various other commodities. All of these increased taxes are clearly calculated to push up inflation. As a result prices must be increased, whether or not the charge is carried through and multiplied, as we know in all probability it will be. These increases are certainly inflationary of themselves. They affect businesses throughout the community.
Whoever buys a vehicle will have to pay more tax - that is dealing with the vehicle alone. Then costs will increase and therefore they will charge more for their commodities.
This will affect families. Of course, we have been a car community for a long time. I think we were once rated as third or fourth in the world. As in many other fields, our standards of living relative to the rest of the world have been declining while the Liberal Government has been in office.
– Look at the latest figures. You are not supported by the latest figures.
– The honourable senator says I am not supported-
– In Russia they have 4 cars to every 100 people.
– The honourable senator mistook what 1 was putting. 1 was saying we are still a relatively high carusing community. We may have slipped a little but, nevertheless, we are a high carusing community. This has an important effect on practically all Australian families. Senator Gair, who interjects, will have his opportunity to show whether he is opposed to inflation, whether he is opposed to the extra burdens.
– I do not have to do it tonight. I have been doing it all my political life.
– The honourable senator will have an opportunity to say whether he wants to help to prevent inflation, whether he wants to help the family man who is affected by this kind of impost. He is affected both directly if he buys a vehicle and indirectly through all the other goods and services which he purchases. The price of these things has increased because those who provide them have to pay increased costs themselves through sales tax. All of this bears heavily on the community. If anyone wanted to prevent inflation he would first of all stop this kind of tax.
– Where would the Government get the revenue? Try to answer that.
– The honourable senator has asked a very good question. He was here just before the Senate election in 1967, and I think he was one of those who voted to pass the off-shore petroleum legislation which gave away resources of the people, which were in the custody of the Commonwealth Government, which amounted, according to estimates which have never been denied - in fact, they have been confirmed - to hundreds of thousands of millions of dollars. The honourable senator voted for that legisation. Senator Marriott also sat here and voted for the proposals which involved us in the Vietnam war. Tt is not for us to discuss the rights or wrongs of that at this stage. However it is costing this country some $400m or $500m a year, leaving aside the future costs of repatriation in various guises. The honourable senator also voted in favour of proposals to acquire a VIP fleet at a cost of some $40m. So do not let him talk to us about where the money comes from. If the Government were simply to cut down on some of its waste and extravagances and its throwing away of all the tremendous resources of this country, it would have the money to avoid not only this kind of taxing but also many others. if that is not a sufficient answer to the honourable senator, let him go to Norfolk Island where the number of companies has increased from two to three about a decade ago to over 1,600. lt has become a tax haven not for a few companies looking lor small lurks but for some of the most powerful corporations on earth. Companies have been registered on that island through the names of well-known residents - the Fletcher Christian, the Quintal and Adams families - as well as the great companies of this country. Some of the most powerful bodies on earth are registered on that island which is tax free. Inquiries should be made about the hundreds of millions of dollars that flow through that island. This would appear to be the case from the transactions that are near the surface. If a study of the book entries were made the figure may well be far more than we could even imagine.
– How do they avoid the tax?
– Under the legislation the tax does not apply to residents - and that term includes companies resident on Norfolk Island. The company law on the island is about 1880 vintage. All a company has to do is register. Actually, they are public companies. They do not even have to have a registered office-. They do not even have to file a profit and loss account. They file a balance sheet once every year and that in most cases shows the original $7 registration fee, although in one instance some $40m simply flowed out but did not appear on the balance sheet. Yet one would think it was the sleepiest sort of island and the most quiet place that one could ever come across. It is increasingly one of the world’s great centres for the avoidance of taxation. I am not saying that it is a criminal avoidance; it is not. It is action which is permissible under the law.
– I am glad that I interjected.
– Yes, and if the honourable senator would care to pay attention to some of these problems he would find himself fascinated by them. But the amount represented there is only a drop in the bucket compared with what is going on in this great community of ours which is one of the treasure chests of the world. The honourable senator asked me where we would otherwise get the revenue that we obtain from a pitiful sales tax item. We are dealing relatively with peanuts when we compare the revenue from sales tax on that item with the revenue available in this country, but it is not peanuts to the people who have to pay the tax and bear the impact of this kind of impost.
– The honourable senator is putting to the Senate that income earned in Australia is not being taxed in Australia. He is saying to the Senate that because these people are involved with Norfolk Island they are evading their tax here.
– I did not say that they were evading the tax.
– I think the honourable senator’s speech will need a bit of analysing.
– I hope so. Senator Marriott asked me a good question and I have given him an answer. I assume that he was genuine in asking his question.
– I was.
– Then the honourable senator will follow up some of the points that I have mentioned. 1 would suggest to Senator Webster that there is no evasion as that is not necessary; there is an avoidance of taxation. This can be done in many ways which are familiar to those who are in this field. Income can be transferred to some place such as Norfolk Island or to some other area. This practice has been common for many years in the oil industry where the oil companies bringing oil to Australia would charge very high prices and the profits would go to the companies which were associated with them. The subsidiary companies which were transporting the oil were registered in Liberia, Panama or some other place where they were not required to pay tax. Naturally an endeavour would be made to return the profits to those places, and in order to achieve this many devices would be used, including the use of patents, royalties and shipping charges. The imagination of the accountants and others concerned with these practices is almost limitless. There are many ways of quite legitimately transferring the profits and income to some place where tax is not payable. There are other interesting features of this with which I do not propose to deal. I should like to return to the question of sales tax, having dealt with the question of how one could raise revenue to replace this amount. This Bill will fall heavily on the family man and on businesses. It will affect all Australian citizens. It is doubly unfair because it falls on the family man directly in what he purchases and indirectly in the goods and services for which he pays. All of these amounts are increased by this kind of tax. It is one of the worst ways to raise revenue. One of the problems is that the imposition of this tax results in increased costs. As a result the Budget has to be increased each year, the State governments are in difficulties with increasing costs and local governments are similarly affected. But in addition every citizen is affected also. The effect of this kind of impost, along with others, is to raise costs. That is the tendency. Surely it is common ground that an increase in sales tax can have no result other than to accelerate inflation. Would anyone in this place deny that? I ask honourable senators to speak out if they say that this can have any effect other than to accelerate inflation.
– It does not accelerate inflation.
– The honourable senator suggests that if we put a charge across the whole range of goods and services by the imposition of sales tax it will not accelerate inflation. J think most economists and other people who consider the matter would say that by increasing sales tax you increase the total monetary value of goods in the community without any increase in real value because there has not been any increase in productivity. You add to the cost of goods an amount which is not reflected in increased value but which is simply reflected in increased prices which go right through the community.
– No, it goes to the Government.
– lt might not add to money inflation, but it adds to cost inflation.
– That is not what I was asked.
– The honourable senator was asked about inflation, but he wants to split hairs. Does he or anyone else deny that it adds to cost inflation?
– Yes, because cost inflation means different things to different people, depending on the way in which they use the expression.
– The honourable senator wants to split hairs even further. I do not think it would be denied, even by the Government, that this adds to cost inflation and that therefore it is quite unsatisfactory to introduce it.
– In what year was it introduced?
– lt was 30 years ago.
– Yes, it has been here for some time. We know that it was an inflationary impost, but to increase sales tax at this time when the community here and communities all over the world are concerned about inflation is deplorable. People recognise that some part of it perhaps is inevitable, but they do not accept that it should add to the rate of taxation in this way. Even if the tax were left at its present level, as the costs of various cornmodi tes increase and prices increase the revenue would go up correspondingly. But the Government is not satisfied with the increased return from 3 per cent or 4 per cent inflation; it proposes to add more to it. Although the amount returned in tax throughout the community will be increased in money terms, the Government is not satisatisfied with that but proposes to push the rate even higher. That, I should think, is perhaps one of the most undesirable contributions that a government could make. The Government has not even the kind of superficial justification that it claims for increasing interest rates, i refer to those instances when it has said: ‘If we do this we will curb general demands.’
Of course what happens in that kind of event is that you increase the burden upon the ordinary wage earner - the low and middle income earners who cannot afford the increase - and you make it more difficult for them to buy houses and to acquire other goods which are hot luxuries. What the Government is doing in this instance is to make it more and more difficult for people to maintain their standard of living. This is the attitude of the Government; this is its philosophy. No doubt it is entitled to this philosophy, hut we reject it completely. The philosophy of the Australian Labor Party is that this kind of impost should not be accepted. It is our intention fo reduce and eliminate this kind of indirect taxation. We are pledged to this and this is what we propose to do.
Despite what Senator Gair has said 1 do not know precisely what members of the Democratic Labor Party intend to do. If they really intend to protect the family man, as they have often said, I would hope that they would support us in opposing this legislation. By doing so they would protect the family man, not only from the direct effect of these taxes but also from the indirect effects in that the cost of goods and services which ordinary citizens have to purchase will not be increased. I would find it difficult to understand how any Party which desired to protect the family man could agree to the imposition of this kind of tax, not only in the field I have mentioned but also in respect of all the other items which are affected by increases in sales tax.
– The Govern ment would not act without some reason. Why does the Leader of the Opposition think the Government introduced those measures?
– The Government had to introduce these measures because it had promised certain reductions in the level of income taxation. The Government made reductions in the income tax scale in what the Opposition conceives to be a completely unfair way. The reductions will benefit the richer persons in the community but will be of very little benefit to those at the bottom of the scale.
– The Government was pressurised by the unions.
– It is true, as Senator Gair has indicated, that the Government was pressured into promising reductions in income tax by the trade unions and others. The trade unions said - and quite rightly - that the income tax scale was unfair. When he was the Commonwealth Treasurer the present Minister for External Affairs (Mr McMahon) admitted at an Australian finance conference and elsewhere that Australians were perhaps the most heavily taxed people in the world and that the only way Australia had achieved its rate of development was in fact by slugging the low and middle income earners. The sense of social injustice was so great that the Government was moved before an election to promise some decreases in the rate of income tax.
– The Government promised them long before that.
– It would be even worse if in fact the Government did promise them before then because it was a long time doing anything about honouring its promise and when the Government did do something what it did was inadequate and unfair. What did the Government in fact do? It matched the cuts in income tax rates by savage increases in indirect taxes which will hit the low and middle income earners who got very little out of the income tax cuts. Although they did not get very much out of the income tax cuts the low and middle income earners will have to share equally with the high income earners the extra cost of such items as cigarettes, motor vehicles, petrol and so on. All people who use these items for their pleasure have been hit equally as hard by the increases. This is the vice of sales tax.
– I asked the Leader of the Opposition earlier why the Government took this action.
– Because it made certain promises as a result of social pres sures and it had to increase the sales tax on certain items to make up for the expenditure it incurred in meeting its promises. In effect the Government is deriving the same amount of taxation from the community but it is deriving it in a more iniquitous manner. The low and middle income earners are being hit more heavily than they were by this across the board form of taxation. This is undeniable. There is no social justice in this form of taxation. The Government has consistently ignored the criticism that has been levelled at it. It has also ignored other sources of obtaining revenue. The Government has provided all sorts of escape hatches under the income tax legislation. Those people who are in receipt of higher incomes are not worried about an increase in income taxation because, for the most part, they can legitimately avoid paying it. However, the low and middle income earners are not in a position to do this. They cannot arrange their affairs in such a way as to avoid in a legitimate manner paying taxation. The response of the Government by increasing sales tax on certain items is, I suppose, the most heartless feature of this year’s Budget, apart from the shabby deal which has been given to the pensioners. This is one example of a range of indirect ways in which the Government has taxed the community. The old motto was to soak the rich. The Government’s motto is to slug the low and middle income earners.
– Is the Leader of the Opposition advocating a means test on sales tax?
– No, because 1 do not think that it would be satisfactory. If this kind of impost does not hit the people on the low and middle incomes directly it hits them indirectly. Businesses which are slugged with this kind of tax pass it on in turn to the little man. The result is that the little man has to meet the burden of any increase in indirect taxation. He does this by paying increased prices for the goods he purchases and the services he seeks. While he might avoid paying a bit of it in the early stages in the long run he is slugged with it.
The Opposition believes that this legislation ought to be opposed root and branch. It is of the opinion that anyone who believes in social justice ought to express their opposition to this legislation. The Opposition will not have a bar of it. In the last few years the Government has increased the sales tax on one item after another. The result is that the rate of sales tax has crept up from 124 per cent to 15 per cent on some items and from 25 per cent to 271 per cent on others.
– The increase in this instance is 21 per cent.
– I said that it was from 25 per cent to 271 per cent.
– The Leader of the Opposition is using extravagant language.
– I said that it was from 25 per cent to 27± per cent, which is 2i per cent.
– How much extra has it cost the honourable senator for his shaving sticks?
– Senator Greenwood has tried to dismiss these increases as being unimportant. An increase of 2i per cent on 25 per cent is actual by an increase of 10 per cent. The previous sales tax has in fact been increased by 10 per cent, that cannot be laughed off. Senator Greenwood may think that these increases are unimportant, but they will not be laughed off by the community. The Government is in fact striking at the heart of the economy. It is striking at the standard of living of every person in the community. The Government is increasing inflation, lt is acting in an unjust and inequitable manner. The Opposition will not accept what the Government is doing.
I note that the Leader of the Government in the Senate (Senator Sir Kenneth Anderson) has gone across the chamber to tell Senator Greenwood that his interjections are not helping the Government’s case very much. The Leader of the Government is quite right in doing so. I think he should restrain Senator Greenwood because if Senator Greenwood continues in this way he will expose more and more of the deficiencies in the Government’s case. I hope Senator Greenwood will continue with this kind of attitude. It shows the real philosphy of the Liberal Party of Australia. I hope the Leader of the Government will not silence him because it is better for the Oppocsition’s case if Senator Greenwood keeps interjecting.
– That is what the Leader of the Government is telling me.
– I thank the honourable senator. I have just indicated to the Senate that that is exactly what the Leader of the Government would be telling the honourable senator. From whichever angle one looks at these increases one can see nothing but injustice. The Government has lost its heart. It professes that it wants to look after the family man and it speaks about what it is doing. These words are spoken so often by honourable senators on the Government benches that they sound like a record being played. Every time mention is made of the plight of the low and middle income earners, the poor and the sick the Government says that it is very concerned about them and it will look into their problems. But the hard fact of the matter is that all it actually does is come forward with taxation measures which strike at the standard of living of these very people. The Government is determined to make the tow and middle income earners bear the brunt of the development of this country by having to meet the taxation which is imposed. It is not a case of those who are best able to afford it having to pay the most taxation. The Government has turned away from this principle and is striking at the people who are less able to afford to pay taxation. It is doing so in a direct and indirect manner. For these reasons, the Opposition will oppose the substantive measures and the ancillary measures which are before the Senate. The whole lot ought to be thrown out by the Senate if it is in fact a self respecting legislature which is concerned about acting on behalf of the citizens of the community.
– The introduction of a sales tax Bill or a series of sales tax Bills is nothing unique now in the presentation of financial measures to the Parliament. It has become almost an annual event. On every occasion on which Bills of this nature come forward they are, naturally, resented because of the type of taxation they impose. I think we are all concerned at the fact that sales tax, by its nature, is an imposition across the board. It can fall like the rain from heaven equally upon the rich and the poor. Therefore basic concern is felt by members at this type of tax, which is completely impersonal and neutral and fails alike on the rich and the poor. It falls heavily on large families who have a lot of purchases in the fields attracting sales tax. But we must also concede that certain grave financial problems are now presented to those who have the responsibility of framing financial documents in the modern Australian economy. The point is that the margin of financial manoeuvre and of elasticity is becoming more and more reduced and circumscribed every year as our fixed commitments grow. The wider the ambit of the welfare state becomes, the move embracing becomes the solicitude of the Government for various segments of society, the greater is the fixed commitment of the Budget in relation to the provision for those committed services.
While we do regret these things unfortunately we have to go along with them. If we are going to eliminate some type of revenue we have correspondingly to truncate some type of receipt and some type of government concern. Unfortunately it is becoming the position that one must pay the money and take one’s choice. In. relation to sales tax the choice is a very unpalatable one. Nevertheless the concern of this Parliament for the form and the content of the financial documents has been expressed in many ways. Already the Budget has been the subject of a substantial piece of criticism in relation to the imposition of receipts tax. The financial position of the Government in relation to the Budget has been severely eroded by that which has been given a very high priority in the consideration of this Parliament, to the point of the rejection of the receipts tax Bills as presented and the representing of them in a more limited fashion.
We must accept that to that extent the Government now finds new financial responsibility. Money has to be discovered from some source. Therefore any approach to this Budget must be one which is coloured by a sense of parliamentary responsibility. I am not here to defend the Government’s financial measures. Our Party on all occasions faces the situation as it is and particularly faces the realities of a situation. This occasion is no different from others. While we are concerned with the imposition and the extension of a tax and the raising of the level of any impost, we are equally concerned that services which are provided shall continue to be provided. All that must be done within the financial circumscriptions of revenue which already has been limited by the actions of this Parliament.
To my knowledge additional imposts have been laid upon the present Budget. They have resulted from amendments to the Health Act which, at the instance of the Senate, were responsible for providing an additional $2m or so to Queensland for its public hospitals. Other amendments to that Act will in turn impose additional imposts on the Budget. The receipts tax, of course, imposed the greatest impost on the Budget outside the original calculations. If we were to go on eroding the revenue provisions of this Budget we could finish up in a very serious situation. It is most regrettable that the Parliament is faced with this situation. It may well be a reflection of some general incompetence in the Government that we find ourselves in this position. Nevertheless until new formulae are discovered, until we can discover some new approach and co-operation with the States in a method of levying imposts on direct and indirect taxation and in the destination to which the consequences of that revenue shall be directed, wc have little alternative but to accept the expenditure commitments as they substantially are.
– You can oppose this Bill.
– We cannot. If we are to go on eroding the Budget in the fashion which has been proposed continuously by the Opposition the whole document could be torn up and should be torn up. All those benefits which it purports to direct, pitiful and all as they are, to pensioners and others would disappear. 1 am not defending in any sense the level of pensions which was provided in this Budget. We are taking a strong stand on that. But it does intrigue me that the Opposition is prepared to take strong and unrelenting stands on matters such as this and was not prepared to take similar unrelenting stands in relation to the rejection of the pension and other social services. I cannot understand this solicitude in other fields when the field in which we understood the Opposition was most socially sensitive, the field of social services, did not attract the relenting opposition to the point of proposed rejection.
– That is because they were not sincere.
– That is the only conclusion at which we can arrive. That was merely a smoke-screen. In matters which are not nearly so significant but which are merely opportunities for embarrassing us or the Government the Opposition is now putting up these sham fights. They are no more sincere in this than they were in other fields. That is an inescapable conclusion which we must now reach. It is a conclusion which I must reach in this case. In view of the fact that the Opposition was not prepared to defeat the Social Services Bill I would like to know whether it is now prepared to defeat the whole of the Budget by this process of erosion involving the rejection of the social services legislation. Is the Opposition prepared to do that?
– Why did not the Opposition oppose the Social Services Bill when that Bill came before the House?
– Because it gave a provision . . .
– Yes, because it gave a provision. The Opposition knows that the balance of the Budget will not be defeated and therefore it can manage to get away with its failure to reject the Social Services Bill without the political consequences. We are moving now in the shadow land of pre-election. Propositions that are put forward here are not put forward with the same sense of sincerity as they might be at other times. I want to tell the Opposition this: We are going to fight this election as I think the Australian people expect it to be fought, both in relation to the Government and to the Opposition, and that is on the question of the acceptance and discharge of public and parliamentary responsibility. That is the case we are going to present to the country - the discharge of public responsibility, the extent to which the Government may have failed to do it and the extent to which the Opposition has consistently challenged it by its activity in and out of parliament. This type of approach to this series of Bills is another illustration of a total sense of parliamentary irresponsibility. On this occasion if we find it necessary to support these Bills while we rejected the receipts tax Bills it is because we are prepared, whatever the political consequences may be, to accept and discharge our parliamentary responsibility. We are satisfied it is this which the Australian people are looking for. They are looking for a government that will in the full sense accept its responsibility and for an Opposition which is prepared to accept its parliamentary and public duty and responsibility. We are satisfied that because the Democratic Labor Party on every issue has consistently elevated public responsibility to the forefront of its thought and programme of action we will receive corresponding support. The attitude of our Party on this matter is in complete pursuance of that programme of action, and that is what we propose to present to the people. Notwithstanding the implications on people who are going to find the burden of this tax very considerable, in view of the general concept of the Budget we support this proposition. We trust that the official Opposition in its approach will display a sense of responsibility which has been conspicuously lacking from its attitude to other Bills.
For those reasons and without unduly going into details in this matter an examination of the figures will show, strangely enough, that the amount of additional revenue which will be discovered by this means will to a substantial degree accommodate the increased social service payments so far as they have been made and without it might make them more difficult to provide. For the reasons I have indicated the Democratic Labor Party supports this measure, as I say, with regret but in the general acceptance of the necessity to preserve this Budget for such benefits as it does provide.
– I support the remarks made by the Leader of the Opposition (Senator Murphy) when he continued the debate on these Sales Tax Bills. Again I want to emphasise the highlights of the speech he made. He said that the increase in sales tax would be one of the militant factors, if one wishes to describe it in that way, that would lead to increased inflation in Australia.
– That is a popular word for you.
– It cannot be applied to the Australian Country Party. Members of the Country Party did not even turn up to address the farmers. Senator Young was out there and someone told me he was a farmer but I presume that he needed addressing. I want to ignore completely the rather childish interjections coming across the chamber and to refer to the Budget Speech presented in this chamber earlier this year and to the following words of the Treasurer (Mr Bury):
The Government has. decided lo increase the rale of sales tax on goods currently in the 25 per cent class to 2H per cent.
He went on to list broadly what would be covered in this respect. I propose to refer to these in detail in a moment. In this financial year it is estimated that the increased revenue will be $23m. In a full year it is estimated to be S25m. I want to refer now to the schedule which lists some of the things on which sales tax has been increased. According to the Government they are luxury items. Senator Murphy said that one of the prime end results of this Bill would be an increase in inflation.
I refer the Senate to the schedule dealing with motor vehicles. If we look through the vehicles covered by this increase of 2i per cent to 27* per cent we find included sedans, racing cars, taxi cabs, estate cars and vehicles so constructed as to be capable of being readily converted into station waggons, estate cars and similar vehicles. I suppose there is nobody in this community today who does not use a taxi cab, probably at least once a week if not more often. Consequently the people who own taxi cabs would be justified in passing on the increased cost to the people who use them.
I turn now to the classification including jewellery and imitation jewellery. I do not think there is a woman in the community who would think that jewellery is a luxury these days unless it is of the class of diamond that Richard Burton is able to purchase for Elizabeth Taylor. This schedule includes precious stones, semi precious stones, pearls, cultured pearls, imitation, reconstructed or synthetic stones and pearls and personal adornments. The only things that are not included are goods of a kind used exclusively or primarily and principally as parts of domes for human wear. One can imagine one of our more delectable females wearing only. 3 diamonds. These would not be subject to sales tax.
I now want to come to the ordinary things that we use at breakfast, lunch and dinner. This category embraces knives, forks, spoons or other cutlery, scissors, cutlery sharpeners, school or university badges. The Government does not even eliminate the kids when it decides to reap a little bit of extra blood money. This schedule also includes school badges and badges which denote membership of organisations or associations of persons. The Government did not even exclude the Returned Services League. It decided that all these, people should pay an extra 2i per cent. This schedule also includes studs, sleeve links, tie clips and all the things that are regarded as the normal aids to dressing of the males in society. It also includes serviette rings, bookends, bookmarks, collar boxes, handkerchief boxes and so on. The list goes right down to include toothpicks. So now we are not able to eat some of the tough steak reserved for the Australian market without finding that the toothpicks required have been taxed an extra 2* per cent.
– Incorporate the list in Hansard.
– I know thai this is all in Hansard. However the chances are that you have not read Hansard. If you sit there quietly for a moment and listen to what T am saying you will learn of some of the things on which you will have to pay extra sales tax. The list includes fountain pens, ball point pencils, and propelling pencils. These are the sorts of things that are essential in everyday life, whether you are writing an order for the butcher, whether you are a youngster doing homework or whether carrying out the ordinary routine of business and day to day work. This schedule also includes watches. The only things which are not included are braille watches and clocks and alarm clocks. Probably I would not be regarded as being too cynical in saying that no member of the Government uses an alarm clock because they have never woken up.
I turn now to toilet, beauty preparations and similar materials. These include powder compacts, powder puffs, powder sprays, powder bowls, lipstick containers and perfume sprays. For years and years the women of Australia have been asking for sales tax to be reduced or eliminated on all ordinary toilet preparations. But this is one of the areas in which the Government makes its biggest vicious kill so far as sales tax is concerned and it cannot resist the opportunity on this occasion of adding an additional 2i per cent. I presume there are some red blooded males on the Government benches. If they had the opportunity of seeing the women of this country refusing to use any cosmetics at all or any scents or any of the normal preparations they would probably be reduced to the stage of deciding that they ought to remove sales tax altogether and perhaps pay a bonus for the use of these things. I am not being nasty in saying that because the same thing applies to males. The Government believes that this is an area in which essential things are bought. Because there is a compulsion on the part of both males and females to purchase these things the Government looks upon it as one of the most lucrative areas for tax gathering. 1 will go a tittle further in this schedule. It includes cameras and their accessories, photographs including negatives, and all of the things normally regarded as being the hobby of people who use their $3 or $4 cameras to take shots of the things they want to remember. Yet the Government cannot resist increasing the tax on these items. Further down the schedule it lists wireless receiving sets, television receiving sets, record players and pickups, combined wireless receiving sets and gramophones and every other combination of that sort of goods such as records for gramophones and phonographs. It also includes projectors. I cannot read the entire 5 pages covered, in due deference to Senator Webster. A message has been passed across to me from the Government benches suggesting that there is an item on the last page that I should not miss and I do not intend to miss it. However, this list includes records for gramophones and phonographs, protective envelopes, stands, cabinets and other equipment designed for the storage of those records. It also includes sound tape recording. 1 do not know how the Australian Security Intelligence Organisation will get on unless it is able to get its recording tapes free of tax, which no doubt is the case.
The position is that all of these things have been affected by the imposition of this additional tax. Senator Murphy said earlier today that it will lead to only one thing - an increase in inflation. On the last page reference is made to totalisator equipment and things like that. I am not particularly worried about this, not being a bettor. However, included in the schedule are contraceptives. Government supporters are keen to see that I refer to these in my speech. 1 suppose that today the medication commonly referred to as the Pill is the contraceptive most in use in this country yet the Government has singled it out for a 2i per cent increase. I do not wish to talk about moral values so far as the use of this medication is concerned but I think it is pretty puerile of the Government to impose an additional 2i per cent in this field. 1 refer the Senate now to the document entitled ‘Commonwealth Finance 1969-70, Bulletin No. 8’ in which there are some very interesting tables. Listed at page 1 of that booklet are Commonwealth funds, receipts and outlay. We find that the Government will receive $6,338m from taxation. There are a couple of other interesting points that ought to be referred to and I intend to mention them. On page 3 of this booklet it is stated that the Commonwealth proposes to outlay $16m for law, order and public safety. In 1965-66 - only a very short time ago - the outlay on this item was a mere $7m. The following year it rose to $10m, then to $12m and then to SI 3m. This year, with the Moratorium and things like that, the Government has had to find $16m for this item. But for education it can find only SI 57m. On cultural and recreational facilities the outlay is $15m, which is Sim less than the outlay on using the baton and the jackboot.
If the Government trebled the expenditure on cultural and recreational facilities it would probably be getting somewhere because there would then be less need for people to engage in protests, as they have to do in the present society. I propose to speak on the motion for the adjournment tonight. 1 propose to talk then on some other aspects which I do not intend to cover in this contribution. In order to avoid reading out this table of figures, with the concurrence of honourable senators I incorporate it in Hansard.
I want to return very briefly to the point at issue; that is, whether-
– You have not got to it yet.
– For those people who are able to understand things, the debate in this chamber has already paid off. I suggest that those people who are unable to understand things obtain a report of the debate in comic form from somewhere else. I suggest that this is one of the most iniquitous taxes operated and exploited by this Government and that it has been exploited to the full by this Gov ernment over a period of 21 years. Honourable senators will remember how we fought for-
– Who introduced it?
– The rather sickening interjections from members of the Democratic Labor Party are an indication of what they propose to do later. They have acted as political bludgers in the political sphere for a long time. They are battening on to both political parties in the hope of obtaining enough votes to be able to retain their seats in the Parliament. They are not interested-
– Gutter language.
– Gutter language is all right for a gutter party.
The ACTING DEPUTY PRESIDENT (Senator Davidson) - Order! The honourable senator will return to the measures before the Senate.
– Thank you very much, Mr Acting Deputy President. If you will prevent Senator Gair from making his stupid interjections, I will be able to continue with what I am trying to say. This is one of the most iniquitous taxes ever operated and exploited by this Government. Later in the session there will be discussions here on personal income tax and the differences that have been brought about by this Government. We will be saying something similar then. I sincerely hope that the wishes expressed by the Leader of my Party when he opened the debate on this subject will be taken note of and agreed to.
– Like my Leader. 1 want to brand this sales tax increase an inflationary measure. All indirect taxes are inflationary. They hil those on the lower incomes just as hard as they hit those on the higher incomes. Those who can least afford the increases are forced to bear them. In the list of goods on which the Government proposes to increase the sales tax are many items that are in daily use in the homes of the Australian people. They are necessities; they are not luxuries. Yet they are put into the luxury category.
The Budget that has been brought down is inflationary, despite the fact that the Treasurer (Mr Bury) says that inflation has been contained. But how has inflation been contained? Is it contained by statements by the Prime Minister (Mr Gorton) at dinners at which the President of the Commonwealth Conciliation and Arbitration Commission is present and at which the Prime Minister warns the assembly that there should not be increases in wages, at a time when the oil industry case is being presented to the Commission and when a case for an increase in the national wage is pending? There is inflation when workers want wage increases. There is inflation when the Minister for Labour and National Service (Mr Snedden) warns the Arbitration Commission that the economy of the country cannot afford increased wages. Despite the fact that Mr Bury is prepared to say that inflation has been contained, he warns the Commission that the economy will not stand wage increases. If the cost of living continues to increase, we must expect wage demands.
There is no thought in the Government’s head of containing the real cause of inflation. We have had demand inflation. We have had cost inflation. At the present time we are going through a period of profit inflation. That was admitted in the Budget speech that the Treasurer presented in the Parliament on 18th August.
– How do you distinguish all those inflations from actual inflation?
– They are all actual inflation. They are all inflationary measures. The demands for wage increases are forced on the people by the arbitrary actions of this Government in measures such as the ones that are before the Parliament at the present time. There is no thought in the Government’s head of putting a tax on profits or of putting a tax on capital gains. That would not do. The Government could not do that because the people who would be hit the most by such a tax are those who provide the sinews of war for the Liberal Party and the Country Party.
– Were not profits taxed retrospectively?
– We all know what the honourable senator gets out of the superphosphate bounty. So, do not let him be bashful about it. The people who would be hit by an excess profits tax or a capital gains tax are those who provide the sinews of war, and that is why they are not attacked by the Government. Yet millions of dollars of taxation revenue is lying around waiting to be picked up by this means, if the Government would only do it.
I have just had a look at a few of the items which are supposed to be luxuries and which are in the schedule of items on which the sales tax is to be increased by 2.5 per cent. One item is motor cars and sta1 ion wagons. I warn the Government that the increases in sales tax in the ‘horror Budget* of I960, as presented by the late
Mr Holt when he was Treasurer, almost brought the Government down. If the Government continues in this sort of way, it will fall - when it has the guts to go to the country. Let me say to members of the Democratic Labor Party that they need not be frightened of a double dissolution. Why do not they send the Government that is doing these things to the country? All they have to do in order to do that is to reject this series of measures-
– You have enough worries without worrying about the DLP.
– Of course we have enough worries. We always have enough worries. But you have a few more worries than we have.
– I would not have any worries if there were a double dissolution.
– There would not be any double dissolution. The Government would have to go to the country because it has supply only until the end of November. Members of the DLP know that. They have made a deal with the Government and they are not prepared to break away front it. Why do not they admit that?
– You let your imagination run away with you.
– lt is just as well that some of us have imagination. You have not. You have gone past the stage of having imagination.
– You are in fantasyland all the time.
– Fantasyland is not a bad land. I have seen people in other lands. I have mentioned motor cars. They are not a luxury these days, but they are an easy target for taxation. Every time that the Commonwealth Government or a State government wants to raise additional revenue it has a shot at the motorist. He is the one that they want to get at.
– There are only 4 motor cars for every 100 people in Russia.
– Perhaps you should go to Russia.
– No, I have no desire to go there.
– But if you know so much about the country, you should be there.
– Will this tax affect the pensioner?
– Of course it will, and well you know it. Surely Senator Webster is not trying to tell me that male pensioners do not shave, or that elderly ladies do not want a hairdo occasionally, or do not want to use lipstick. Apparently Senator Webster thinks they do not. 1 wonder what his wife pays for cosmetics. He is able to afford it.
– She is a natural beauty and does not need cosmetics.
– But he does. All toilet and beauty preparations are subject to increased sales tax as from 19th August. Powder compacts, powder puffs, power sprays, powder bowls, lipstick containers and perfume sprays are subject to the increased tax.
– Senator Keeffe incorporated this in Hansard. Perhaps you could move on.
– Senator Keeffe made his speech and the Hansard report of it has not yet been issued. I will read it tomorrow morning. Senator Kennelly would be about the only senator who would be able to dodge the increased tax on the next item because he uses a blade razor. Safety razors and safety razor blades, electric shavers and other mechanical shavers and parts and accessories for them are all to be subject to the increased tax. Will any honourable senator opposite tell me that they are not necessities? All aids to shaving are covered.
– People are running around today with long hair and beards
– Although the boys are running around with long hair, there is no increase in the tax on hairdressing tools. Scissors are particularly excluded. It therefore seems to me that the Government favours the long-haired boys. Toilet or dressing cases, including home hair waving sets, are covered by this measure. The hairdressers will be forced to pass on these increases in their costs. All the preparations they use in their salons are subject to the increased tax, so they will be forced to raise their prices. Many housewives will have to look after their own hair because the preparations they require are all to be increased in price. AU these things impose a further burden on the people. It is no use to talk about the $29m increase in taxation revenue. In fact it is $29m on top of several other millions of dollars to be gained by the Government through increased taxation.
I would think that anybody with any regard for people in the lower income group would oppose this measure. But the people who purport to be the champions of the little people are not prepared to oppose this legislation. That is fair enough. They are entitled to their own views, but they are not entitled to go out and tell the people or to use this chamber to say that they are the champions of the little people in this country and want justice for them. When the debates in this forum of Parliament are not being broadcast, those so-called champions of the little people criticise this measure but al the same time say that they will support it. They use the pretext that if they keep nibbling away at the Budget by refusing small increases the Budget will have to be thrown out.
It is amazing where money can come from. Only last week the Prime Minister was able to find an extra $360m to buy off Sir Henry Bolte. But 1. am not sure that he has yet bought him off. Sir Henry might still go on with his challenge to the payroll tax. He has not yet withdrawn the writ he has issued against the Commonwealth to straighten out this matter. There has been an attempt by the expenditure of S360m of public money to buy off the Premiers from opposing the Commonwealth.
– I think it was S70m. You are going to extremes.
– lt is $360m over a period of 5 years. You can work it out for yourself. It is $50m this year, and that is more than the increase in pensions will cost, lt is more than will be raised by the increases in taxation we are now debating. When the Treasurer presented the Budget he said that the Government could not alford to pay the pensioners an increase of more than 50c a week. That is to cost about $3 1m a year, but $50m can be grabbed out of the air at any time to try lo buy an election. The same thing happened a couple of years ago when the Commonwealth Government gave the
Western Australian Government about S40m or $50m for the Ord River scheme. If the Government has its way, it will use public money to buy itself back into office on this occasion.
– I thought you said that the Government was giving the pensioners too little. Now you are saying that it is taxing people too much with this tax. Be consistent, man.
– The Government is giving the people too little. It could have afforded to give them more. Where did the $50m come from to buy off the State Premiers? That could have been used to give the pensioners an increase of SI a week instead of 50c. This is the sort of accounting that Senator Webster does not understand because he does not want to understand it. Along with the rest of the Opposition. I oppose the measure.
– The Senate is discussing the motion for the second reading of 9 Bills to amend the Sales Tax Act. I have listened to 3 honourable senators opposite in an attack upon this measure. The attack has been characterised by extravagant language, emotional appeals, a singular lack of argument, and a complete lack of merit. It should be remembered that sales tax in this country is imposed to raise revenue. The revenue is necessary for the purposes of government. That has been accepted by successive governments, as it is accepted by governments in virtually every country in the world. If members of the Labor Party want to criticise this measure they should never forget that the Party which introduced sales tax in Australia was the Australian Labor Party. Although it has had opportunity - fortunately over only an 8-year period in the 40 years that sales tax has been imposed in this country - it did not take advantage of il to repeal this measure.
– Senator Cant forgot to tell us that.
– We all like Senator Cant. He is doing the best he can to put a good case on his own Party’s performance. We must allow for the fact that he is circumscribed by the limitations which the merits of his case impose. The purpose of sales tax is to raise revenue.
If the people of this country require government expenditure in areas where that expenditure should be made, revenues have to be provided. That is basically the justiication for sales tax. The fact that on so many occasions we have heard this chorus which we are hearing tonight from the Labor Party merely exemplifies, if exemplification is necessary, that it has been in Opposition for many years. Oppositions will always oppose sales tax increases. Governments must, of necessity, rely upon measures which will enable them to get the money they need. This Government is merely repeating an example which was set for it when 40 years ago a Labor Party government introduced into this country sales tax legislation.
In this country the procedure for imposing sales tax is an exceedingly cumbersome method. It is cumbersome because of the nature of the Acts which are required to impose the legislation. If one examines the sales tax legislation one finds that 22 Acts of Parliament are necessary for the imposition of the tax and that 3 sets of regulations are necessary for its enforcement. One finds a multiplicity of forms and procedures which have to be observed. Nine Sales Tax Bills have to be passed. Each Bill deals with a particular form of taxation. That is necessitated by section 55 of the Commonwealth Constitution which states that every Act imposing taxation must deal with a particular form of taxation. Rightly or wrongly, 40 years ago an eminent lawyer advised that the particular forms of taxation which were necessary in order to impose the appropriate sales tax legislation were 9 in number. So we have a category of transactions which are identified in each of the Sales Tax Bills.
The imposition of the sales tax depends not so much upon the Sales Tax Acts which the Government is seeking to amend at the moment, but rather upon the Sales Tax Assessment Acts. Strictly speaking, these Acts do not impose taxation but they fix the conditions under which the liability is imposed. They fix the conditions of assessment. They prescribe the requirements for collection and for administration. The reason for an Assessment Act as distinct from a Taxation Act is to be found in section 55 of the Commonwealth Constitution, to which I have referred. Of course, the Sales Tax Assessment Acts are not being amended on this occasion. The tax is imposed by the Sales Tax Acts and the Bills which actually impose the sales tax at an appropriate rate upon the sale value of the goods - these Bills which the Senate is considering - raise the rate from 25 per cent to 27* per cent. T think it is significant to acknowledge that the increase is 2* per cent - from 25 per cent to 27* per cent.
The Labor Party seeks to make much of this increase, lt uses an emotive form of description and from that emotive description it seeks to build an argument, lt says that the increase is 10 per cent on the existing rate. Of course it is 10 per cent, but if we realise that the increase is from 25 per cent to 27* per cent of the sales value of particular commodities, the increase is not a substantial one.
– The tax is not applied on the sales value of the goods, lt is on the wholesale value of the goods. The sales value rises by the profit margin fixed by the retailer. Sometimes that is 100 per cent.
– I am noi concerned with what might be an increase from time to time in the sales value because whatever that increase is the sales tax, as I think the honourable senator said, is imposed on that value. If, as is the position, the current rate of tax is 25 per cent, all that these Bills do is to increase the rate from 25 per cent to 27* per cent. The increase in the sales tax can be fairly described as a modest increase. In total it will provide $29m for the Commonwealth Government in a full year. The Treasurer (Mr Bury) said that for the current year it will provide $23m. I was saying that the sales tax legislation is imposed by a variety of Acts. Apart from the 9 Sales Tax Acts and the 9 Sales Tax Assessment Acts, there is a Sales Tax (Procedure) Act and a Sales Tax (Exemptions and Classifications) Act. The tax is based upon the sale value and is designed to fall upon the last wholesale sale of the goods. For that reason I think it was quite extraordinary that Senator Murphy, in the first 5 minutes of his major speech attacking these measures, suggested that the sales tax is capable of snowballing from I transaction to another so that the price increases from transaction to transaction. That is not involved in the sales tax. The tax is imposed upon the last wholesale transaction.
In all the circumstances in which the many types of transactions are categorised as liable to tax. double taxation is avoided by a system of certificates of registration and quotations. All manufacturers and wholesalers are required to register with the Commissioner of Taxation. They are required to lodge returns, lt is on that basis that the sales tax is imposed - not as a snowballing multiplier but on 1 transaction. It is designed to coveT the last whole- safe transaction.
– I would agree completely with the honourable senator on that. There is no doubt about that. Any person who purports to represent the rightful sales tax as being another amount by purporting to add anything and by purporting that this is the sales tax is a criminal. Is that not clear?
– I would have thought that he ought to be regarded as a criminal. Perhaps under the terms of the legislation he is a criminal if he is found out. I accept what Senator Murphy said.
– My point was that, in the nature of things, once one adds a cost the natural tendency is to have a snowballing effect - not a multiplication of taxes.
– Order! I think the interjection is too lengthy.
– I accept the interjection which you, Mr President, tolerantly allowed. If I misunderstood Senator Murphy in any way, I apologise to him. I certainly understood his remarks in that way when I rose to speak. If I was mistaken, by his interjection he has made his point clear. The Sales Tax Acts impose rates of certain percentages of the sales value. Those rates apply to the last wholesale transaction. The Acts apply to the sale of goods and commodities which ate categorised in the Sales Tax (Exemptions and Classifications) Act. This is part of the cumbersome procedure which is involved.
I took the trouble to read the speech made by Prime Minister Scullin when he introduced the sales tax legislation in 1930. One of the features of his speech which attracted me was the statement that one of the advantages of the sales tax legislation was its simplicity of administration. I think that, in terms of the development of the sales tax legislation, simplicity of administration is the last thing which could be claimed for it. I instance that by taking 1 example, say a motor car. Prior to the introduction of this legislation the sale of a motor car was taxed at the rate of 25 per cent of the sales value. When the proposed legislation is enacted, the sale will be taxed at the rate of 271 per cent of sales value. Why is it that the sale of a motor car can be taxed? For the answer I think one has to look at the Commonwealth Constitution which gives the Commonwealth the right to impose taxation. Then one has to look at the Sales Tax Assessment Act, which has been passed by Parliament and which requires a manufacturer or a wholesale merchant to be registered. The Sales Tax Assessment Act provides that sales tax shall be imposed by the Sales Tax Act and shall be levied and paid upon the sale value of goods by manufacturers or wholesale merchants. Transactions in respect of which the tax is payable include any one of those transactions categorised separately in seriatim Sales Tax Act by Sales Tax Act over the 9 separate Acts. Thirdly the Sales Tax Act declares a rate of tax which is currently 25 per cent and which will in due course be 27J per cent in respect of the goods covered by the Second or the Fifth Schedule of the Sales Tax (Exemptions and Classifications) Act. Therefore it is to the Sales Tax (Exemptions and Classifications) Act that one has to go to find the particular goods in respect of the sale of which the tax is payable at the rate which is fixed by the various Sales Tax Acts. It is difficult to see where there is simplicity of administration in this procedure.
Accordingly, if one looks at the Sales Tax (Exemptions and Classifications) Act, one sees listed the goods in respect of which sales tax in one of these many transactions which are specified in the Sales Tax Assessment Act and the Sales Tax Acts is applicable. Under the Sales Tax (Exemptions and Classifications) Act we find that the First Schedule lists the goods which are totally exempt from sales tax. One finds in the Second Schedule certain goods, most of which are contained in the table which has been incorporated in
Hansard by Senator Keeffe, in respect of which a rate is fixed by the Sales Tax Act. The Third Schedule lists household goods of various descriptions in respect of which the rate of tax, speaking from recollection, is 24 per cent. There was a Fourth Schedule which was repealed in 1962. The Fifth Schedule contains a category of commodities which are, broadly, the vehicles which are capable of transporting passengers. We commonly call them cars. Hence a motor car being in the Fifth Schedule is one of the commodities liable to tax. The rate was fixed at 25 per cent. If the sale can be fitted into any one of the transactions embraced by the 9 Sales Tax Acts and the 9 Sales Tax Assessment Acts, then the rate will be hereafter at a rate of 27* per cent. It is the Sales Tax Act which makes the tax payable.
What do these amending Bills do? In the first place, they raise the rate of tax on goods in the Second and Fifth Schedules - all honourable senators have been given a list of the types of goods to which those schedules refer - from 25 per cent to 27J per cent. It should be noted, particularly in view of the criticisms which have been directed at this legislation, that the tax measures do not affect household goods, nor do they make any goods which in general were previously non-taxable - that is goods in the First Schedule - liable to taxation. One should stress, however, that there are 6 categories made taxable which previously were not taxable. They are specified in the Sales Tax (Exemptions and Classifications) Act, and strictly they do not arise for debate on this measure. They are certainly not of a character which could be regarded as being household goods of general use.
Finally, the amending Bills do not affect the 15 per cent rate which is applicable to goods not specified in any of the schedules. I think it is significant to note that over the years the amount which sales tax legislation produces for the Government as a proportion of total revenue has been diminishing. In 1958-59 the proportion of sales tax received represented 17 per cent of total revenues. In 1963-64 sales tax provided only 13.5 per cent of the total revenue? of Government. In 1968-69 it was 11.7 per cent. In 1969-70 it was 9 per cent. On my calculations of what is estimated for the year 1970-71, notwithstanding the increase, it will still represent only 8.2 per cent of the total revenues which are raised by the Government. Therefore it is not a significant amount, lt is not a significant proportion.
One might ask: Why then is it being increased? The sales tax is being increased, as is made apparent from the Treasurer’s Budget Speech, because there must be a recognition by government, in a discharge of a responsibility which it has to the community, that it must ensure that there is as far as can be achieved a balanced budget. The needs of the economy were expressed and recognised by the Treasurer at the time he presented his Budget. He instanced that there were - 1 have stressed this already - growing expenditures and requirements upon government. There was a need, furthermore, for the Government to honour a promise to give income tax relief. Furthermore, there was the obligation on the part of the Government so to order its affairs that we would not have a galloping inflation, the type of cyclical fluctuations which would in the long term reduce the real value of the money which the people had in their purses and pockets. The fundamental justification for sales tax revenue, as I stressed earlier, is that it provides revenues for government, and it is an incidental justification that in the imposition of taxation the economy may also be controlled in such a way as to prevent the development of those factors which it must be of constant concern to government to keep in check.
I have stressed that the Labor Party introduced sales tax in 1930. It was opposed, of course, by the Opposition because all oppositions will oppose taxation measures. But it was introduced by the Government of the day in 1930 because it was necessary in the circumstances then prevailing. There was an Australian Labor Party Government at the time. The next substantial change which took place was in 1940 when a United Australia Party Government was in office headed by Mr Menzies. At that stage the sales tax legislation which he introduced - and it represented a substantial increase - was not opposed by the Australian Labor Party, even though its main spokesman said that he would criticise it but not oppose it. There was a responsibility - maybe a few people would agree with me in this - on the part of the Labor Party in the early 1940s which is not to be found in that Party in the early 1970s.
– Will you tell us what the percentage was when we first introduced it?
– I am not too sure. I think it was a very small amount. It raised approximately $12m. in our present currency, when it was introduced in 1930. I think the Government is now able to raise something like $65Sm from it. That is because a lot of changes have occurred under the progressive policies of Liberal and Country Party Governments since 1949.
– The Labor Party, especially in New South Wales, is even more interested in sales tax now than it ever was before.
– 1 am gratified to hear that the Labor Party has taken an interest in sales tax. The character of that interest, of course, 1 am not aware of. All I can say is that looking al the record in the Commonwealth field it was the Australian Labor Parly which introduced the sales tax legislation. It was the Australian Labor Party which criticised but did not oppose the significant increase and extension of the sales tax which occurred in 1940. It was the Australian Labor Party which did not use any one of the opportunities it had over 8 years, between 1941 and 1949, to remove what a number of its spokesman even then described as an iniquitous tax. To me what is significant at the present time is that the Australian Labor Party does not say what it would do to replace the revenue which would be lost if this iniquitous tax. as honourable senators opposite describe it, was to be abolished. I know that when a tax is increased by 21 per cent, from 25 per cent to 271 per cent, the amount of money which is involved in the increase in the price of a shaving stick or ornamental piece of jewellery is of absolutely no consequence. The Labor Party is shedding crocodile tears when it seeks to speak on behalf of the family man in this area. But when honourable senators opposite talk about sales tax being an iniquitous tax which falls heavily on the family man they are getting into the sort of criticism which comes from the Democratic Labor Party. What we would like from the Democratic Labor Party and from the Australian Labor Party is an indication of what they would put in place of sales tax if they got rid of that. If they castigate it in the way in which they do one would suppose, if they were sincere and meant their words, that they would abolish it if ever they had the opportunity to do so.
– We would curtail expenditure.
– I am happy to hear Senator Cavanagh speaking with one of those many voices with which the Labor Party speaks from time to time, lt would be quite satisfactory if you curtailed expenditure after you curtailed revenue, but unfortunately for Senator Cavanagh he is out of step once again wilh his leaders, both in the other place and in this place. When the Budget was being criticised approximately 2 months ago honourable senators opposite were saying that the Government was not spending enough money.
– It was being spent in the wrong direction. Our leader criticised the expenditure in Vietnam.
– I appreciate that the Leader of the Australian Labor Party is very careful in the language he uses. Everyone will agree with that. Not only did he say that not enough money was being spent in the right direction but that not enough money was being spent generally. I am afraid that Senator Cavanagh cannot have it in the way that he seeks to put it now. The point is that the Labor Party is faced with a dilemma which it has not yet resolved, lt wants more money to be spent and yet it wants to cut down on the means which this Goverment, imposes to raise revenues, lt has not yet said what type of revenue producing scheme it would introduce in order to make up for the gap. Whilst that position prevails the Labor Party is properly to be castigated for its policy of financial irresponsibility which is devoid of any appreciation of what is required as a fundamental in the government of this country. Nothing has been more clearly demonstrated than the fatuous sort of opposition which has been raised to this measure tonight.
We have had from Senator Murphy an extravagance of language. I think he was carried away by the emotion of the case he was putting. He talked of hundreds of thousand of millions of dollars being involved. That is not the case with regard to this legislation. He stressed by way of some opposition that this was legislation which fell heavily on the family man and on business men, and that it was one of the worst ways of raising revenue. That is fair enough. I accept that a general criticism of that character can be levelled. But aso I think it should be recognised that arguments against indirect taxation of 30 years ago are not arguments which have the same applicability today. Sales tax legislation these days is not flatly regressive. Sales tax legislation now is selective. One instance of this is the fact that we have 4 schedules in which the various types of goods which are subject to sales tax are categorised and we have different rates applying to the different schedules.
– On baby powder but not on dog powder.
– 1 concede that in the particular example which Senator Cavanagh mentions. I am not sure of the facts. I accept that there are anomalies here and there, but it is the constant concern of government to be able to select, so far as it can, the rates of tax applicable to certain transactions. Over the years there has been a pretty fair appreciation of the relative rates. My own personal view is that government should show a more constant concern about the applicability of the rates applying to particular commodities in the schedules of the Exemptions and Classifications Act. I know, and I think all honourable senators like me know, that we have received year by year letters from the cosmetics manufacturers and retailers complaining about the rates of sales tax which are applicable to cosmetics. 1 think they present a fairly strong case and I should have thought that government ought to give consideration periodically by means of some committee which is charged with an examination of the sales tax legislation and the relevance for utilitarian purposes of the rates of taxes on particular commodities to whether changes ought to be made from year to year. I think this is desirable because one of the unfortunate things which government must bear in maintaining legislation of this character is the fact that it appears unrelenting and inflexible year by year in maintaining in some categories those commodities about which there is some concern. I suggest that to the Leader of the Government in the Senate (Senator Sir Kenneth Anderson) on the basis that it might be one matter that the Government might take into account in its further consideration of this legislation.
But the main attack, as I understood Senator Murphy, was an allegation that the Government did not need to introduce this 2.5 per cent increase in sales tax. He said it was introduced because the income tax cuts had necessitated it. He did not go on to say whether or not these income tax cuts should have been made and he did not indicate what he would do or what his Party would do if these tax cuts were not instituted. I think his failure to indicate what he would do is highlighted by the fact that we all know that last October both major political parties promised income tax cuts. The Government, under the Prime Minister (Mr Gorton), indicated that it would provide taxation relief in the sum of $200m over a 3-year period commencing with the Budget in 1970. We do not know what precise sum the Leader of the Opposition, Mr Whitlam, had in mind, except that he said that anything the Prime Minister could do he could do better. Of course, we all know that there is no business for Mr Whitlam which is better than show business.
Be that as it may, when you have an acknowledgement in that way that income tax cuts are what the electorate wants - indeed it is an offer which is put to the electorate by the Government and the Opposition - it indicates a recognition of community feeling, in those circumstances I do not see how government can avoid carrying out what the parties have promised. If the promise is carried out and the consequence of carrying it out represents some damage or danger to the economy, government must make up the revenues which it has lost. The Government has increased sales tax and that is the way it is making up the loss.
From the Opposition we have not had one practical suggestion, and in the absence of a practical suggestion as to how the revenue would be raised to make up the loss necessarily brought about by reason of the income tax cuts, the opposition which they pose to this sales tax measure must be regarded as hypocritical, as insincere and as being made solely for the political advantage which the Labor Party gets from opposing a tax measure which in its character must be regarded as unpopular.
Those considerations, to my mind, represent the main considerations which ought to be advanced in this debate. No government will deny the necessity for imposing tax measures or for increasing the rates of taxation, but because it is a government it has a responsibility to ensure that expenditures are met. I think that one of the features which over the years has suggested that the people of this country merit the government which they have elected is the fact that responsibility in these measures has always been one of this Government’s characteristics. In this measure, as in others, I think that characteristic is evident.
– No-one denies the right of governments to raise revenue, but one questions the need to raise revenue on this occasion. It is the method of raising revenue to which we are strongly opposed. I question also the need in this case to raise $29m by increasing from 25 per cent to 271 per cent the sales tax on a wide variety of articles. Senator Greenwood indicated that the need to raise this revenue had been brought about by certain income tax reforms which the Government has carried out. The Government carried out these reforms in a rather irresponsible and spectacular way. If 1 correctly recall the promises which the Prime Minister (Mr Gorton) made he said that there would be income tax reductions to the extent of $60m for those in the middle income group. However, in typical fashion, the Prime Minister made tax reductions right across the scale including incomes of more than $10,000 a year. The amount of revenue which the Government has lost by giving income tax relief to people who receive over $10,000 is $28m, which is $lm less than the Government expects to raise by way of this legislation. I would therefore suggest that there was no need to impose increased sales tax.
The method by which the Government intends to raise this additional revenue is. as has been stated by the Opposition, an iniquitous one. Under the method of indirect taxation the Government extracts money from the pockets of the people without them being conscious of what is happening, except at the time the lax is announced. I have spoken against the inequity of sales tax from the very moment I entered this chamber 2 years ago. The Leader of the Government in the Senate (Senator Sir Kenneth Anderson), who represents the Treasurer (Mr Bury) in this chamber, will recall that I objected strongly to the fact that 15 per cent sales tax was being imposed on children’s school books. That tax is still being imposed. This item comes under another schedule of the sales tax legislation. However, the motive is exactly the same. Sales tax is an unjust tax and it is inflationary. I do not care what Senator Greenwood has said; the fact is that an increase of 21 per cent in sales tax means that the price of goods to the consumer rises by more than that figure. Retailers do not object to an increase in sales tax. They make a profit of 50 per cent, 60 per cent, 75 per cent or even 100 per cent, on retail sales and higher sales tax on wholesale prices means higher profits.
– What difference is it going to make if there is a 21 per cent increase from 25 per cent to 271 per cent? lt will make some difference in certain instances, but not much, surely?
– lt makes a considerable difference overall. The Government has indicated that it expects to derive $29m from this legislation. This $29m will be an imposition on the whole of the community, lt will be an added imposition on the 25 per cent rate which the Government has already imposed. The sales tax goes up and up; it never comes down. The sales tax imposed on certain items has been increased from 121 per cent to 15 per cent and in this from 25 per cent to 271 per cent, lt will never be decreased. Sales tax is an imposition on the cost structure. The cost structure forces up the price of the goods. The prices start to impose further pressures throughout the community. It is these pressures which the Government has continually complained about. These are the pressures which necessitate the workers and the farmers demanding increased wages and returns on their commodities. It is these pressures which are causing so much unrest in the community.
The Opposition indicated early in this session by way of questioning of the Leader of the Government that the Trade Practices Act ought to be properly implemented and the States ought to introduce complementary legislation so that there will be some form of profit control. In other words, the Opposition believes that profit margins should come under some sort of supervision. At present there is no supervision whatever of profit margins and there is no supervision of the arrangements which are made by some firms to fix their own price levels. There is nothing to prevent firms from making a profit on sales tax. The Leader of the Government ridiculed the suggestion that there should be such a thing as price control. I think he would be prepared to go even further and ridicule profit control, which is what it should be called. Unless there is some steadying influence over the movement of prices and unless the Government accepts responsibility for not injecting further costs into the price structure we are going to have an ever increasing inflationary spiral and an increase in the prices of basic necessities. As I have said sales tax is inflationary. A grocer who buys a delivery van will pass the cost on to the consumer. lt is necessary in Australia to have some responsibility accepted by the Government for profit control.
Senator Greenwood said that no suggestion had been made by the Opposition as to how to raise the required revenue in another way. The Leader of the Opposition (Senator Murphy) referred to the wasted expenditure on a particularly unnecessarywar. He referred also to the unnecessary expenditure on VIP aircraft. He indicated how money could be saved in many ways by avoiding the tremendous wastage which occurs in defence procurement, particularly on items such as the Fill aircraft. However, there is another way in which money could be raised in Australia. In fact, far more than the $29m which the Government is endeavouring to raise by way of this iniquitous indirect tax could be raised. I refer to the imposition of some form of taxation on share transactions. This changeover of money from one person to another does not add one iota to the productivity of the company to which the shares belong. The money merely changes hands. If the Government were to impose some form of taxation on share turnover it would rapidly derive the amount of money which it seeks through increased sales tax. In fact, I believe that if a tax had been imposed on this form of transaction the changeover of shares in the Poseidon scandal - and I call it a scandal because it was a scandal - alone would have resulted in the Government deriving income equal to the amount of $29m which it seeks by way of this legislation.
– A tax is applied at the moment, is it not?
– If a tax is already applied 1 do not think that it is sufficient.
– lt is called a receipts tax, is it not?
– A receipts duty is imposed, but it is amazing how companies can avoid paying it. For example, no stamp duty is to be paid on the transfer of assets from Mount Isa Mines Limited to a holding company which is considered to be within its structure. This transaction is going to cost the Queensland Government many millions of dollars. A proper examination of these share transactions will reveal that stamp duty is being avoided in this fashion. All I am suggesting is that this area could afford to bear some taxation. The turnover is so great that the tax imposed would need to be only small but at least it would be paid by those who could best afford it. It would be interesting to find out just how much those who made large sums of money on the Tasminex NL shares will pay by way of taxation. It is in this area that the Government should be looking to raise finance. It should be looking to the great overseas companies which have secondary companies in this country. For instance the mining sands companies which are exploiting or intending the exploit the Cooloola sands area revealed in a mining warden’s court that they had paid no tax on their operations in Australia. The reason for this is that they sell below cost to their overseas parent and so avoid paying company tax in Australia. This is a tax evasion which is carried out by even larger companies. I suspect that Queensland Alumina also falls into this category.
– The honourable senator is talking about State tax.
– No, they are company taxes and, in effect, they are also income taxes which the Commonwealth gathers on behalf of the States and min.buses to the States. In effect the sales tax is raised for a similar purpose. I suggest there are many other avenues for raising finance in this country which would avoid the necessity of imposing sales tax which, irrespective of what the Government says, bears down upon the ordinary people in the community. I ask the Government to appreciate the point of view of the Opposition which looks on these taxes as taxes which increase costs and charges and are iniquitous in the whole area of their operations. For this reason we intend strongly to oppose the Bills and vote against them.
It is all very well for the DLP to suggest that it can see no other alternative. Members of that Party say they see no need to erode the Budget as it has been presented. They suggest that at some future stage this matter can be corrected. 1 feel that the DLP shifts away from the responsibility of facing what this country desperately needs and that is a double dissolution which will take both these Houses back to the people. If it achieves nothing more than bringing the election of the Senate and the House of Representatives together it will have achieved something indeed, lt will put the policies of all parties completely to the test at the right time; that is at a time when so much dissatisfaction is found in the community. But the DLP will shirk its responsibility on al! occasions, ft goes as far as the brink and then it withdraws because it realises its popularity is not of such a great extent that the people will return its members to this place in the same numbers as at the present time. This is the secret of the voting pattern of the DLP.
One would expect the DLP to oppose this provision, but of course they know that if they opposed it we would be forced to go to the country at the same time as the House of Representatives and that would mean a loss in Queensland of one of their number and also a loss in Victoria. They are not prepared to suffer these losses. At the same time the Government is not prepared to see them suffer such losses because it is upon the DLP support that the Government depends for its majority in the Senate. I say to honourable senators: Do not fool yourselves, because that is the secret of the Government’s success. The Government will support and encourage the DLP. It will compromise with them as it did on the receipts tax legislation. It wilt compromise with them on matters of defence. In effect the Government is controlled and ruled by this Rump of 4 in this place. I am not bringing the Country Party into this debate because it is part and parcel of the Government. But this unholy alliance between the DLP and the Government has worked to the detriment of this country for the last 10 years to my knowledge. It has worked to the detriment of the ordinary person. 1 suggest that the DLP accept full responsibility for this because the Government knows no better.
– in reply - Honourable senators are debating the Sales Tax Bills (Nos 1 to 9) 1970. One would not have thought so after listening to most of the speeches. With the exception of Senator Greenwood’s and Senator Byrne’s, who spoke to the issues of the matter, the rest of the speeches varied from Norfolk Island, to transactions on the stock exchange and every other conceivable subject except sales tax Senator Keeffe waxed oratorical on all sorts of imaginary subjects which had no relationship to the Bills at all. It is a fact that this is a sales tax Bill. Most of the speeches have been in the context of a Budget speech, f sent out to find whether Senator Georges had spoken during the Budget debate. Senator Murphy is not immune to this criticism. He made a second Budget speech. I feel bound to admit that he was provoked by some interjections initially from this side of the chamber. The proposal in this Bill is something within the framework of the Budget. I thought we would have been getting down to a matter of substance on the sales tax - but I suppose this is politics.
During the debate there has been some trenchant criticism of sales tax, per se, by the Labor Party. As Senator Greenwood pointed out it is interesting to note that this tax was introduced by the Scullin Government in 1930. It is true that the rate has increased significantly since then. It is rather odd that we hear from members of the Opposition this strong criticism of sales tax as a means of raising revenue. To my recollection the Labor Party has never voted against a sales tax Bill when it has been brought forward at Budget time. Now it proposes to vote against this sales tax measure. It is almost as though they were crying crocodile tears. As Senator Georges has only been here 2 years I suppose be can be excused. Last year he did not vote against the measure. The honourable senator is in a climate in which he is trying to have it both ways. In our hearts we recognise that this is a form of raising revenue. It is used in the indirect sense. It is equally true that on this occasion additional revenue of $29m will be raised. This will continue to be a method of raising revenue.
As I said when I spoke during the Budget debate, the tendency in the free world today is to move more into the indirect field in terms of revenue raising rather than in the direct sense. As I am looking at Senator Georges I remember that he made a great contribution about taxation on earnings over the $10,000 mark. Something like 4,950,000 people pay tax and only 1 per cent of that number have a taxable income of over $10,000. So oratorical remarks we have heard tonight really are not germane to the issue. We all understand these facts. It would not matter whether we were in Government or the Labor Party was in government; sales tax would be imposed. It is a form of raising revenue which is necessary for the administration of government. In fact on this occasion it provides for an increase in revenue of some $29m.
I do not think I need perpetuate what has been going on all night or to get into a second Budget debate. Let us face it: This is a revenue raising tax - an essential tax for the purpose of raising revenue for Government expenditure. I suggest that the Opposition is making a great mistake on this occasion. As distinct from former occasions, this is simply a Budget item. The Opposition recognises this fact. However, because of some political manoeuvre, perhaps because of a special event to take place on 21st November, the Opposition has decided to make a great spirited effort this time in opposing this Bill and voting against this increase in sales tax. The Opposition has had since 1949 to vote against sales tax. It has not seen the light before and I do not think it is sincere on this occasion.
That the Bills be now read a second time.
The Senate divided. (The President - Senator Sir Alister McMullin)
Majority . . . . 2
Question so resolved in the affirmative.
Bill read a second time and reported from Committee without requests or debate; report adopted.
Motion (by Senator Anderson) put:
That the Bills be now read a third time.
The Senate divided. (The President - Senator Sir Alister McMullin)
Majority . . . . 2
Question so resolved in the affirmative.
Bills read a third time.
Debate resumed from 13 October (vide page 1068), on motion by Senator Sir Kenneth Anderson:
That the Bill be now read a second time.
– One of the alterations to the exemptions and classifications contained in this Bill was brought to my notice and I asked the Minister for Civil Aviation (Senator Cotton) a question on it the other day. I understand that Qantas Airways Ltd, which was enjoying exemption from sales tax, will not enjoy that exemption after this Bill becomes law. I asked the Minister whether that was true and whether it was a fact that this alteration would cost Qantas in the vicinity of $lm a year. He said that it was true that this was happening, but at that stage he was unable to confirm or deny the figure I suggested. I am wondering whether he has any more information now. As I understand the position, the estimate is that this alteration will cost Qantas about $900,000 a year, plus the cost of extra staff that will have to be employed.
Also, I would like to know why Qantas has to lose this exemption at this stage. Is it because of pressure from overseas air lines which think thatthey will obtain some gain from this alteration? Is there some agreement under which they can exert pressure? What warning did Qantas have of this alteration? As I understand the situation, it came very suddenly and has caused a great deal of trouble in future budgeting by Qantas. It does not take a lot of reasoning to work out that if a company is budgeting and it thinks that it has another$1m a year to spend and it suddenly finds that it has not, its planning will be thrown out to that extent. Can we have some comments from the Minister in regard to this matter?
– I will have to be very quick. In response to Senator Willesee’s question, I directed this matter to Qantas Airways Ltd within about 6 hours. He andI are in 2 different positions. He has information from Qantas that I am unable to obtain. Officers of Qantas told me that it was impossible for them to arrive at an accurate figure for me to give to Senator Willesee. They did not know what it was. I said to them: ‘Can you give us some indication, such as between something and something or something plus or minus?’ They said: ‘No, we cannot. It will take an involved calculation over some period of time to work it out. We will need the help of the Treasury and the Taxation Branch on this matter. Therefore, Mr Minister, we cannot help you’. I said to them: ‘We want it urgently and quickly’. They said: ‘We do not have it. So, perhaps there is a lightning fast calculating genius at Qantas who has all these things in his head but is keeping them especially for his close friends. I would like to be able to say that I will obtain this information for Senator Willesee as fast as I can; but, of course, the limitation that I have is that I have to work through the official people who run Qantas.
The other point that I mention to Senator Willesee is that, as far as I can detect, it is a fact that no undue influence was used by anybody. This was regarded by the Treasury as a proper adjustment in a situation which it thought conferred on Qantas a benefit that properly the airline ought not to have in the competitive world of international air traffic in which it lives.
The other point Senator Willesee makes is that this alteration will cause tremendous adjustments in Qantas budgets and will cause some great difficulty. That has not been communicated to me as the responsible Minister. The Qantas budget comes down regularly. There has been no request for revisions or for things to be held up. So, I will do everythingI can to obtain the information for Senator Willesee; but I cannot go along with him on the amount he mentions the problems this adjustment will cause, the difficulties it will create or the extra staff that will be required. So far all this information has been denied to me.
That the Bill be now read a second time.
The Senate divided. (The President - Senator Sir Alister McMullin)
Majority . . . . 2
Question so resolved in the affirmative.
Bill read a second time.
Nuclear Fallout - Trade with China
– Order! It being after 10.30 p.m., in accordance with the sessional order relating to the adjournment of the. Senate, 1 formally put the question:
That the Senate do now adjourn.
– I will not detain the Senate for long. Today I received replies to questions Nos 584 and 586. I am not satisfied with the replies and I propose to mention some of the facts associated with them. Honourable senators will recall that earlier this year Senator Wilkinson and 1 endeavoured to obtain some details of the nuclear fallout in areas of northern Australia. Some weeks ago I asked the appropriate Minister whether he would supply to the Parliament exact and up to date details of measurements of nuclear fallout elements caesium 137, strontium 90 and iodine 131 in the area of Launceston and the Atherton Tableland. That was supplemented by this question:
Will the Minister provide for the Parliament an accurate assessment in layman’s language of the degree of nuclear fallout in the eastern States of Australia as a result of recent French nuclear bomb tests in the Pacific? Will the Minister also advise in how many areas of Queensland the fallout was measured and of the degrees of difference in the fallout measurements in the various areas of that State?
Frankly, I am not satisfied with the replies I received today to those questions. My doubts have been reinforced by replies to questions we of the Opposition have asked about the establishment of the Jervis Bay nuclear power station. On the last occasion on which I asked in the Senate whether the type of establishment to be set up there would lend itself at a later date to the production of nuclear weapons, I was told by the Minister concerned that it was not known what type would be set up. It was not known whether raw uranium would be used. The Eighteenth Annual Report of the Australian Atomic Energy Commission was tabled today. At page 13 it states:
After Cabinet consideration of the report of the feasibility study, and further discussions with the New South Wales Government, the Prime Minister announced in October 1969 that the Commonwealth Government would ‘take Australia into the atomic age by beginning the construction of an atomic plant at Jervis Bay to generate electricity. He said: ‘We believe that Australia will make increasing use of atomic power in the years ahead, and that the time for this nation to enter the atomic age has now arrived.’
We still do not know the type of reactor that will be used at Jervis Bay. Today has particular significance because an aerial bomb explosion took place in mainland China. In addition, two underground explosions occurred, one in the United States and one in Russia. On the news broadcasts 1 heard nothing about protests by this Government about the aerial explosion in mainland China. Perhaps it is too far away, or we do not want to offend the Chinese because they might cut down on their purchases of our wheat. No attempt has been made to ratify the nuclear non-proliferation treaty. No real protests have been lodged about the French atomic tests in the Pacific.
In a moment I will quote from the replies I have received, as they bear out what 1 am about to say. On 15th May an atomic test was carried out in the Pacific by France. An explosion of a so-called hydrogen bomb took place on 3rd July, more than 2 months ago. Although it is now 15th October, the replies furnished today by the Minister for Supply (Senator Sir Kenneth Anderson) state that testing of the fallout from those explosions has not yet been completed. The Minister said in one of his replies:
The monitoring of caesium 137 and strontium 90 has been in progress since 1957. Although fallout from the USSR and US tests in the early 1960s is still occurring in Australia and the more recent tests by France have meant some small addition-
I would say that that is a rather hypocritical statement.
What do you mean by ‘hypocritical’?
– 1 will explain it to you in a moment.
Obviously you cannot explain the words you use. Are you referring to the author or to the statement, in using the word hypocritical’?
– I am referring to your advisers, if you want to put it that way, or you yourself.
– That is what I wanted you to make clear.
– It comes from either category. We are living in a sick society and it is no wonder that we are going bad in the middle.
– You find it easy to throw words around, but you should pull yourself up a bit.
– I hope you can back up your statements later, because you have certainly given nothing in these replies. I am sorry about that, Mr Deputy President. The Minister provoked me into making those statements. The reply I was quoting continues: the annual deposit of these two long-lived radioisotopes in 1968 was less than a fifth of the deposit in 1964. This annual downward trend has continued. The annual rate of deposition of caesium 137 and strontium 90 is well below the value which the National Radiation Advisory Committee accepted in November 1965 as constituting no significant hazard to the health of the Australian population then or in the future. This would embrace all locations, including the areas of Launceston and the Atherton Tableland.
Two paragraphs further on the Minister refers me to an article that appeared in the Australian Journal of Science’ of December 1969, in respect of data for 1968. A further reference is made to the Australian Journal of Science’ published in May 1969. Those extracts from the scientific journals set out in scientific terms the fallout over Australia from nuclear weapons tested by France in Polynesia from July 1968 to September 1968. No layman could understand them. One would need a science degree to be able to absorb the statements made by the scientists who compiled the report of May 1969. That is also true of the article that appeared in December 1969. It sets out the fallout of strontium 90 in the Australian environment during 1968. Those journals contain significant statements. If one had made a study of these matters one would be able to make some assessment. The average layman who has made no study of nuclear fallout finds it virtually impossible to understand the statements in the journals.
I want to know - and I ask this with all due respect of the Minister - why the tests have not been completed. I know that scientists say that results can be taken over a period of 35 days, but apparently the preferable period is 50 to 60 days. If there were an explosion in May this year why is no report available now? If the hydrogen bomb were exploded on 3rd July this year why Ls no report available? There must be some explanation for it. Why does the Government indulge in secrecy regarding fallout from nuclear tests? Why is it very tame cat in its approach to protesting? Why does it have no knowledge of what will happen about the establishment of the nuclear power station at Jervis Bay? 1 make this charge - and i make it with sincerity and with some misgivings - that either the senior advisers - and I ani not talking about the run of the mill scientists or the men who do all the hard work - have misinformed the Government or the Minister does not want the country to know what the fallout is, particularly in the milk producing areas of Queensland. In the ‘Australian Journal of Science’ the scientists who wrote the story admit that the fallout in the Queensland area is appoximately double that in any other State. They still maintain, of course, that it is below the danger level. Who knows what the danger level is? Many years ago it was said that DDT, the pesticide or insecticide, had no effect on human beings. Today countries are banning DDT because of its cumulative effects and long-term dangers, particularly upon the young. Who knows what the cumulative effect of strontium 90 or iodine 131 will be? I have talked to medical people about this. They admit that they do not know what the long term effects are.
In order to bolster the war-mongering sections of the community members of the Government are deliberately suppressing information that ought to be made available. I ask a simple question. I ask for the measurements taken of these 3 elements resulting from fallout to be set down in black and white. The Government is refusing to give this information either because it has been hoodwinked by its high level technical officers or because it is deliberately suppressing information that ought to be made available because it wants to suppress the information and because it fears that the fallout could have a long term effect on the nation’s children and on generations yet to come. I challenge the Minister to tell the truth about this and to put down something in black and white, if he has the courage. If he has not the courage. I will say so for the next 5 weeks until the Senate election campaign is over and I will continue to say it afterwards. The Minister either accuses his advisers or admits that he has fallen down as Leader of the Government in the Senate.
(10.43)- First of all 1 would say to Senator Keeffe that his trouble is that he wants to see a bogy. Because he wants to see a bogy he is prepared to malign everybody who does not want to see the bogy with him. He maligns officers of the Public Service and myself. He takes away their character by inference and by the snide use of words.
– That is a lie.
That is not a lie and the honourable senator has proved it by his own words.
The DEPUTY PRESIDENT (Senator Bull) - Order! Senator Keeffe’s remark is offensive. The honourable senator will withdraw it.
– I will withdraw it. lt is an untruth.
Senator Keeffe sought some information. I obtained some information for him. That information did not suit him. Therefore he went into this diatribe to which we had to listen. Tomorrow I will have officers of my Department study what he said. I will ask them to disregard all the spurious matters. I will ask them to ascertain whether there are any matters of substance in what he said. If there are, I will provide an additional answer.
Whilst I am on my feet, if I may, with your permission, Mr Deputy President, I wish to mention that at question time today I answered 2 questions asked by Senator Murphy about trade with Red China. In my reply I indicated that strategic goods would not be supplied because of a certain procedure. I refered to the United Nations. To the extent that I referred to the United Nations I was completely at fault. I had in mind of course the COCOM list which was issued by the Co-ordinating Committee of the North Atlantic Treaty Organisation countries. Because of the pressure of question time, I said ‘United Nations’. Actually where I was at fault was that I was confusing the issue with Rhodesia. The United Nations has applied sanctions in relation to Rhodesia. I confused COCOM with the United Nations. I wanted to correct that at the first opportunity.
Question resolved in the affirmative.
Senate adjourned at 10.45 p.m.
Cite as: Australia, Senate, Debates, 15 October 1970, viewed 22 October 2017, <http://historichansard.net/senate/1970/19701015_senate_27_s46/>.