3rd Parliament · 2nd Session
The President took the chair at 2.30 p.m. and read prayers.
CABLE TO TASMANIA.
Senator PEARCE. - I desire to ask the
Minister representing the PostmasterGeneral, without notice, the following ques-. tions : -
Is it a fact, as reported in the Melbourne Age and Argus of 8th August, that, as the contract between the Commonwealth Government and the Eastern Extension Telegraph Company, in respect to the cable service between Tasmania and Victoria, will expire in March, 1909, the Government have decided to lay a cable of its own ?
Is it a fact that the Government have de cided to have a survey for such proposed cable at a cost of£1,000?
Will such sum of£1,000 be treated as “ other “ expenditure, or as a charge on the States chiefly concerned, i.e., Victoria and Tasmania ?
From what vote of the Estimates passed by
Parliament does the Government propose to take the amount of£1,000?
Has Parliament sanctioned such expenditure?
Have the States of Victoria and Tasmania consented to the survey of their coasts for a suitable landing place for the cable?
In view of the expressed opinions of Senator Dobson and other legal authorities, will it not be necessary for such consent to be formally given by an Act of Parliament of the States of Victoria and Tasmania?
Before committing Parliament to any ex. penditure, will the Government givethe Parliament an opportunity of expressing its opinion whether, in view of the success of wireless telegraphy, it is advisable to spend money on cables, where wireless telegraphy can be successfully installed ?
Senator KEATING.- I could give the honorable senator a reply to some, but not to all of the questions. If he desires full information I ask him to give notice of them.
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– I desire again to ask the Minister representing the PostmasterGeneral, without notice, the number of applications for telephones for the years ending 31st December, 1905 and 1906 respectively ; the number of lines connected for the same period; and the applications in hand at the end of eachyear?
– I am now in a position to inform the honorable senator that the applications during 1 905 numbered 5,108 ; and during 1906, 5,784. The number of lines connected during 1905 was 5,018. and during 1906, 5,792. The number of applications in hand at the end of 1905 was 822, and at the end of 1906 636.
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Report presented by Senator Henderson and read by the Acting Clerk as follows : -
The Printing Committee have the honour to report that they have met in conference with the Printing Committee of the House of Representatives.
The Joint Committee, having considered all the papers and petitions presented to Parliament since the last meeting of the Committee, recommends that the following be printed : -
Precis of correspondence between the Commonwealth Government, the late Sight Hon. R. J. Seddon, and the’ Government of the United Kingdom, &c, respecting the Navigation Laws of. the Empire and the question of coastal trade.
Excise Tariff Act 1906. - Exemptions in regard to manufacturers of Agricultural implements.
Geo. Henderson,
Chairman.
Committee Hoorn, 8th August, 1907.
Motion (by Senator Henderson) proposed -
That the report be adopted.
– I think that there was an understanding with the Senate that the Printing Com mittee should include in their report a list of the papers in respect of which they made no recommendation.
– I have no desire to find fault with the Printing Committee, but to referto a matter which I believe is occupying their attention, with a view to indicating a way in which economy can be effected. A report of experts in connexion with the Bounties Bill was laid on the table of the Senate and printed. Later on or before that time there were excerpts from that report, together with excerpts from a report by a Queensland official, printed and laid on the table. I notice that both papers contain a large quantity of matter which is precisely the same. In the report on the Bounties Bill certain excerpts are printed in one kind of type, but in the other report they are printed in another kind of type, showing that a quantity of matter was re-set, and a great deal of unnecessary expenditure incurred. What I suggest to the Printing Committee is that where they find that tables and other matter which are likely to be used in two or three reports have been . set up, they should try to arrange that such matter should be stereotyped and the stereos kept until they are required again. That would avoid the resetting of a large quantity of matter, and consequently insure considerable economy.
– I recognise that in this session, at any rate, we have a live Printing Committee, and if he will allow me to do so, I desire to congratulate Senator Henderson upon being its Chairman ; also upon their evident intention to act wisely and promptly. I ask the honorable senator when he isreplying to say whether the report has omitted any reference to those documentswhich the Printing Committee think should not be (printed, either because they are lengthy, or for any other reason. I believe that the Senate will appreciate the reports of the Printing Committee more if they enumerate, not merely the documents which are recommended to be printed, but alsothose which are not so recommended, if any. I do not think that it would make the reports very lengthy if they stated that for certain reasons the Printing Committeehad decided not to recommend the printing of certain papers.
– In reply to the very friendly criticism by Senators Chataway and Clemons, I desire to say that the Printing Committee are trying to do what they can in the directions to which they have referred. At to-day’s meeting of the Joint Committee, a subcommittee was appointed for the purpose of devising a form of report which would keep both Houses fully informed in connexion with all papers which have been tabled. We hope to have a form devised by next week. We are anxious to find out the best method of drawing up an index which will show the number of papers tabled in each House, what recommendation the Printing Committee have made in respect of each paper, and, probably, the reason for its recommendation. Every member of the Senate would then be able to see at a glance what had been done with the papers, and where they were to be found. I may inform Senator Chataway that so far the Printing Committee have been exceedingly careful not to order the printing of any document which was already in type. Before taking any action, we have caused inquiries to be made at the Government Printing Office, to see whether the type had already been set up or not. I may point out that, while we may recommend papers to be printed, we have no control over the printing of them. But we take every possible precaution to see that a paper which is already in type shall not be printed again, and that the type shall not be set up twice. Beyond that, I do not think we can, go, unless, of course, the Senate should invest us with control over the Government Printing Office, which I do not think it is likely to do.
– Senator Givens has correctly answered the inquiries of my honorable friends. We have taken the steps which Senators; , Mulcahy and Clemons have indicated, and at more than one meeting we have spent considerable time in discussing the complications to which Senator Chatawayhas alluded. We find, however, that despite our best efforts, we shall not be able at any time to cope with the difficulty, inasmuch as there are so many reports on a subject made. Each report may have a particular relationship to a certain amount of correspondence which has been prepared for another report. If the honorable senator will look up the reports of Commissions and Conferences, he will find that the same matter has been printed in three, four, or, perhaps, halfadozen papers, and probably in each case it appears in different type, and is set to different measure. The Printing Committee think that, at the present time, it is utterly impossible to avoid such complications; but, if it can be avoided, it will be done.
Question resolved in the affirmative.
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MINISTERS laid upon the table the following papers -
Report of Royal Commissionon Secret Drugs, Cures, and Foods, together with copy of Commission, Diagrams, and fac simile copies of advertisements.
Defence Acts Regulations -
Military Forces. - Repeal of Regulation 59, and substitution of new Regulation in lieu thereof ; and amendment of Regulations 65, 66, and 67. - Statutory Rules 1907, No. 80.
Military Cadet Corps. - New Regulations 62-68. - Statutory Rules 1907, No. 81.
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President of the Executive Council, upon notice -
How many criminal appeals have been addressed from each of the States of the Commonwealth to the High Court?
How many of such appeals have been granted from each State?
How many of such appeals have been dismissed from each State?
– The answer to the honorable senator’s questions is as follows : -
Applications for special leave to appeal to the High Court in criminal cases have been made as follows : -
Applications granted - New South Wales, 5 ; Western Australia,1 ; total, 6. In one case leave subsequently rescinded.
Applications refused - New South Wales, 2; Victoria, 1 ; Queensland, 1 ; Western Australia, 1 ; total 5. The case was a Western Australian case.
In the cases in which special leave to appeal was granted the result of the appeals was as follows : -
Appeals allowed - New South Wales, 3.
Appeal dismissed - New South Wales, 1.
Appeal pending - Western Australia, 1.
In addition to the above there was one appeal from Quarter Sessions in New South Wales by way of special case, which was dismissed.
The above particulars do not include summary jurisdiction cases.
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asked the VicePresident of the Executive Council, upon notice -
If it is the intentionof the Government during the present session to introduce legislation “ restricting the weight of grain and other produce shipped in bags” ?
– The Government is in sympathy with the object of this question, and will take an opportunity to further consider it.
– Arising out of that answer, might I ask the Vice-President of the Executive Council what” is the object of the question with which the Government are in sympathy?
– I thought the object was obvious, and known to honorable senators. I believe that grave complaints have been made of the weight of bags of grain as ordinarily shipped, and the idea is that the bags should be made smaller, so as to reduce the weight.
– Should not the producers be consulted about that?
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Report adopted.
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In Committee (Consideration resumed from 26th July, vide page 1054) :
Clause 2 -
The taxation by a State, in common with’ other salaries earned within the State, of -
the official salaries of officers of the Commonwealth earned in the State after the commencement of this Act; and
the allowances, paid after the commencement of this Act, of Members of the Parliament elected’ in the State, shall not, if the taxation is not at a higher rate or to a greater extent than is imposed on other salaries of the same amount earned in the State, be deemed -
to be an interference with the exercise of any power of the Commonwealth, or
to be inconsistent with any Act by or in pursuance of which the salary is fixed or made payable.
– I move -
That after the word “ allowances,” line 7, the words “ and salaries “ . be inserted.
Honorable senators will see from the amendments which have been circulated, that it is proposed to follow up this amendment with a proposal for the insertion of other words, the object being to make the salaries of Ministers of State for the Commonwealth, the presiding officers and Chairmen of Committees in both Houses, all being members of Parliament, liable to taxation in the States in which they have been elected, if those States should so desire. It will be remembered that in the cases Deakin and Lyne v. Webb, it was held that these salaries were exempt from taxation.
Senator Sir JOSIAH SYMON (South Australia) [2.53]. - Now that the Bill is in Committee, our object should be to make it effective. I do not quite understand the object of inserting the words “ and salaries “ in relation to amounts which I believe are referred to in the Constitution as allowances. What is it specifically directed against?
– The salaries of Ministers, the presiding officers, and the Chairmen of Committees of both Houses, in order to meet the cases of Deakin and Lyne v. Webb.
– I see, the allowance is £400 a year, and the additional payment made to these officers is salary.
Senator Colonel NEILD (New South Wales) [2.54]. - I have been requested to bring before the Committee a matter referring to cases pending against members of the Public Service; but I am not quite sure whether I shall be in order in doing so on this clause.
– I think the honorable senator would be in order if the matter deals with the official salaries of public officers.
– I have been asked by telegraphic and postal communications to draw attention to a statement which was made by the Vice-President of the Executive Council, no doubt in perfect good faith, but which was painfully inaccurate, withreference to income tax claims now pending against officers of the Public Service. At page 955 of Hansard for this year, it will be found that I drew attention to the matter, on the 25th July, and the Vice-President of the Executive Council, in reply, said -
A large number of cases were instituted, but since the High Court re-affirmed its former decision in the two cases which I have quoted -
Those cases were the Commissioners for New South Wales v. Baxter and Flint v. Webb. all the others were immediately abandoned.
Unfortunately that is not the case.
– As a matter of fact, I was referring to the State of Victoria where I understand it is so.
– In connexion with the cases referred to a strange condition of affairs exists. The State Government of Queensland is harassing certain public officials there in utter defiance of the decisions of the High Court. I feel that I am justified in bringing the matter forward, as evidence of the manner in which some of the Governments of the States are seeking to harass persons in the employ of the Commonwealth, contrary to the law as laid down by the High Court. It should be remembered that we have onlyjust passed through the Senate a measure confirming the finality of appeal in that Court. It is reported, in the most authoritative manner, that the following is the state of affairs at present existing
As the High Court ruled that the item of costs should be attended to by the States Governments concerned, Federal officers naturally concludedthat their interest in the matter was at an end.
This is not so, however. Notwithstanding that the High Court unanimously refused to grant leave to appeal to the Privy Council, the Crown Solicitors in New South Wales and Victoria are approaching the Privy Council and asking that august body to permit an appeal to be heard practically in defiance of the High Court’s ruling. In Queensland the trustees of the fund raised by the Association for the defence of Commonwealth officers have been notified that the State Government has succeeded in obtaining a further adjournment of the seven cases pending in the District Court until the decision of the Privy Council is known.
It will be remembered that when these appeals first came before the District Court an adjournment was asked for until theHigh Court cases could be heard, and the Crown Solicitor opposed the adjournment asked for en the ground that the State was losing interest on the money in dispute. The learned Judge, however, granted the request, and advised the parties that failed before the High Court to immediately abandon the proceedings before the District Court, otherwise they would be mulet in costs.
Contrary to what the Vice-President of the Executive Council said in the speech from which I have already quoted on the 25th July last, I find that -
Notwithstanding this advice, the Crown appeared before Judge Miller on 22nd inst. and applied for a further adjournment, and it was granted. We may not comment on the, full significance of this further adjournment, and must perforce trust our readers to draw a right conclusion.
Though we have passed a Bill positively affirming that finality of appeal in these matters shall lie with the High Court -
– That Bill does not do that.
– It is supposed to do it.
– It professes to take away the right of granting leave to appeal to the Privy Council in certain matters from the Supreme Courts of the States ; that is all.
– I think that what I have stated is the intention of the Bill.
– Yes.
-Whether it accomplishes that intention or not, it is not for me to say. Notwithstanding that fact, and notwithstanding that the High Court has refused leave to appeal- by a unanimous decision, not merelyby a decision of the majority of the Justices - we find the Queensland Government harassing these eight officers with litigation and by piling up costs. We know very well that, however costs are finally adjusted, even if they are recoverable against the Crown, no one in litigation ever recovers the full amount of his outlay from the other side. These officers are, I assert, being treated in a manner that is not consonant with the dignity of any Government; and it opens my mind to the fact that in proposing to afford the States Governments an opportunity, as this Bill does, to attack the public servants of the Commonwealth, we are affording them an opportunity to carry on this system of harassment to a greater extent than they are already doing. I hope that honorable senators will see chat it is a very dangerous thing to afford States Governments further rights of worrying and harassing than they already possess, and that this particular clause, proposing to afford them additional liberty and licence, ought not to be agreed to in its present form.
– I donot like this clause for many reasons. The object of it is to make it legal for any State to impose taxation upon the allowances granted to Federal members of Parliament, and to override the decision of the High Court to that extent. I think that it would be verv much simpler - and I cannot see any real objection to such a procedure - if we were to say definitely, in making the allowances paid to Federal members taxable, that the whole of the taxation in respect of those allowances shall be paid to the State which the member represents either in the Senate or in the House of Representatives. What reasonable objection can there be to that?
– Would it not be interfering to a certain extent with States rights ?
– I do not think so. It wouldrather be upholding them. It is a simple and a fair way of dealing with the question, and would certainly save an infinity of trouble. For instance, take the amount of taxation payable in respect of the allowance to a senator or a representative from Tasmania. The question arises, first of all, as to the amount to be paid to the State of Tasmania, and, secondly, to the State of Victoria, in which the member or senator for a certain period resides. How is the proportion to be decided? That would be by no means an easy question for any tribunal to determine, and it would be difficult for any lawyer to advise upon it. I am sure that Senator Best will agree with me as to that. We should escape that difficulty altogether if we simply provided, in making these allowances taxable, that the whole of the taxation shall go to the State that the member or senator in question represents.
– Instead of a proportion?
– Instead of any proportion. If we are to pay taxation on the allowances we receive, is there any senator who would not prefer that that taxation should go to the State which he represents? We all want that; or if we do not we ought to want it. It is the fairest thing to do.
– Does not this Bill practically accomplish that object? It limits the taxation to the State which elects the member or senator?
– No; this clause simply says that the taxation by a State of the allowances paid to members of the Parliament shall not be deemed to be an interference with the exercise of any power of the Commonwealth.
– That is to say, the taxation of the allowances of the members elected within the State.
– Precisely ; but it does not shut out the other contingency.
– I think so.
– Let us consider the case of a senator from Western Australia.
– There is no income tax there.
– I hope the State will consider the wisdom of having an income tax before long.
– We have one in Queensland-
– Take South Australia, which is the shining example.
– Take the case of a senator from Queensland. He has to reside in Melbourne during most of the year. Queensland and Western Australian representatives practically cannot go home during the whole of the session.
– We are only officially domiciled in Queensland.
– I am perfectly certain that in cases like that an attempt will be made - and possibly a successful! attempt - by the State in which the Federal Capital is located, or in which Parliament is sitting, to tax the allowances of members. At present it is Victoria that taxes them, but I am not making any attack against Victoria. New South Wales may be concerned in the future.
– Another argument for getting to the Federal Capital as soon as possible !
– It has nothing to do with the Federal Capital. In the case of such senators as I have mentioned, at any rate, it is certain that the State of Victoria will claim, under this Bill, incometax in respect of allowances paid while they are residing in Victoria.
– The honorable senator wishes to impose additional taxation on such senators.
– I do not wish todo anything of the sort. I wish to make it clear that only one State shall have the power to tax the allowance of a Member of Parliament, and that that State shall be the one which he represents, and not the State in which he lives during aportion of the year.
– That is achieved by thisclause, as I think I shall be able toshow to my honorable friend.
– I am opposed to it.
– I do not know what Senator Stewart wants.
– I want fair play,and to pay my income tax in the State where I live. It is a Commonwealth salary, not a Queensland or a Tasmanian salary that I receive.
- Senator Stewart maycallit any kind of salary that he likes. I am dealing with the question that if taxation has to be paid on the allowance of a member of this Parliament, it should t>e paid to the State which he represents, not to the State in. which Parliament may be sitting.
Senator Sir JOSIAH SYMON ‘(South Australia) [3.1 1]. - There is a great deal of force in what Senator Clemons saysThere are two reasons which may commend his suggestion to the Senate. One is that wh’ich he incidentally mentioned, that if we are to pay income tax we should all prefer - and it is only fair - that it should be paid to the State in which we are domiciled. As things stand at present in the body politic in Australia, income tax is levied by the States and not by the Commonwealth. If there were an universal income tax levied by the Commonwealth it would be a differ - ent matter. But we are dealing with a State form of taxation; which stands, to a large extent, in lieu of Customs and Excise, of which the States previously had control. Their reservoir of taxation is their income tax, and, it may be, their land tax. Therefore we should all prefer - and I think it is consistent with the principle upon which (the tax is levied - that we should pay the tax as citizens of the States which we represent. We are here in. Victoria by the accident of our membership of the Federal Parliament. We are not residents here.
– The honorable senator is able to go home every week, but I am not.
– I do go home every week, and J hope that Senator Stewart is as fond of his home as I am. If he is not, it is one of the defects of a very fine character. It seems to me to be obviously the just principle upon which to proceed that we should, if we are to pay this tax, pay it to the States of which we are citizens, inasmuch as it is in respect of our citizenship that the tax is levied. But there is another reason, and that is that the clause as it stands will give rise to a great deal of confusion, and perhaps to litigation. Senator Neild has referred to hardships in Queensland in regard to the salaries of Federal officers. The claims there made are made on account of salaries earned within the State. But in the case of allowances paid to Members of Parliament - which my honorable friend, Senator Clemons, had in mind - only a proportion is, so to speak, earned within a particular State. How is it to be apportioned? How much of the salary of a Minister representing, for instance, New South Wales, is earned in Victoria? How much of the salary of the Minister of Home Affairs is earned in Victoria ? It may be said that the whole of it is earned in Victoria, but the Minister may dispute that. Will Victoria, ‘which has been referred to as exacting this tax to the uttermost farthing, be content merely with a Minister’s assertion - “ I earned the greater part of my salary in Queensland, as I resided there during the six or seven months of the recess?” Every one of these things would be a matter for investigation. Personally, although I think that the incidence of the tax ought to be just and fair over allowances and everything else, I would much rather have struck out of the Bill the t taxation of the allowances of members and salaries of Ministers than have the confusion and the disputes which are sure to ensue if the clause is passed as it is. I am quite ready to agree that all these allowances and salaries should be taxed, but I think the tax ought to go to the State of which the man is a citizen, being leviable in respect of his citizenship, and not because he happens to come to Victoria, for instance, for a little while. When the original claim was made upon me here by Victoria, it was made upon the whole of my allowances. That would be unjust, and an extortion. Why should I - I do not mind, because I am used to it - or other people, who are not so familiar with the atmosphere of Courts as I am, be dragged into them, in the endeavour to reach what can only be at best a rule of thumb proportion between the amount earned in Victoria and the. amount earned in the State to which he belongs? The thing on the face of it seems perfectly absurd. I hope, therefore, that the VicePresident of the Executive Council, who, I believe, has the same object in view as I have, will endeavour to draft some provision that will do the thing directly and not in this round-about Way, which will simply plunge us all, Ministers and members, into a Court of law in order to determine the question of how much of our allowances or salaries are earned in one State and how much in another, o It must be .remembered also that the proportion may vary from year to year in different States. The whole question is so beset with difficulties that it would be far better to settle it in a direct and simple way, and upon what I conceive to be a just principle.
– What . amendment would the honorable senator suggest?
– I should be very glad to assist in drafting one. When I discussed the Bill before, I had framed an amendment in substitution of the whole of the second paragraph, but, unfortunately, I have not got it with me. In the form in which the clause now stands, it may be claimed that it is implied that the whole of the salary is earned within the State for which the member is elected. Perhaps that is what my honorable friend means. If that is the intention, then the only object is to have it directly and clearly expressed. At present, it is in such a state that it will merely lead to disputes and differences, and the calling in of some tribunal to settle them. That ought to be avoided, because many members may feel that they are mak-* ing a concession in respect to this income tax question,- and that, as they are doing it on high grounds, as I think they are, it ought to be done directly and clearly so as to avoid the possibility of involving either State or citizens in disputes. _ I should like to say a word as to the situation Senator Neild referred to. It is an anomalous and difficult position, which I am afraid .will not be redressed to any great extent by this measure. I refer to the difficulty in connexion with the finality of appeals. Ever, since I have had anything to do with Federal affairs, I have always advocated - and I do so as strongly now as I did ten years ago - the finality of the High Court in regard to appeals affecting our own domestic concerns, except on matters concerning other parts of the Empire. My criticism, to which the VicePresident of the Executive Council incidentally referred when I interjected with regard to the other Bill, is not at all in derogation of the attitude I have always taken as a national Australian. I was simply pointing out that that was not the way to do it. My honorable friend, referring to my. interjection, put it that there was a difference of opinion as to what the effect of the Bill would be; but I only want to make it quite clear that I do not believe in - the word I used the other day was punishing - but I will say in depreciating the State Courts, or taking away from them jurisdiction which they are perfectly competent to exercise, as though they were in fault, when it is not their fault at all, and when there is a direct, easy, and effective remedy in another way. I said before that it was not my fault that that great policy which we all agreed upon in the Convention was not carried out, but the criticisms which I offered upon this clause were in respect of the second part of it, to which I invite the Minister’s attention. It is in effect a legislative reversal of the decision of the High Court, whether right or wrong. It is a legislative declaration that that decision must have been wrong, as we are reversing it. We are asked to declare that the imposition of this- taxation shall not be an interference with the exercise of any power of the Commonwealth or with its instrumentalities, as though we were a Court of -Appeal ourselves from the High Court of Australia; while at the’ same time it does not advance one hair’s breadth the object we have in view. It does not give the High Court that finality, limited only in the way I have referred to, which I for one wish it to have in the national polity of Australia. It is a legislative reflection, of course not intentional, upon the High Court. It declares that the decision of the High Court - that the imposition of income tax by the States was an interference with the- instrumentalitiesof the Federation, and with the exercise of Federal powers, and therefore could not stand - was wrong, because we are asked to declare that that taxation shall not be deemed to be such an interference. I hope my honorable friend will endeavour to frame this clause without the necessity of putting in that provision. I endeavoured to express my views before as to the attitude of the High Court in relation to these measures, but I want to protect the High Court from this reflection, if we can accomplish the legislative object’ we have in view without it. I certainly think we can if we adopt the idea Senator Clemons has thrown out.
– I want honorable senators to bear in mind that the law, as laid down by the High Court after full reconsideration of their previous judgments, .and after the decision of the Privy Council, is that the salaries of Federal officers and Federal Ministers are not liable to taxation by the States. This measure provides that the States shall be at liberty, if they choose, to tax the salaries of Federal officers and Federal Ministers, and the allowances’ of Federal members, in common with other salaries,, so far as they are earned within that State. So if an honorable senator from Queensland finds it necessary in the discharge of his duties to spend six . months in Victoria, and then resides at his own home in Queensland for the remaining six months, according to the terms of the Bill the Queensland Government is only to be at liberty to tax him in regard to the six months in which he resides in Queensland.
– What State can tax him for the other six months?
– As regards the other six months, he will not be liable to any taxation at all.
– Is that so?
– Unquestionably. He will not be liable for taxation in Victoria at all.
– In the case of a Minister, the honorable senator says he will not be liable in Victoria at all, but will be liable for the six months he spends at his own home. Then the Government are making him liable in Queensland in respect of the salary which he does not earn in Queensland, but are allowing him to escape in respect of the salary he earns in Victoria.
– As regards the allowances of Members of Parliament, the salaries of Ministers, presiding officers, and Chairmen of Committees, they are only to be liable in respect of the period during which they reside in their own States. In other words, they are to be regarded as only earning their salaries in their own States when they are residing there.
– Supposing a member or Minister spends three days in the week here, and three days in New South Wales?
– As a matter of fact New South Wales does not charge any income tax on members’ allowances ; but that is beside the question. In the case suggested it will of course be for the Commissioner of Taxes of New South Wales to exact any return that he thinks proper for the number of days the member was resident in New South Wales.
– That will be terribly complicated.
– Income tax returns are always complicated, and the Commissioners of Taxes themselves are accustomed to complications of the kind. I trust that honorable senators have followed me closely, because I wish to distinguish between the contention of those who have spoken and the terms of the Bill.
– Do I understand that if a senator for Queensland spends only three weeks in that State during a year, he will only be liable in respect of that term ?
– That is so.
– Does the Minister think that the salary for the three weeks would be earned in Queensland?
– Yes; the Bill, in effect, says so.
– It does not say so. There would be no salary earned there because he would have earned it by attending here.
– Not at all.
– How much would he earn if he went there on a visit?
– The clause says-
The taxation by a State in common with other salaries earned within the State -
Ihope I have made that absolutely clear, but if I have failed I am sorry.
– The honorable senator has made it quite clear that a representative of Queensland will be taxed on the income which he does not earn in the State.
– He is only to be liable in respect to that proportion of his income which he earns while he is resident in his own State. He is not to be liable in respect of any portion of that income so long as he resides in Victoria. My honorable friends opposite think that in the case I have mentioned the Queensland Government should be at liberty to tax its senator in respect of the total allowance or salary as the case may be, irrespective of where he resides.
– No, while he is residing in the State. The Minister will be taxed on the whole of his salary in Victoria?
– Then why should not the other main be taxed in Queensland, just as the Minister is taxed here ?
– Simply for the reason that the income tax is always imposed by a State upon the salary earned within the State.
– It will be a strong inducement to legislators to keep away from their States.
– I do not think so, because after the exemption is deducted, the amount will be very small.
– What exemption?
– In Victoria the exemption is, I think, ^200 on incomes under a certain amount. If honorable senators think that the several States should tax in regard to the whole of a salary, then I do not want” to obstruct their wish. I have sought to make it clear that, if a senator from Queensland spends one-half of the year in Victoria discharging his parliamentary duties, during that period he should he not be liable in his own State? Victoria or in his own State.
– Why should he not be liable in his own State ?
– If, however, he spends the other half of the year in Queensland, he is to be liable to that State in respect of that period. I hope I have made it quite clear that a member of Parliament will only be liable to income tax in respect of that portion of his salary which is earned in his own State. Senator Symon has referred to the subject of finality. He has again stated that the Bill is a legislative reversal of the decision of the High Court, and a legislative reflection on that body. Such is not intended, and the Bill cannot possibly bear that construction. We admit the law as laid down by the High Court to be sound law, but we say that its effect is the creation of a privileged class, and consequently we seek to get away from that position. With limitations, the privilege is extended to the States, if they think proper, to impose income tax in respect of Federal salaries and allowances. If the Judiciary Bill be passed in its present form, it will insure absolute finality, because it has been held by the High Court that the income tax cases involve questions as to the limits inter se of the constitutional powers of the Commonwealth and those of a State. Under that Bill, when a question of the kind is raised, the action will at once be transferred to the High Court, which, of course, will have fina! jurisdiction. If in a State Court a Judge ruled that a case of the kind did not come within section 74 of the Constitution, an appeal would lie at once to the H;gh Court, and the jurisdiction of the latter Court would again be asserted. There is no getting away from the fact that under any possible circumstances final itv must be reached under the terms of the Judiciary Bill. I think that Senator Neild unintentionally did me an injustice when he mentioned that I made an inaccurate statement in regard to certain proceedings which had been initiated in various States by the Commissioners of Taxes. Probably we were talking at cross purposes at the time. I was referring to what had taken place in Victoria. A large number of cases were instituted here, and the judgment of the Privy Council was applied by the State Court. On appeal to the High Court the decision in the case of Deakin v. Webb was re-affirmed in the cases of Baxter and Flint. In Victoria the Income Tax Commissioner practically abandoned a large number of /oases in which he had instituted proceedings, because in Flint’s case the High Court had declared that a Federal officer was immune from State income tax. If the proceedings had been, continued, the Commissioner would have been mulcted in costs. He took the only course which could be followed in the circumstances. In the cases of Baxter and Flint an effort is being made by New South Wales and Victoria to obtain special leave from the Privy Council to appeal against the decision of the High Court. I consider that the Federal servants have nothing to fear. We trust in the High Court, and seek in every possible way to support it. It is for honorable senators to determine whether or not the several States shall be at liberty to tax the whole of the income of a member of Parliament or only a proportion of it. The Bill provides that a State shall be at liberty to tax the proportion which is earned therein, and under the circumstances we deem that to be fair and reasonable.
. -I am sorry to say that I cannot agree with Senator Best’s interpretation of the clause, nor with his opinion as to the way in which it will be interpreted and worked. He has stated that if a member of Parliament resides for one part of the year in Melbourne, while Parliament is sitting, and spends the remainder of the year in his own State, he will be taxed by his own State in respect of the time which he has spent there. I cannot agree with the honorable senator’s view. But if it is right, let us see what will happen : A senator for Queensland or Western Australia will say, “ If I continue to reside in Victoria’ for some time before and for some time after Parliament meets, so that, instead of spending, say, six months of the year in Melbourne, I decide for purposes of my own to- spend ten months here, I shall thereby escape taxation by my own State, except as regards the proportion which I earn therein.” It may be a temptation to a member of Parliament to stay in Melbourne
– The amount involved is too small, I think.
– It is not desirable ‘ that there should be a possibility of such a thing happening. What I propose will obviate that. It will not, of course, . have any effect upon the amount of taxation which a State will levy upon its representatives. That will not be determined by this Bill, but by the State itself. I again have to differ with Senator Best when he says . that the State of Victoria could not impose income tax in respect of these allowances.
– In respect of the allowance to a Queensland senator.
– In respect of the allowance to any senator. Why should they not? The honorable senator and I are fellows in misfortune because we have had to make payment of income tax. As a rule such a tax is demanded in respect of money that is earned in a State by a man who resides in, or is domiciled in, the State. Can we say with regard to many representatives of Western Australia and Queensland that they are not domiciled in, or residents of, Victoria for a great portion of each year?
– They are not domiciled in Victoria.
– The honorable senator must know that the legal interpretation of the term “ domiciled “ is a difficult matter to decide. In some Income Tax Acts the word is not used, and the reference is to “reside in,” or is a “resident of.”
– The limitation here proposed is found in the words “elected by the State.”
– That would not affect the Statute passed by the State that levies an income tax. If a State passes an Act to levy a tax in respect of incomes earned within the State, it seems to me to be open to. argument that the State of Victoria can impose an income tax upon these allowances.
– The honorable senator should look at the words “elected by the State.” There is no liability at present, and this would limit it to the taxation of a member elected by the State.
– I am afraid that that does not touch the matter. All thai the Bill provides is that our allowances shall not be exempt from taxation. Senator Best must recognise that the question of how the taxation is to be imposed is a matter for States legislation. We have no Federal income tax. This taxation is levied by the States under their own enactments.
– They cannot levy taxation on these allowances at’ all at present. That is the law.
– And we are by this Bill going to empower them to do so.
– Only in a limited way - “earned in the State,” and “members of the Parliament elected in the State “ ; those are the limitations.
– I think the honorable senator must recognise that those limitations are not precise or defined. I have pointed out that there might be considerable dispute on the question of domicile, or whether a man is a resident of a State. In the imposition of an income tax we often find that regard is had to the place in which the income or allowance is paid. The allowances to Federal members are paid in Melbourne in nine cases out of ten. Income tax is frequently levied in respect of an occupation carried on in a particular place. Who will say that the occupation for which we get an allowance of £400 a year is not carried on in Melbourne? It certainly compels us to be in Melbourne, and we are occupied in Melbourne.
– The honorable senator ignores the fact that Victoria has no power to tax these salaries and allowances at all.
– Whether Victoria has or has not that power is not for us to settle in this Chamber, and there can be no possible doubt that the Commissioner of Taxes in Victoria thought he had the power, as Senator Best would have known if; like other honorable senators, he came from one of the other States. Demands were sent to senators from the other States by the Victorian Commissioner to pay income tax in Victoria. Senator Best can give us no positive assurance that income tax will not be levied by Victoria in respect of allowances paid to honorable senators representing other States.
– I have no hesitation in saying that the High Court will hold’ that they are not liable.
– The High Court has never been asked to decide the question.
– The High Court has absolutely decided it in the cases to which I have referred.
– Decided the destination of the income tax in respect of these allowance’s?
– Decided that income tax could not be levied on Federal salaries and allowances. _
– By whom?
– Bv any State.
– That is not deciding which State shall levy and be entitled to receive income tax in respect of the allowances.
– A decision has been given that the States have no power to levy income tax on these salaries and allowances. We are here initiating legislation to give the power, and surely the limitations we impose in this Bill will con-* trol the area of the power?
– I do not think so. I propose to indicate an amendment adding certain words to the clause which will put the matter beyond any doubt, and which will make it certain that a member of the Federal Parliament shall be sub- ject to no more taxation than is imposed by the State which he represents.
– I think the honorable senator is proposing to make the payment larger than it would be under the Bill.
– No, the amendment I intend to propose is to add the following words to the clause -
Provided that in the case of any allowance or salary paid to a member of Parliament - - and by that I mean to include, as Senator Best has suggested, allowances to ordinary members and salaries to Ministers and officers - such taxation in respect thereof shall be levied by and paid wholly to the State of which such member is a senator or representative, as the case may bc.
That would not require any one to pay any more, but it would secure, without the possibility of litigation, that such taxation as we might be compelled to pay in respect of our allowances would go wholly and solely to the States we represent in the Federal Parliament.
– That would not exempt’ any one, and some members of the Parliament would have to pay on a different footing to others.
– Are we not at present on a different footing with regard to State taxation ? I reside’ in Tasmania, where the heaviest land tax in the Commonwealth is imposed. In Western Australia there is no land tax and no income tax either. We are citizens of the various States we represent, and the whole object of the clause is that the States from which we come shall tax us as they think fit.
– Suppose, some members of the Parliament live most of their time in Melbourne - as many do?
– I simply say with regard to all these allowances that they should be taxable by the State which sends the representative or senator to the Federal Parliament.
– - I intend on this occasion to vote against the Government. Reference has been made to Queensland, Tasmania, Western Australia, and New South Wales, but no reference has been made to South Australia in this connexion. At present, unless some honorable senator kicks over the traces, and keeps us a day longer here, honorable senators from South Australia, from the time they leave their homes, are two nights and part of two half-days in the train. They are “two days or a little more in Melbourne, and may be at home for two or three days in each week. I should like Senator Best, in the circumstances, to explain how the tax is to be divided. The common-sense view is put forward in the amendment, and I am prepared to support it. I will do so for another reason, and that is to escape the filling up of the income tax schedules. I am going to tell honorable senators a secret with respect to the schedules which have to be filled up -in South Australia. They were so complicated during the time that Senator O’Loghlin was Chief Secretary in the Kingston Ministry that the AttorneyGeneral of the day, who is now a Judge of the Supreme Court of South Australia, told me that rather than go to the trouble of preparing his own taxation return he hired a man to do it for him. I shall be found on this occasion voting with honorable senators on the other side, who are usually my opponents.
.- There is a desire on the part of the Government to carry legislation which will, so far as Victoria is concerned, enable the State Government to levy income tax on all Federal officers, and members of the Federal Parliament representing that State. I do not believe there is a representative of Victoria in either House of the Parliament who will offer the slightest objection to that. However, a feeling has been expressed in the Committee that members of Parliament should not be placed in any different position from that in which Federal officers generally are placed. I believe that the amendment suggested by Senator Clemons would make an invidious distinction.
– It could not do that.
– I shall endeavour to show in what way. In the Federal Parliament there are representatives from States in which income taxation is levied and of States in which there is no such taxation. This may be a far-fetched case, but I take a Federal member representing Western Australia or Queensland. He might have to remain in Victoria for eleven months of the year, and at the end of the session might go to Western Australia or Queensland and remain there for a month. If an income tax is in force in the State from which he comes, he will be liable only in respect of the amount of his allowance covering his month’s residence in the State.
– And the exemption under the Income Tax Act would cover that.
– In that case he would be exempt from this taxation altogether. That is not a fair position. ‘ I do not object to pay income, tax, and I think it would be unfair that any honorable senator should, in respect of income taxation, be placed in. a position different from that of any Federal officer or employe1. Senator “ Clemons’ proposal would make that distinction, and I say that it would not be a fair one to make in the interest of the States or of the employes of the ‘Commonwealth.
Senator Colonel NEILD (New South Wales) [4.0]. - Senator Clemons has argued in favour of the payment of income tax by Federal members of Parliament in one State and to one State. Senator Findley has argued in favour of the payment of income tax both in the State of residence and in the State where Parliament meets. The proposal of Senator Clemons would have this effect as compared with payment to two States : If there were payment in one State only, there would be only one exemption. But if there were payment in two States, there would be two exemptions; and if the exemptions were liberal in character, very little would remain to be taxed.
– Does the honorable senator think that would be fair?
– I am not saying whether it would be fair or otherwise. I am merely pointing out the consequence pf Senator Clemons’ proposal.
– The answer would be’ that the State concerned would say to what extent the member might claim exemption, and tax him accordingly.
– There is a statutory exemption in every State that imposes income tax.
– There was an income tax in Queensland some years a.go under which there was no exemption.
– I was not aware of that.
– The honorable senator, I understand, wishes to have the advantage of both exemptions?
– Reference has been made to- the fact that in Western Australia there is no income tax. Let me also point out that within a few months there will probably be none in New South Wales, where the abolition of the tax forms a leading feature “of the programme of the present dominant party. In the past, New South Wales has never sought to collect income tax upon the allowances of Federal members, or, if the tax has been tendered by them, it has not been accepted by the State. The New South Wales Income Tax Commissioner has respected the decision of the High Court. As to the difficulty of determining the amount payable, let me point this out : Some time ago, when the Victorian Income Tax Commissioner, with the help of the Crown Solicitor, was worrying members of this Parliament, I pointed out that my services as a senator were not rendered to Victoria, but to the whole Commonwealth, and I expressed a willingness to pay to each State one-sixth of whatever amount of income tax might be due. That suggestion did not meet with the approval of the Crown Solicitor, and some further correspondence ensued. It happened that in that particular year the Senate had only met something like 129 days. I pointed out to the Crown Solicitor that as I had been so little in Victoria, the Commissioner surely could not claim taxation from me on account of the period when I was in New South Wales. Thereupon, he sent to me an intimation that the amount of the allowance which I had earned in Victoria was within the statutory exemption of £12 5 Now I take it that it would be quite as easy to adjust the amount payable to various States in the future as it was in that case in Victoria. There was no trouble. It was very easy for me to ascertain how many days I had been in Victoria: A list of attendances is issued at the end of every session, and, adding one or two more days when I might have been in Melbourne, though not in attendance in Parliament, I was able to make up an account of the time that I had spent in this State. I feel sure, however, that if the Bill were passed, including Senator Clemons’ amendment, it would not be at all what the Victorian Government wants. They want to get at as many members of Parliament as possible. Senator Clemons proposes, in effect, to take it outside the category of possibility that the Victorian Government shall obtain income tax from any members of the Federal Parliament except those residing within the State.
– That is what the Bill provides.
– That has nothing to do with the proportion or the incidence of the taxation. My honorable friend, Senator Best, appears to be confusing two matters. He says that the law is that Victoria cannot tax the allowances of a member of this Parliament, but, as a matter of fact, the law is that none of the States can tax them. But this Bill will have the effect, according to some authorities, of making taxation payable partly in Victoria and partly in the State of domicile.
– No.
– Then what need is there for Senator Clemons’ amendment.
– I do not know.
– I contend that the amendment will prevent litigation.
– It is not necessary.
– I cannot rely upon Senator Best’s dictum. He is not a Judge of the High Court. Let us make the matter clear.
– I really see very little objection to the amendment.
– An obligato to one’s little solo is very pleasant, but the present obligato almost reaches orchestral effects. As I have said, I shall vote against this Bill, and against all proposals to make it more comprehensive, because I have a rooted hatred of the informer -character of income taxation. I have fought it whenever I have had an opportunity in my past life, and I shall continue to fight it. Although I am not liable to income tax, and although the Government of my State has promised the abolition of it there, I desire that the people of the rest of Australia shall, as far as my vote and voice can go, enjoy the same freedom from a hateful impost which is obnoxious to every man who has a mind above grovelling and key-hole legislation.
– I have listened with considerable attention to the discussion, and must say, with all respect to the Vice-President of the Executive Council, that his position is not at all clear. I am not sure that as the Bill stands the Victorian Government would not be able to claim taxation from Federal members. It seems to me that they would not only be justified in doing so, but would be incited to come 011 and levy taxation upon the whole of us. No doubt the Bill has been carefully considered by the Cabinet and by the AttorneyGeneral, but I cannot see the scintilla of an exemption so far as the members of thisParliament are concerned. I assume for a moment that the Victorian Government would have power under this Bill to come down upon the members of the Federal Parliament.
– There is no such power. They can only levy taxation upon the Victorian members of the Parliament.
– I am inclined to think that the Victorian Government will trea t this Bill as a piece ofwaste paper, and will contend that we are liable to pay.
– The High Court has decided that point.
– Why does not the Government accept the amendment?
– I do not see any objection to it, but it does not carry us a step further
– The fact that there is a difference of opinion is an additional reason for making the legal effect clear.
– Will the amendment make it clear?
– I think so.
– Then let it go in, if honorable senators are of that opinion.
– I presume that an arrangement between Senator St. Ledger and the Minister does not settle the matter altogether. There seems to be a good deal of confusion about it, although the explanation of the VicePresident of the Executive Council made it quite clear to me. The position seems to be that members of this Parliament, by the decision of the High Court, are at present not liable to income tax. The Bill makes them liable under certain condition^ and limitations, which are, so far as members are concerned, that they shall be liable only to the States in which they are elected, whilst residing in those States. The Victorian senators under that provision will be in a position somewhat different from that of senators from other States. As they reside altogether in Victoria, they will be liable for income tax during the whole year, ^whilst senators from other States will be only liable to their States in respect of the period in which they reside in their States. Senator Clemons is still not quite satisfied, and desires to make it still clearer by an amendment. Does he propose to make members liable in the State in which they reside for the whole year, or only for the time that they do reside there?
– I simply mean that whatever income tax is payable in respect of our allowances should be paid to the States we represent, neither more nor less. That will be whatever the State decides is payable.
– If honorable senators think that will’ make it a little clearer, there can be no possible objection to it. Senator Clemons wishes to provide, as he thinks, more definitely for what Senator Best says the Bill already does. Victorian senators have certain advantages as a set-off to the position which they will be placed in in this regard, seeing that they are not under the expense which senators from other States have to incur when they reside for a certain part of the year in Victoria. So far as the little extra cost in income tax to Victorian senators is concerned, I think members- from other States would be glad to exchange with them, in order to have the advantage of residing in the State where the Parliament sits.
.- I have always had two leading thoughts with regard to this Bill - first, that it ought to be only a permissive Bill, allowing the States to tax Federal allowances and sala ries in such a way that we should be subject exactly to the same income tax, with all its incidence and regulations, as other citizens of our own States ; and secondly, that the income tax should be payable wholly to the State which a member represents. ‘ For that reason I shall support . Senator Clemons’ amendment. Although the clause may mean the same thing, yet, if, the amendment be not made, the Income Tax Commissioners may . raise all kinds of complications under the words “earned within the State,” as to whether a member who is six months out of, say, Tasmania attending the Federal Parliament, helping to make the laws, and earning his salary, has earned it in Tasmania or in Victoria. In order to obviate that difficulty, it would be better to accept the amendment. I am in favour of the whole of the salaries or allowances of members being taxed by the State in which the taxation is .payable. I take it that we are all domiciled in our States for perhaps six or seven months, and residing here for five months. But while I am absent here my home is still in Tasmania. My children may be educated there. I get the benefit of the whole upkeep of the Tasmanian Government the moment I .put my foot on Tasmanian soil. While I am here the Victorian Government gets something out of me on. all I wear or consume. But I deny that they ought to get five-twelfths of my income tax simply because I reside here for five months.
– I do not think the Victorian Government want it.
– At the same time, the Victorian Government began to send out notices to all of us in respect of the money we earned for the whole of the seventeen and a half months of the first session while residing in Victoria. For all that, we were not all domiciled here. I am domiciled in Tasmania. The Tasmanian Government protect me and my property, and I want to pay the whole of my income tax to them, less such exemptions as the law of Tasmania permits to me in common with every other Tasmanian citizen.
– I do not think Senator Dobson is quite consistent in making his latter . remarks, after saying that he thought the Bill should be merely permissive. The object of the Bill is to relieve the position that has occurred owing to the decision of the High Court of Australia, and to make the salaries of Federal officers and members amenable to the taxation laws of the various States. We are asked, however, to go further, by trying to correct the anomalies of the various States Income Tax Acts. We might very well leave the States to arrange those things ‘themselves, and to deal with members who earn portion of their salaries over here in the same way as with other individuals whose incomes, although taxed in their States, are not entirely earned there, as, for instance, the captains or crews of ships, and commercial travellers. Surely we can leave the States to deal fairly and justly with us as they do with other people in a similar position. It is preposterous that we should be asked to pay income tax in Victoria because Parliament happens to sit here for a few months in the’ year, especially in view of the principle that there shouldbe no taxation without representation.We have no representation in the Victorian Parliament, and consequently there is no obligation on us to pay income tax to Victoria.
– My amendment makes it clear that Victoria cannot tax us a farthing.
– The honorable senator is going very close to trespassing on States rights. We should leave it to the States to adjust these matters. If we have to suffer an occasional injustice, we shall not be in any worse position than other people of the same class, who do not earn their salaries entirely in the States in which they are domiciled. I am afraid that we are trying to remedy anomalies and injustices that may exist in the various States income taxes. That is not quite our function.
Amendment agreed to.
– I move -
That after word “Act,” line 8, the following words be inserted : - “ less expenses at the rate of £11s. per day while attending the sittings of Parliament, or while travelling on Commonwealth business, or visiting their constituencies or other portions of Australia for the purpose of obtaining information of public importance.”
Some honorable senators have accused me of attempting to make members of Parliament a privileged class by means of this amendment, but. my object is rather to prevent them from being penalized, and to place them on exactly the same level, so far as income taxation is concerned, as other members of the community.
– If the honorable senator does not press his amendment, the law of the State will put members on the same level as other citizens.
– I wish to make it clear.
– Then the honorable senator begins to make exemptions in his own favour, although I know he does not want to do that.
– I certainly do not want to do so. The payment of£400 a year that we receive is either a salary or an allowance. It cannot be both. If it is a salary, then for income tax purposes an allowance ought to be made for suchexpenditure as is incurred in performing the duties of the office of a member of Parliament. What are those duties? I live in Queensland. I am elected to the Federal Parliament, and summoned to Melbourne to attend its sittings. That is portion of my duty as a senator. I am provided by the Commonwealth with a free railway pass to Melbourne, but I do not get any other allowance for expenses. The Commonwealth member of Parliament is placed in a quite different position from the ordinary civil servant. If a Commonwealth civil servant lives in Melbourne and the Government send him to Brisbane on Commonwealth business, he is allowed not only his train fare like members of Parliament, but also an allowance of, say, a guinea a day for expenses. This is in addition to his ordinary income. If our payment of , £400 a year is a salary, then when we are asked by the Commonwealth Government to come from our residences in other States to Melbourne on Commonwealth business, we ought to be treated exactly as are other Commonwealth servants, and given an allowance for expenses. No honorable senator has proposed anything of that kind. Another duty which no member can evade is that of travelling around his own and other States on Commonwealth business. Here, again, he is placed on quite a different footing from other “Commonwealth servants, if his payment is a salary. When other servants of the Commonwealth travel on public business they get their train fare and steamer fare, and also a daily allowance for expenses. I claim, therefore, that if our payment is a salary we ought to get all the allowances that are made to other members of the Commonwealth service. If on the other hand it is an allowance, then we ought for income tax purposes to be permitted to deduct such sums as are spent in doing the business of the Commonwealth.
We ought to be allowed a sum when we come to Melbourne on Commonwealth business, and when we travel ‘round the country on such business as we are compelled to do. If there is anything left over and above what is spent out of the allowance in performing the duties of the office, then members of Parliament ought to be subject to taxation on the net amount just as other members of the community are subject to the same sort of taxation. Take, for example, a commercial traveller who receives an annual salary of .£500, and a daily allowance of j£i is. for his expenses. No Income Tax Commissioner would think of taxing him on the guinea for his daily expenses.
– If he had to pay his own expenses the Commissioner would allow him to deduct them.
– That is all I want to make sure of.
– This is not the way to do so.
– An Income Tax Commissioner does not tax a Federal officer on his travelling expenses. If, for instance, a Federal officer receives a salary of ^400, and travels on 200 days in the year with an allowance of one guinea per day, the Income Tax Commissioner does not charge him income tax on the ^210, as that is merely an allowance to cover the expenses. We are in an exactly similar position. The .£400 is not a’ salary, because it is not subject to the same conditions as is a salary. It is an allowance for expenses, and ought to be treated in the same fashion as are allowances paid to Federal officers. . Under the Constitution, and in practice, we give our services as members of Parliament for nothing, but we are allowed a sum of ,£400 a year to cover the expenses which we incur in performing our duties. I commend the amendment with confidence to the sense of justice and fair play, which I am sure dominates the mind of every member of the Senate.
– - On the ground of justice and fair play I ask my honorable friends not to entertain the proposal. On what grounds can we possibly be justified in formulating a scale of exemptions for ourselves? The object of the Bill is to place members of Parliament, so far as allowances and salaries are concerned, on exactly the same basis as other members of the community. Why should we dictate to the States as to how they shall formulate their income taxes, what exemptions they shall allow, and how they shall treat certain members of Parliament? We should dp a great injustice to ourselves if we adopted the amendment.
– The honorable senator lives in Victoria, and therefore is not put to any expense; but it is quite a different matter with those who come from other States.
– My honorable friend must see that under the Bill I shall suffer infinitely greater taxation than he will, because I shall be resident in Victoria all the time, and will be liable to taxation by the State in respect of the whole period. My honorable friend, however, will only be liable to taxation in respect of that portion of the year which he happens to spend in Queensland. If he travels at times, with the object of, so to speak, earning the allowance, that will be a matter for the Income Tax Commissioner of his State to deal with. It is not for us to dictate to that officer what he shall do.
– When Senator Stewart is travelling he will be exempt, but when we are travelling we shall have to pay.
– Yes. Suppose that Senator Stewart resides in Victoria for six months in a year. The proportion of the ^£400 which he earns here is ^200. During that period expenses are being incurred and, properly speaking, should come out of that slim.. But when he gets back to Queensland, the other ^200 will be earned, and the expenses which he incurred here should not be deducted from that sum. That might be the effect oi his amendment. Strictly speaking, it is only while he is in Victoria and earning the -£200 that he should be entitled to make a deduction. When he is at home earning the other £200 - which alone his State will have the right to tax - why should he be at liberty to deduct from that sum the expenses which he incurred in Victoria, and for which he has already been paid? We, as members of Parliament, are not justified in creating exemptions for ourselves. That is essentially a matter for the States to deal with. It will really be against the dignity of the Legislature to attempt to create privileges for ourselves which other members of the community are not to be- permitted to enjoy. In the circumstances, I urge my honorable friend not to persist in his amendment.
– - There is one remark made by Senator Best which I resent. It was entirely uncalled for. If he had followed my argument he would not have delivered the speech which he did, and he would have seen my position clearly. I said that, instead of trying to create privileges for members, of Parliament which other members of the community did not enjoy, my object was to prevent members of Parliament from being penalized as he proposes they shall be.
– Not at all.
– What other mem.ber of the community is taxed on the expenses which he incurs in earning his gross income ? That is exactly the proposal which the honorable senator makes, and while he does that he accuses me of trying to create a privileged class.
– Not at all.
– But the! honorable senator did, and I resent it.
– I did not intend to do so. I was pointing out that that would be the effect of the amendment.
– If that statement of the Minister gets abroad it will not be very nice for me, because a great number of persons are not able to enter into the niceties of these questions, and they will immediately come to the conclusion that I have been trying to create a privileged class.
– Let me assure my honorable friend that I certainly had no intention of making a reflection of that’ kind.
– It will appear in Ilansard.
– I am sorry if what I said is capable of bearing that construction.
– People will say “This avaricious senator for Queensland wishes to exempt himself from all taxation.” If I deny the statement it will be pointed out that the Vice-President of the Executive Council rose in his place and directly charged me with doing so, and that another senator from Victoria was guilty of the same offence, and, being” found guilt v on the evidence of two such worthy individuals, I shall be sentenced to some punishment. I do not want that to happen. I do not wish to be exempted from’ a single farthing of taxation which other members of the community are called upon to bear. I am quite willing to pay income-tax on ray net income, but I most decidedly object to be called upon to .pay income-tax on the gross income.- Every one who has been in Parliament for -any time knows that an average member has to spend nearly all his income in getting a seat, attending the meetings of Parliament, and’ travelling up and down the country. That is one of the responsibilities of the position. If he does not do so, he will not be a member of Parliament very long, because he will incur the hostility of the electors. If the Minister will make it absolutely clear to me that members of Parliament, can only be charged income-tax on their net income
– I cannot give my honorable friend an assurance as to what the States will do, nor attempt to dictate to them what they shall do.
– The honorable senator is asking me ‘to agree to go past the decision of the High Court, which de,clares that I am not liable for income-tax, and to place myself at the mercy of the State which he is seeking to empower to tax me in any way it pleases.
– No, to tax the honorable senator as the State taxes any other citizen.
– No,. to tax me on my gross income.
– The honorable senator will be allowed to make the same deductions as any other citizen.
– An ordinary citizen is not allowed to deduct his living expenses.
– And the honorable senator will not be allowed to deduct them.
– Ordinarily a member of Parliament maintains a home in his own State, while he comes to Melbourne to attend to his parliamentary duties. Will the honorable senator say that he ought not to be allowed to deduct his’ living expenses in Melbourne while he is away from home on Commonwealth business, and earning his allowance? Again, the senators from Queensland and some members of the other House have to travel over an entire State. I have to travel over the whole of Queensland, and spend a great deal of money in1 doing so. I have to do that in the interests of the Commonwealth. Am I to incur all that expense, and, in addition, to be taxed on the very money which I have laid out?
– That is a doubtful point, I think.
– That is the position in which some honorable senators wish to place members of the Federal Parliament, and, because I protest against it, I am charged with trying to create a privileged class. It only shows how fearful of public opinion a large number of people are, and how, rather than face it manfully as they ought to do, they are willing, not only to submit to injustice themselves, but to impose injustice on others. I wish, before I vote for this clause, to have it made perfectly clear that under this Bill, which gives the States power to fax salaries, which the High Court has declared are not taxable, I shall not have to pay taxation on such money as I spend, so to speak, in earning my income. If that is made clear, I shall be satisfied.
– Senator Stewart must know that I neither directly or indirectly reflected upon him in what I said. No one could attach such a meaning to the words I used in seeking to show what would be the effect of the honorable senator’s (proposal. I have, in the meantime, striven to work the matter out in figures. On the scale the honorable senator has suggested, his expenses would amount to an average of something like £5 per week. I assume that he is in Melbourne for six months - during the period of a session. During that time, of course, he is not liable to this taxation. Half of £400 is£200, and that, therefore, without deductions, would be the amount on which he would be liable for taxation in Queensland. His expenses at£5 per week for twenty-six weeks would amount to £130, and, deducting that amount from the£200, £70 would be the balance left on which he would be liable for taxation. I come now to the next feature, and it is that in Victoria, and probably in the other States imposing income tax, a certain amount of income is exempt from taxation. The amount exempted in Victoria is £200, and it would probably be something like that also in Queensland. In these circumstances, there is no possibility of the honorable senator having to pay income tax in the State of which apparently he appears to be so fearful. Assuming that no portion of income were exempt in Queensland the honorable senator, in the circumstances I have described, would be liable for income tax on , £70 only.
– But I understand that Senator Clemons intends that a member shallpay income tax in the State from which he comes on the whole allowance of£400. Is the Vice-President of the Executive Council absolutely clear about that?
– That is a matter for the State.
– I am absolutely clear so far as Senator Clemons’ suggested amendment is concerned that it will carry out the intention of the Bill,..and I have, therefore, no objection to it. I agreed to accept the amendment because the honorable senator was under the impression that it would make the intention of the Bill more plain. Senator Stewart must see from the explanation) I have given that there is little or nothing, in the amendment he has proposed. I again urge that it would be a mistake on our part to attempt to dictate to the States as to what exemptions should be allowed, or how income tax should be imposed.
Senator WALKER (New South Wales> [4.50]. - There is doubtless a great deal of truth in what the Vice-President of the Executive Council has said, but I think that Senator Stewart made out a very good case from his point of view. I may be mistaken, but I was under the impression that Senator Clemons intended under the amendment he has suggested that each member of the Federal Parliament should make a return of£400 as his yearly income from this source to the State from which he comes. If that were so, there would be a good deal of force in Senator Stewart’s remarks. It must be remembered that under the judgment of the High Court we are not liable for’‘income tax. Senator Stewart says that if we are going to change the effect of that decision we should see that we are not charged income tax on the expenses we incur in living away from our homes. Honorable senators coming from such distant States as Western Australia and Queensland deserve our sympathy in this matter, and I should be disposed, if Senator Stewart’s amendment were pressed to a division, to vote for it if only to show my sympathy with honorable senators coming from distant States.
– I am satisfied, and I ask permission to withdraw my’ amendment.
Amendment, by leave, withdrawn.
– I move -
That after the words “elected in the State,” the following words be inserted : - “ and of Ministers of State for the Commonwealth and the Presiding Officer and Chairman of Committees of each House of the Parliament, all being respectively Members of the Parliament elected in the State.”
If that amendment is agreed to, paragraph b of clause 2 will read as follows -
The allowances and salaries, paid after the commencement of this Act, of Members of the Parliament elected in the State and of Ministers of State for the Commonwealth and the Presiding Officer and Chairman of Committees of each House of the Parliament, all being respectively Members of the Parliament elected in the State.
– I am not quite sure that I grasp the effect of the amendment. Income tax on the allowances and salaries of members of Parliament may be chargeable by the State which each member represents, but the question is to what extent it may be chargeable.
– I have explained that.
– I am prepared to accept the assurance ofSenators Clemons and Best that the allowances earned during the time Federal members are absent from their States and are in Melbourne attending Parliament will not be liable to taxation. In the circumstances, I shall not press the point, but I direct attention to it.
Amendment agreed to.
Amendment (by Senator Clemons) proposed -
That the following words be added to the clause: - “Provided that in the case of any allowance or salary paid to a Member of the Parliament such taxation in respect thereof shall be paid wholly to the State for which such Member is a Senator or Representative, as the case may be.”
– I should like Senator Clemons to say whether it is quite clear that the taxation would not be chargeable in respect of the whole allowance of £400 a year.
– I do not think that it could be made clearer.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 3 -
This Act shall not apply to the salary of the Governor-General .
– I should like to ask why this clause appears in the Bill.
– It is the usual thing.
– I think there is no doubt that the salary of the GovernorGeneral is exempt from income tax under the Constitution.
– I intended to direct attention to the same point. I should like to ask the VicePresident of the Executive Council whether it is not perfectly certain that the salary of the Governor-General would be exempt from income tax, even though this clause were not included in the Bill.
– It might be.
-Is there the slightest doubt about it?
– It might be as honorable senators say, but it is usual to include such a provision to avoid any possible difficulty.
– The position of the Vice-President of the Executive Council, and my own, in connexion with the amendment made in the previous clause is reversed in the case of this clause, but it will be generally admitted that there is a difference between dealing with the salary of the Governor- General and dealing with our own salaries.
– The object of the Bill is to provide that there shall be no privileged class in the community, and why should there be a privileged individual ?
– I should be prepared to make the distinction in the case of this individual. I think we should not touch the salary of the Governor-General. I ask Senator Best whether he could not see his way to the omission of this clause.
Clause agreed to.
Title agreed to.
Bill reported with amendments.
page 1584
In Committee (Consideration resumed from 19th July, vide page 763) :
Clauses 3 and 4 further postponed.
Postponed clause 7 -
The State Acts set out in the First Schedule shall, to the extent specified in that schedule, cease to apply to bills of exchange, cheques, and promissory notes drawn or made after the commencement of this Act.
Bills of exchange, cheques, and promissory notes drawn or made after the commencement of this Act shall not be subject to stamp duty under the laws of any State other than -
in the case of a bill of exchange (not being a cheque) - the State in which the bill is drawn ;
in the case of a cheque - the State in which the cheque is payable ;
in the case of a promissory note - the State in which the note is made.
Upon which Senator Keating had moved by way of amendment -
That the following words be left out, “ Bills of exchange, cheques, and promissory notes drawn or made after the commencement of this Act shall not be subject to stamp duty under the laws of any State,” lines 6 to 9.
.- When this matter was last discussed I drafted an amendment which was designed to meet certain criticisms that had been levelled at the language employed in the Bill. But after moving it I had a consultation with the Attorney-General, and learned from him that the amendment drafted was open to practically all the objections that might be levelled against the clause in its original form. After further consultation with my colleague I now intend to ask the Committee to pass the clause as it stands, and to allow me to withdraw the amendment. The objection to the clause, so far as I remember, was not so much to what it sought to achieve as to its form. I said at the time that the effect of my amendment would be precisely the same as the effect of the clause. It will be seen that, as we have power to prescribe what are the essentials of a bill of exchange, it is also open for us to say that a bill of exchange shall not be subject to stamp duty in any State except as we prescribe. Another mode of arriving at the same conclusion, which seemed to meet with some approval, was that we should simply provide that a bill of exchange was not to be inadmissible in evidence if it did not bear the stamp of a State. But that indirect method of obtaining our object might lead to some difficulties whilst achieving no better result. We consider, after giving further thought to the matter, that it is better to leave the clause as it stands. In my speech in moving the second reading I pointed out that it is competent for us to provide that a bill of exchange shall not bear any stamp at all, or that a stamp shall not be essential to its validity, or to its admissibility in evidence. But we do not propose any such thing as that. We do not desire that bills of exchange shall be exempt from stemp duty altogether. What we do desire, however, is that bills of exchange shall be subject -to one stamp duty only. At present a. bill of exchange may be drawn in one State and negotiated in another, and may, under the laws of the two States, have to bear the duty stamp of the State in which it originated, as well as duty stamp of the State in which it is negotiated.
– Is it not proposed te* take away States revenue?
– The clause will take away a certain amount of States revenue, but nothing like so much as would be the case if we provided that bills of exchange should not bear stamp duty at all. A small amount of revenue is affected at present. The object of the clause is to make these instruments of commercial transactions more easily negotiable than they are at present - that is to say, to make a bill of exchange drawn in one State negotiable throughout the Commonwealth, instead of being subject to additional taxation when made negotiable outside the State in which it is drawn. Although my amendment wasnot circulated in a printed form, I had formally moved it, and I now ask leave to withdraw it in order that the Committee may have an opportunity of adopting the clause as it stands.
Amendment, by leave, withdrawn.
– The Bill appears to me to be a perfect measure so far as drafting is concerned, but at the same time there does not seem to be any. necessity to take away States revenue. Seeing that the question of revenue was affected by the measure, I telegraphed to the Premier of Tasmania as to the effect upon the State which I represent. I will read his answer -
Referring to telegram yesterday estimate of loss of revenue - Inter-State bills £1,000, inland* bills £1,600, cheques £8,000.
It therefore appears that a considerable amount of revenue is involved.
– That is, if a total abolition of stamp duty were proposed.
– But Tasmania cannot afford to go on losing -£1, 000 here .and ^1,000 there. . The Premier of the State is evidently opposed to the stamp duty being interfered with.
– With reference to Senator Dobsen’s statement, it may ‘be interesting to the Committee if I state that I communicated with the Treasurer of Queensland on this subject, and have ascertained that if the proposal of the Bill is carried out it W1 mean a loss to the revenue of that State of £,1,000 a year. Nevertheless, I am in favour of the clause as it stands. The amount involved is not serious, and I am inclined to the opinion that it is better to lose £1,000 a year than continue the confusion which at present prevails in reference to bills of exchange.
– I beg to move-
That all the words after “State,” line 9, be left out.
The object of my amendment is to abolish the taxation of bills of exchange, cheques, and promissory notes. No doubt if the amendment is carried it will mean a loss of revenue to the Treasurers of the States, be- cause they have hitherto been in the habit of raising a considerable sum from these sources. But my object is to place our system of taxation upon a scientific basis if I can. I do not think that industry and the currency ought to be taxed, nor should instruments that are practically tools of trade be subject to taxation. Every one will admit that the taxation of promissory notes, bills of exchange, and cheques is a hindrance to business transactions. A tax on a cheque is practically a tax on the currency. A cheque is given to pay an account in order to save the passing of money. It is practically a labour-saving machine. It is a portion of the currency, and for that reason it ought not to be taxed. Why should any one be called upon to pay a tax of one penny when he signs a cheque in payment of an account? If I pay an account of twenty shillings with a sovereign I am not taxed, but if I hand the shopkeeper a cheque, which is just as good as a sovereign if my bank balance is on the right side, I am taxed to the tune of a penny. Where is the justice in that ? The men who give promissory notes are not the rich, who can get credit. If a poor fellow like myself is not able to pay a debt, his creditor asks for a promissory note for the amount, and the debtor’s poverty compels him to give it. He is immediately taxed, so that instead of being a tax upon wealth, the stamp duty on promissory notes is really a tax upon poverty. A large number of persons engage in business with insufficient capital, or, beginning with a very small capital, their business speedily develops to such an extent that they are compelled not only to give accommodation to their debtors, in which case they may demand promissory notes, but also to get accommodation from their creditors, in which case they, in turn, have to give security. Why should these transactions be subject to taxation? There is no reason except that it has been the custom, and that successive Governments have adopted it as an easy means of raising revenue, apart from any question of its justice or injustice. The Senate ought to seize every opportunity of placing the contributions of the people to the cost of government upon a sound financial basis, and honorable senators should recognise that no basis can be sound which is uncertain. This means of raising revenue is very uncertain, because if money is plentiful promissory notes and bills of exchange become correspondingly rare, and the revenue falls off. A reference to municipal taxation will show the ridiculous system of State taxation that obtains in Australia. Municipalities raise their revenue from property. They assess the ratepayers on the value of their property.
– They also raise revenue from licences.
– That system is also a survival, in many cases. The collecting of money in that fashion ought to be abolished. We ought to remove every impediment to the freedom of trade and industry. No one can deny that the stamping of these documents is an impost on industry. I have shown that the rich escape the tax altogether. A man with a small business, issuing a number of small cheques, promissory notes, or bills of exchange is being continually taxed, whereas another engaged in huge enterprises and paying in large sums, rarely dealing in promissory notes in such a way as to have to pay the stamp duty on them, evades the tax. Some honorable senators will claim that my amendment is an invasion of State rights, and an attack on State revenues. I admit that that, in the circumstances, is unavoidable. We are given power by the Constitution to make laws regulating the issue of bills of exchange, cheques, and promissory notes. We have the power to say whether they shall be stamped or unstamped. Having been given power to make the laws regarding these instruments, we ought to assume the whole power, and not merely a part of it. If Parliament thinks they ought to be taxed, then the revenue from them should come to the Federation and not go to the States. I am, of course, opposed wholly to their taxation, but if my amendment is defeated, I shall support any other amendment, if such is moved, to reserve the revenue from them to the Federation. The Minister of Home Affairs intimated, when the Bill was previously under discussion, his intention to provide that these instruments should be accepted as evidence in a Court of justice, whether stamped or unstamped. Is that provided for in the Bill as it now stands?
– Yes.
– Will they be accepted as evidence in a Court of justice, even if unstamped?
– Yes; if the Bill is passed in this form.
– I ask honorable senators to give my amendment favorable consideration and support.
– As I have not copies of the various States Acts, will the Minister of Home Affairs tell me whether sub-clause 1 of clause 7 will, as a matter of fact, repeal the provisions that the States have made for taxing bills of exchange, cheques, and promissory notes ? In other words, if the Committee rejected sub-clause 2 of clause 7, would it be necessary also to reject sub-clause 1. ? I suppose it would.
– I do not think that any of the Acts imposing stamp duties appear in the first schedule.
– That schedule merely refers to certain sections of some Acts without giving their effect. Those may be the sections in, the State Acts that provide for tlie stamping of bills of exchange.
– In Tasmania the stamping of these instruments comes under the Stamp Duties Act.
– Which sub-clause 1 of clause 7 does not repeal ?
– Which sub-clause 1 does not touch.
– I shall oppose Senator Stewart’s amendment; but I think I shall be compelled to go further. I see no reason why we should attempt to interfere with taxation via stamps, and leave alone taxation in various other directions. The States may be wise or unwise im taxing these instruments. That is no concern of mine. _
– Have we not the power to abolish the taxation on them?
– From my point of view, and also Senator Stewart’s, some of the States are extremely unwise in their land taxation. Yet we cannot alter it. Why single out this form of taxation for our interference?
– We have the power in this case, but not in regard to the land.
– Because we happen incidentally and accidentally to have the power to interfere in this Bill with the stamping of these instruments, does Senator Stewart think it wise that we should interfere? The possibility of our interference with taxation generally is limited. Coming from various States, we may point out hideous anomalies in our own State taxation, but as a Federal Parliament we haveto put up with it. We cannot alter it, and I object to our altering it in a small matter like this. I object to this Parliament saying to the States, whether it knows the details or not, “ You do not know how to provide proper taxation on, cheques and bills- of exchange. We shall alter what you have done.”
– Is it not a good thing, to remove anomalies?
– I think we are pursuing that idea a great deal too far.
– Can we not make it uniform throughout the Commonwealth - collect the money and return it to the Statesif we have no use for it, or apply it to some legitimate Commonwealth use?
– My answer is that if we endeavour to secure uniformity we shall certainly be telling some States, perhaps the majority of them, that they do not know anything about the proper way in which to tax ‘bills of exchange and promissory notes. It was never intended by the framers of the Constitution that we should try to rectify every possible anomaly in the various States. It does not give this Parliament the right to say to the States, “ There is only one right way in which te* tax bills of exchange and promissory notes, and it is our way.” If we adopt the amendment, I do not know what we may interfere with. I feel certain that Senator Givens does not know more about this form of taxation in his State, or the effect which the amendment may have in Queensland or Tasmania, than I do as regards my own State. It is wrong for us to be alwaystinkering with taxation in the States when we cannot face the question thoroughly. We have been informed that the effect of the clause as it stands will be to deprive some States of a certain amount of taxation. Why should we pass it? Why should we say to the States that we know better than they -do how these instruments ought to be taxed? Why should we say it is desirable that the States should receive lessrevenue? The one answer to the inquiry is - to produce uniformity. To what extent will the blessing of uniformity spread ? We all know that if it is a blessing it will only affect a very limited class, in spite of what - Senator Stewart says. The percentage of persons who deal in these instruments isvery limited. He must know as well as I do that they are almost entirely confined te* large commercial houses. An ordinary private individual has very little to do with bills of exchange and promissory notes.
– But they pass on the expense of them to the public.
– The honorable senator is trying to induce the Committee to believe that it is a good thing that private persons should be floating promissory notes and dealing in acceptances. No matter what a man’s credit may be, it is an utterly bad thing for him to be floating promissory notes. I hate them. I like to pay for an article if I have the money, otherwise I am always prepared to do without it. I admit that the clause is much better than the amendment ; but I shall not be a party to any capricious interference with the rights qf- the States to raise taxation in the way they think fit, where the Constitution enables them to impose that taxation. I intend to vote against the clause.
– I was out. of the chamber when Senator Keating spoke, but I understand that the Government intend to accept or propose a modification of clause 7. His assurance with regard to sub-clause 1, that the taxation of. the States is not interfered with by the mere fact of the schedule repealing the clause– -
– Sub-clause 1 and the schedule do not affect any of the States.
– I should naturally expect that, on account of the construction of the Bill.. But I understand that the honorable senator intends to abandon the -question of stamping, and to deal only with these documents as a matter of evidence. If sub-clause 2 is to stand, the honorable senator will receive strong resistance from me. I suggest that it should be deleted. I am anxious to know what modification he intends to propose. I gathered from his remarks that it is to the effect that notwithstanding that a bill of exchange or promissory note may not be stamped according to the law of the State- in which it may be required to be produced in a Court, it shall not thereby be rendered inadmissible in a Court as evidence. On a former occasion, I believe he pointed out that, having consulted with the AttorneyGeneral, there was some difficulty even as regards that view of the question. I can quite understand the difficulty which may arise because, constitutionally, we have not the power to interfere with the law which regulates evidence in State Courts for State purposes. Clause ‘2 raises a very contentious question. I shall resist any attempt on the part of the Commonwealth; Government to interfere with the right of the States to tax in any form. It was suggested from this side, and I think that the suggestion met with support from -the. other side, that it would be a dangerous thing at the present time to interfere with the exclusive taxing power which the States have possessed so far.
– A State has no exclusive taxing power.
– Up to the present time, the States have had exclusive taxing power in regard to the taxing of their own documents.
– Yes; but the Commonwealth Parliament has had power of taxation ever since it came into existence.
– I am not in favour of any legislation which will interfere with the taxing power of the States. If it is proposed to make such interference, let it be done on a broad, clear basis, so that the States may know exactly how they stand; but do not let us interfere with their taxing powers by a side wind. I should like to hear an expression of opinion from the Minister as to the nature of the amendment which he proposes to submit, and as to how far he will accept suggestions from this side?
.- I am in favour of the amendment of Senator Stewart, because I want the Commonwealth Parliament to assume to the fullest possible extent the trust reposed in it by the people of Australia. When they approved of the Constitution; Bill, they gave this Parliament full, and if we choose to use it, exclusive power to deal with bills of exchange and promissory notes. It_ is known to every one that when the Government introduced the Quarantine Bill in another place, their only authority for doing so was paragraph ix. of section 51 of the Constitution. That contains only one word “ quarantine,” which, of course, must be read in conjunction with the prefatory part of the section. In their Bill, the Government propose to take the largest and widest powers in regard to quarantine, both internal and at the ports. I approve of their action. They would have been false to the trust reposed in them if they had not accepted the responsibility with which they were saddled by the people. Our legislative authority, in regard to promissory notes and bills of exchange, is just the same as in regard to quarantine. The people of the Commonwealth have saddled the Government and the Parliament with the responsibility of dealing with those instruments. When we are told by Senator St. Ledger and others that the Bill is an unwarrantable interference with the rights of the States, I reply that that is not so, because the people of the Commonwealth have deliberately said to the States, “You shall not have the right to deal with this subject. For various and good reasons we give it to the Federal authority.”
– I did not use the word “ unwarrantable.”
– The whole tenor of the honorable senator’s argument was that we should not pass this legislation, and he declared that he would resist any interference with the taxing rights of the States. The States have not a scintilla of right to adopt any taxation of this sort.
– Unless we permit it to be done.
– Exactly. The States were deprived of that right by the people of Australia seven years ago, when, for good and sufficient reasons, it was handed over to the Federal authority. The legislative power was also framed in the Convention for good and sufficient reasons. It was generally recognised that it was extremely desirable to have uniform legislation throughout the Commonwealth in regard to bills of exchange and promissory notes, that the traders in one State should not be handicapped with respect to instruments of trade and commerce as compared with the traders in other portions of Australia. How are we to secure that uniformity which the people of Australia and the framers of the Constitution said we ought to have, unless we accept the responsibility of depriving the States of the right to impose differential taxation? I take it that if this power is left to the States we are bound to have differential taxation in accordance with their differing weeds. One State might be experiencing a financial crisis at the same time that another was in a highly prosperous financial condition, and the State suffering financial stress might turn to these sources of revenue for relief, and exact heavy stamp taxes on instruments which the. people of the Commonwealth have said should not be subject to differential taxation. This power was handed over to the Commonwealth in order to secure uniformity-, so that those who make use of these instruments of commerce should not in any particular State be subjected to a handicap. But even though we were to adopt Senator Stewart’s amendment there would be no reason why the States should be deprived of any revenue. The Government, acting as a Committee for this Parliament - and, after all, that is what the Government is - might cause to be made an investigation of the taxes at present levied on these instruments of commerce throughout the States, might strike an average, and impose such a tax as, would enable the Commonwealth to return to each of the States, as we now return surplus revenue, an amount equal to that at present derived by the States from this form of taxation.
– Would the honorable senator be prepared to agree to that ?
– I should!
– That would not satisfy Senator Stewart.
– Senator Stewart is able to speak for himself.
– The honorable senator will defeat Senator Stewart’s amendment if he continues that argument.
– I prefer to be permitted to judge for myself what I am doing, and I say that I should welcome such a proposal. If we are to undertake the large and varied enterprises which the Government seems inclined to embark on at the present time, and to carry out some more of the functions imposed upon us by the Constitution, I foresee that by-and-by we shall be in need of money. We cannot carry out those functions without relieving the States of expense, and if we do that we shall be justified in using- revenue hitherto enjoyed by the State from the performance of those functions. Is it not a fact that amongst the matters with which it was intended that the Federal Parliament should deal was the question of old-age pensions. How have we discharged our responsibility to the people of the Commonwealth in that respect ? Many old people have died in misery, want, and poverty because of our supineness in the matter, and because we have not had the courage to do the right thing. Honorable senators who are in favour of the establishment of a Federal old-age pension scheme have been against our doing anything in the matter because we have hot sufficient revenue. The reason why we have not sufficient revenue is that we return to the States, under the Braddon section, three-fourths of the net revenue from Customs and Excise, and we have gone so far as to have returned up to the 30th June” of this year very nearly ;£6, 000,000 over and above what we were compelled to return under the Constitution.
– So the honorable senator wishes to destroy the Braddon section?
– Is it not a fact known to every one that the very people who christened the section the “ Braddon Blot “ were members of the anti-Socialist, free-trade party, to which Senator St. Ledger belongs. Those people are now on the stool of repentance. They are ready .to fall down upon their knees in worship of the right honorable gentleman who was the author of the so-called “ Blot.” If honorable senators are in earnest in the matter of old-age pensions, there is here a source of revenue open to the Commonwealth which could be availed of for the purpose, and the use of which would involve no deprivation of the States. What hardship would it be to New South Wales to be deprived of her revenue from stamp taxation if, at the same time-
– New South Wales is giving up the stamp duties.
– That is another good reason why this proposal would not interfere with her rights. Let me point out that even in States which have adopted no oldage pensions scheme, the care of the indigent aged poor costs a lot of money. Queensland maintains a benevolent asylum at Dunwich, and a miserable pauper allowance in the shape of an indigent old-age allowance.
– It is one of the very best old-age pensions systems in the world.
– I am glad that I have at last found one man ready to stand up in defence of the meanest and paltriest old-age pensions system in the whole world. Senator St. Ledger says that it is the best in the world, but I invite him to tell that to the (poor, helpless old man who has 5s. a week paid to him as a pauper’s dole.
– I ask the honorable senator not to discuss the various systems of old-age pensions.
– I was drawn away from the question by interjections, and as all interjections are disorderly, I was probably out of order in taking any notice of them. I have submitted contentions which must appeal with great force to honorable senators, because they cannot be successfully denied. I have always been, and I hope will always be, in favour of the
Commonwealth Parliament being true to the trust reposed in it by the people of Australia by assuming to the full every responsibility with which it was rightly saddled1 by the people. No half-hearted assumption of Commonwealth powers shall haveany support from me.
. I should like to point out to Senator Givens that there is no abrogation of our duty in not insisting, upon forcing legislation if, in our opinion, it is not absolutely essential, and if in refraining from doing so we are conveniencing the States.
– How are we to obtain uniformity if we do not exercise our powers.
– We are seeking uniformity in this Bill.
– In one respect only.
– First of all, we are providing that what, at present, prevails to a considerable extent in the States, so far as bills of exchange are concerned, shall, in future, be universal throughout the States. I wish briefly to refer to Senator Givens’ declaration that, in giving us the right to deal with these matters, the people desired that we should deal with them entirely. That is not at all’ necessary. The Constitution properly provides that in some respects there may be concurrent powers. We could, if we chose, permit’ the States to continue taxation, and! at the same time impose taxation in these matters ourselves.
– Could we prevent the States from imposing this taxation?
– We could if we chose exercise exclusive powers of taxation and deprive the States of the right to tax these instruments. What we have to consider always is the interest of the Commonwealth as a whole, and the achievement and advancement of that interest with as little friction and as little interference as possible with the individual freedom _ of the States. We should always keep that in mind. That is the Federal spirit. The States are sovereign within certain prescribed lines, and the Federation is sovereign also within certain prescribed lines. In the exercise of our Federal functionsthere will continually arise occasions in which we can, without any derogation of our powers, leave to the States a littlegreater freedom than we need leave to them,, if we chose. Whenever we can do that, we should do it in exactly the same way as we concede to each other wherever we can as a matter of courtesy, good breeding, or good fellowship, some of our own rights. I have no wish to discuss the whole measure, but I wish to say that it is important that the Federal spirit should permeate all our deliberations and all our acts. It is often quite possible to do what is necessary in the interests of the Commonwealth without exercising our powers too rigidly. Of course, if we can only conserve the interests of the Commonwealth by a rigid and complete enforcement of our powers, we must so enforce them ; but then only with regret that the circumstances compel us to do so.
– I am rather sorry that Senator Stewart has moved this amendment,
And hope that he will see cause to withdraw it. I am with him in his desire to force the Governments of the States, as well as the Commonwealth Government, to adopt a more equitable system of taxation. But we may pay too big a price in striving to attain that end. I feel that it is incumbent upon me to speak in the interests of those States which are “temporarily suffering in respect of their revenue. I was rather struck by the attitude of Senator Givens. In seconding the amendment he said that he was prepared to go the length of transferring the power of raising taxation from the States Governments to the Federal Government in respect of promissory notes, cheques, and bills of exchange. If that were done there would be no difference so far as the public are concerned. We should simply relieve the States Governments of this particular power of taxation, and should to that extent encroach upon their revenue, whilst there would be no immediate intention on the part of the Commonwealth Government to adopt this particular form of taxation itself. To carry this amendment would be most regrettable from the point of view of some of the States. It would have the effect of intensifying the smouldering* feeling of discontent that at present exists between some of the States and the Commonwealth.
– Does the honorable senator think that cheques ought to be taxed ?
– I do not. I am also in agreement with Senator Stewart in my desire to exercise to the full the powers with which the Commonwealth Parliament and Government are invested. I believe that it is a good thing for us to exercise those powers which the people have placed in our hands. But it is one thing to have a giant’s strength, and quite another to use it. Senator Givens may argue that because it is proposed to utilize the full powers of the Commonwealth in regard to quarantine, it is justifiable to exercise our powers to the full in regard to this particular form of taxation. But it ought to be remembered that the Commonwealth has waited seven years before taking action in regard to quarantine. Why was not that power exercised at the outset?
– There has not been time to deal with the matter earlier.
– I should say that the reason why this power, in common with other powers of the Commonwealth that are still dormant, was not exercised earlier was that it was realized that it was wise policy to introduce the authority of the Commonwealth in various directions gradually, and thus obviate the confusion that might arise from any sudden or rash employment of our power. To carry the amendment would be to bring about an immediate dislocation of the finances of the States. I quite agree that the States Governments should be made to realize that they ought to adopt a more equitable system of taxation than they have at present. But the price that we are now asked to pay for making them take that step is too great. There is need to obviate as much as possible all friction, such as would be caused if the amendment were adopted. I, however, intend to move an amendment, which would have the effect of preventing a form of taxation to which I, in common with Senator Stewart, object, from pressing unnecessarily harshly upon persons who may be unfortunately in a condition of poverty. That object would, I think, be attained by adding a new subclause d -
In the case of bills of exchange and promissory notes of a greater face value than £50.
– That is a’ step in the same direction. I shall vote for the honorable senator’s amendment if he moves it, and my amendment is not accepted.
– The purpose of the Bill is a worthy one. It is to secure, as far as possible, uniformity in reference to the instruments of commerce with which it deals. It is desirable that uniformity should be obtained in our business relationships. It is also within our power in dealing with this Bill to lighten the burden of taxation resting on the poor. I fail to see why a duty stamp should be required on a bill of exchange or a promissory note in the case of a person who, perhaps, has to get his furniture on time payment,, or who has to avail himself of the good will, generosity, or desire to help a fellow man, of some person in more affluent circumstances.
– I do not know that we should accomplish much by the honorable senator’s amendment, because the usurer would pocket what the State Government would lose. .
– At all events the amendment would block. one means of profit of which the usurer now avails himself. I trust that Senator Stewart will not persist in his amendment, but will see the wisdom of the policy of a gradual but steadfast utilization of ‘ Commonwealth powers, and by that means make the relationships between the Commonwealth and the States Governments work more smoothly.
– I do not approve of this clause at all. It appears to me that we are unnecessarily depriving the States of revenue. Notwithstanding the philanthropic desires of Senator Givens, which I appreciate, it would, I think, be an unwise step to take taxation out of one pocket and put it into another. One or two points in connexion with the clause appear to me to be rather strange. A State will be able te tax an English bill of exchange to any extent it likes, but it will not be able to tax a bill between Victoria and New South Wales. It is also a curious fact that thepayee of a bill of exchange is not the person who pays the tax, but the drawer of it.
– That has not been my experience.
– But the clause says that the tax shall be paid in the State in which the bill is drawn. It ought to be paid in the State in which the bill is payable. That is a blot upon the clause which ought to be altered. Similarly, in the case of a promissory note the State in which the note is made is to receive the tax, instead of the State in which the note is paid. Perhaps the Minister will consider whether amendments cannot be made in these directions.
– Senator Givens’ suggestion, though it may seem to be a very satisfactory solution of the diffi culty presented on the face of it, will, I think, on further examination by the honorable senator himself, be found not to disclose any considerable advance. His suggestion is that, even if we take away from the States the power to impose stamp tax upon promissory notes and bills of exchange, it would still be competent for the Commonwealth Government . to impose similar taxation. He has suggested that the money thus raised could be applied by distributing it amongst the States.
– Have we power to take from the States the right to impose a tax on these instruments?
– I submit now, as I did in my second-reading speech, that we have that power.
– Even in regard; to English bills?
– We have the most complete and unlimited power to legislatewith regard to bills of exchange and pro- ‘missory notes circulating in the Commonwealth. No condition is- attached to the exercise of that power by section 51 of the Constitution. It is therefore possible for us to say that a bill of exchange, or a promissory note shall be negotiable, and shall be evidence in any proceedings in the Commonwealth without any. stamp being attached to it.
– But we cannot take from a State the right to require that a cheque shall be stamped?
– If any StateLegislature thought fit to pass legislation which was inconsistent with Commonwealth legislation it would be void and of noeffect. Having the full power to legislate with regard to these instruments, we cam legislate to the effect that so long as they, comply with certain conditions they shall be negotiable throughout the Commonwealth. We can legislate that they shall be producible in evidence in any Court of law or any arbitration proceeding, or at anyhearing. We can legislate to the effectthat no person shall be liable to any penalty under any State law for not complying with any additional requirement that a State law may impose with regard totheir negotiability. Earlier in the debateon this clause, an honorable senator asked me whether sub-clauses 1 and 2 of thisclause were inextricably associated - whether, if sub-clause 2 were negatived, we should also have to negative sub-clause 1. I said, “ No.” Sub-clause 1 applies tocertain States Acts, which are set out in the schedule, and says that they shall not apply to bills of exchange and promissory notes after the commencement of this measure. The reason why the two sub-clauses are separable is this : That the Acts set forth in the schedule are State Acts, which deal with the features of bills of exchange just as decidedly as this Bill does. But they have no relation whatever to the imposition of stamp duty on bills of exchange, promissory notes, or cheques. In each of the States that provision, is made by separate enactment. In Tasmania, it is provided for in the Stamp Duties Act 1882, and subsequent Acts. Under that Statute, which I shall only quote as an illustration of State legislation, inland bills of exchange, and promissory notes not exceeding £5, are subject to a duty of 3d. ; exceeding £5 and’ not exceeding ^25, 6d. ; and for every succeeding £2$ or part thereof, an additional 6d., payable by the drawer or payee An inland bill there is a bill drawn and payable in Tasmania, whereas in most of the other States an inland bill is a .bill drawn and payable within the area specified in the- Bill now before the Senate - the whole of the Australian States, Fiji, and New Zealand. The Tasmanian Stamp Duties Act further provides that a foreign bill of exchange shall also be taxable at the same duty as an inland bill of the same amount and tenor. To illustrate the present position, a bill is drawn in Victoria; a stamp duty is imposed on it ; it is subsequently negotiated in Tasmania, and another stamp duty is imposed on it by Tasmania. On the other hand, an inland bill in Tasmania is subject only to one stamp duty, even if it is drawn in the north and negotiated in the west, and the same applies in every individual State. We come down now with a comprehensive measure to define all the features applicable to bills of exchange and promissory notes from one end of the Commonwealth to the other. For the purpose of this measure there is no boundary line between the States. We are legislating in respect of these instruments for the whole of the area comprised within the Commonwealth. We desire that that area shall be regarded as entire and indivisible, just as each individual State has regarded its area heretofore. Is there anything unreasonable in that? Would it not be ari anomaly to- propose anything else? It would be absurd if, after legislating to define all the features and characteristics of bills of exchange for the whole
Commonwealth, and setting out the conditions as to their negotiability and the responsibilities of the parties concerned in them> applicable to the whole of the Commonwealth, we were then to leave it to each State as a bill came within its borden to impose upon it whatever taxation it liked. It may be argued that this Bill, a.c it stands at present, still leaves it to thf State of origin to impose taxation. But 1 have already pointed out that in all the States the law generally relating to bills of exchange is contained in one measure, and the law imposing stamp duty in another. So far the Commonwealth has not entered upon any species of taxation which resembles the stamp duty taxation of the States. We have no proposal even for such a measure. We have no machinery at present for giving effect to it. If before we had anything of the kind we were to sweep away entirely the powers of the States over these instruments there would necessarily elapse a certain interval during which a considerable amount of revenue would be lost both to the States and the Commonwealth. If Senator Givens’ suggestion is ever to be given effect to, if should only be after the Commonwealth has first of all fortified the position for itself and the States by making provision for the imposition of Commonwealth stamp duty taxation. Then, and not till then, should a suggestion such as Senator Givens has put forward be given effect to.
– What is to prevent the insertion of a provision in this Bill that it shall not come into operation for six months ? In the meantime, we could pass the . necessary Bil.l imposing the stamp duty.
– That could be done just as effectively in the way I have indicated. We should make sure of our hare before we proceed to cook it. If we intend to give effect to the honorable sena-. tor’s suggestion, we should make sure first of a Commonwealth Stamp Duties Act, making these instruments subject to Commonwealth stamp fluty, and then make provision for the use of the resultant revenue either by relieving the States of certain obligations or distributing it amongst the States. At the present time State stamp taxation is in operation, and we propose to limit it only in the way indicated in this clause. Some honorable senators have had communications from the Governments of their respective States. We have been informed by one honorable senator that the
Premier of Tasmania estimates the loss of revenue to the Tasmanian Treasury under the provisions of the Bill as it now stands- at £I,000 per annum, whereas if Senator Stewart’s amendment were carried it would be £10,600 per annum. Senator Chataway has informed us that he has reliable information that the loss to the Queensland Treasury by the abolition of the right to impose taxation upon bills other than Queensland bills would be about £1,000 per annum. The bulk of the revenue derived by the States from this source comes from the taxation of cheques. For instance, the revenue in Tasmania from Inter-State bills is £1,000, from inland bills £1,600, and from cheques £8,000. I assume that these figures will apply proportionately to the other States, although I think that in Western Australia the loss would perhaps be greater. I believe it was estimated that the loss to that State by the carrying of Senator Stewart’s amendment would be £18,000 per annum. It is rather hard to determine what the actual loss to Victoria would be.
– ,£80,000.
– I can quite imagine that it would be. In these circumstances, I earnestly urge Senator Stewart not to persist with his amendment, which will produce no other result than the dislocation of the States’ finances, simply for the possible prospect of getting some of the States to reconsider their fiscal provisions, and re-adjust their taxation on what Senator Stewart would regard as a more equitable basis. The Bill, as it stands provides that there shall be only one stamp duty imposable upon a bill of exchange or promissory note, and so each of these documents will carry with it throughout the whole of the Commonwealth that Federal feature that is, and should be, most prominent in anything that comes within the scope of Federal legislation.
– Will it be a uniform rate of stamp duty throughout the .Commonwealth ?
– I cannot say that.
– Then if it is not uniform, it will not be Federal.
– The fact that there1 is no double stamp duty, as heretofore, will, tend to show that the instrument exists bv, and derives its value, force, and legal effect from, Federal legislation. If, however, the ideas of Senator Stewart and
Senator Givens are adopted, considerable loss of revenue will be caused to all the States, to the benefit, so far as I can see, of nobody. There will be a loss of revenue involved in the adoption of the Bill as it stands, but it will be comparatively small.
– It will be a considerable loss to Tasmania.
– Does the honorable senator regard £1,000 out of £10,600 as a considerable proportion?
– It will be more’ than £1,000. I should “trunk it would, be £2,000.
– I do not know whether I am to accept the honorable senator or the Premier of Tasmania as my authority.
– I may know more about” the commercial transactions of Tasmania than even the Premier.
– I understand, at any rate, that the Premier of Tasmania has been explicitly asked by Senator Dobson for the information which he has furnished. I ask Senator Stewart not to press the amendment, and earnestly commend to honorable senators the clause as it stands at present.
Progress reported.
Sitting suspended from 6.25 to 7.4.5 p.m.
page 1594
Senator Colonel NEILD (New South Wales) [7.45]. - I propose to allow the Order of the Day for the resumption of the adjourned debate on the second reading of the Criminal. Appeals Bill to go over until to-morrow, when I shall be able to place it better than I could to-night.
page 1594
– As the Budget is to be delivered in the other House this evening, I move- -
That the Senate do now adjourn.
– Those who are in favour, of the question will say “ aye,” on the contrary, “ no,”- the. “ ayes” have it.
– The “ noes “ have it.
– There was only one “no.”
Question resolved in the affirmative.
Senate adjourned at 7.47 p.m.
Cite as: Australia, Senate, Debates, 8 August 1907, viewed 22 October 2017, <http://historichansard.net/senate/1907/19070808_senate_3_37/>.