House of Representatives
9 October 1953

20th Parliament · 1st Session

  1. House of Representatives
  2. 20th Parliament
  3. 1953

Mr. Speaker (Hon. Archie Cameron) took the chair at 10 a.m., and read prayers.

page 1225

QUESTION

CRANIUM

Mr GREENUP:
DALLEY, NEW SOUTH WALES

– Has the Minister for Supply, on behalf of the Government, completed preliminary arrangements for a new uranium- agreement with the United Kingdom? Will the new agreement cover production from all new fields discovered in Australia? Is it the intention of the Government that British private interests should be invited’ to develop fields in Australia under this agreement? Will the Minister give an assurance to this Parliament and the people that no long-term agreement will be concluded before the terms and substance of such agreement are submitted to this Parliament for ratification? .

Mr BEALE:
Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

– The question of the honorable gentleman is wildly speculative. I have not . concluded any agreement, nor has the Government done any more than discuss this matter with Lord Cherwell during his presence in Australia.

page 1225

QUESTION

THE PARLIAMENT

Mr GULLETT:
HENTY, VICTORIA

– I desire to ask the Vice-President of the Executive Council whether it is a fact that we ‘are passing through the longest period in the history of this Parliament during which the Opposition has failed to move a single motion for the adjournment of the

House! Is this circumstance indicative of the apathy with which the Opposition regards national affairs or has the Opposition no valid criticism to make of Government policy?

Mr SPEAKER:

– Order ! The VicePresident of the Executive Council is not responsible for the actions of the Opposition.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Do you rule that I am not to answer the question, Mr. Speaker, or have I the option of doing so?

Mr SPEAKER:

– I do not think that it is a question which affects the Minister. He has no control over the Opposition.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– If I am permitted to answer all that I wish to say is that if the Opposition will not fight there is no way to make it do so.

Mr JOHNSON:
KALGOORLIE, WESTERN AUSTRALIA

– I address a question to you, Mr. Speaker. I was intrigued by a ruling which you gave yesterday on a question asked by the honorable member for Grayndler. You ruled, bit, that an honorable member could neither speak nor ask a question if he was not at the seat or place allotted to him in this chamber. Not long ago you, sir, occupied a seat on this side of the House and on many occasions, after having commenced your speech from your rightful place, you concluded it at ot near the front bench and, at times, minus your boots. If you were then conforming to the rules of the House, what standing order has since been amended to prevent honorable members from enjoying a privilege similar to that . of which you yourself took advantage?

Mr SPEAKER:

– The honorable member has raised a most interesting question, but what was done by me when I occupied a seat adjacent to that which the honorable member now occupies, and other seats in this chamber, has nothing to do with my rulings from the Chair. They are entirely different matters. I think that I should make it perfectly clear that the Standing Orders provide that as soon as a member has been elected to this place he must decide where he intends to sit. The relevant Standing Orders are 30, 31 and 32. Standing

Order 57 provides that when a member enters this chamber he shall proceed forthwith to’ his own seat and not to the seat of another honorable member. It is in their own seats that I expect honorable members to seat themselves. But if an honorable member, having commenced his speech from one of the seats at the back of the chamber near where the honorable member for Kalgoorlie sits, desires to get to close quarters with some of his friends, as I myself, used to do, I shall have no objection if he follows my very good example.

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

– I ask the Chairman of Committes whether it is his practice to follow the same procedure when calling members in committee-

Mr SPEAKER:

-Order! Matters relating to committee debates must be dealt with in committee.

page 1226

QUESTION

COMMONWEALTH EMPLOYEES’ FURLOUGH ACT

Mr HAWORTH:
ISAACS, VICTORIA

– In March last the Parliament passed an act entitled “ The Commonwealth Employees’ Furlough Act “, which provided that employees who had served for more than eight years in the Commonwealth Service, and who had been retrenched since July, 1942, shall be entitled to pro rata leave or pay in lieu. It appears that payment has unfortunately been withheld from some employees because of differing legal opinions in regard to certain definitions contained in the act. Is the VicePresident of the Executive Council able to tell the House whether the matter has been satisfactorily resolved and whether the Government now proposes to approve of these payments?

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The Government thought that it had made its intention perfectly clear when the bill was introduced in the House, but differences of opinion arose as to the interpretation of the word “ retrenchment “. I understand that these differences have now been resolved and that approvals are now going forward.

page 1226

QUESTION

BASIC WAGE

Mr KEON:
YARRA, VICTORIA

– In view of the farreaching economic decisions which the Commonwealth Arbitration Court is now called upon to make, and the fact that as in future automatic adjustments of the basic wage, based on the C series index are not to be made, the court will have to make such decisions on its own account, can the Minister for Labour and National Service say what action will be taken to supply the court with expert advice and staff in accordance with the provisions of the Commonwealth Conciliation and Arbitration Act?

Mr HOLT:
Minister for Immigration · HIGGINS, VICTORIA · LP

– The matter that the honorable member has raised has been examined from time to time, but it is felt that already there is conveniently available to the court information which can be gathered from various departments and from the Commonwealth Statistician. The honorable member will be aware that in the long basic wage hearing recently concluded the Commonwealth Government was represented by counsel for the specific purpose of assisting the court with any information it might need. That course has been followed on other occasions by this Government and by previous governments. Whatever weaknesses may exist in our present system of conciliation and arbitration, there is no lack of adequate information.

page 1227

QUESTION

ROADS

Mr DUTHIE:
WILMOT, TASMANIA

– In view of the need for a national roads policy in this country and the. grave and rapid deterioration of our strategic and secondary roads because of the increased speed and weight of motor vehicles, will the Vice-President of the Executive Council give an assurance that serious consideration will be given to the establishment of road research laboratories, financed out of the proceeds of the petrol tax, so that constant tests of materials and road construction methods may be made by the Commonwealth on behalf of State road authorities? I visited such a laboratory in England last year, and I was deeply impressed by its splendid work in the interests of better roads in the United Kingdom.

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Surely the honorable member must realize that there is a vast difference between Great Britain where there is only one government, and Australia where there are six States whose responsibilities include roads. I cannot, on behalf of the Government, give the assurance that the honorable member seeks. The States already have their own research authorities to advise them on road construction.

page 1227

QUESTION

ARMED FORCES

Mr CURTIN:
WATSON, NEW SOUTH WALES

– When does the Minister for the Army intend to make a statement to the House about the Army pay-roll robbery in Japan? Is it a fact that the sum of £200,000 is now involved, and not £60,000 as was first supposed?

Mr FRANCIS:
Minister for the Army · MORETON, QUEENSLAND · LP

– I made a definite statement to the honorable member for Watson yesterday that his information on this matter was not correct. I do not propose to reply to any other questions on this subject, because it is mib judice. A court-martial is now proceeding in relation to this matter.

Mr GRIFFITHS:
SHORTLAND, NEW SOUTH WALES

– My question, which is addressed to the Minister for the Army, refers to his alleged statement outside the House yesterday that a certain soldier, who had been stationed at Woomera, had been granted compassionate leave, from which he did not return. Will the Minister produce the application for leave, the duplicate of the leave pass, and the warrant for travel on the aircraft, so that the fears of the wife of the soldier as- to whether her husband has met with foul play can be allayed ?

Mr FRANCIS:

– The honorable member for Shortland raised this matter shortly before the expiration of the time allotted for “ Grievance Day “ yesterday and, consequently, I did not have an opportunity to reply to him.

Mr Griffiths:

– The Minister was not in the chamber.

Mr FRANCIS:

– I want to make it clear that the honorable gentleman knows more about the case than he indicates, because I have written to him constantly about it, and on the day before he spoke he should have been in possession of a letter setting out the full details.

Mr Griffiths:

– I received a letter yesterday.-

Mr FRANCIS:

– There are no suspicions, no fears, and no misunderstandings in this matter. The soldier in question was only engaged as an office clerk in the transport section of the Long Range Weapons Testing Establishment at Woomera. He has had domestic difficulties. On more than one occasion, he applied for special compassionate leave in order that he might have discussions with his wife. He expressed the hope that if he was granted further special leave, the problems which were disturbing them would be settled. He was granted that special leave, and he, with other persons, travelled from Woomera by a courier leave plane bound for Adelaide. I believe his wife, who had. been living at Port Augusta, had gone to New South Wales. When his leave expired, he did not return to camp and has not yet returned, although every endeavour is being made to apprehend bini. There is no need for anxiety in connexion with this matter. There has been no duplicity. The soldier, who was only engaged on clerical duties in the transport section, obtained leave in the ordinary way.

page 1228

QUESTION

GRASSHOPPERS

Mr DRUMMOND:
NEW ENGLAND, NEW SOUTH WALES

– Has the attention of the acting Prime Minister been directed to statements from responsible leaders in rural areas that a grasshopper plague is threatening practically the whole wheat crop of New South Wales? Reference has been made particularly to the infestation in the Tamworth and associated districts, but the plague extends through to the Victorian border. In view of the fact that « disaster to this major pail; of the Australian wheat crop would have most serious effects upon the financial resources of Australia in the coming year, and upon the cost of living, will the right honorable gentleman confer with . his colleagues with a view ‘to ensuring that the concerted action shall be taken by Commonwealth and State authorities to enable primary producers to combat this plague, which goes far beyond their ordinary responsibilities ?

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The honorable member for New England does me too much honour when he addresses me as the acting Prime Minister. I know that he has always been interested in rural matters, and I give him an assurance that I shall discuss the grasshopper plague with the Minister for Commerce and Agriculture, who is visiting some of the States at the present time on business associated with his department. I am certain that the Minister, in turn,’ will confer with the New South Wales Government and, if necessary, offer to co-operate with it in endeavouring to combat the plague.

page 1228

QUESTION

ROYAL AUSTRALIAN AIR FORCE

Mr OPPERMAN:
CORIO, VICTORIA

– Does not the Minister for Air consider that the anonymity, which surrounds members of the Royal Australian Air Force performing official duties is being carried almost to absurd lengths? In explanation of my question, I point out that a report concerning a flight made to the Woomera rocket range by obsolete Mustang aircraft, referred to “ experienced officers, under a groupcaptain who is a senior technical officer in addition to being a pilot whilst another officer was described as a previous commanding officer of the Royal Australian Air Force No. 77 Squadron, who was awarded the Distinguished Service Order and the Distinguished Flying Cross.- As it is obvious that the name of that officer must have been mentioned when he received those awards, is it not also obvious that any one who wished to devote the time to this type of puzzle could find out his identity and that of the other officers to whom I have referred? Would it not be better in such reports to refer to the names of the officers concerned and also to the excellent work which they are performing, thus giving members of the public an opportunity to become acquainted with their work, as they are acquainted with the work being done at Woomera by Sir William Penney and other scientists?

Mr McMAHON:
Minister for Air · LOWE, NEW SOUTH WALES · LP

– There appears to be no good reason for anonymity in respect of the officers to whom the honorable member has referred. I do not know why the names were suppressed, but I shall find out. I shall also endeavour to ensure in future that if publication of the names of the men concerned will be for their good and also that of the service, they shall be published.

page 1229

QUESTION

CANBERRA

Mr FREETH:
FORREST, WESTERN AUSTRALIA · LP

– I direct a question to the Minister for the Interior. Are members of the Parliament allowed to reside in government hostels in Canberra other than the Hotel Kurrajong? Have any exceptions been made to the general rule? Are charges for accommodation in such hostels lower than those for the accommodation of honorable members at the Hotel Kurrajong ?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– As far as I know, there is no general rule which lays down where honorable members shall live in Canberra. I have no objection if an honorable member chooses to sleep in a park. Most honorable members reside at the Hotel Kurrajong, but some reside at the Hotel Canberra and others are accommodated at other hostels. I underHand that the honorable member for the Australian Capital Territory resides at Reid House, where the accommodation charges are very much cheaper than are those at the Hotel Kurrajong. But that is no reason why he should not live there. We try to avoid telling anybody where he must live. I was surprised that the honorable member for the Australian Capital Territory did not display the same attitude of mind towards the Minister for Territories as has been displayed by other honorable members in his case.

Mr J R FRASER:
ALP

– ‘Can the Minister for the Interior inform the House whether it is a fact that Reid House, which charges a relatively low tariff and provides less sumptuous conditions than those provided at other government hostels, has, during the last twelve months, shown a profit, whilst the Hotel Kurrajong, at which the Minister resides and which provides more comfortable accommodation, has operated at a considerable loss?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– I have not in my mind details of the accounts of Reid House. I know, aud the information has been published for all who wish to read it, that the main loss on the hostels this year was that incurred by the Kurrajong Hotel.

Mr Ward:

– That was because of the special furnishings that were supplied for the Minister’s room.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– Similar furnishings were also put in the rooms of members of the Labour party. They have been put in for the benefit of other people as well, in order to improve conditions. As honorable members know, it is impossible for a hotel, without incurring loss, to reserve accommodation for members of Parliament during a session, and sometimes for committees and other people who come to Canberra when the House is not sitting. For that reason I dp not think anybody could reasonably expect the Hotel Kurrajong to operate at a profit. Perhaps the loss might have been less had the honorable member for the Australian Capital Territory moved his quarters from Reid House to the Hotel Kurrajong now that he is a member of this Parliament, in which case he would bis obliged to pay a. little more for accommodation. This matter is perfectly open and, as far as I know, nobody feels that there is any reason for doubt, in connexion with it. I am glad to say that most of the government hostels in Canberra operated at very little loss last year. The Hotel .Kurrajong, of course, made the biggest loss, but I do not personally sec how that could be avoided in the circumstances. A loss would have been made irrespective of the extra piece of furniture put into my room or the quantity of food which the honorable member for East Sydney ate.

Later:

Dr EVATT:
BARTON, NEW SOUTH WALES

– My question is supple:mentary to the question asked by a government supporter of the Minister for the Interior in relation to Reid House, Canberra, and the honorable member for the Australian Capital Territory. Was that question asked and answered by prearrangement. and was the purpose of it to deter the honorable member for the Australian Capital Territory from pursuing his criticism of the conduct of the Australian National University in relation to its houses?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– I do not know exactly what the Leader of the Opposition wants me to answer to that question.

Dr Evatt:

– Only the facts.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

-Well, the facts are that any member of this House is entitled to ask a question and that, if the question is in order, Mr. Speaker will allow it. I do not believe for a minute that the honorable member for the Australian Capital Territory intended that his inquiries into this matter should have had the result that they had yesterday, but we must accept the responsibility for our actions and the honorable member for the Australian Capital Territory, by his criticism yesterday, caused a newspaper to publish certain headlines which made it appear that there was something peculiar about the action of the Minister for Territories in renting a house from the Australian National University.

Mr Ward:

– It looks queer to me.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– The honorable member’s spectacles are so different from those of everybody else that everything looks queer to him. On the general question of whether the university should let houses, the people of Australia have been persuaded by big headlines in the newspapers to believe that there is something wrong about a Minister renting a house at the university. I make it clear that in my opinion, more accommodation should be provided in Canberra for. honorable members, particularly those from distant places such as Perth, North Queensland, or the Northern Territory. The Department of Works is building two and three bedroom flats in Canberra and I hope that some of them will be available for honorable members and their families, if they require them, so that members of this Parliament can enjoy more of the family life to which they are entitled.

page 1230

QUESTION

ELECTORAL

Mr LUCK:
DARWIN, TASMANIA

– I ask the Minister for the Interior whether, if a Commonwealth census is to be conducted this year or early next year, the Commonwealth electoral rolls could be checked for accuracy in conjunction with the taking of the census, particularly in instances in which State andFederal rolls do not agree? Can the Minister say when electoral redistribution, if found to be necessary, will be made?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– I do not know the actual date of the census, but I think it is to be taken about the middle of next year. Preparations are being made for it now because at least eight months is needed for the assembly of the necessary staff and equipment and the completion of the preliminary organization. I do not know what happens after that, and I am not prepared to prophesy at the moment. At any rate, the electoral rolls are checked from time to time. In fact, they are checked continually, and supplementary rolls or new rolls are printed before any election takes place. I think that new rolls will probably be issued for the general election next year. In any case it would be of no use to check the Commonwealth rolls against the State electoral rolls of Queensland, for example. I think we should prefer to make our own check separately.

Mr SWARTZ:
DARLING DOWNS, QUEENSLAND

– As a Commonwealth census is to be held next year, will the Minister for the Interior confer with State governments which operate electoral rolls under State jurisdiction, and ascertain whether they will accept, in future, the Commonwealth electoral roll which will be brought up to date after the census? I refer particularly to Queensland.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– I thank the honourable gentleman for his suggestion and will make inquiries. In the case of the State of Queensland, I am not optimistic about the result.

page 1230

QUESTION

HEALTH AND MEDICAL SERVICES

Mr FITZGERALD:
PHILLIP, NEW SOUTH WALES

– Will the Minister for Health say whether it is true that the medical benefits scheme does not provide for people who suffer from what are described as chronic illnesses? Is he aware that stomach ulcers, blood pressure, and arthritis, to mention only a few common complaints, are listed amongst these so-called chronic illnesses? If so, what action does he intend to take in order to provide for the needs of these people and relieve the grave injustice from which they now suffer?

Sir EARLE PAGE:
Minister for Health · COWPER, NEW SOUTH WALES · CP

– I made what I thought was a very comprehensive statement on this matter yesterday, when I pointed out that one of the biggest health insurance organizations in Australia had decided to remove the ban on what are called pre-existing illnesses, which at present are not covered by the medical benefits scheme. This organization will lift the ban in each instance as soon as the person concerned has been insured for a period of two years. At present, such persons are paid the Government’s share of the benefit if they are insured.

Mr Fitzgerald:

– The insurance organizations do not pay benefit.

Sir EARLE PAGE:

– The organization that I have mentioned will do so if the person has been insured for two years, which I think is a very reasonable arrangement to make. I shall not argue the point with the honorable member, who, apparently, like everybody else, wishes to have a low rate of premium under the insurance scheme in order to allow people in the lowest income groups to share in its benefits. The insurance organization must remain solvent, and in order to ensure solvency, it has had to adopt a system under which persons suffering from pre-existing illnesses must obtain a certain degree of equity in the fund before they can obtain benefits. The Government has insisted that persons who contract these diseases after insuring even though they be chronic in their natura, must be covered by an insurance organization as a preliminary to their registration.

Dr. H. V. EVATT, M.P.

Mr PEARCE:
CAPRICORNIA, QUEENSLAND

– In directing a question to the Vice-President of the Executive Council,. I remind the right honorable gentleman that some time ago I asked whether the taxing clerk of the High Court of Australia had informed the Government what amount of money was paid to the Leader of the Opposition when he acted as counsel for the Communist party in a High Court case some time ago when judgment and costs were entered against the Australian Government. Will the Vice-President of the Executive Council inform the House how much the Leader of the Opposition was paid for his services to the Communist party-

Mr Whitlam:

– That is a lie. He appeared for a trade union.

Mr SPEAKER:

– I believe that I heard an honorable member say “ That is a lie “. Did the’ honorable member for Werriwa (Mr. Whitlam) use those words ?

Mr Whitlam:

– :Yes, I did.

Mr SPEAKER:

– Order! The honorable member will withdraw the word “lie”.

Mr Whitlam:

– It is true, but I withdraw it.

Mr SPEAKER:

– Order ! The honorable member for Werriwa will withdraw the word unconditionally, or I shall name him.

Mr Whitlam:

– I withdraw in deference to you, Mr. Speaker. The Leader of the Opposition appeared for a trade union.

Mr Bryson:

Mr. Bryson interjecting,

Mr SPEAKER:

– Order ! The honorable member for Wills (Mr. Bryson) will remain silent. Unless honorable members refrain from interjecting, somebody will be named shortly.

Mr PEARCE:

– If the Vice-President of the Executive Council is not in possession of the information to which I have referred, will he secure it at an early date? It is said that between £4,000 and £5,000 is involved and I am one of many people who would like to know the facts.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The honorable member for Capricornia has posed a most interesting question. I shall certainly give consideration to it and advise the honorable member after inquiries have been made.

Dr EVATT:

– I wish to direct a question to the Vice-President of the Executive Council supplementary to that asked by the honorable member for Capricornia. Will the right honourable gentleman make it perfectly clear that I did not appear for the Communist party at all? The suggestion that I did so is completely untrue, and it would be a lie if the honorable member for Capricornia spoke with a knowledge of the facts. If he will study the facts, he will discover that I did not appear for the Communist party at any stage.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– , I understood, Mr. Speaker, that the Leader of the Opposition was to address a question to me, but in fact, he made a statement. He did not have leave to do so.

Dr Evatt:

– What I said was true.

Mr SPEAKER:

– Order ! The VicePresident of the Executive Council is correct. The Leader .of the Opposition did not have leave to make a statement.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The question that was asked by the Leader of the Opposition contained information of which I have no knowledge whatever. I shall certainly make inquiries along the lines that he has suggested and advise the right honorable gentleman.

“WHEAT MARKETING BILL 1953.

Motion (by Mr. McEwen, through Mr. Eric J. Harrison) agreed to -

That leave be given to bring in a hill for an act to amend the Wheat Industry Stabilization Act 1 048- 1053.

page 1232

INTERNATIONAL WHEAT AGREEMENT BILL 1953

Motion (by Mr. McEwen, through Mr. Eric J. Harrison) agreed to -

That leave be given to bring in a bill for an act to approve acceptance by Australia of the agreement revising and renewing the International Wheat Agreement.

page 1232

ESTATE DUTY ASSESSMENT BILL 1953

In committee: Consideration resumed from the 7th October (vide page 1125).

Clause 3 (Estates of persons dying on active service).

Upon which Mr. E. James Harrison had moved, by way of amendment -

That, at the end of sub-clause ( 1.) the following paragraph be added: - “ (/I by adding the following sub-sections: - (5.) From the value of the estate of a person who is or has been a member of the naval, military or air forces of the Commonwealth and who during service as such member or within three years of the termination of such service dies as a result of injuries received or disease contracted during such service., there shall be deducted in respect of such part of the estate as passes to the widow, children, grandchildren, parents, brothers, sisters, nephews or nieces oi the deceased a sum of Five thousand pounds or where the value of that part is less than Five thousand pounds, an amount equal to the value of that part. (0.) Subject to sub-section (3.). the question as to whether a person lias or has not died as a result of injuries received or disease contracted on service as a member of the naval, military or air forces of the Commonwealth may on the application of the legal personal representatives of such person or a person beneficially interested in his estate be determined by a Judge of the Supreme Court of a State or Territory and the Supreme Court of a State is vested with Federal jurisdiction for the purposes of determining the question.’.”.

Mr McMAHON:
Minister for the Navy and Minister for Air · Lowe · LP

– In the course of the debate on this clause, the honorable member for Balaclava (Mr. Joske) and the honorable member for Bowman (Mr. McColm) suggested that the concession proposed in it should be granted also to members of the forces serving in Japan who were attached or allotted to units supporting the operations of units in Korea. The Treasurer (Mr. Fadden), in his secondreading speech, said -

Advantage is being taken of this opportunity to authorize the allowance, in respect of the estates of persons who die on war service in Korea or Malaya, or as a result of injuries sustained or disease contracted during such service, of the special deduction of £5,000 already provided for in respect of the estates of persons who die on or as a result of service in the second world war.

The honorable members wanted an assurance that the statement I have just read applied also to the estates of personnel serving in Japan who were supporting the war effort in Korea. I assure honorable members that, on a proper interpretation of the legislation and regulations, the estates of personnel serving in Japan under the circumstances I have mentioned will be covered by the provisions of the hill. It is necessary to go through a somewhat tortuous process to ascertain what the law will be. I have gone to considerable trouble to find out the true position so that I can make it clear to the House. Clause 3 (e) dennes the term “ war service “ by reference to the Repatriation Act 1920-1952. Section 107 (b) of that act states that “ war service “ means, in relation to a member of the forces, service while a member of, or attached to, a body, contingent or detachment of the armed forces allotted for duty in an operational area. In order to find out whether personnel serving in Japan will be entitled to the benefits of this measure, we have to find out first whether they, or the units of which they are members or to which they are attached, have been allotted for duty in an operational area. That is the critical question : Has the unit been allotted for duty in an operational area? The members of such a unit need not, in fact, be in an operational area. The point is whether they have been allotted for duty in such an area. Units in Japan are, in fact, supporting the defence effort of Australia in Korea. All of those units are in Japan for that purpose; Japan is a base area for operations in Korea. In October, 1952, the Government decided that Army personnel in Japan, whose duties can be classified as supporting operations in Korea, shall be eligible for special benefits provided for personnel on active service. Subsequently, the Army took action to allot all units in Japan as supporting activities in Korea. Therefore, under the law, all Army personnel in Japan are considered to be allotted to those units and enjoy the same benefits :is those on active service. Certain exceptions existed in respect of naval personnel, but action has been taken to make it clear that all naval units in Japan are allotted as supporting activities in Korea. No difficulty has arisen in respect of the Air Force as air personnel have always been eligible for benefits provided under the repatriation legislation. Summing up, the position is that since the 28th April, 1952, all service personnel posted to units in Japan supporting operational units in Korea are eligible to benefit from the proposed exemption from payment of estate duty prescribed in this measure. I believe that that will meet the suggestion that has been put forward by my colleagues.

Dr EVATT:
Leader of the Opposition · Barton

– The statement that the Minister for the Navy (Mr. McMahon) has made with respect to the legal position is substantially correct. That is to say that there is a sufficient link-up between the provisions of the repatriation legislation and the facts that he stated to make defence personnel in Japan, who are allotted to the forces in Korea, eligible to receive the benefit of this concession. There may be a few exceptions - I do not know - but if the concession applies to the whole of the forces in Japan, the suggestion made by the honorable member for Bowman (Mr. McColm) has been met. However, that position only brings into stronger relief the point that was made by my colleague, the honorable member for Blaxland (Mr. E. James Harrison) with respect to the general principle. Although personnel are allocated to Korea, in the sense that the Minister has said, it does not follow that all the personnel involved are serving, or have served, in Korea. The point is that they may be called upon to serve in Korea. I suppose that some personnel are engaged in base duties, or organizational duties. Taking the position of the flight, at Malta as an example, it is clear from what the Minister has said that none of the Air Force personnel serving for training purposes in the Mediterranean would be eligible to receive this concession. Some of those personnel may be eligible on other grounds. For instance, they may have served in Korea, or in Japan in the sense that the Minister has indicated. The position arises that members of forces undergoing training in the Mediterranean, who are doing work of great importance in training, are subject to the risks of service which always accompany Air Force operations. Only a few days ago, a distinguished officer of that flight lost his life.

Mr McMahon:

– That man was an Australian, but he was in the Royal Air Force.

Dr EVATT:

– That may be so, but the benefit that the bill intends to give in respect of estate duty will apply not only to deceased members of the Australian armed forces, but also to members who might otherwise be liable to estate duty whether they were members of the Royal Australian Air Force, any allied air force, or even any United Nations force. The case made out by the honorable member for Blaxland is that in one aspect or another everybody in the military forces, whether serving in Australia, in our territories, in Korea, Japan, Malta or Malaya, is facing some risk in connexion with the performance of his duties.

Mr FREETH:
FORREST, WESTERN AUSTRALIA

– .So is a coal-miner.

Dr EVATT:

– A coal-miner does not face military risks. A coal-miner is dealt with by other laws covering death or disablement. Military personnel are not dealt with by the same laws. The principle was laid down during the last war by a proclamation made by Mr. Curtin, the then Prime Minister, in 1942 that all military personnel whether inside or outside Australia who died on military service, or through disability contracted during military service, should get the benefit of this precise provision. That principle continued in, operation until 1947. Is it not reasonable that this concession should apply to all the military forces of Australia irrespective of where they are performing their duties? If they are not performing their duties, then of course in the case of death this provision would not apply. Not many cases will be involved if this slight concession to the special nature of military service is given to the members of the forces. Some of the work done by members of the forces in Australia may be attended with greater risks than the service of some of our servicemen in Japan or elsewhere overseas who are not called upon to go into action. The measure does not include men on service in Malta or New Guinea, or those serving in the permanent military forces or certain other forces. Accepting the Ministers explanation of the legal position, the question is left open whether the principle, which is a reasonable one, will be really destroyed.

Mr ERIC J HARRISON:
President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I believe that the Leader of the Opposition (Dr. Evatt) has sufficient knowledge of the matter before the committee to realize that the governing act is the Australian Soldiers’ Repatriation Act. This is not the place to attempt to amend thatact. The measure before the committee covers war service, and there is a big difference between what the right honorable gentleman has suggested and war service. The right honorable gentleman would be a very brave man if he sought to alter the Australian Soldiers’ Repatriation Act in the terms of this amendment, because by so doing he would destroy the whole of the benefits that flow from that act to the men who receive those benefits because of war service. Therefore, this measure has been designed to follow the interpretation of the controlling act. We propose to follow that through, and do not intend to widen its scope and so destroy the benefits that are being received by ex-servicemen who have obtained those benefits through war service. Therefore, the Government intends to proceed with the bill as before the committee. I move -

That the question be now put.

The Committee divided. (The Chairman - Mr. C. F. Adermann.)

AYES: 49

NOES: 40

Majority . . . . 9

AYES

NOES

Question so resolved in the affirmative.

Question put -

That the amendment ( vide page 1232) be agreed to.

The committee divided. (The Chairman - Mr. C. F. Adebmann.)

AYES: 40

NOES: 51

Majority . . . . 11

AYES

NOES

Question so resolved in the negative.

Clause agreed to.

Remainder of bill - by leave - taken as a whole and agreed to.

Bill reported without amendment; report adopted.

Bill - by leave - read a third time..

page 1235

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

Secondreading.

Debate resumed from the 8th October (vide page 1223), on motion by Mr. Eric J. Harrison -

That the bill be now read a second time.

Mr LESLIE:
Moore

.- The argument that has been put forward by the honorable member for Melbourne (Mr. Calwell) and other honorable members of the Opposition has been that the Government has failed to reduce taxation because it has been estimated that £11,000,000 more in tax will be collected during the current financial year than was collected last year. Honorable members may be allowed to argue various matters in different ways but a degree of consistency is required in arguments on a matter such as this. Opposition members have claimed that the Labour Government reduced taxation during its period of office. Let us ascertain exactly what did happen during the Labour Government’s term of office. According to the table of national income and expenditure statistics which has been provided in connexion with the budget, the total amount of taxes collected by the Labour Government in the financial year 1946-47 was £393,000,000. In the’ financial year 1949-50, the last financial year in which the Labour Government was in office, the total amount of taxes collected was £556,000,000. Yet honorable membersopposite have declared that the Labour Government’ reduced taxation in that period.

Mr Curtin:

– Hear, hear !

Mr LESLIE:

– The honorable member for “Watson (Mr. Curtin) says “ Hear, hear ! “ Yet honorable members of the Opposition have claimed that because the estimated total taxation receipts for the current financial year will exceed the total collections of the last financial year, the Government has not effected any real reduction of taxation. Of course, the Government has effected a real and genuine reduction in taxation. The only real and genuine reduction both in the rate of taxation and the total amount collected has occurred since this Government has been in office. The figures on which’ I am basing my argument have been provided by the Treasury in connexion with the budget. They have not been prepared by any party politician, by the Treasurer (Sir Arthur Fadden), or by the Government. According to these figures, as I have shown, the amount of taxes collected increased steadily during the period of office of the Labour Government. It was not until the present Government took office that the total amount of taxes collected actually fell. In the financial year 1951-52 the total taxation collections of this Government amounted to £919,000,000. In 1952-53 the total was £885,000,000. It has been estimated that during the current financial year the total amount collected will be only £874,000,000. I do not know how many years have passed since the total amount of taxes collected ha.s declined but until this Government took office it had not declined since before the war. These official figures show that the Government has arrested the steep increase in taxation which has taken place ever since the Labour Government took office.

Mr Curtin:

– What authority has the honorable member for saying that?

Mr LESLIE:

– Here are the actual figures. From 1946-47 to 1949-50 when the Labour Government was in office, total collections of income tax rose by £80,000,000. In 1946-47 income tax collections totalled £208,000,000. Between 1946-47 and 1949-50 the rate of taxation was reduced, yet the total amount of tax collected rose to £208,000,000. If Opposition members are correct in c. aiming that this Government has failed to reduce taxation, because it has been « estima ted that £11,000,000 more will be collected this year than was collected last year, they had better cease claiming that the Labour Government reduced income tax if they wish to be consistent.

Another argument that has been made the theme of Labour’s propaganda is that, the Government is concerned only with the interests of wealthy people. Let us compare the record of the Government with that of Labour governments which profess to watch the interests of the small man in the community. I invite honorable members to peruse the table of income tax statistics which was presented by the Treasurer when he made his budget speech. These statistics were compiled by treasury officers and the Commonwealth Statistician. If honorable members refer to Table No. 60 they will observe that in 1946-47 an individual taxpayer with a taxable income of £200 paid in tax £8 4s. 7d. and that a person with a taxable income of £1,000 paid £141 10s. 5d. In 1948-49, a person with a taxable income of £200 paid £5 6s. 2d., and a person in receipt of a taxable income of £1,000 paid £70 6s. Those figures show that in the year in which the Labour Government reduced the incidence of income tax on the individual, it granted a tax reduction of 35 per cent., or 7s. in the £1, to the small man, but to the big man it granted a reduction of 50 per cent., or 10s. in the £1.

Mr CURTIN:

– That is not right.

Mr LESLIE:

– The honorable member for Watson has a copy of the budget papers. He should examine them more closely. The figures I have cited are taken from those papers. In 1950-51, the first year of office of the Menzies Government, the taxpayer who had a taxable income of £200 paid £3 2s. 7d., and the taxpayer with a taxable income of £.1,000 paid £40 ls. Hd. In the following year, when the Menzies Government reduced tax rates, a person with a taxable income of £200 paid £1 18s. lOd. and a person with a taxable income of £1.000 paid £39 6s. 3d. Thus, under the administration of this Government, the small taxpayer was granted a tax reduction of 38 per cent., or 7s. 7d. in the £1, but the large taxpayer was granted a. tax reduction of only .02 per cent., or one-fifth of 1 per cent., or less than id. in the £1. These figures are irrefutable.

Mr Curtin:

– If the figures are accurate, we accept them.

Mr LESLIE:

– Opposition members must accept them because they are the official figures. I hope that we shall hear no more of the deceitful argument that. because we anticipate that, as the result of the prosperity which this country is enjoying we shall receive increased income tax collections, we have not reduced the incidence of the tax on the individual. That argument is completely knocked out by the figures which I have cited. If the members of the Labour party use that argument against this Government they must use it equally against themselves. Let us hear the end of the equally specious argument that this’ Government is heedless of the interests of the small man about whom the Labour party professes to be so solicitous. The figures contained in the budget papers completely refute that argument. I can well understand that the honorable member for Watson and his colleagues hang their heads in shame’ when the very people for whom they profess to do so much good are in reality the ones who suffered most under Labour rule.

It is often said - and the statement was repeated by the honorable member for Melbourne, who is the Deputy Leader of the Opposition, last night - that what matters most is not the taxes that are taken from the people but what is left to them to spend after they have met their tax commitments. Again I shall cite figures from the table relating to national income which was circulated with the budget papers. In 1948-49, the people were able to save in payments to insurance funds an amount of £24,000,000 and in other personal savings an amount of £203,000,000. In the following year, which was the last year of the Labour Government’s administration, the figures rose slightly, personal savings and savings through insurance funds amounting to £313,000,000 and £28,000,000 respectively, [n 1952-53, when the people were supposed to be suffering so severely from the savage taxation imposed by the Menzies Government, they were able to save through payments to insurance funds £344,000,000, and in personal savings £492,000,000- an all-time Australian record.

Mr McMahon:

– When was that?

Mr LESLIE:

– That was in 1952-53. In that year the people were able to “make a phenomenal saving. These figures prove conclusively how unjustified is the Opposition’s attack on the taxation record of this Government. I can understand why the people were able to put away nearly £500,000,000 in that year and at the same time swell their savings in insurance funds. During that year the effect of the Government’s financial and economic policies began to be felt.- Black markets and controls had disappeared and goods were then displayed on the top of and not beneath the counter. Compare living conditions in the average Australian household to-day with what they were when Labour was in office. It is all very well to argue that a piece c£ household furniture costs a few shillings or perhaps a few pounds more to-day than it did five or six years ago. It does on paper, but when Labour was in office many commodities that are readily available to-day were virtually priceless. A person was lucky to be able to buy them at all, and usually his pockets had to be well lined to do so. Under the Labour Government, because of the vicious system of controls adopted by the socialists, many working people had to struggle even for some of the bare necessaries of life. There was a rationing caused by scarcity. That is the policy of the socialists. This Government has removed oppressive controls. People to-day are able to enjoy a reasonable standard of comfort, and at the same time to save considerable sums of money out of their income. I hope that the figures that I have cited will still the specious arguments of honorable members opposite about the alleged increase of taxes. There is no need for me to cite the actual assessment figures set out in the bill to prove that there is an average reduction of 12£ per cent. It is quite obvious that there is. This Government’s desire rn assist the small man is evident throughout the budget proposals. It is true that substantial income tax concessions are t.> be given this year to companies, but after all companies in accordance with this Government’s sense of fairness, carried thu main burden of tax increases in 1951-52. Let us compare this Government’s income tax proposals with those of the Labour Government. Between 1949-50 and 1951-52 the commitment of taxpayers in the lowest income tax group was reduced from £3 19s. Id. to £1 18a. a year. In the same period the income tax contribution made by the average company was increased from £3,700 to £6,800. Thus, the burden of tax was placed upon those best able to bear it. Now that we are in a position to make substantial reductions of taxes, we are levelling the scale out. The taxpayer who formerly was in the lowest income tax group now pays no tax at all. He cannot pay less than that. Is it not logical to expect that in any proposals for a reduction of taxes, the taxpayers who suffered the biggest increase in 1951-52 should receive a proportionate measure of relief? So, lot there be an end to the arguments that honorable members opposite have been advancing. Successive Labour speakers have merely repeated the fallacious statements made by the honorable member for Melbourne. Nothing new has been added to the debate. We are told over and over again that the budget is a rich man’s budget, and that because total receipts from income tax in the current year are estimated at £11,000,000 more than they were last year, no real reduction of tax is being made. If that argument is to be accepted, it can be applied equally to the time when, despite a reduction of tax scales by the Chifley Government, the total receipts from income tax in that year exceeded revenue for the previous year by £80,000,000.

I come now to the concessional reductions provided for in the act. My attention has been drawn to the plight of one section of the community - it is not a very big section admittedly - which is suffering extreme hardship because of the limits placed upon concessional deductions. I ask the Treasurer to consider extending the deductible allowance for medical expenses to include all costs incurred by parents in the purchase of medical equipment and aids for physically handicapped children. I would go further and allow all expenses incurred by a physically handicapped adult on the purchase of such equipment as a deductible allowance, provided of course ‘that no provision for it has already been made under the Workmen’s Compensation Act. This is a. direction in which substantial assistance could be given to a section of the community which is suffering from a grave disability.

Mr Thompson:

– Is the honorable member referring to what is known as artificial aids?

Mr LESLIE:

– Yes, but I go further and include such equipment as wheelchairs. The parents of physically handicapped children have to meet many expenses that are not incurred by normal families. Very often clothing has to be specially manufactured. A child who . suffers from a disability of the feet may require a specially made pair of shoes every month. Such expenses are beyond the capacity of most families, and the result is usually that other children in the family have to make sacrifices. There would be no difficulty in administering a concession such as this. A medical certificate is all that would be required. I believe, too, that there should be no limit on the concessional deduction for medical expenses incurred in respect of physically handicapped children.

Mr Curtin:

– Why has the Government not introduced those concessions?

Mr LESLIE:

– This is the first time, so far as I am aware, that the cause of the physically handicapped has been pleaded in a public place. They have been left out of the picture too long. If the honorable member for Watson will look around the Sydney suburbs he will see many families whose standard of living is seriously reduced because of expenses involved in the care of physically handicapped children.

A strong argument has been advanced to me in favour of allowing free gifts for the provision of public utilities as deductions for purpose’s of income tax. At the present time, the income tax law provides that gifts for charitable purposes may be claimed as deductions. I am of the opinion, despite the recommendation of the Commonwealth Committee on Taxation, that this principle should be extended so as to include free gifts to public utilities. Rate-payers in some districts are prepared to make a gift to a local authority towards the provision of public utilities, such as a road, hall, or clinic. Such works, amenities or facilities are not charities but the local authority, in order to provide them, would be obliged to raise loans, on which interest would be payable, or increase rates and taxes. To-day, when money is not readily available, people should be encouraged to help themselves and their district. The term “ public utilities “ could easily be defined, and I know people who are prepared to make free gifts for various purposes other than charity if they can claim the amounts as deductions for income tax purposes. I hope that the Treasurer will give serious consideration to this matter, because such gifts would mean tremendous savings to the residents of various districts, and ultimately to the Commonwealth.

I also believe that expenses incurred by a taxpayer, while undergoing medical treatment away from his home, should be an allowable deduction for income tax purposes. People who live in country districts are often obliged to travel to a city for medical attention. They may not be admitted to a hospital, and have to obtain treatment as out-patients. Those persons incur substantial expense for accommodation. The Government should examine the possibility of allowing reasonable expenses incurred in such circumstances as deductions for income tax purposes, when the taxpayer or his dependants are living away from home. I have great pleasure in complimenting the Government on having gone as far as it has to grant tax relief.

Mr CREAN:
MELBOURNE PORTS, VICTORIA · ALP

– I propose to refer to several matters some of which arise from the Income Tax and Social Services Contribution Bill 1953 and some which relate to the Income Tax and Social Services Contribution Assessment Bill (No. 2) 1953. The first matter to which I direct attention deals with the tables contained in the budget speech of the Treasurer (Sir Arthur Fadden), which purport to compare the amounts of tax payable on given incomes by taxpayers in Australia, the United Kingdom and New Zealand. An important document such as this, which has been issued by the Treasurer, should be more exact when it makes comparisons of this kind. I direct attention particularly to two footnotes to statement No. 8. The direct comparison seems to be between incomes of £600 in Australia, the United Kingdom and New Zealand. Reference to the footnote reveals that the amounts are expressed in the currencies of each of the three countries ; but I point out that £600 in Australian currency has a different value from £600 in United Kingdom currency or in New Zealand currency. It takes 25s. Australian to make a United Kingdom £1 or a New Zealand £1. A comparison, which presents a given income in Australia, the United Kingdom and New Zealand as if each has the same value is dishonest. If one of the currencies had been expressed in dollars, the comparison could not have been made. The dollars would have had to be converted into pounds.

Another footnote to the table directs attention to the fact that the tax payable in the United Kingdom includes contributions to national insurance. A similar comparison in Australia should include the amount which an individual pays for hospital and medical services. I simply point out these matters, because I do not think that valid distinctions can be drawn between taxes paid in one country and another country. I agree with the statement of the honorable member for Moore (Mr. Leslie) that the real concern is how much is taken home by the taxpayer in Australia. He is not consoled by the fact that a taxpayer in another country takes home more or less than he does. His problem is exclusively one for himself.

I direct attention, too, to some figures published on page 170 of the budget papers circulated by the Treasurer. This is an analysis of the amount of tax payable by individuals in various income groups. In the income group from £105 to £150 in the financial years 1950-51 there were 43,212 male taxpayers and 71,021 female taxpayers. Those 114,233 taxpayers paid £128,000 in tax, or an average per capita of a little more than £1. In the income group £151 to £200 there were 57,214 males and 94,687 females, and those 151,901 persons paid £389,000 in tax, or an average of approximately £2 10s. an assessment. In the group £201 to £250, there were 66,125 males and 103,335 females, or a total of 169,460 persons. Their aggregate payments were £831,000, or an average assessment of £5. Those figures show that some 435,000 taxpayers, or more than oneeighth of the total number of taxpayers paid such a small amount of tax a head in the financial year 1951-52, that the receipts could hardly have paid the administrative costs.

Those groups which I have mentioned, contained approximately 166,000 males and 269,000 females. The majority of those females would have been single girls, who were earning incomes of less than £5 a week. In my opinion, an extraordinarily good case can be made for following the principle adopted in the Estate Duty Act whereby the basic exemption has been raised from £2,000 to £5,000. The basic exemption in the income tax law, which was originally £104, should be raised to £250. Had that exemption been increased in 1950-51, some 435,000 taxpayers would have been relieved of the obligation to submit returns, and the cost to the revenue would have been only £1,348,000, because the average assessment for the whole year in this group was only a little more than £3. I reiterate that a good case exists, in terms of purchasing power of the £1, to raise the statutory exemption from £104 to £250. If that were done, the staff of the Taxation Branch of the Treasury would bc relieved of many administrative problems, and the number of persons required to submit returns would ‘be reduced by. some 435,000 without a significant reduction of revenue, certainly not in terms of the concessions that have been given to other groups in the community, particularly companies, which .are to benefit to the extent of £33,000,000. Such statistics reveal that two out of every three persons in the group to which I have referred ure females who are in receipt of income of £5 a week or less. I suggest that no very good reason exists to impose income tax upon that section of the community.

I wish to draw the attention of the House to the question of depreciation allowances. Recently, the honorable member for Sturt (Mr. Wilson) asked the Prime Minister (Mr. Menzies) what the cost would have been had the 40 per cent, initial depreciation allowance applied to this budget. In answering the question, the right honorable gentleman seemed to me to draw a figure out of the air. He said that it would cost approximately £20,000,000. Even if that answer was accurate, it still would be misleading.

To begin with, such a payment would not involve revenue for this year to any degree; it would not be involved until at least 1954-55. In any case, if an initial depreciation allowance were given this year, next year, or in any other year, it would simply mean a deferment of revenue. In the long run, the taxpayer would not receive the benefit of greater depreciation allowances, whether they were made in that way or by the normal method. It is merely a question of when taxpayers shall become entitled to the deductions. The accountancy profession itself is not unanimous about the merits of such a proposal. In any event, the initial allowances still apply, as far as primary producers are concerned, to items which are regarded as matters of capital expenditure. Where capital expenditure is undertaken by a primary producer, he is allowed to claim 20 per cent, in each of five years until the item of equipment concerned has been written off.

I invite the attention of the House to an interesting article on this matter which appeared in the Australian Accountant of June, 1953, contributed by Mr. G. T. Webb, who is a Bachelor of Commerce and an Associate of the Australian Society of Accountants. In that article he refers to an opinion expressed in the well-known British journal, the Economist, dealing with the proposed renewal of the initial depreciation allowances when the United Kingdom budget was being introduced by the Chancellor of the Exchequer, Mr. Butler, in April, 1953. Mr. Webb stated -

Although welcoming this concession, “ The Economist” did not attach undue importance to it, and considered that it would not result in any great increase in investment, pointing out that the allowances represent interest-free loans, which would become repayable if the rate of allowance or of new investment fell.

I am not taking sides at this stage but simply suggesting that there is lack of unanimity on this mater amongst economists and accountants. Mr. Webb suggests, finally, that the problem merits investigation by accountants so that a reasoned statement of the attitude of the accountancy profession thereto could Tie available. He says -

It is likely that in the future economists will devote more attention to the possibilities of influencing business activity through appropriate taxation allowances in respect of depreciation.

Since income tax is the central part of our economy to-day, I suggest that more careful consideration should be given by this Parliament to income tax legislation. We have before us to-day simultaneously two bills which deal with entirely different matters. One deals with rates of tax and the other with proposed amendments of the principles and methods of assessment. . The assessment bill proposes several separate kinds of amendment. I suggest that the bill should be considered carefully at the committee stage rather than at the second reading stage. During the short time 1 have been a member of this Parliament, approximately four sets of amendments of the Income Tax Assessment Act have been enacted, and in no instance has sufficient consideration by the Parliament been given to those amendments, although they dealt with specialized matters which the ordinary member of Parliament would have difficulty in comprehending unless he was prepared to undertake a certain amount of inquiry. In the past, it has been usual to issue with income tax assessment bills an explanatory memorandum concerning the principles involved. That has not been done on this occasion, and for that reason honorable members may be somewhat in the dark concerning the matters involved in the legislation.

Tt seems to rae that the time has come to appoint a parliamentary committee to deal with, taxation matters. I am a great believer in the committee system. In my opinion, matters of this kind should be discussed at the parliamentary level by honorable members rather than handed over to outside bodies which, although they compile informative and learned reports, do not represent the proper method of dealing with these problems. The Parliament ultimately must legislate on. taxation matters, and it is important that the members of the Parliament should understand the matters about which they are asked to legislate. A parliamentary committee consisting of ten or twelve members of all parties could devote its time to taxation matters and interrogate witnesses from all spheres of activity.

Apparently the Government now concedes that creative artists in the community, such as authors, who perhaps produce a work of art in one year, which may be the fruition of many years of concentrated effort, and receive a relatively large payment for it, should not be obliged to pay tax in that year at an inordinate rate. It is proposed that, in the future, income of that kind shall be averaged for the purpose of computing a rate. Although there will be no exemption of income earned, the income earned will be subject to tax at a lower rate than that which ordinarily would apply. I urge upon the Treasurer that since our society appreciates sport as well as culture, this proposed amendment of the income tax might have been widened to include others, such as boxers. A fighter is in the prime of his career only for a few years. He may be sufficiently successful to win one or two big fights and earn thereby, say, £5,000 or £6,000 in a year. Naturally, he must pay income tax on the aggregate income of that year. In a year or so, as a result of his boxing, he may suffer ill health. Some of the money which he has already paid in tax would then be very useful in paying for medical and other expenses. Last year when I referred to this matter in the House, I cited an article by Mr. Mervyn Williams in the Sporting Globe of Saturday, 25th October, 1952, in which he drew attention to the case of Andre Famechon, a French boxer, who came to this country and was obliged to pay £S00 in tax in one year. A little later he broke his leg and he seldom fought again. During his enforced idleness he could have done with a part of that £800 which he had paid to the Treasury. I suggest that when this measure is being discussed in the Senate, the Government consider extending its ambit to cover a wider field than merely artistic workers. I appreciate, of course, that the proposal to alleviate the tax burden on authors is a forward step, -but I contend that there are others in the community to whom the provisions should also apply.

The next matter to which I draw attention is the refusal of the Commissioner of Taxation to allow as deductions certain amounts, which in my opinion, should be so allowed. I refer to an example that came personally to my notice. A waterside worker claimed in his income tax return a deduction for the cost of overalls and working gloves on the ground That they were required in his occupation. The portion of the act that applies Lo such deductions is section 51 (1.), which states -

All losses and outgoings to the extent to which they are incurred in gaining or producing the assessable income, or are necessarily incurred in carrying on a business for the purpose of gaining or producing such income, shall be allowable deductions except to the extent to which they are losses or outgoings of capital, or of a capital, private or domestic nature, or are incurred in relation to the gaining or production of exempt income.

Gloves normally are not a part of the street dress of waterside workers. In fact, in this instance they were used by the taxpayer in the process of earning his income. In support of his decision to disallow the claim, the Commissioner of Taxation referred to Board of Review case No. 120, which was decided in Melbourne on the 2nd June, 1952. That case involved a coal-trimmer who had claimed a deduction for the cost of the following items: - Two pairs of boots for working on coal and two pairs of overalls for the same purpose. He had also claimed deductions in respect of some other expenses associated with his religious beliefs, but that claim is not relevant to my argument. The Board of Review, in rejecting his claim, stated -

As to the claim for deduction in respect of expenditure upon boots and overalls, this was an expenditure of - money in respect of which the taxpayer acquired assets of equivalent value.

That is a fact, but the boots that a coalminer would wear on the coal face would certainly not be the boots that he would wear down the street on a Saturday morning. The board’s ruling continued -

It may bc. though the Board has no evidence before it, that it was at least expedient that the taxpayer should wear overalls and special boots while engaged in his work.

That is true of a number of occupations which ave of a dirty nature. A worker in these jobs needs special clothing for his work, ‘ and the expense of buying that clothing is necessarily incurred in the earning of his income. The board’s ruling continued further -

But- it. would seem that the purpose served was to protect from, or avoid damage to or the soiling of, his ordinary clothes and footwear rather than to assist the taxpayer in any way in performing the duties for which he was paid. On this view, the expenditure would be of a private nature.

That is a most unfair interpretation of the law. The sort of clothing that waterside workers and miners wear on their jobs is not the clothing that they wear in ordinary civil life. In other words, they must incur additional expenditure because of the nature of their employment, and such expenditure should be allowed as a deduction for taxation purposes.

If these expenses cannot be allowed under the provisions of section 51 (1.) of the act as it stands, the Government should amend the provision accordingly. There is no doubt that if a company provides overalls for its workers, it can obtain a taxation allowance for that expenditure. What is the difference between expenditure incurred by a, worker and similar expenditure incurred by his employer? If a worker bears the expense, he is entitled to claim a deduction, in my opinion. Many of these claims were granted by the Taxation Branch a year or two ago, but a more rigorous interpretation of the act has been applied recently. This change .of policy may have arisen from the Board of Review decision that I have quoted.

Mr Thompson:

– The worker incurs the expense in earning his income.

Mr CREAN:
MELBOURNE PORTS, VICTORIA · ALP

– That is true. In the decision that I have cited, the Board of Review quoted a ruling given in a South African case, which is dealt with in the third edition of Gunn’s Income Tax Law and Practice. This involved a claim by a barrister who practised in the Supreme Court of South Africa for a deduction in respect of the cost of a silk gown which he wore in the course of his job. The South African authorities conceded that the gown was necessary to the pursuit of his occupation, but ruled that it was of a capital nature. However, provision is made in the Australian act for costs of a capital nature to be recouped in certain circumstances, either by means of depreciation allowance or by means of the replacement of the asset from time to time. It would not be difficult to overcome this objection. The amount involved might be only £10 or £12 of assessable income annually in the case of a worker, but this would involve £2 or £3 of income tax if the man earned £700 or £800 a year. The marginal income in such instances bears tax at the rate of 3s. or 4s. in the £1. An additional £2 10s. in the pocket of such a worker is of more consequence to him than is the same amount in the Consolidated Revenue Fund. I ask the Government to apply a more flexible interpretation to section 51 (1.) of the act or, if that would adversely affect the administration of the act, to amend the appropriate provision in order to allow expenses of this kind to be treated as normal deductions. A waterside worker must have gloves to protect his hands while he works, and his employer does not provide him . with gloves. Therefore, he should be allowed a deduction for the cost of working gloves. The same principle should be applied to coal-miners, engineers and others who work in dirty jobs. I sincerely hope that the Treasurer will give sympathetic consideration to my representations.

Mr WHEELER:
Mitchell

.- After having listened to the honorable member for Melbourne Ports (Mr. Crean), one wonders what useful contribution he has made to this debate. I acknowledge that he approached the subject in a very sincere manner, but I hope that he never returns to private practice as an accountant because, if he advised his clients in the manner in which he dealt with taxation problems in his speech, I am sure that they would leave him befuddled, bewildered and far from home. The honorable gentleman did not deal with matters of great moment. I suspect that the honorable member talks with two voices. In this chamber he speaks with the voice of the socialist, but in his electorate he uses a different voice. For half an hour the honorable member ploughed tediously through figures and eventually he arrived at the matter of depreciation allowances. The Australian Labour party is divided upon the question of depreciation. Some honorable members opposite have referred to the budget as a rich man’s budget, but almost in the next breath they have stated that if they are returned to office as the government, they will restore the 40 per cent, depreciation allowance. The honorable member for Melbourne Ports did not make the position clear. His analytical mind had not balanced the political ledger at that point and I suspect that we shall have to await another presentation of accounts before we are informed of his thoughts upon the subject. Eventually he moved figuratively into the boxing ring to engage in a verbal bout. The result again was indecisive. Wordy bouts are often fought in this chamber, and I have to inform you, Mr. Speaker, that there is intense regret in my electorate because you are not able to be an active participant in those bouts, as you were before you were appointed to your high office.

I turn my attention now from the boxing ring and the honorable member for Melbourne Ports to the bills that are before the House. The budget from which these bills flow has been described by honorable members opposite as a rich man’s budget. If that is true, there must be many rich men on the Opposition side. Many Opposition members and supporters of the Australian Labour party will benefit from the. measures that are now under discussion. They have based their attack upon the relief that is to be given to companies, but big companies are composed of numerous small shareholders banded together. I do not divulge any secrets when I state that a number of honorable members on the Opposition side are company shareholders. They will gladly accept the benefits that these measures will convey to the companies, but they have a political obligation to oppose them. I can see nothing wrong in honorable members opposite being shareholders in big companies. It is to their credit that they have helped to develop Australian industry by taking up shares, but there is something wrong with the hypocritical manner in which they rise in this chamber to denounce the measures that will put money into their pockets.

The Government has acted wisely and justly in deciding to reduce burdensome company taxes. For party reasons, honorable members opposite must try to perpetuate the political fantasy that these measures will provide relief for the wealthy. Although the fact may not be acceptable to honorable members opposite, a company is a union of investors. The Broken Hill Proprietary Company Limited which is quite frequently attacked by honorable members opposite employs many trade unionists. Behind those employees there is a still larger union. That is the combination of investors, large and small, who have pooled their money and resources to provide the finance that will make jobs available for workers at Newcastle and elsewhere and give Australia a steel industry. I direct the attention of honorable members to the Federated Ironworkers Association of Australia. It has a membership of 100,000 trade unionists. .If the average income of the members were £600 a vear, their combined earnings would total £60,000,000, but they are _ not referred to as the wealthy ironworkers, nor are they subjected to a specially high rate of taxation. The Broken Hill Proprietary Company Limited has 30,000 shareholders who contribute to its financial structure. Their combined returns from the company are much smaller than those of the company’s employees.” Honorable members on the Government side have no objection to that. In the list of shareholders of the Broken Hill Proprietary Company Limited there may be found the name? of workers side by side with those of capitalists. There can be no complaint about that, but I believe it is right that rich shareholders should be taxed at a higher rate. Men of moderate means should- not have to pay the same rate of tax as the rich shareholders. However, that has been the rule under Australia taxation laws for many years.

This budget, which has been described by the Opposition as a rich man’s budget, gives relief to the most unfairly taxed section of the community - the company shareholders who have invested their funds virtually in the future of Australia. Company shareholders are the only persons who pay two income taxes on the same income. That is the kind of injustice that honorable members opposite want to perpetuate. The larger proportion of honorable members opposite are certainly not in the lower income bracket. Apart from any money that they may get from company shares, interest on bank accounts or mortgages they have a substanital personal income. Most of them receive three or .four times as much as many company shareholders, yet members of the Parliament aTe required to pay a far lower rate of taxation. Many of the alleged champions of the less privileged on the Opposition side want to continue that system. When the Government suggests some rectification of those injustices, honorable members opposite howl about a rich man’s budget. It is true that some shareholders are wealthy and it is right that they should be taxed at the higher rates, but it is wrong that those on the lower incomes should be subject also to the higher rates that are applicable to the major shareholders. In heavily taxed Great Britain under a Labour government, the tax that a company has paid is credited to the shareholders on personal income tax assessments so that the tax liability of a shareholder of moderate means in respect of income from shareholdings is met. The wealthy shareholder pays income tax at the full personal rate, less the amount that has been credited to him by way of company tax. I agree that those laws apply to the United Kingdom and may not be applicable to Australia at this stage of our economy, but I have no hesitation in congratulating the Treasurer (Sir Arthur Fadden) on two steps that he has taken in the right direction, first, in reducing the crippling rate of company taxation and, secondly, in removing the penalty rate from property income.

It must not be thought that company shareholders will be the only ones to benefit because the thrift of company shareholders provides capital which in its tura provides jobs for the workers. One of the major causes of inflation is the fact that our taxation system is devised to penalize thrift and encourage the spendthrifts. With an expanding economy such as ours, we need savings. We must allow the people to save and get a fair reward for their thrift. Let us make no mistake. The savings of the people of this country provided the money for the establishment of our great industries. Their money made industry possible in Australia. At one time, saving was considered to be a virtue, but’ now. in the eyes of Labour, it is regarded as a cardinal al n. am glad to acknowledge that the honorable member for East Sydney (Mr. Ward) i3 a guiding star that other honorable members oppo)site should follow, because he has proved his capacity to save money.

The fact that the average shareholding in big companies is very small is unpalatable to left-wing propagandists Nevertheless, it is a fact. Every day stock exchanges handle numerous small transactions in the shares of companies such as the Colonial Sugar Refining Company Limited and the Bank of New South Wales. Shares are bought in lots of two, three, four or five, and each deal involves less than £100. The idea that investment is solely the province of wealthy people is wrong. The average shareholding in the Bank of New South Wales is 34 shares. On the latest figures available. Broken Hill Proprietary Company Limited has about twice as many shareholders as it has employees. The value of the average shareholding in that company is about £600. In Dunlop Rubber’ Australia Limited, the average shareholding is worth about £387, and in Australian Paper Manufacturers Limited, about £294. The Colonial Sugar Refining Company Limited is regarded with a great deal of hatred by honorable members opposite. It has an annual pay-roll of £4,500.000, and the average shareholder owns about 48 shares. The average shareholding in the Commercial Bank of Australia Limited is 372 shares. The bank has 10,944 shareholders and the average dividend for each shareholder is £26 a year, or 10s. a week. Yet Labour complains that the Government’s taxation measures will benefit only wealthy people.

As we pursue this matter further, we find that in many public companies shares are held by holding trusts on behalf of estates in which several persons are interested. In some companies, the largest shareholdings are held by superannuation fund trustees, acting on behalf of hundreds of employees. It has been estimated that about 600,000 people in Australia, own shares in their own names, but the number of real owners is probably much larger than that. Very few shareholders can be classed as wealthy people. The. Labour party is contradicting itself completely. It is criticizing the Government’s taxation measures on the assumption that they will be of benefit only to the rich and wealthy, but, according to the honorable member for Melbourne (Mr. Calwell) aud the Leader of the Opposition (Dr. Evatt), Labour would reintroduce the 40 per cent, depreciation allowance for companies if it were in office. The honorable member for Melbourne and the Leader of the Opposition are keen on that allowance, but other members of the Opposition, such as the honorable member for Fawkner (Mr. W. M. Bourke) are not. They condemn it. That is characteristic of the indecision of the Labour party and its illogical approach to most matters that come before the Parliament.

Some members of the Labour party rush in to hobnob with the wealthy, while they savagely attack any concession given to small shareholders. Labour is quite happy to serve big business, provided big business will contribute to its funds. But, it hates to see workers saving a little money to buy property or shares. The thinking of the Labour party at this stage is still guided by the dead hand of Dedman. It fears most the creation of little capitalists, because it realize* that when a worker gets a stake in the country he is no longer an easy prey for the class war propaganda on which the Labour party thrives. Such a worker begins to think for himself, and when he does so, he is lost as a Labour supporter. The modern Labour machine works on the basis that Labour will get its money from the very rich and its votes from the very poor. It has no use for any one between those two sections of the community. E am glad to say that our taxation measures have not been actuated by political motives. The Government has gone a long way to rectify the great injustice that has been done to the saving community, and I congratulate it on the action it has taken.

I have referred to the fact that the Labour party is concerned only with two sections of the community - the very poor, where it hopes to stir up class hatred, and the very rich, to which it can say, “We are your natural enemies. Look at what, we can do to you when we are in power.

We expect you to give us financial assistance “. Between those two sections of the community, there is a solid core of very worthy citizens, the middle class men and women. They are not violently interested in politics. They go on their way, seeking no great reward and asking only to be, left alone. Australia owes much to this class of people, which comprises the worker, the businessman, the salaried man, the executive, the primary producer and the farmer. The average man in this class has been content to look after himself, provide shelter for his family, educate his children and pay his way. He is the man who takes a part in the activities of local organizations, charities and sporting bodies. All in all. he is a figure in the community. He pays his way and he saves a little. Previously lie was regarded as being comfortably off, but in recent years, owing to high taxation, he has been unable to provide for his future and has been living from day to day. Before 1953, he was in the privileged class, but now he belongs to one of the under-privileged classes. He is the man who, fairly recently, saved a little money, contributed to war loans and made, some provision for his future by investment in public companies. Labour hates him because he represents a section of the community that is not easy prey for Labour propaganda. In the past, he was the solid backstop of the country, now he is in an under-privileged class because he has been practically taxed out of existence. He looks at the welfare state with some degree of fear, because he realizes that in these days he must save at least £8,000 to give him, on retirement, a weekly income equivalent to the age pension. I see no great hope for the middle class man until the day arrives when he can enjoy the benefits of a national superannuation scheme on a contributory basis, regardless of the money he has been able to save. If these taxation concessions will give some relief to a section of the community which comprises people from the workers upwards, why does the Labour party oppose .them? The answer to that question is that Labour hates independence. It hates the man who can stand on his own feet. It hates the man who can think for himself and is not disposed to accept the rotten dogma of socialism.

If Opposition members are not opposed to the granting of such concessions why have they refrained from commenting upon the provision contained in clause 7 of the Income Tax and Social Services Contribution Bill, which deals with the limitation of tax and contribution payable by aged persons. That clause reads - (1.) This section applies to a taxpayer who -

  1. being a man, has attained the age of 65 years, or, being a woman has attained the age of 60 years, on or before the last day of the year of income. . . . if his net income does not exceed three hundred and seventy-five pounds, no income tax and social services contribution is payable by him.

Members of the Opposition have completely ignored that concession which the Government is making to members of the community with limited means who have made provision for their old age. Whereas, under the Chifley Government all persons were liable to pay income tax on an income of £104 a year, this Government, in 1951, raised the exemption in respect of a man of 65 years of age and a woman of 60 years of age to £234 a year. That meant that a married couple could have an income of £468 a year without being liable to pay income tax. For instance, if the husband was in receipt of superannuation benefit of £400 and his wife had income of £68, neither of them was liable to pay income tax. Last year, this Government raised that exemption to £254 for individuals, making the exemption £508 in respect of a married couple. Under this measure, the Government proposes to give still greater concessions to that section of the community. The clause to which I just referred provides that a man of 65 years of age or a woman of 60 years of age shall not be liable to pay tax on an income less than £375 a year, or in the case of a married couple within that age group, on an income less than £750 a year. Members of the Opposition have remained completely silent about that concession which is to be made to this worthy section of the community. The proposal means that a married couple coming within the age groups which I have mentioned may have an income of £15 a week without being liable to pay income tax. I have no doubt that the people who will benefit will readily welcome this concession which will be approximately seven and a half times more generous than the concession that was allowed to persons within this class under the Chifley Government. Regardless of the source of income, whether it is derived from savings that a couple may have made for their old age or is contributed to them by their children, such a couple will not be obliged to pay income tax on an income less than £15 a week. Obviously, members of the Opposition do not relish the Government’s generosity towards those who make provision for their old age. This proposal refutes the contention of honorable members opposite that the budget 13 a rich man’s budget. If those honorable members oppose this concession, let them say so. If they agree with it, they have failed to commend the Government for having made it. But they are strangely silent about this matter. Their attitude reminds me of strange happenings in another place where, I understand, their colleagues are advocating the imposition of a capital levy.

Mr SPEAKER:

– Order ! The honorable member may not refer to proceedings in the Senate.

Mr WHEELER:

– I was about to protest against the Labour party’s proposal to plunder the savings of persons with limited moans. These measures are carefully designed to give effect to the budget proposals to afford relief to the community. Although members of the Opposition protest against these concessions, I believe that privately they admit the wisdom and generosity of the Government in making them to a section of the community which has steadfastly contributed, to the Welfare of the nation. I commend the Government for its generous treatment of these persons.

Mr EWERT:
Flinders

.- The approach of the honorable member for Mitchell (Mr. Wl” der) to these measures was characteristic of a stock and share broker, but it is not the policy of the Australian Labour party to approach matters of national policy in that manner. The honorable member for Moore (Mr. Leslie) said that this Government has been the only government that has really reduced taxes since the end of World War II. He said that the Government had already reduced total collections of taxes by £30,000,000. Characteristically/ he omitted to point out that before it made any reductions of taxes, it had increased taxes under its horror budget in 1951 by over £200,000,000. Under that budget, the Government practically taxed out of existence persons in the middle class about whose interests the honorable member for Mitchell was so solicitous. After the Chifley Government reduced rates of taxes, total collections during its regime increased by only £123,000,000, but since this Government assumed office total collections of taxes have increased by £370,000,000. Yet, this Government promised the people that it would reduce taxes. Whereas under the Chifley Government collections of taxes paid by individuals increased by only £44,000,000, this Government has increased collections of taxes payable by individuals by no less than £200,000,000. The Chifley Government made five major reductions of rates of taxes. Yet, the Prime Minister (Mr. Menzies), during the general election campaign in 1949, speaking on behalf of the present Government parties who were then in Opposition, complained about increases of total collections of taxes under the Chifley Government and promised that if the parties for which he spoke were returned to office he would reduce taxes. The people are now only too well aware of the actual occurrences since this Government won that election. In spite of that promise, the Treasurer (Sir Arthur Fadden), when he introduced his first budget, declared that no general reductions of rates of taxes could be made. In the following year, 1951, the Government, so far from honouring its promise to reduce taxes, imposed a special levy of 10 per cent. Last year, the Government removed only that impost which it had imposed the preceding year. Nevertheless, income tax. collected last vear was still £200,000,000 more than in 1949. In 1953, another budget was presented, but inflation was still increasing; money incomes as distinct from real incomes. At last the Treasurer discovered that, because of inflation, he could partially reduce rates in order to favour the rich, and collect £10,000,000 more from the income tax than he had collected the year before. Therefore, the only credit that he can take is for increasing the income tax on individuals by more than £200,000,000 and for displaying great ingenuity in making use of the inflation that this Government has done so much to induce into our financial system. The honorable member for Moore misquoted from table 60 of the budget papers. He claimed that individuals who receive between £500 and £1,000 a year are the rich of the community, which is not true, and he did not mention those who receive more than £1,000 a year. Moreover, he made no allowance for the increase of incomes because of inflation under this Government.

I have before me a table drawn up by the Treasury. That table shows the basic wage in various years and wages 20 per cent, and 40 per cent, above the basic wage, together with income tax and social services contributions applicable to those amounts, for a single taxpayer and various taxpayers with dependants together with percentages of tax payable to wage received. I ask for leave of the House to incorporate the table in Hansard.

Mr SPEAKER:

-I must look at the table first because these things have an awkward side to them.

The table having been submitted to the Chair,

Mr SPEAKER:

– Having looked at the table, I indicate to the honorable member that there will be some difficulty in having the table incorporated in Hansard. There is nothing objectionable about the material of the table, and providing that the mechanical difficulty of printing could be overcome the table would be acceptable for incorporation in Hansard. Is leave granted to incorporate this table in Hansard?

Mr Hulme:

– No.

Mr SPEAKER:

– I heard a “ No”. Accordingly leave is not granted.

Mr EWERT:

– The honorable member who refused to grant leave, has done so in the past, and it is obvious that both he and the Government will attempt to camouflage the facts about income tax to the very end. I now propose to read this table as I have been refused leave to have it incorporated in Hansard. There are certain headings across the top of the page as follows : - Year, Income, Tax and contribution payable by a single taxpayer, Tax and contribution, payable by a taxpayer with a dependent wife, Tax. and contribution payable by a taxpayer with a wife and one child, and Tax and contribution payable by a taxpayer with a wife and two children. 1949-50, £338 (basic wage), tax £16 16s., 4.9 per cent, of income, £8 lis., 2.5 per cent, of income, £3 9s., 1 per cent, of income, £1 7s., 4 per cent, of income. 1949-50, £406 (20 per cent, above basic wage), tax single taxpayer £24 10s., 6 per cent, of income, taxpayer with wife £14 19s., 3.6 per cent, of income, taxpayer with wife and one child £8 13s., 2.1 per cent, of income, taxpayer with wife and two children £5 9s., 1.3 per cent, of income. 1949-50, £473 (40 per cent, above basic wage), tax £33 10s., 7 per cent, of income, £22 8s., 4.7 per cent, of income, £15, 3.2 per cent, of income, £11 6s., 2.4 per cent, of income. 1950-51, £428 (basic wage), tax £26 5s., 6.1 per cent, of income, £14 5s., 3.3 per cent, of income, £7, 1.7 per cent, of income, £3 14s., 9 per cent, of income. 1950-51, £514 (20 per cent, above basic wage”), tax £38 ls., 7.4 per cent, of income, £23 17s., 4.6 per cent, of income, £15 3s., 3.0 per cent, of income, £9 18s., 1.9 per cent, of income. 1950-51, £599 (40 per cent, above basic wage), tax £51 10s., 8.6 per cent, of income, £35 3s., 5.9 per cent of income, £24 15s., 4.1 per cent, of income, £18 14s., 3.1 per cent, of income.

In 1951-52 we notice the effects of the actions of this Government in increasing the total tax in proportion to the wage received. 1951-52, £522 (basic wage), tax £43 5s., 8.3 per cent, of income, £27 8s., 5.2 per cent, of income, £17 12s., 3.3 per cent, of income, £11 13s., 2.2 per cent, of income. 1951-52, £626 (20 per cent, above basic wage), tax £62 2s., 10 per cent, of income, £43 5s., 7 per cent, of income, £31 4s., 5 per cent, of income, £23 16s., 3.8 per cent, of income. 1951-52, £731 (40 per cent, above basic wage), tax £83 16s., 11.4 per cent, of income, £62 5s., 8.5 per cent, of income, £47 19s., 6.5 per cent, of income, £39, 5.3 per cent, of income.

Then taxes were reduced by 10 per cent, and the figures under the respective headings were as follows : - 1952-53, £596 (basic wage), tax £51 ls., 8.6 per cent, of income, £34 15s., 5.8 per cent, of income, £24 7s., 4.1 per cent, of income, £18 8s., 3.1 per cent, of income. 1952-53, £715 (20 per cent, above basic wage), £73, 10.2 per cent, of income, £53 14s., 7.5 per cent, of income, £41 ls., 5.7 per cent, of income, £33 6s., 4.6 per cent, of income. 1952-53, £834 (40 per cent, above basic wage), tax £97 7s., 11.6 per cent, of income, £76, 9.1 per cent, of income, £61 4s., 7.3 per cent, of income, £51 13s., 6.2 per cent, of income. 1953-54, £613 (basic wage), tax £46, 7.5 per cent, of income, £28 4s., 4.6 per cent, of income, £19 2s., 3.1 per cent, of income, £14 5s., 2.3 per cent; cf income. £736 (20 per cent, above basic wage), tax £65 2s., 8.8 per cent, of income, £44 18s., 6.1 per cent, of income, £34 ls., 4.6 per cent, of income, £27 8s., 3.7 per cent, of income. 1953-54, £858 (40 per cent, above basic wage), tax £88 8s., 10.3 per cent, of income, £64 14s., 7.6 per cent, of income, £51 17s., 6.1 per cent, of income, £51 17s., 6.1 per cent, of income, £43 14s., 5.1 per cent, of income.

T apologize to the House for the need to read those figures. Apparently the honorable member for Mallee (Mr. Turnbull) refused leave because he could not understand what the figures were about.

Mr Turnbull:

– I did not refuse leave.

Mr EWERT:

– The honorable member for Mallee has a past reputation.

Mr Turnbull:

– I rise to a point of order. The honorable member for Flinders (Mr. Ewert) has said that I have a past reputation. Apparently he was indicating that I have a reputation for preventing honorable members from having matter incorporated in Hansard. So far as I can remember, on only one occasion have I done that, and on that occasion my action was justified. As the honorable member’s statement is offensive to me I ask that it be withdrawn.

Mr SPEAKER:

– The honorable member for Flinders will withdraw that remark.

Mr EWERT:

– I shall be very happy to withdraw the remark that the actions of the honorable member for Mallee in the past were offensive to him. Quite apart from the fact that taxpayers in various ranges of income are now paying more in taxes-

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I rise to order! I do not know, Mr. Speaker, whether you appreciated the full implication that was contained in the withdrawal by the honorable member for Flinders. He said that he would be very happy to withdraw the statement that the actions of the honorable member for Mallee were offensive to him.

Mr SPEAKER:

-Order! The withdrawal must be unqualified.

Mr EWERT:

– I withdraw. The percentage of tax paid in relation to all ranges of earnings has increased and taxpayers benefit less in relation to the number of their dependants. Furthermore, the taxation concessions provided in the budget will not result in an actual reduction of taxation, because increased tax will be derived from the taxation of inflated incomes. So far from reducing taxes paid by individuals this Government actually budgeted to receive an additional £20S,000,000 a year. It was successful in collecting extra taxation to the amount, of £203,000,000 a year. Despite the socalled reduction of taxation, individual taxpayers will be required to pay more tax than in 1949. The tables that accompanied the budget show that if the present rates of taxation were continued, additional revenue of £50,000,000 from so-called tax income would be derived in this financial year. Therefore it is possible for the Government to reduce the rates of taxation and still collect £10,000,000. more from individual taxpayers in this financial year than in the la3t year.

This is not due to any increase of employment. The latest Bulletin of Employment Statistics shows that between March and July of this year there was no increase of the total number of persons employed in the community, and certainly no re-employment, in total, of the 87,000 or S8,000 of the people who lost their employment in 1951 and still have not regained it, without taking into account additional workers who have newly come on to the employment market, and immigrants. If the Government has favoured some one - and truly it has - whom has it favoured? It has favoured people in the upper income groups. The Treasurer stated in his speech introducing the income tax aud social services contribution resolution -

To provide some incentive for those persons in the upper income groups, who are primarily responsible for initiating expansion of business activity, and encouraging development, it is proposed to reduce the maximum rate of tax from 15s. in the £1 to 14s. in the £1. For the same reason, it is proposed that the maximum rate shall apply only to taxable income in excess of £10,000 a year, instead of the present £1.0,000.

The honorable member for Mitchell said that this Government is trying to encourage thrift, but the Treasurer’s own words show that those who will gain most by the imposition of taxation at the reduced rates will gain by way of increased profit.

Silting suspended from 12.45 to 2.15 p.m.

Mr EWERT:

– Will the Government, by favouring in its tax proposals the upper income groups, achieve further reinvestment of capital in essential industries? There still exists throughout industry and business a great degree of uncertainty regarding the future. We all know that businessmen and other investors will invest money only when they are fairly certain of a return on their capital and a reasonable percentage of profit on it. Many business firms are now worried about the cost structure which the inflation caused by the Government’s policy has raised to too high a level. Only recently the Melbourne factory of West.clox (Australia) Proprietary Limited closed down because high production costs made it impossible for it to continue economically in operation. I raised that matter in a question to the Prime Minister, but his only reply was that some people would suffer. He gave no indication that the Government would take cognizance of, and do something 1o counter, the high costs that have resulted from its policy. I asked a further question regarding the Tariff Board’s report and the threat represented by high costs to the continuation of Australian industry even when it endeavours to supply only the home market. Once again no indication was given when we would receive that Tariff Board report, and again no indication was given of the Govern ment’s attitude to the high cost structurewith which its policy has afflicted industry.

There can be no certainty, under present economic conditions, that thepeople who will receive increased profits as the result of the concessions to be made to them under the Government’s proposals will re-invest the increased return. The individual taxpayer whose dividends are increased as a result of the budget will have a choice of re-investing the increase or of putting it into savings. Before making his decision he will examine the trend of consumption expenditure, which gives some measure of the demand in the community for Australian production. I refer to the White Paper on National Income and Expenditure 1952-53, which states as follows : -

Food, tobacco, cigarettes and alcoholic liquor were the only other major items on which expenditure increased substantially and for these items the increase of 10 per cent, was about the same as the rise in average retail prices. Purchases of other goods in retail shops were about the same in money terms, although purchases of hardware, furniture, electrical goods, &c, fell slightly. As average prices were some 5 to 10 per cent, higher this suggests that the quantities of these goods purchased in the last year were considerably lower than in 1951-52, or that there was a greater concentration of purchases on lowerpriced goods at the expense of higher-priced goods.

In other words, no more goods were manufactured or purchased last year than were manufactured or purchased in the previous year. The increase of the values of sales was accounted for by the increase of prices that has been caused by inflation. I cite that as a further reason why we cannot, unfortunately, expect that the increased profits that share-holders will now receive will be re-invested, as they should be and need to be, to finance the production of more capital goods. In this respect the budget, if it was sincerely intended to encourage investment, appears more likely to misfire than to achieve success.

The benefit of reduced tax that will accrue to people whose incomes are less than £600 will total only £4,700,000, but the group that receives more than £5,000 taxable income, which consists of a relatively few people, will gain £13.000,000 as a result of tax relief this year. It cannot be sincerely claimed, therefore, and it certainly cannot be proved, that the budget is not a rich man’s budget. Companies will this year pay £33,000,000 less in income tax than they paid last year. I challenge the propriety of remitting £33,000,000 of tax to companies at a time when individuals, including the family man, are required to pay £10,000,000 more in taxes this year than they paid last year. After all, these ordinary individual taxpayers will pay the prices that will provide the profits that the Government will tax at a lower rate than last year. As a result of the Government’s concessions to companies a great deal of money will be transferred to the pockets of the people who already are making a huge profit from the community.

The 31st Annual Report of the Commissioner of Taxation, at page 98, shows that 75 per cent, of individual taxpayers derive their income from personal exertion only. Averaged out, they are the people who receive les3 of the national income than do other groups. About one-half of the total income derived from property goes to 2.8 per cent, of the total number of taxpayers. In the high income ranges the greater part of the income from property, including dividends, is received by people who also receive relatively high and, in many instances, very high, incomes from personal exertion. Yet these people are favoured under the Government’s proposals. The personal exertion incomes of taxpayers who receive composite incomes derived from property and personal exertion total nearly ten times their property incomes. But the Government is very solicitous about the people in those high income groups. Three per cent, of public companies earn 50 per cent, of the total taxable income derived by public companies. The honorable member for Mitchell completely overlooked the fact that a company is, of its own volition, a corporate entity. He also overlooked the fact that the ordinary investor, whether small or large, takes no really active part in the control of the affairs of the company or companies in which his capital is invested. Property income represents in total only 5.5 per cent, of the totalincome derived from personal exertion. The 22 per cent, of taxpayers who have a composite income from property and personal exertion, whom the Government has chosen to assist most, pay at present 51 per cent, of the total taxes paid.

I refer finally to the increase from £104 to £130 of the concessional allowance for a dependent wife, about which some misconception may have arisen. That increase is only one of 25 per cent. Such an allowance applies to a dependent father, mother, daughter keeping house for a widowed taxpayer, and a housekeeper having care of a child. As this increase of allowance has been made necessary by the increase of prices that has occurred under this Government, in effect the allowance will not be increased at all. The ostensible increase will go only part of the way towards meeting the increased cost of living.

The Opposition approved the liberalizations in respect of educational expenses and medical expenses, but we must not forget that they will not take effect until next financial year.

Mr DEPUTY SPEAKER (Mr Adermann:
FISHER, QUEENSLAND

– Order! The honorable gentleman’s time has expired.

Mr FAIRHALL:
Paterson

.- During this debate Opposition members have complained that honorable members on this side of the House have not defended the Government’s taxation proposals. The Government is not on the defensive in this debate. Apparently the Opposition themselves have found too little to complain about in this bill. That is quite understandable. One can quite understand the dilemma in which many Opposition members find themselves in trying to present a good case against provisions which are of material benefit to many of them who are in the higher income groups themselves and who are substantial investors. The House has been forced to listen to hours of tedious repetition of precisely the same arguments that were put forward in this House on a similar occasion last year and, no doubt, the year before. It seems that so long as taxes are levied on incomes the House stands condemned to listen to these arguments forever. One unfailing barometer of the mental state of the Opposition is the honorable member for Melbourne (Mr. Calwell). Obviously the. honor able member enjoys his work. When he comes to the table with his Mona Lisa smile and enters the debate in a good temper we know that all is well with the Labour ship. But when he complained querulously in this debate that the Government did not accept the amendment which he moved on a similar occasion last year he indicated that Labour’s barometer pointed to deep depression. The honorable member said that the Government did not want to reduce taxes. Nobody doubts that the Government wants to secure the lowest possible level of taxation on personal and company income. But the primary responsibility of the Government is to take care of the Australian economy and the Government would have acted irresponsibly if it had done what the honorable member for Melbourne wanted it to do twelve months ago. Such action would have resulted in the fiasco that the honorable member has been trying to engineer for some time.

Not many years ago, when the inflationary period began, the honorable member advocated that people should not reduce their spending but that they should spend everything that they had and so hasten the process which he anticipated would bring his party into office. During the speech that he made in this debate the honorable member for Melbourne said that between 1946 and 1949 the Labour Government had reduced taxation by 14 per cent. I dislike quoting comparative taxation scales because, unless one takes into consideration the < background against which taxation has been imposed, such a comparison can have no relevance. But so that the people will not accept any misstatement of fact by the honorable member for Melbourne I shall mention that the Commonwealth Year-Booh shows that between 1946 and 1949 collections of income tax rose from £215,000,000 to £280,000,000. In other words, they did not decrease by 14 per cent. They increased by 30 per cent. In this period the total amount of revenue collected rose from £390,000,000 to £580,000,000 which was an increase of 48 per cent. Surely the honorable mem- ber for Melbourne has badly confused his figures. He professes not to understand how it is possible to establish that the Government is reducing rates of taxation in view of the fact that the total amount of taxation collected has increased. This subject was ably dealt with by the honorable member for Petrie (Mr. Hulme), who invited attention to the fact that we now have considerably increased numbers of taxpayers so that a lower rate of tax would still produce the same return or even a greater return of revenue. The fact that the Government has been able to maintain the full scope of its services for an increasing number of people and, at the same time, reduce the rate of taxation payable by the individual is surely a triumph of sound administration. No misquotation of statistics by the Opposition can cloud that fact. If the mathematical ability of honorable members is at such a low ebb that they can not appreciate the correctness of my statements how can the Australian people trust them to form a government?

From the shadowy sidelines of their arguments Opposition members are fond of drawing figures by way of illustration. Because the level of taxable income at which the rate of income tax becomes constant is £16,000, Opposition members have repeatedly cited the case of a taxpayer receiving £16,000 a year as though this was the average income of those who support the Government. The fact is that the most cursory examination of wage rates on the one hand, and electoral results on the other, will indicate that the Government is supported by hundreds of thousands of good trade unionists who realize that pounds shillings and pence are not the be-all and end-all of their relationship with their government. They realize the benefits to be derived from sound administration as well as from reductions of taxation. The honorable member for Port Adelaide (Mr. Thompson) materialized a £500 a year taxpayer with a wife and two children. I understand that the basic wage for some time past has exceeded £500 a year in all States. So it seems to me that if a man with a wife and two children is only receiving £500 a year some trade union organizer has not been doing his job because some employer is not paying this gentleman sufficient or he has not yet reached his majority. And if a man has gathered to himself a wife and two children at a tender age he has been misusing energy. I suggest that such taxpayers would be extremely rare. The honorable member for Port Adelaide stated that such a man would pay fi 14s a year in income tax. That is Sd. a week. Is that too much to pay for the benefits of sound government and administration, for the advantages of defence which this gentleman shares, or for the social benefits in which he and his family already participate and must expect to participate more ? Already this man would be drawing 15s. a week in child endowment. So that after deducting 8d. a week from that amount this man would still have 14s. 4d. a week which had been contributed by some other taxpayer.

Let us consider the whole of Labour’s policy in relation to income tax. There is not the slightest, doubt that taxation has become the major instrument of government policy. In the hands of the Labour party it is a device for redistributing income from production regardless of the effect of the redistribution and regardless of the fund from which the distribution takes place. On the other hand, the Government is dedicated to encouraging production so that the material standards, not, only of those on higher incomes, but of those on every level of income, may rise. Opposition members have complained that the modifications in the tax scales favour the wealthy, as though to be wealthy were some sort of crime. A great contribution has been made to the welfare of this country by many of those who are classified by the Opposition as wealthy. A great demand for increased revenue was made during the war and the cry was “ Soak the rich “. That, the Labour party did, and in full measure. But when the time comes to reduce the level of expenditure, not greatly but a little, the cry is always one of relief for the lower income earners. And so, in the fullness of time, Labour hopes to squeeze up the lower man and squeeze down, the top man, until, lo and behold, we have the fulfilment of Labour’s objective - a soul-destroying mediocrity. I admire the patience of the socialists in the pursuit of their policy, but the deadly constancy of that policy should be understood bv the people. In recent days the direction of Labour thought on these matters becomes increasingly clear.

This is an income tax and social services contribution assessment bill, and the rates struck have a vital bearing on the means test. We are concerned to know how the Leader of the Opposition planned to reduce taxation and get rid of the means test in the life of a single parliament. In the last few days the policy of the Labour party has leaked out. It is a secret no longer. It is common knowledge in the lobbies and in the street that Labour now promises a capital levy.

Dr Evatt:

– Nonsense! The honorable member must be desperate to talk like that.

Mr FAIRHALL:

– There is some disputation among members of the Labour party as to what constitutes capital, one group saying that money does not constitute capital. Is it to be supposed that the Labour party, if returned to office, will embark on wholesale confiscations of land and buildings and use such confiscations as a means of finance?

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– The anti-Labour parties have been using that method for 40 years.

Mr FAIRHALL:

– If the people are foolish enough to get out of the means test in that way they will have to put up with the state in which the country will find itself. All of this is very pertinent to the subject of tax rates and what is to be accomplished with the proceeds. Honorable members will recall that Abraham Lincoln once said, “ You cannot make the poor richer by making the rich poorer “. We are entitled to question Labour’s aims. Does the Labour party propose to raise the whole standard of material comfort, or does it propose to pursue a vindictive and wholly irrational policy of destroying any one who gets above the mediocre level to which it aspires? The honorable member for Port Adelaide (Mr. Thompson) made a plea for equity in the compilation of the tax scales. He spoke about ability to pay as though that were the only principle to be considered.

Mr Drakeford:

– la it not a good principle ?

Mr FAIRHALL:

– It is good within limits, but the Labour party does not accept the limitations. The Labour party does not take into consideration the effort made by a taxpayer to put himself in a position in which he has greater ability to contribute to the national revenue. The Government exists to render service to the people. Surely some measure of the benefits received must enter into the establishment of the obligation to contribute. When we attempt to determine where equity lies in this matter, the plain’ fact is that the taxation schedules are a hotchpotch of prejudice, emotion and expediency, and mostly the latter. While this system of raising national revenue persists the schedules will always be in that shape.

We have heard a good deal about the policy of the Labour party, which considers that taxation should be based on ability to pay, and advocates increased social services. A certain Karl Marx once said that the socialist policy would be “ From each according to his ability, and to each according to his need “. I see no difference between that philosophy and the present policy of the Labour party. The Government believes in the dignity of the individual. But how can the dignity of the individual be preserved if we persist in putting him in a position in which he has to exist on public charity? Our emphasis must be placed on the need to give encouragement to the individual, and to expand the national economy. Governments must leave the taxpayer more of his money to spend in his own way. The Labour party has spoken as if any income in excess of arbitration awards must be the result of privilege or monopoly. The plain fact is that this country benefits from the efforts of a number of people, who are prepared to put extraordinary energy into the job of establishing their own security. By so doing, they confer tremendous benefits on the rest of the community.’ There is a price to be paid for higher incomes. United States of America authorities, not for any miserable political reasons, but because of the cost to the American economy, are concerned about the decreasing expectation of life of persons who control commerce and industry. The mental and physical strain of running a business, particularly in these days, is beginning to take its toll of them. If a man’s life is shortened by fifteen or twenty years because of the imposition of these heavy strains on him, are we to deny him the benefit of his success and higher-earning ability? It is true that management is valueless without labour; but it is equally true that labour is less productive without management. Surely the time will come when honorable members will realize that no criticism should be offered, and no steps should be taken, which drive a wedge between labour and management.

I turn now to the subject of company tax, which is always singled out for trenchant attack by Opposition members, because they do not understand how business functions. No country is more in need of rapid and extensive development than is Australia. I do not believe that governmental effort to develop Australia can be really effective. The best develop.went for which we can hope is that which flows from the activities of individuals, who are prepared to put money and effort to work in a productive enterprise, and conduct it successfully. This sort of development demands increasing aggregations of capital, which has long since been beyond the ability of any individual to contribute. So, Ave shall always be in the hands of companies which can provide the necessary aggregations of capital, not necessarily the capital of the wealthy, but capital from individual investors, who, as the honorable member for Mitchell (Mr. Wheeler) has pointed out, are prepared to put into the production organization their £100, £200 or £300, or invest their surplus savings in an effort, not only to secure themselves - that is incidental - but also to develop this country. Opposition members repeatedly overlook the fact that anything from £1,000 to £2,000 of investment in plant and machinery is required to provide employment for only one of their supporters. Where do honorable gentlemen suppose this sort of investment money comes from ? No less than 80 per cent, of the work force of this community is employed by private industry. Therefore, the subject of company tax and profits has a definite and intimate relationship to. the problem of the standard of living, the constancy of employment, and the prospects of every wage-earner in Australia. Where does this investment capital come from? My friend, the honorable member for Flinders (Mr. Ewert), wants to know whether a reduction of the rates of tax on higher income-earners will stimulate investment in industry. Of course it will. Industrial investment comes from persons in the middle and upper income brackets. I pointed out, in another debate, that the investor is not responsible for the ever-mounting cost structure, which threatens to destroy the very foundations of our economy. There is no source of investment capital other than the man who earns every week a little more than he needs to live on, and is prepared to plough that surplus back into industrial development. The banks to-day hold about £900,000,000 in savings. That is not £900,000,000 for investment. It is savings for spending, because in the main investment capital does not come from the income strata which has contributed those bank savings. Nevertheless, the fact that that money is there is the basis on which industry can grow and develop. In recent years, tax rates have been too high. They have not left in the hands of the one-time investor sufficient for investment. From that disparity has arisen the need for overseas investment in Australian industry. However, I do not believe that to be the answer. Much improvement would take place if the socialists opposite could somehow be persuaded to get rid of the idea that profit from investment, which is, in effect, the rental that a man receives for the use of the tools of industry, is immoral. As the honorable member for Mitchell (Mr. Wheeler) has pointed out, there are 600,000 shareholders in industry in this country. The Broken Hill Proprietary Company Limited, which is so often singled out for attack by Labour supporters, has more shareholders than it has employees. That is the general pattern of Australian industry. The ownership of industry throughout the Commonwealth is widely diffused, and for that reason industry is on a sounder basis.

There is no mystery about investment. Any one can share in the profits of investment if he is prepared also to share in the risks of investment and of industrial management. The coal-miners of this country have lost a lot of money in times gone by through strikes. If they had remained at work and invested that money in their industry, they would today be not employees, but the owners of the mines in which they work. The plain fact is that industries must be able to retain enough of their earnings to expand. We often wonder about the ability of the American economy to carry half of the world. The facts are not very hard to find. One has only to compare the figures of the returns to shareholders, after taxation has been paid, in the United States of America and Australia to learn some very valuable lessons. In 1939, the return on shareholders’ funds after the payment of tax was 8.5 per cent, in both countries. However, in the years between 1939 and 1951, the return to the American investors increased to 14.4 per cent., whereas the return in Australia was only 8.2 per cent. There is the incentive for increased production and wider mechanization. That is the situation that has enabled America to pick up and carry the broken down economies of half of the world.

If we survey a broad representative group of companies employing a very high percentage of the Australian labour force, we find that whereas in this country the return on shareholders funds after providing for taxation varied from only 3.6 to 9.4 per cent., in America it has varied from 8.3 per cent, to 16.2 per cent. It is clear that the Americans can teach us a lesson. They have built a tremendously strong and resilent national economy by encouraging investment in industry. They have encouraged investment by returning reasonable profits to shareholders, not only for the ultimate strengthening of industry, but also to give incentives to those who own it. If we seize a big percentage of business earnings, we obstruct the rate of technical progress. It is not the employer or even the investor, but the wage earner and consumer - in the ultimate analysis the wage-earner and the consumer are the same person - who stand to lose most if hostility to reasonable earnings, both before and after taxation, is to be allowed to destroy incentive. Because this bill moves in the direction of correcting harmful distortion of the Australian income position, I have not the slightest doubt that it will commend itself to the widest possible range of thoughtful people in this country.

Mr Thompson:

– I rise to make a personal explanation. I do not know, whether the honorable member for Patterson (Mr. Fairhall) intentionally misrepresented what I said last night, but be has told the House that I said that a taxpayer on £500 a year, with a wife and two children, was paying £1 14s., or 8d. a week in tax. My statement was that the taxpayer who, under the Government’s proposals, pays £5 6s, a year, would, if the concessional deduction for a wife were increased to £156, that for the first child to £104, and for the second child to £78, pay £1 14s. in tax. That is what I advocated.

Mr Fairhall:

– I am prepared to amend my mathematics, but I still think he is a fabulous figure.

Mr MORGAN:
Reid

.- Honorable members opposite “ have chided Labour on its financial policy. For instance, the honorable member for Patterson (Mr. Fairhall) said that Labour had advocated a capital levy. I am afraid that is a figment of the honorable member’s imagination, or perhaps his fulminations can be put down to election jitters and forgiven. On the other hand, the honorable member for Balaclava (Mr. Joske) said Labour had advocated lower taxes and increased expenditure. Surely there is nothing very wrong in that. I should think it is a most worthy objective in an underdeveloped country such as Australia. As the honorable member for Patterson (Mr. Fairhall) said, no country is more in need of rapid development than is Australia. Surely there is nothing wrong in using the credit resources of the nation for developmental purposes. Adequate development cannot be provided for out of current revenue or out of savings, whether voluntarily by way of government loans, or compulsorily by way of taxation. The honorable member for Balaclava also said that Labour believed in the unlimited use of treasury-bills. The facts belie that statement. I shall quote from the latest report of the Commonwealth Bank figures showing the use of treasury-bills since the war ended. The report shows that treasury-bills outstanding on account of Commonwealth Government at the end of June, 1946, amounted to £343,000,000. Australia had. -just emerged from a costly war during which considerable treasury-bit finance had been necessary. In 1947, outstanding treasury-bills had been reduced to £278,000,000. In 1948, the figure stood at £208,000,000 and in 1949, when the Chifley Government went out of office, it was £123,000,000. In both 1950 and 1951 the figure stood at £108,000,000. Then the increase started. By 1952 the figure had risen to £153,000,000, and in the current year it has reached £222,000,000. That clearly disproves the charge made by the honorable member for Balaclava. The national credit - treasury-bills - had to be utilized to finance the war effort, and rehabilitation, repatriation, housing, developmental works, and greatly increased social services in the post-war period. At the end of 1949, when, unfortunately, the Menzies Government assumed office, Australia was on the verge of a veritable golden era.

The Chifley Labour Government, whilst prosecuting a vigorous war effort and subsequenlty readjusting the country to peace-time conditions, substantially reduced the amount of treasury-bills, and made big reductions of taxation. A3 a matter of fact, the Chifley Government made five reductions of taxation, amounting to £280,000,000 in four post-war years. The House will recall that the present Prime Minister and the Treasurer made wild promises during the election campaign in 1946, regarding tax reductions, but Mr. Chifley calmly said that the Labour Government would reduce taxes from time to time as the circumstances warranted. Mr. Chifley was a man of his word. I shall remind honorable members opposite again of the promises made by the present Prime Minister during the general election campaign in 1949. The right honorable gentleman, in his policy speech delivered on behalf of the Liberal party and the Australian Country party, said of the Labour Government -

The Government has been forced by public opinion to reduce the rates of tax to even a greater extent than we proposed at the last election. ifr. Chifley was a man of his word. He promised, on behalf of his Government, that taxes would be reduced when the circumstances warranted. The reductions made in the period from 1946 to 1949 exceeded, the taxation relief that the leaders of the Liberal party and the Australian Country party had proposed to give. The present Prime Minister also stated in his policy speech in 1949 -

The Commonwealth’s taxation revenue is ?200,000,000 more than hi the most critical period of the war.

We still believe that rates of taxation must he steadily reduced, as riiition.il production and income rise and as economies are effected in administration.

We know perfectly well that the present Government, far from fulfilling those preelection promises; actually doubled taxation. The increase was made, not by steady progression, but sharply, in. a manner that shocked the whole nation. Australia has not yet recovered from the horror .budget. The Government has a queer idea about the manner in which a promise should be honoured. In the general election campaign in 1949 the present Prime Minister said, ““We shall reduce taxation “. Within the next few years, his Government doubled taxation. Now, just before honorable members opposite go to meet their masters, the Government grants a slight reduction of taxation.

The Chifley Government used sound financial methods, and tributes have been paid to its financial policy by economists throughout the world. Economic experts agreed that when the Chifley Government was in office from 1946 to 1949 Australia’s economy was the soundest in the world. Yet within a year or two after the defeat of the Chifley Government, Australia faced an economic crises through a disastrous financial policy pursued by the Menzies Government. The Prime Minister and the Treasurer believed that high taxes would assist to cure inflation. A flood of goods was permitted to enter this country in 1.950, with the result that many Australian industries were crippled. Instead of encouraging local industries to regain their feet, the Government has forced many of them to the wall by imposing on them a crushing burden of taxation. Unemployment began to increase, although there was full employment when the Labour Government was in office, and approximately 160,000 persons were out of work at the beginning of this vear. Far from curbing inflation, the Government has actually fed the flames by its taxation policy. I shall read & passage from an address delivered by Mr. G. H. Mountain, M.A. (Econ.), senior economist of the National Bank of Australasia Limited, at the Australian Institute of Political Science Winter Forum, 1953. After a long dissertation on, and analysis of, the finances of Australia, Mr. Mountain said -

It is obvious that Australian taxation, both relatively and in an absolute sense, has reached new, high levels since the pre-war years. It had to rise greatly, of course, during the war years and nobody could expect that the pre-war ratios would be restored.

But a glance at the accompanying Table shows that after the war, no real effort was made to bring about any appreciable reduction. Indeed the annual yield rose steadily; violently is not too strong a term for the more recent years. Last financial year was an all time record, ?989,000,000 being collected and spent equal to about 30.5 per cent, of national income, or on a more refined comparative basis, approximately 29.7 per cent, of total private income.

There does not appear to be one jot of evidence to show that these huge levies had even a salutory effect upon our postwar inflation. Indeed, much evidence points the other way; to the conclusion that these enormous taxation imposts have aided and abetted inflation of our cost and price system.

That view is supported by an address given at the annual conference of the Federated Taxpayers Association of Australia, and published in the Taxpayer’s Bulletin of July last. The address was delivered by Mr. J. McKellar White, who moved the following motion : -

That, in the opinion of this conference, total taxation should not exceed 25 >er cent, of the national income.

Mr. McKellar White stated;

In recent times economic thought has followed the proposition enunciated by Colin Clark that the maximum safety level of taxation is 25 per cent, of the national income.

Taxation ‘beyond that level, so it is said, aggravates inflation in all its aspects.

After a careful analysis of the course of public finances here and abroad in the post 1914-18 war period, the 1930 depression and the post 1939-45 war period, Mr. Clark is reported to have said - “ Though the evidence may not bc conclusive, it certainly all lends support to the idea that the critical level of taxation beyond which inflationary forces suffer a political check occurs at about 25 per cent, of the national income.

If this experience from the 1940’s, on top of that of the 1920’s and 1930’s, does not convince you that the safe political and economic limit of taxation is somewhere near 25 per cent, of national income, then I don’t know what will. And in this figure we must include taxation in all its forms, direct and indirect, central State and local.”

Although taxation is often justified as a weapon to control inflation (for example. Sir Arthur’ Fadden’s 1951 budget speech) it fails in this purpose if it merely draws off private spending powers and transfers a comparable expenditure to the Government.

Beyond Safe Level.

Taxation beyond the “ safe level “ goes further. The spirit of incentive is dulled, thrift is not worth while, the investment of risk, capital is discouraged and costs just do not mean a thing.

Beyond a certain point, taxation causes businessmen to neglect their businesses and to play golf in the middle of the week as well as on Saturdays.

Incentives.

Overtime is not worth while if the additional . inward puts the whole of the year’s earnings into a higher tax bracket.

The farmer regards it as foolish to expend capital and his own labour in planting more acres if, in the result, the tax gatherer takes the large share of a good crop while he is left to carry the loss- of’ bad seasons himself.

Why save out of the tax paid residue of one’s income if savings are vulnerable to rapacious death, estate and gift duties? In any event the welfare State will care for us in our old age and for our dependants who follow.

Why invest our savings in risk enterprises such as starting new businesses if we can invest in gilt-edged government loans, the return from which, after taxes are paid, is little less than private enterprise offers?

Why should the business manager of the board of directors cavil at meeting claims for higher salaries and wages, higher expenses allowances, higher advertising appropriations, if the knowledge registers that 10s. in every pound of additional expenditure is recouped by way of taxation deductions?

These factors all add up to adding fuel to the fire of inflation.

Until the crash comes or, as Colin Clark maintains, until the ratio of taxation to national income is reduced to 25 per cent., many of us are protected (to an extent) from real suffering - salaries and wages, business profits, professional earnings all tend to move in some sympathy with the rising cost of living.

Fixed Incomes.

But not so the person depending on a fixed money income for sustenance.

War and uncontrolled inflation may inure many sections of taxapayers to high income tax’ rates.

But to-day the taxpayer is neither persuaded by national emergency nor consoled by a fictitious inflationary affluence that high taxation is necessary or bearable.

Our organization should therefore be untiling in our efforts to persuade governments to recognize as the margin of safety 25 per cent, of the national income.

Mr. McKellar White then sets out a tabulation showing the ratio of taxation to national income during the past decade, which is as follows: -

It will be seen that the ratio was high under the Chifley Government during the war years. However, by 1947-48 it had been reduced to 25.9 per cent. In 1948-49 it was 27.2 per cent. By 1949-50, which was the last year of office of the Chifley Government, the ratio had been reduced to 24.4 per cent., which, as Mr. Colin Clark has indicated, provided a very safe margin. Immediately after this Government came to office, the ratio began to increase. In 1950-51 it was 26.7 per cent, and by 1951-52 it had risen to 30.8 per cent., which was even higher than the war-time and immediate post-war ratio. Under the present financial proposals of the Government, it will be 27 per cent., which is beyond the danger point referred to by Mr. Clark.

Honorable members may recall that soon after the Government introduced its taxation measures in 1950-51, costs soared and the value of money declined. .The cost of homes doubled in a period of approximately two years. I submit that that indicates that the Government was following a completely crazy financial policy. Particularly is that comment applicable to the Government’s method of financing national works from taxation revenue. The Treasurer admitted last January that it was wrong to do so. At that time, he said that that particular part of the Government’s financial policy had been rectified and that in future such State works would be financed by means of loans, which except for the interest thereon, do not add to the burden of taxpayers. Nevertheless, the Government appears to have persisted in its previous policy in regard to Commonwealth developmental works as projects such as the Snowy Mountains hydro-electric scheme indicate.

Mr SPEAKER:

– Order! The honorable gentleman is getting away from the bill, which deals with the assessment of income tax and the rates to be levied. I have given him a great deal of latitude. For the remainder of his time he should keep to the bill.

Mr MORGAN:

– I am dealing with the rates of tax, and I am submitting that they are unduly high. I wish to show that the Government could reduce those rates considerably by adopting proper financial methods.

The proposed tax concessions are purely nominal, because no real reductions, in terms of money, will be given to the taxpayers. Nevertheless, the Treasurer has said that an overall reduction of 12J per cent, in rates, amounting to £51,250,000 will be made. It seems to me that if the Government were to finance public works, which this year will cost £102,000,000j by means of treasury-bills, for loans for instance, taxation could be reduced by a further 25 per cent., which would have the effect of bringing the ratio between taxation and national income below the danger point mentioned by Mr. Colin Clark. That would give a real incentive to industry and to the people generally and would help to restore confidence in the business life of the community.

Alternatively, the Government could give further concessions to shareholders orrecipients of social services benefits. Had the Government adopted sound financial methods, a considerable saving could have been effected and the taxpayers would have benefited accordingly. To utilize taxation revenue in order to finance such schemes means that present day taxpayers are being required to finance by means of a permanent compulsory loan, schemes from which future generations will derive the major benefit. During four years of its period of office, the Chifley Government was able to reduce taxes by a total of £280,000,000. This Government has inincreased taxes fourfold, to the figure of £1,130,000,000 since it has been in office.

Honorable members opposite seem to me to be going through pre-election spasms. I do not think that the Government will be able to hoodwink the people any longer or to delude them by means of specious promises in regard to reductions of taxation. It is doubtful whether it will be able to continue to drug its own supporters by such means. An analysis of the proposed taxation reductions discloses which section of the community will benefit from them. In 1952-53, income tax on individuals yielded £37,200,000. In 1953-54 it is expected to yield £398,400,000, or an increase of £11,200,000. Last financial year, collections from sales tax totalled £89,000,000, whereas this year the total is expected to be £87,700,000 or a decrease of £1,300,000. On the other hand, company tax, which yielded £167,000,000 last financial year, ‘will yield only £133,600,000 this financial year, or £33,400,000 less. It is therefore obvious that public and private companies are the only section of the community which will obtain any real benefit from so-called taxation concessions!

The following table which refers to a married man with two dependants, indicates the way in which income tax will be reduced when the budget proposals become effective : -

Obviously, those who really provide the bone, nerve, sinews and marrow of the community will continue to be taxed almost as heavily as they were taxed last year, whereas those who have accumulated fat will receive the benefit of substantial reductions. These figures show where the Government’s sympathies and interests lie. It has undergone no change of heart on the issue of taxation. Fortunately, a recent gallup poll has indicated that the people will not be fooled next year as they were fooled at the last election and are only awaiting the fateful day. This Government cannot avoid the reckoning. Tinder the Constitution, it must face its real masters some time next year. It certainly will go down in history as an all-time record-breaking government for the repudiation of promises.

This taxation measure is just another confidence trick. It offers no real relief to the great body of the wage earners, who are the real producers of the community. The only way to restore confidence to the people is to institute a sound financial policy. After all, the use of taxation revenue should be confined to administration, social services and other duties of government which obviously should be financed from current revenue. Many of the purposes to which the Government proposes to apply taxation revenue could be satisfied by the use of the national credit resources, either through the issuing of treasury- bills or the raising of loans. The people should be allowed to make use of their savings in their own ways. This Government declares that if believes in private enterprise, yet it will not allow people who have been fortunate enough to accumulate savings to use that money as they think fit, whether it be for their own comfort and enjoyment or for investment in Government loans or private enterprise. The stock market today is stagnant. It is not attracting investments from the general public, and this fact indicates that the Government has done a grave disservice to the community through the financial and economic policies that it has pursued during the last two or three years. Real public confidence and prosperity would be restored if the people were allowed to use their savings according to their own wishes. The only way to establish a sound social and economic policy, as far as 1 can see, is to make sure that the Labour party is returned to office as soon as possible so that it may continue with the work on which it was engaged when it went out of office in 1949.

Mr FAILES:
Lawson

,- The outstanding feature of this debate appears to me to> be that, although it relates specifically to a taxation measure, it cannot be divorced from the general budget proposals of the Government. I realize that our speeches must refer to the subject-matter of the bill, but I suggest that we must keep clearly in our minds the fact that these taxation proposals constitute only one of many features of Government policy that we have been considering and will continue to consider during the current sessional period. Obviously, it would be impossible to effect great reductions of taxation of all kinds and at the same time to continue without alteration all services that the Government provides for the community. Those who demand so emphatically that taxation shall be further reduced - I refer particularly to members of State governments - should remember that the States ave able to continue to function only because they receive a large share of the Commonwealth’s taxation revenue. In fact, the records show that the States have received from the Commonwealth in various ways during the last year n total of £220,000,000. That money came out of revenue collected by the Commonwealth. Therefore, it is idle for State governments to demand that the Commonwealth reduce taxation, unless1 they do so specifically with the idea of resuming their former taxing rights.

Several members of the Opposition have remarked that Government supporters have not been eager to support the bill in this debate. I have not noticed any reluctance on the part of honorable members on this side of the House to express their approval of the hill. There is a very old proverb that good wine needs no bush, and this measure requires very little support. Its merits are obvious. Members of the Opposition have referred to the opinions of a wide variety of economists, both well known and otherwise, in their efforts to convince the Parliament that the Government’s proposals are unfair, but they certainly will not succeed. The Parliament should make up its own mind. It should not be dependent upon the views of all sorts of obscure so-called authorities but should be able, as I think it is, to determine its own views on such matters. The merits of the bill are plain. Obviously, the measure will help to achieve the objects that the Government set out to achieve when it first gained office in 1949. The Government was not able immediately to do all it hoped to> do, . largely because of unexpected circumstances, but now it is within sight of its goal.

One member of the Opposition complained that the Government had not provided an explanatory booklet in. order to clarify its taxation proposals. The simple fact is that, the Treasurer (Sir Arthur Fadden.) has taken such pains to simplify our taxation system that on rids occasion, there is no need for an explanatory booklet. When, this Government was elected, the taxation laws were so complicated, and the various forms and methods of assessment were so involved, that very few people could, make head or rail of them. The Government set out at once to clarify the system of making returns and assessing tax. Having accomplished that task, it turned its attention to the various acts, and since then it has amended them in order to eliminate the worst of the complexities. lt. has succeeded so well that explanatory booklets are no longer necessary. The simple bill now before the House deals clearly with both the method of assessment and the. rates of tax. Some members of the Opposition may need, assistance to understand the- measure, but this is 0nl % because they have concentrated their attention on extraneous matters. Some nf them have complained that this Government has not reduced taxation although it promised to do so. That is not true, of course. The Government certainly promised to -reduce taxation, and it has done so very generously. It increased rates in one year only because, unlike other governments that I know, ir. does wh.it it considers to be right intend of what it thinks to be politically expedient. Had it wanted to be politically popular, it would not have increased taxation when it did so. but then the 1-953-54 budget could not have been produced in its present form, and this bill woul’d not have been practicable. Tt courageously took the correct course of doing, what it knew to be right, although Hunt course may not have been to its political advantage. Honorable members opposite have stated, that the previous Government was able to reduce taxation, and this Government should have been, able to do so, but they did not mention that the Chifley Government received over a period of three years, and principally in one year, £135,000,000 from the sale of disposals equipment which had been purchased with loan money during the war. That was a large addition to revenue and. it could have been given back to the people by a reduction of taxation. On the other hand, this Government had very little disposals equipment to sell because it had already been sold and, in fact, it had to purchase some of the equipment back again. It was needed because ‘of the danger of war that faces Australia from day to day and has been present for several years.

Under this bill, concessions are to be given, by way of deductions and amendment of existing provisions, that have been glossed over by honorable members opposite. They include the elimination of the differential rate between property and personal exertion income. Quite a number of the provisions of the bill will not become known generally until the taxpayers prepare their returns or reecive au assessment. If they do not know of them already, they will get a. pleasant surprise. The differential rate has been a bone of contention for many years and has acted adversely against many persons, including aged taxpayers who invested their savings and were living on the interest on capital. Many honorable members probably have relatives who are placed in that position. Those people have been subjected to the higher rate of taxation because their . income from life savings derived by personal exertion has been rated on the same level as income from property which is higher than the personal exertion rate. Provision is to be made also for the allowable deduction for a wife to be increased from £104 to £130. Is there an honorable member who does not consider that his wife is worth more than the amount previously provided? The new provision will be welcomed.

The Government has done well in ex: tending the concessions for educational expenses. Those expenses axe incurred not. only by wealthy people but by many taxpayers who are forced to send their children away from home to study. Many of then-i live in hostels. In my electorate, of Lawson, there are hostels at Mudgee and Dubbo in which children from scattered districts, as well as those close at hand, have to live while at school. I was disappointed last year when I could not tell the parents of the children that they could claim, for income tax purposes, the amount that they paid to hostels which were not under the control of the school authorities. I have noticed with pleasure that the Treasurer has agreed to representations that were made to him on this matter, as he has done in many other cases where it was possible, and has made such expense as hostel boarding fees an allowable deduction. Parents will be able to claim for the living expenses of their children as well as the cost of text-books and school fees.

Honorable members on the Opposition side often refer to persons who are in receipt of the basic wage. They study the list relating to income tax to determine how much income tax such a person will pay. They forget, however, that before a person is called upon to pay income tax, he has to submit a statement of his taxable income. Many deductions, some of them of the statutory nature, are deducted from the actual wage that the taxpayer receives. I am not referring to deductions that may be incurred in the acquisition of an income but to statutory deductions. They include gifts, donations, hospital and dental fees - and allowances made for dependants. The basic wage earner is shown on the list as a man earning about £600 in round figures. If the taxpayer has a wife and two dependent children he will pay, according to statement No. 7, £13 ls. in taxation. The truth is that such a person probably does not pay that tax on his actual wage. He may have had a number of allowable deductions taken from his wage returns before he arrived at his taxable income.

I direct the attention of honorable members to page 170 of the budget. Under the heading “ Miscellaneous and Statistical “ there are figures relating to income taxation. The statistics show that taxpayers with an actual income ranging between £301 and £800 number 2,100,000. They represent approximately two-thirds of the total number of residents. The total taxable income of that group is £887,900,000, which means that the average actual income of those 2,100,000 is £534. So two-thirds of the resident taxpayers are in the income bracket between £301 and £800 and have an actual income of £534. From that sum, they have some statutory deductions so that their actual average taxable income. is £425. I invite honor.able members to consider the basic tax on such an income after taking into consideration deductions for wife and children and dependants. The basic tax on £425 is 83. 3d. a week. A man with a wife and two children on that income who pays 8s. 3d. a week in income tax collects in child endowment alone 15s. a week. What a magnificent country this is when a man who is representative of two-thirds of the taxpayers does not pay as much in income tax as he receives in one benefit alone from social services ! In addition he is guaranteed against illness and old age and his wife is given security in the event of his death. He knows that if he needs hospital attention, it will be provided for him. For the small sum of 8s. 3d., the Federal Government, which has been so severely criticized, will give him all the privileges of citizenship and, in addition, will pay him 15s. each week by way of child endowment. It may be said that an income of £425 a year is very low, although it is not the actual income but only the average, taxable income after advantage has been taken of all the deductions for which provision i3 made in the beneficent taxation, measures that we are discussing. Let us assume the man has an actual income of £800 a year. After taking advantage of all the deductions to which he is legally entitled, he will be required to pay £35 14s. a year income tax, or 14s. a week. He still will not pay as much in income tax as he will receive from 4.he Government in child endowment payments. What a wonderful country Ibis is!

Mr Ward:

– What about indirect taxes ?

Mr FAILES:

– The honorable member for East Sydney (Mr. Ward) and his socialist friends on the other side of the House, who claim that they represent the lower-paid man, or the wage-earner, as they call him, blind themselves to these figures. They are not prepared to tell people with low incomes that the greatest taxation benefits they have received have been given to them by governments composed of parties on this side of the House. Honorable members opposite pretend to be the friends of the wool-growers. They complain about how we hit the woolgrowers a couple of years ago, and they pretend to support them. But they do not support the wool-growers. They do not support even the people they claim to represent, because they will not tell them the truth about taxation. This measure does not require to be supported by honorable members on this side of the House. It stands on its merits. It represents the achievement of the ambition of the Treasurer, who has fought to honour the promise he made some years ago and make sweeping reductions of the taxes paid by the great majority of the people of this country, two-thirds of whom are in the £500 to £800 a year income group.

Mr DALY:
Grayndler

.- I have listened with considerable interest to the few members of the Government parties who have half-heartedly supported this last-minute attempt to redeem the pledges that were made by their leaders in relation to taxation concessions in 1949 and 1951. As members of the Opposition have pointed out, these measures will not fulfil the promises that were made on those occasions. To prove the falsity of the Government’s claim that it is reducing taxes, I propose to place on record unshakable evidence that taxation, in many instances, is being increased. The policy speech delivered by the present Treasurer (Sir Arthur Fadden) in 1949 was published in a booklet, with the Treasurer’s photograph on the front. On page 15 of the booklet the following statement appears : -

Ti the socialists are defeated, therefore, rates of taxation, both direct and indirect, can and will be steadily reduced.

Let me compare total tax collections and rates of taxation under this measure with total tax collections and rates of taxation in 1949-50, when that statement was made. In 1949-50, total tax collections were £504,000,000. In this financial year, the Government will collect over £874,000,000 from the Australian people or over £270,000,000 more than was collected from them in 1949-50.

Government members interjecting,

Mr DALY:

– I know that honorable members opposite do not like this revelation of the way in which the Government has dishonoured its promises and is endeavouring to mislead the Australian people into believing that it is making reductions of taxes. I want to place on record evidence that will be used most effectively against the Government when, at the appropriate time, it is dragged screaming before its masters, the electors. In 1949-50, under the Chifley Government, the amount of tax paid per head of population in Australia was £62 13s. 2½d. Under the new rates of taxation, it will be £98 0s. 3d., a substantial increase. When we examine these matters logically, we see that the Government parties are trying to play the same trick on the Australian people as they played in 1949. They were elected on a pledge to reduce taxation, but, having been elected, they immediately increased income tax by 10 per cent. Then, twelve months later, they made a 10 per cent, reduction, and told the Australian people that taxes had been reduced. That is the kind of thing that the Government is trying to do now. The fact that £270,000,000 more in taxes will be taken from the pockets of the Australian taxpayers this year than was taken in the year when the Government was elected proves that the pledge to reduce taxation has been torn to shreds and forgotten. The Government is running away from it. I say quite sincerely that the Australian people will not tolerate governments that do not honour the pledges on which they are elected. Ultimately, the Government parties will pay the penalty for dishonouring the pledges that were written indelibly into the policy speeches delivered by their leaders.

The new rates of taxation have been represented as a fulfilment of the Treasurer’s tax reduction promise. In 1951, after the horror budget had piled burden after burden on the taxpayers in order to meet an economic crisis, a single man on the basic wage was required to pay £38 2s. a year income tax. In 1953, after a tax reduction budget that is supposed to reduce the burdens of the taxpayers because the economic crisis has been overcome, such a man will be required to pay £46 3s. a year income tax - a very substantial increase. The transition from a .horror budget to a prosperity budget has resulted in an increase of his income tax by £8 ls. a year. That is the position in which taxpayers will find themselves after this measure has been passed. Yet, the Government claims that under this bill it is reducing taxes. Whereas in 1951 a basic wage earner with two children paid tax amounting to £8 14s., he will now pay £14 ‘6s. in tax, the alleged reduction in that case being an increase of £5 12s. annually. The basic wage in 1951 was £9 9s., whereas, to-day, it is £11 16s. All of the figures that” I have cited have been obtained from official sources. They show clearly that the Government has broken its promise to reduce taxes. Government supporters do not like to hear criticism of their shortcomings. After the next general election, the honorable member for St. George (Mr. Graham) and the honorable member for Mitchell (Mr. Wheeler) and their colleagues, when they are judged fairly on the record of the Government, will find themselves on the outside looking in. The Government says that taxes should be reduced in the interests of the nation, particularly on the incomes of persons in the lower income groups. The fact is that it has given the greatest concessions to the wealthiest and most powerful sections of the community and the least concessions to persons in the lower income groups. Fancy a government that pledged itself to reduce taxes, imposing tax on a person with two children who is earning only the basic wage which, owing to the decline of the purchasing power of money under this Government, is but a mere pittance! I shall accept every opportunity in this House and elsewhere to brandish this booklet in which the Government’s promises to reduce taxation have been recorded. I have no doubt that the cost of printing the booklet was borne by the private banks who are the friends of the Government.

The honorable member for Mitchell had much to /say about liberalization of social services and superannuation schemes .and all the other grandiose plans which he and his colleagues speak about but make no attempt to put into effect. The Prime Minister (Mr. Menzies), in the joint polley speech of the present Government parties during the general election campaign in 1949, promised to remove the means test. He said -

During the new Parliament we will further investigate this complicated problem, with a view to presenting to yon at the election of 1992 a scheme for your approval, Meanwhile existing rates of pension will, of course, be at least maintained. We will, much more importantly increase their true value by increasing their purchasing power.

I should not be in order if I proceeded to deal with the decrease of the purchasing power of money since the Government assumed office. However, another general election is approaching and the Government has not yet given any indication to the people that it is able to evolve a scheme for the abolition of the means test. Far from removing the means test it has reimposed it on every patient in every public hospital in every State with the exception of Queensland. The Government of that State prevented the means test from being re-applied there. This Government, by refusing to make available adequate funds for services that the hospitals are rendering, has imposed a further burden on the masses of the people. During the four years that it has been in office, it has failed to present any scheme for the abolition of the means test. Under this measure, it will not advance .one step nearer to the fulfilment of the promises that it made to increase social services benefits. Although it must have realized that this would be the last opportunity that it would have to present a budget to this Parliament, it holds public opinion in such contempt that it has failed even .at this late hour to honour its election promises. If I were in order in doing so, I could deal with the long list of other pledges that the Government has repudiated just as it has repudiated its promise to reduce taxes. What justification has any government for imposing tax on a basic wage-earner with two children when, at the same time, it is making huge remissions of tax to companies and wealthy organizations ? Whilst I admit that assistance should be given to industry, the Government should take a broader view of the economy as a whole. The fundamental principle of taxation is that the heaviest burden should be placed on the ‘shoulders of those best able to bea r it. That means that the greatest contributions should be demanded from those with the greatest incomes, and. concessions should he made to persons in the lower income groups at the expense of the more fortunate members of the community. This is a rich man’s budget. My colleagues have cited figures that prove conclusively that the greatest benefits to be provided under this measure will be made available to the wealthy sections of the community. I ask for leave to continue my remarks at a later date.

Mr SPEAKER:

-(Hon. Archie Cameron). - I take this opportunity, so th at honorable members will not be caught unawares, to point out that I have heard seventeen honorable members speak on this measure and that we have long since reached the stage of tedious repetition. “When the debate is resumed next week, I shall require tohear something new or I shall not, permit honorable members who indulge in tedious repetition to continue with their remarks.

Leave granted ; debate adjourned.

page 1265

CUSTOMSBILL 1953

Bill received from the Senate, and (on motion by Mr. Eric J. Harrison) read a first time.

page 1265

ADJOURNMENT

Parliament House

Motion (by Mr. Eric J. Harrison) proposed -

That the Housedo now adjourn.

Mr MORGAN:
Reid

.- I desire to raise once again the matter of the heating arrangements in this House. We are now half-way through spring, and entering the warmer part of the year, but we still suffer from the absurd system of filtering the temperature in the chamber from that of the outside air. I suggest that there is no justification at the present time for the air-conditioning of this place. Surely honorable members should be allowed to breathe in God’s pure air, especially the air of Canberra, which, at the present time of the year, is fresh and pleasant. I used to enjoy that air, as well as the Canberra sunshine in days gone by but the sittings of the Parliamentare now so strenuous that I am now no longer able to do so. I suggest that the: air-conditioning of this chamber makes honorable members hot and uncomfortable. At times it is like an oven. Surely we do not need to be molly-coddled to that extent. There may be some justification for air-conditioning in Canberra during the winter months, but honorable members are very seldom here at that time, and I suggest that central heating and air-conditioning are a menace to health at any time. People who have travelled in the United States of America have told me that the widespread use of heating and ventilating systems there is tending to soften, the people both physically and mentally. Surely honorable members do not want to suffer similarly.

I suggest that this chamber is a veritable death-trap. Honorable members are frequently here until the early hours of the morning, and then they are discharged into the icy cold night air. It is not at all extraordinary that as many as six honorable members at a time have been laid aside with pneumonia. Moreover, during the present sittings of the Parliament, an all-time record has been established by the number of deaths of our colleagues. Nobody seems to care about that, and nobody seems to be responsible for the health of honorable members. I. believe that some responsible member of the Government should take up this matter, thoroughly investigate it and reach a logical conclusion that will be acceptable to all honorable members. I hope that that will be clone quickly, because we do not want to be condemned for the rest of the spring to spend a large proportion of each week in this unhealthy and overheated atmosphere. At any rate, before next year action should certainly be taken to remedy this state of affairs. Perhaps if some honorable members believe that, they would be too cold if the chamber were not artificially heated, they could be issued with rugs to keep them warm. In any event, the present system of central heating is not necessary, and I suggest that it should be removed so that honorable members can en joy something of the delightful springand summer climate of Canberra.

Mr WARD:
East Sydney

.- Mr. Speaker-

Motion (by Mr. Eric J. Harrison) agreed to -

That the question be now put.

Original question resolved in the affirmative.

page 1266

PAPERS

The following papers were presented : -

Public Service Act - Appointments - Department -

Interior - H. A. Johnson.

Territories - H. C. Haskew.

House adjourned at 3.58 p.m.

page 1266

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Bitumen

Mr Duthie:

e asked the Minister for Supply, upon notice -

  1. Is bitumen being made in Australia by oil companies?
  2. If so, how many tons of Australia’s requirements are being so manufactured?
  3. How many tons are being imported?
  4. How does the Australian cost of production of bitumen compare with the landed costs of imported bitumen?
Mr Beale:
LP

– The Minister for National Development has supplied the following information: -

  1. Bitumen is being made in Australia by the Shell Company of Australia Limited, Vacuum Oil Company Proprietary Limited, and Bitumen and Oil Refineries (Australia) Limited.
  2. During the twelve months ended the 30th June, 1953, 98,776 tons of bitumen were manufactured in Australia.
  3. During the twelve months ended the 30th June, 1053, 24,330 tons of bitumen were imported into Australia.
  4. Bitumen is one of several simultaneous products of the refining of crude petroleum. The allocation of the cost of production to the individual products ran only he done on an arbitrary basis which would vary . with different refineries. It is not possible to assess a true cost of production for bitumen.

Uranium.

Mr.Curtin asked the Minister for Supply, upon notice -

Whatwas the cost to the Commonwealth of the installation of uranium mining equipment and ore treatment plant at Rum Jungle and Radium Hill, respectively?

Is the Combined Development Agency carrying out the installations?

What per cent. interest is charged on the amount of dollars involved?

As the Combined Development Agency consists of the British and American Governments, has the Australian Government made any effort to be included as a third party of the agency?

Mr Beale:
LP

e. - The answers to the honorable member’s questions are as follows : -

  1. The figures for Rum Jungle are not yet known. The figures for Radium Hill are a matter for the South Australian Government.
  2. No.
  3. None.
  4. No.

Employment

Mr Daly:

y asked the Minister for Labour and National Service, upon notice -

  1. How many persons (a) male and (b) female are registered for employment at the following offices: - (a) Newtown and (b) Mascot?
  2. What are (a) their ages and (b) the classifications in each category?
  3. What is (a.) the longest period applicants have been registered and (b) the average period, in each district?
  4. What is the average number of applicants daily (a) male and (b) female at each office?
Mr Holt:
LP

– The answers to the honorable member’s questions are as follows : -

  1. At the 25th September, 1953 (the latest date for which figures are available), 907 males and 280 females, who stated when registering that they were unemployed, were registered for employment at the District Employment Office at Newtown, and 337 males and 99 females were similarly registered at the District Employment Office at Mascot. 2. (a) Statistics are not available. The information sought could only be supplied if a detailed check of registration documents was made. (b) Those registered were registered for employment in the following occupational groups: -
  1. (a) and (b). See answer to, 2 (a).
  1. During the four weeks ended the 25th September, 1953, an average of nineteen males and seven females registered for employment each day at the Newtown office, and eighteen males and six females at the Mascot office. In addition, of course, persons attend to check on the availability of employment and to lodge income statements for unemployment benefit.
Mr Daly:

y asked the Minister for Labour and National Service -

  1. How many vacancies for employment exist at the following offices: - (a) Newtown and (b) Mascot, for both male and female persons ?
  2. What are (a) the classifications and (b) the addresses of the employers?
Mr Holt:
LP

– The answers to the honorable member’s questions are as follows : -

  1. At the 25th September, 1953 (the latest date for which figures are available), there were 262 vacancies for males and 209 for females registered at the Newtown District Employment Office, and at the Mascot District Employment Office 422 vacancies for males and 195 for females. 2. (a) The distribution among industries of these vacancies was -

It should be noted that the placement of applicants registering at these offices is not restricted to vacancies existing in the area’s served by the offices. Vacancies are cleared on a widespread basis to ensure the maximum scope for placement. (6) It would be a breach of the confidential relationships existing between employers and the Commonwealth Employment Service to make this information a variable

Mr Daly:

y asked the Minister for Labour and National Service, upon notice -

  1. What is the number of persons (a) male and (b) female, registered for employment in (c) each State of the Commonwealth, and (d) throughout Australia?
  2. What are the classifications of the applicants ?
  3. How many vacancies for employment exist in industry in each State of the Commonwealth ?
  4. What are the classifications of these vacancies ?
Mr Holt:
LP

– The answers to the honorable member’s questions are as follows : -

  1. The numbers registered with the Commonwealth Employment Service for employment in each State at the 25th September, 1953 (latest figures available), who, at the time of registration, said they were unemployed, were -
  1. Those registered for employment at the 25th September, were registered in the following occupational groups: -
  1. The following were the number of unfilled vacancies registered with the Commonwealth Employment Service in each State and for Australia at the 25th September, 1953 (latest figures available) : -
  1. The industrial distribution of the vacancies registered with the Commonwealth Employment Service in Australia at the 25th September was -

Cite as: Australia, House of Representatives, Debates, 9 October 1953, viewed 22 October 2017, <http://historichansard.net/hofreps/1953/19531009_reps_20_hor1/>.

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