Senate
2 October 1924

9th Parliament · 2nd Session

  1. Senate
  2. 9th Parliament
  3. 1924

The Deputy President (Senator Newland) took the chair at 3 p.m., and read prayers.

page 5023

AMENDING INCOME TAX BILL

Senator DUNCAN:
NEW SOUTH WALES

– Is it the intention of the Government to introduce this session an amending income tax bill, other than the bill dealing with live-stock returns?

Senator PEARCE:
Minister of Home and Territories · WESTERN AUSTRALIA · NAT

– Such a bill has already been introduced in another place.

page 5023

PAPERS

The following papers were presented : -

Country between Kingoonya (South Australia) and Alice Springs (Northern Territory) :Report of Committee of representatives of the Commonwealth and South Australia.

Ordered to be printed.

Canadian Preference: Report by Tariff Board on Commonwealth Government’s proposals for reciprocal trade agreement.

Commonwealth Board of Trade -

Report on the subject of trade with India, China, and the East, together with an addendum containing particulars of certain developments which have occurred in connexion with the subject since the Report was prepared.

Return showing nationalities of seamen engaged on British ships in Australian ports during theyear ended 30th June, 1924.

River Murray Waters Act - River Murray Commission - Report foryear ended 30th June, 1924.

page 5023

QUESTION

WIRE NETTING: INCOME TAX DEDUCTION

Senator REID:
for Senator J. B. Hayes

asked the Minister representing the Treasurer, upon notice -

If the Government has decided to allow sums spent on wire netting to be deducted from income for taxation purposes, and if the returns for this year have gone in, will the allowance be made if amended returns are sent in?

Senator PEARCE:
NAT

– The answer supplied by the Treasurer is “ Yes.”

page 5023

QUESTION

TRADE PREFERENCE AGREEMENT WITH NEW ZEALAND

Senator PAYNE:
for Senator J. B. Hayes

asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. Is it the intention of the Government to negotiate with New Zealand for preferential treatment as regards the tariff for our products ?
  2. If so, and as a number of our primary producers, such as growers of hops, potatoes, and oats, may be consequently very adversely affected, will the Minister see that Parliament has an opportunity of discussing the subject before this preferential treatment becomes operative ?
Senator WILSON:
Honorary Minister · SOUTH AUSTRALIA · NAT

– The answers to the honorable senator’s questions are as follow : -

  1. Negotiations are in progress, but it is not likely that any finality will be reached at present.
  2. No treaty can be made without the approval of Parliament.

page 5023

ZOOLOGICAL MUSEUM AGREEMENT BILL

Motion (by Senator Pearce) agreed to-

That leave be given to introduce a bill for an act to approve an agreement made between the Commonwealth of Australia and William Colin MacKenzie and for other purposes.

Bill presented, and read a first time.

page 5023

DAIRY PRODUCE EXPORT CHARGES BILL

Bill (on motion by Senator Wilson) read a third time.

page 5023

DRIED FRUITS EXPORT CONTROL BILL

Bill (on motion by Senator Wilson) read a third time.

page 5023

SIR EDWARD PELLEW GROUP OF ISLANDS

Debate resumed from 18th September (vide page 4448), on motion by Senator Pearce -

That the Clerk of the Senate have leave to return to the Home and Territories Department the original report by SurgeonLieutenant W. E. J. Paradice, M.B., Ch.M., on the Sir Edward Pellew Group of Islands, laid on the table of the Senate on 21st August, 1924.

Question resolved in the affirmative.

page 5024

INCOME TAX COLLECTION BILL

Second Reading

Debate resumed from 1st October (vide page 4950), on motion by Senator Pearce -

That the bill be now read a second time.

Senator GARDINER:
New South Wales

.- The title of this bill will probably lead some honorable senators to overlook certain of its features. The measure will seriously affect quite a number of public servants, who have given good service to the Commonwealth. Many persons believe that if economy in the administration of the departments can be effected by a reduction in the number of public servants, nothing else matters very greatly. My belief is that it ought to be possible for changes to be made in the Public Service without inflicting very serious hardship on individual members of it. Clause 2 of the bill provides -

Section 12 of the principal act is repealed, and the following sections are inserted in its stead : - “12a. (1.) If, in consequence of any alteration effected by any Act passed during the year One thousand nine hundred and twenty-four in the law relating to income tax payable under Commonwealthlaw, there is a decrease in the work involved in the collection of that income tax so that, at any time prior to the thirty-first day of December. One thousand nine hundred and twenty-five, the services of any officer of the Taxation Branch, or of any officer transferred to the service of a Stateunder an arrangement made in pursuance of section four of this Act, are no longer required, that officer may, subject to this section, be paid compensation in accordance with this Act upon his retirement from the Branch or Service (as the case may be) as a direct consequence of the decrease in work. “ (2.) Compensation shall not be paid to any officer retiring from the Taxation Branch or from the service of a State unless the Public Service Board certifies that there is no office in the Service of the Commonwealth to which the officer could be suitably transferred.

That, on its face, appears to be a perfectly fair arrangement. We should, however, examine the matter closely to ascertain what is likely to occur. As honorable senators are aware, some time has elapsed since this amalgamation was effected, and certain officers who were transferred from the Commonwealth Service have taken up duty as state officers. It is natural to assume that those officers will be retired from the Commonwealth Public Service, as the whole of the business is being done by state officers. That, at any rate, is the case in New South Wales. What will happen to those Commonwealth officers? In many cases they have been receiving in the state Service higher salaries than would have been paid them had they remained in the Commonwealth Service. Under this bill, when it becomes an act, they will receive compensation unless the Public Service Board certifies that positions can be found for them within the Commonwealth Public Service. Members of that Service are always anticipating trouble, because they have so frequently encountered it. These officers fear that they will be offered a position that, in respect to salary and conditions, will not be on0 an equality with what they at present hold, and if they decline to accept the position offered, they will be retired from the Commonwealth Public Service without receiving any compensation. They very properly think that the positions offered should be on an equality with those which they now hold, or that they should be equal to the positions which they would have heldhad they continued in the Commonwealth Service, and so have been eligible for promotion to any vacancy that occurred. I hope that, in committee, the Minister (Senator Pearce) will give to this claim the consideration that it merits, and guarantee security and satisfaction to those who will be affected.

I realize that the principle involved is not a big one, but it nevertheless requires to be ventilated. There is no warrant, in a bill of this or any other description, for inflicting the slightest injustice upon any person. In making changes to effect economy in the collection of taxation no one is anxious that the whole brunt of the saving shall fall on the men who are doing the work. I hope that the Minister will see his way to add a proviso to clause 2 providing that when the change takes place officers of the Commonwealth Taxation Department will either receive other positions in the- Commonwealth Service at salaries commensurate with those they now enjoy or not be deprived of compensation, because they are offered positions which they must refuse on the ground that the salaries attached to them are lower . than those which they are drawing in the service of a state. The Minister may be able to assure me that these officers are amply protected, and that the amendment I suggest would’ unnecessarily load UP the bill to provide for a danger that is unlikely to occur. He will see, however, that men in the circumstances I have outlined may suffer hardship. I do not know whether this bill will receive much detailed consideration in committee. It must be passed, because the work covered by it has been already carried out, and because it is inevitable that retrenchment should follow the amalgamation of the Commonwealth and State Taxation Departments.

Senator GRANT:
NEW SOUTH WALES · ALP

– It waa my intention to take advantage of the opportunity this bill presents to lay down for the guidance of honorable senators a scheme for national taxation, but I think I can do that more effectively on the Income Tax Assessment Bill when it comes before us than on a measure which merely makes provision for the compensation of certain officers formerly employed in the taxation office. I again enter my emphatic protest against the expenditure of a large sum of money annually to carry out the fatuous idea of taxing people in proportion to the amount of service they render to the community. I cannot imagine anything more foolish and more likely to lead to trouble, and prevent- people from being industrious than the old world fashion of taxing people in proportion to the” services they render to the community. The sooner that method of taxing is swept away the better. I am pleased that in his report the Income Tax Commissioner has drawn attention to the fact that he has been compelled to purchase costly calculating machines, for the purpose not of collecting more revenue from the taxpayers, but of carrying out the provisions of the Income Tax Assessment Act. The purchase of these machines, which is a dead financial loss, is only typical of the very large volume of work that has to be done in order to carry out the provisions of the act. However, as the Government has found it necessary to introduce at least four amending measures dealing with the collection of income, tax, ample opportunity will be afforded to me to submit to honorable senators some of my ideas on taxation, which I hope will meet with their approval.

Senator PEARCE:
Minister for Home and. Territories · Western Australia · NAT

– Senator Gardiner can rest assured that there is no likelihood of what he fears happening. The position is governed by the words, “ to which the officer could be suitably transferred.” Officers of the Public Service are graded, and it cannot be said that one is suitably transferred if he is tranferred to a vacant position in a lower grade than he formerly held. The meaning intended to be conveyed by the words is that an officer must be suitably transferred having regard to his grade or division. Already a large number of officers have been transferred under the provisions of the original act, and in no case has one officer been transferred in the circumstances which Senator Gardiner fears may arise.

Senator Gardiner:

– If an officer is receiving in the state Service a higher salary than he was formerly receiving in the Commonwealth Service would he be suitably transferred if he were appointed to fill a vacancy in the Commonwealth Service at the salary he formerly enjoyed in that service?

Senator PEARCE:

– He would probably be suitably transferred in view of the fact that the amount of compensation payable would be based on the salary he was receiving as a Commonwealth officer. I do not know that many men are likely to be transferred under the conditions outlined by the honorable senator. As the agreement affects the officer as a Commonwealth servant, and continues to affect him, although he has become a state officer, regard might be paid to his existing salary and grade at the time of his transfer, but I cannot say definitely that such will be the case. The purpose of the bill is mainly to deal with returned soldiers who have not had the opportunity to pass examinations. I do not think that the circumstances feared by Senator Gardiner can arise, but if they do a suitable transfer will most likely be a transfer at the existing salary or something approximating to it. -It is not always .possible to get absolute equality. My information is that the meaning of the words “ suitably transferred “ is a transfer having regard to the division and grade in whichthe officer was employed.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate.

Report adopted.

page 5026

INCOME TAX ASSESSMENT BILL

Bill received from House of Representatives and (on motion by Senator Pearce) read a first time.

page 5026

GRAFTON TO SOUTH BRISBANE RAILWAY BILL

Bill received from House of Representatives and (on motion by Senator Pearce) read a first time.

page 5026

INCOME TAX BILL

Bill received from House of Representatives and (on motion by Senator Pearce) read a first time.

page 5026

ENTERTAINMENTS TAX ASSESSMENT BILL

Second Reading

Debate resumed from 1st October (vide page 4950), on motion by Senator Pearce -

That thebillbe now read a second time.

Senator GARDINER:
New South Wales

– This measure deals with a method of raising taxation to which I take exception, but as it is to provide some remissions, I do not know if this is an occasion on which I should protest against an entertainments tax generally. If an opportunity were afforded to abolish this form of taxation, I should move in that direction. If there is one form of taxation more than another which should be left to state governments, it is an entertainments tax. As the present Government is not sufficiently enlightened to go to the one true source of revenue - the values created by the people and given to the land - it naturally falls back on other systems, some of which are objectionable. The Australian workers to-day are so enlightened that if they were asked directly to pay, say, the £36,000,000 which was raised from Customs and excise duties last year out of their earnings, they would object.

As they pay this amount indirectly, when purchasing goods, they are really unaware of the fact that they are contributing so much to the revenue. Under this system the Government derives more money from this source than it otherwise would. During the war period every avenue of taxation was exploited, except the one which could have been exploited with the least injury to the community. It is now some years since the war terminated.

Senator Pearce:

– But we have still to meet our war debt.

Senator GARDINER:

– Yes, thatis still with us, and instead of collecting revenue by means of an entertainments tax, we should adopt a system under which every one would.be fairly treated. AsI may not get another opportunity during this session to express my idea of the way in which we should meet our national debt, and as the money to be derived under this bill is to meet some of the interest on our debt, perhaps I may be permitted to suggest how our war obligation could be met without imposing additional taxation upon any one.

Senator O’Loghlin:

– That would be a good idea.

Senator GARDINER:

– Yes. Instead of imposing an entertainments tax, I suggest that the Government direct the landowners in Australia to value their land - informing them that a land tax would not. be imposed upon it, but that if they undervalued it, it would be resumed by the Government, if it so desired, at 10 per cent. above their valuation. By this means the value of the whole of the privately-owned lands in Australia could be tabulated, and the Government could then impose a tax on the increased value which’ would accrue to those lands thereafter. If that were done the debt would be wiped out in less than twenty years. When Istate that in respect of the municipality of Sydney, a comparatively small area, there was, in three years, an increase in valuation, representing an unearned increment of noless than £4,500,000, it will be seen that the application of this principle to the whole ifthe privately-owned lands in the Commonwealth would result in an enormous revenue for the Government. I appeal to the Minister to drop these petty methods of taxation. I always feel exceedingly sorry for the unfortunate blind man holding out his little tin box for the collection of pennies from a benevolentlydisposed people. The position of the Commonwealth in connexion with this entertainments tax likewise inspires pity. Why should the Commonwealth hold out its little tin box for the collection of pennies from all who patronize picture shows, theatres, or outdoor forms of amusement? I rose particularly to express my disapproval of this method of taxation. ]it should be ‘beneath the dignity of the Commonwealth to be continually calling upon people to put their pennies into the box in order to help the Government.

Senator HANNAN:
Victoria

– I endorse the remarks of my leader and protest against the continuance, by the Federal Government, of taxation of amusements or sports. I am opposed to all forms of class taxation. The entertainments tax is a vicious tax for which there is no justification. It was imposed during the war, when the Government was .obliged to reach out in many directions to obtain more money to finance its tremendous obligations. When it was imposed there may have been, and probably was, some justification for it, but there is none to-day, and I was hoping that it would be repealed during the present session. In every community there are two types of the average parents. One denies, as far as possible, all forms of entertainment to their children; the other, on the contrary, endeavours to provide as much entertainment foi’ the members of their family as’ possible. They patronize picture shows and theatres, and a considerable number of them, being a sport-loving people, regularly attend football and cricket matches, races, and other forms of outdoor sport. For so doing,, they are called upon to contribute to the revenue. If the money that will be lost by the repeal of the tax is required to carry on the services of the Government, the burden should be laid on all sections of the community, according to their means. The amusement and sport-loving section of the community should not be singled out for taxation. I have no objection to the bill, but I protest against the continuation of this unfair system of taxation.

Senator O’LOGHLIN:
South Australia

– I support the bill, but, in my opinion, it does not go far enough. I agree with Senator Hannan that the Government should abolish this obnoxious and harassing tax, and I intimate that, when the bill is in committee, I shall move in clause 1 to strike out all the words after “ Principal Act,” with the object of inserting the words “ is hereby repealed.” If this is carried! the act will be repealed.

Senator GRANT:
NEW SOUTH WALES · ALP

– I entirely disagree with the statements of my leader (Senator Gardiner), and I am glad that Senator Pearce recognizes the fallacy of his argument. 1 also disagree with Senator Hannan’s statement.

Seator Hannan. - The honorable senator does not patronize any form of entertainment or sport, and he does not feel the tax. Why should I be taxed if I attend an entertainment or sports gathering ?

Senator GRANT:
NEW SOUTH WALES · ALP

– The honorable senators’ statement is not correct, and I resent his personal interjection. We, in this Senate, should be able to rise above petty personalities. In dealing with this question, Senator Gardiner referred to the scheme, laid down many years ago by Russel] Wallace. That gentleman, as has been the case with many other statesmen right down the ages, was afraid to tackle those persons who were best able to pay. As a way out of the difficulty, he suggested that those who possessed land should be permitted to retain it, but that from a certain date the added value given to that land by the presence of the community should be annexed for communal purposes. That suggestion has frequently been used to get away from the real question at issue. It is both inequitable and impracticable, as any one who has studied the question knows. In New South Wales there is an excellent system of local taxation. No matter what the location, or size, of an estate, the owner must pay annually towards the local revenue a uniform rate per fi, irrespective of every other consideration. That principle underlies any decent system of land value taxation. It underlies the present progressive land values tax.

The DEPUTY PRESIDENT (Senator Newland). - I point out to the honorable senator that this bill proposes certain exemptions from taxation, and does not impose taxation. I ask him to confine his remarks to the bill.

Senator GRANT:
NEW SOUTH WALES · ALP

– I have no desire to conflict “with your ruling, but Senator Gardiner was permitted to place before the chamber ideas which I regard as utterly fallacious.

The DEPUTY PRESIDENT.- The honorable senator, in making that remark, is reflecting upon the Chair. I point out that Senator Gardiner briefly referred to a system of taxation, but he did not enlarge upon it. Having referred to it in a few words, he then continued to discuss the bill. It is unfortunate that, when a presiding officer shows a little generosity; and allows one honorable . senator to get a little away from the question under consideration, other honorable senators should take advantage of his leniency. I shall not, in future, allow honorable senators, when speaking, to get away from the subject under discussion.

Senator GRANT:
NEW SOUTH WALES · ALP

– Senator Hannan when speaking on this question, informed us that taxation should be imposed on the basis of a person’s ability to pay. I entirely disagree with that. Should I be in order in. pointing out a better system of raising revenue than that suggested by Senator Hannan?

The DEPUTY PRESIDENT. – I again remind the honorable senator that this bill is to remit taxation.

Senator GRANT:
NEW SOUTH WALES · ALP

– I express my en-‘ tire disagreement with the statements of Senators Hannan and Gardiner as to the proper method of taxation. Personally, I am opposed to the income tax altogether, as it is a tax upon industry - a penalty imposed upon the most worthy citizens in order to shelter those who are well able to pay. The benefits of this measure will be almost microscopic. Certain forms of amusement are no longer to be subject to taxation, but the reduction involved is so small as to be scarcely perceptible. I agree with other honorable senators that amusements should be exempted from taxation. I consider that it is wrong to tax a man because he visits a picture show, a theatre, or the races. To the extent that it proposes to reduce taxation, I approve of this bill. In the troublous times’ through which we have passed there might have been some justi fication for the imposition of this tax. The Labour party was responsible for suggesting this method of raising revenue for Commonwealth purposes, although the act was, I think, passed toy a Nationalist Government. This form of taxation should ‘be abandoned at the earliest possible moment. Recently we were informed that the revenue of the Commonwealth for the financial year just ended was more than sufficient to cover expenditure. That being the case, one would ha-ve thought that the Government would take steps to reduce taxation. That has been ‘ done, but only to an almost imperceptible extent. No tax should be levied on a ticket admitting to amy amusement which costs less than 5s. It would be better if the tax were levied on tickets costing 10s. or more. I shall support the amendment suggested by Senator O’Loghlin to repeal the act altogether.

Senator MCDOUGALL:
New South Wales

.- This bill brings back old memories. This form of taxation was first imposed by a Labour Government in 1916, when Mr. Higgs was Treasurer. At that time a big fight was put up against the imposition of this tax on the lower- priced entertainment ticket, and since then some measure of relief has been granted by different Governments. I remember moving an amendment to exempt tickets costing ls., but, unfortunately, I was not successful. The tax has, to some extent; been evaded by amusement promoters charging lid. for admission to their entertainments. T agree with other honorable senators that this is a wrong form of taxation. Why should a few people who organize a dance, or a bazaar, to assist some charitable object, and who know nothing about this tax, be afterwards brought before a court and fined for not paying it? It is an outrage . on the freedom of the people. I believe, however, that certain forms of amusement are fair game for the taxation authorities People who are prepared to sit all night upon .the footpath to purchase tickets to enable them to gain admittance to an entertainment which may cost them 5s. or 10s., should be taxed to a greater extent than they are to-day. The tax should be a graduated one, and should not apply to any ticket costing less than ls. 6d.

Senator GRANT:
NEW SOUTH WALES · ALP

– Tickets “ costing less than 10s. should be exempt from taxation.

Senator McDOUGALL:

– I have suggested1s. 6d. as the lowest-priced ticket which should be taxed. The popular1s. ticket certainly should be exempt. The Minister has given notice of an amendment which, to a certain extent, will remove the present inconsistency. I see no provision in the bill to remove Tattersall’s sweeps from the sphere of taxation. Instead of those sweeps being handed over to a State Government to be taxed, they should be exempt from taxation altogether. I remember that when the original bill was introduced some years ago we fought for days and nights over its provisions. At the next election campaign an honorable senator, who is now a state Minister, tried to make the people believe that I was in favour of the imposition of a tax on tickets admitting to picture shows. I challenged him to resign his seat in the State Parliament, offering to resign mine also, and contest the . electorate with him, but the challenge was not accepted. Although I voted for the imposition of the tax, I endeavoured in committee to have it reduced, but was not successful. This measure of relief, small as it is, will be welcomed by the taxpayers. The value of this tax to the Commonwealth is very small, and considering the heavy taxation that is levied in other directions, the Government should abolish it.

Question resolved in the affirmative.

Bill read a second time.

In committee :

Clause 1 - (1.) This Act may be cited as the Entertainments Tax Assessment Act 1924. (2.) The Entertainments Tax Assessment Act 1916 is, in this Act, referred to as the principal Act. (3.) The principal Act, as amended by this Act, may be cited as the Entertainments Tax Assessment Act 1916-1924.

Senator O’LOGHLIN:
South Australia

– At the second-reading stage, I intimated that I proposed to move for the repeal of the principal act. My first idea was to insert after the word “ Act,” first occurring, in sub-clause 3, the words “is hereby repealed,” but upon looking into the matter, I saw that that would not completely achieve my object, as subclauses 1 and 2 would still remain. I therefore move -

That clause 1 be left out with a view to insert inlieu thereof the following: -

The Entertainments Tax Assessment Act is hereby repealed.

In the bill, that act is referred to as the principal act. If it is repealed, the entertainments tax will be abolished. Honorable senators on this side have always opposed that taxation, and I shall not, therefore, debate the matter at any length.

The TEMPORARY CHAIRMAN (Senator Payne:
TASMANIA

– I suggest to the honorable senator that he will achieve what he desires if he moves that the words “ Repeal Act” be inserted after the word “ Act,” second occurring, in sub-clause 1. There must be a short title to the bill.

Senator O’LOGHLIN:
South Australia

– My sole object is to test the views of honorable senators on the matter. I accept the suggestion, and move -

That the words “ Repeal Act “ be inserted after the word “ Act,” second occurring, in sub-clause 1.

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I feel sure that the committee will not accept the amendment. The budget outlined the remissions of taxation that it is possible to make. It would not be advisable in this slap-dash way to remit taxation to the extent of from £400,000 to £500,000 without paying regard to the financial consequences that may ensue.

Senator O’Loghlin:

– The Treasurer has a big surplus.

Senator PEARCE:

-For the coming year it has yet to be demonstrated whether there will be a surplus. In any case it will probably not be sufficient to counteract the loss of revenue which will follow if the amendment is carried. The committee should not do anything which would have the effect of destroying the balance of the budget. No one can say that substantial remissions of taxation are not proposed to be made during the current year. The amount which it is intended to remit is greater than many persons anticipated that it would be, and there is disappointment in some quarters because of the generous nature of the Government’s proposals, and the fact that they have been so well received in the country.

Senator GRANT:
NEW SOUTH WALES · ALP

– I support the amendment. If carried, it will result in the retirement of many officers who are employed in the Taxation Department, but I presume that they can be absorbed in other departments. We need not, therefore, have any fears in regard to their welfare. The Entertainments Tax Act, from its inception, has been a source of very great annoyance to the Income Tax Commissioner. It has involved, and it still involves,an immense amount of unremunerative printing and the employment of a large number of officials; but, above all, it is a tax that falls with regularity and unerring accuracy upon the poorer section of the community.

Senator H Hays:

– The regularity with which it falls depends upon the individual.

Senator GRANT:
NEW SOUTH WALES · ALP

– That is quite true. We are all aware that many persons attend picture shows and other forms of amusement. Whenever they do so they are compelled to pay the tax that is provided for by the principal act. Sometimes the amount is Id., at other times it is ½d., that each person has to pay. It should never have been imposed. The act was passed on account of the dense economic ignorance of the members of the Federal Parliament at the time. I hope that to-day there is a great deal more enlightenment amongst honorable senators. The Commonwealth hasthe right to levy taxation in any direction that it chooses. This, unfortunately, is one of the means that it has adopted for swelling its revenue. Many persons believe that thefield of income taxation should be entirely abandoned by the Commonwealth and left wholly to the various states. With that I am in complete accord. The relief which this bill proposes to give is so slight as to be scarcely perceptible, but failing the acceptance of the amendment I shall support the measure. It is most humiliating for the Income Tax Commissioner to be obliged to collect a small sum from every patron of a picture theatre. The bill gives us an opportunity to abolish the entertainment tax, and I hope that honorable senators will avail themselves of it. It is quite true that the Treasurer’s sources of revenue would be curtailed if the amendment were carried. I think that last year approximately £500,000 was obtained from this tax. But, having regard to the fact that the revenue was greatly in excess of the expenditure, and bearing in mind also that during the current year we may confidently expect to receive a very much greater amount in Customs revenue than was received last year, it can be safely assumed that the Treasurer would not be inconvenienced to any extent if this tax were remitted, as the total revenue would still be more than sufficient to meet the expenditure.

Question - That the word proposed to be inserted be inserted (Senator O’Loghlin’s amendment) - put. The Committee divided.

AYES: 8

NOES: 14

Majority . . . . 6

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Clause 2 -

Section 12 of the principal act is amended by inserting at the end thereof the following paragraph : - “ ; or (e)that the whole of the net proceeds of the entertainment are, or will be devoted to -

such purposes as are, in the opinion of the Commissioner, either religious or public,

Section proposed tobe amended -

Entertainments tax shall notbe charged on payments for admission to any entertainment where the Commissioner is satisfied:

Amendment (by Senator Pearce) proposed -

That after sub-paragraph (ii) the following new sub-paragraph be inserted: - “; (iii) such funds of a society or association not carried on for the profit or gain of the individual members thereof, as the society or association sets apart to provide sick, accident, or funeral benefits for or onbehalf of any of its members “.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 3 (Refund of tax in certain cases).

Senator GRANT:
NEW SOUTH WALES · ALP

– Can the Minister give the Senate any idea to what extent the revenue will suffer if we agree to give a refund of the tax where entertainments have been affected by climatic conditions or unforseen circumstances?

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– If I were a meteorological prophet I might be able to forecast what entertainments would fail on account of climatic conditions, but as I am not a prophet nor the son of a prophet I cannot supply the required information.

Clause agreed to.

Title agreed to.

Bill reported with an amendment. Standing and Sessional Orders suspended ; report adopted.

page 5031

DRIED FRUITS EXPORT CHARGES BILL

Second Reading

Senator WILSON:
South AustraliaHonorary Minister · NAT

– I move -

That the billbe now read a second time.

This bill is supplementary to the Dried Fruits Export Control Bill, to which the Senate agreed yesterday. It proposes to levy on all dried fruits exported a charge which is equal to the levy now raised voluntarily by the whole of the dried fruit producers of Australia. It is estimated that a levy ofd. per lb. on 30,000 tons of dried fruits will provide about £35,000, which should meet the working expenses of the Dried Fruits Export Control Board, and the cost of advertising and marketing the dried fruits. In fixing this charge the Government has been guided by the experience of the Australian Dried Fruits’ Association. As honorable senators have already discussed the whole question on the Dried Fruits Export Con trol Bill, I do not think it is necessary for me to say anything further at this stage.

Senator GRANT:
NEW SOUTH WALES · ALP

– I should like to ascertain from the Minister whether he has any information to the effect that those who are directly concerned in the exportation of dried fruits have expressed their approval of the proposal to tax the volume of fruit exported. It is rather a good idea that the cost of administering the bill should be defrayed by those engaged in the dried fruits industry, but it is not quite clear from this bill whether the whole of the cost will be met by the export levy.

Senator Wilson:

– That was all fully set out in the Dried Fruits Export Control Bill.

Senator GRANT:
NEW SOUTH WALES · ALP

– In those circumstances I shall not oppose the second reading.

Question resolved in the affirmative.

Bill read a second time.

In committee.

Clause 1 agreed to.

Clause 2 (Definitions).

Senator FOLL:
Queensland

– I regret that the bill has not been made sufficiently wide to include the whole of the dried fruits of Australia. The other day we passed a very comprehensive measure dealing with the production of butter all over the Commonwealth, but the benefit to be derived from this bill will be confined to practically one section of producers of dried fruits. Overproduction has also been experienced by the people who are engaged in drying apples and peaches in Tasmania, and I see no reason why the machinery of this bill should not be extended to include them. The Minister may assure me that it can be done in the future, but I take this opportunity to draw attention to the fact that another section of dried fruit producers is also in need of the assistance afforded by this legislation. In the course of his marketing scheme, will the Minister keep in view the need for extending help to the people engaged in producing dried apples and peaches ?

Senator WILSON:
South AustraliaHonorary Minister · NAT

– The Government would have been only too willing to extend every consideration to every section of the dried fruit industry, but with Governments, as with people in all walks of life, it is manners to wait until you are asked. To my knowledge those who are engaged in the industries referred to by SenatorFoll have not approached the Government for assistance.

Senator Reid:

– Can the Minister say that there is any quantity of dried peaches exported ?

Senator WILSON:

– The quantity of those dried fruits exported is comparatively small. Speaking off-hand, I do not think that dried apples are exported to any great extent.

SenatorFoll. - That is an industry which should be developed.

Senator WILSON:

– Yes. Apples unsuitable for export can often be successfully dried. I am sure the Government would render assistance in the direction indicated if it were needed.

Clause agreed to.

Clauses 3 to 5 and title agreed to.

Bill reported without request; report adopted.

Standing and sessional orders suspended; bill read a third time.

page 5032

INCOME TAX ASSESSMENT (LIVE STOCK) BILL

Second Reading

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I move-

That the bill be now read a second time.

This bill is being introduced in consequence of a recent judgment of the High Court in the appeal of Cameron v. Deputy Commissioner of Taxation, Tasmania. The appellant had returned his live stock at a value which was less than the departmental standard value. The Deputy Commissioner assessed him on the basis of the departmental standard values. The appellant appealed to the court for a judgment that his values were the correct values, and the Supreme Court of Tasmania upheld the appeal. At the same time the appellant’s counsel raised the contention that the departmental standard values were invalid and unconstitutional, because the regulations had prescribed different values for the various states. This contention was coupled with another, viz., that if the departmental values were invalid and unconstitutional, live stock could not be brought to account in any income tax return for the period from 1st July, 1917, to 30th June, 1921, because no valid values for stock had, in fact, been . prescribed as required by the act. The points of law were referred by the Supreme Court of Tasmania to the High Court, which upheld them. The effect of the judgment on past assessments was as follows : -

Assessments for the years - 1915-6, 1916-7, 1917-8.- Live stock on hand at the beginning and end of each year should be brought to account in the returns at market values. 1918-9, 1919-20, 1920-1, 1921-2.- Live stock on hand at the beginning and end of each year should not be brought to account at any value.

In the first three years the application of market values would operate with great severity on live-stock owners because market values were on the upgrade, and any legal obligation upon taxpayers to return their stock at market values would mean that owners would have paid income tax on the great increases in values which were then evident, notwithstanding the fact that numbers of the stock were actually lost in succeeding years through drought, or other kindred adverse conditions. In the next four years, the exclusion of live stock from the returns would mean that all owners would be thrown upon the cash basis for purposes of their assessments. This would mean that ifa breeder of stock sold animals at a high price he would be taxed on the total sale price without any deduction in respect of the value of the stock in the previous year or years. Such a position would have been crippling and perhaps ruinous to many live-stock owners, particularly to those carrying on in a comparatively small way. The Government, therefore, considered it absolutely necessary to take such action as would save the revenue from unnecessary loss through refunds arising from purely technical grounds, and, at the same time, would give live-stock owners the opportunity to have their past assessments maintained or amended to a market value basis for all years; as they might elect. The bill therefore, provides that in respect of all past assessments from 1915-6 to 1921-2, both inclusive, live stock not disposed of at the beginning and end of each financial or trading year, shall be brought to account at market value, if the live-stock owner so elects within four months after the bill becomes law. If the owner does notso elect, the bill provides that his past assessmentsshall be deemed to be correct, valid and effectual. Taxpayerswho wish to be assessed on the basis of market values are to be required to send written notice to the Commissioner, of their election of that basis within the period of four months mentioned. The bill provides that Mr. Cameron, who took the case to the court, shall retain the benefit of the judgments of the courts on the particular assessment covered by his appeal, and that he shall have the same right of selection of thebasis of his other assessment as the bill grants to all taxpayers. The question hasbeen raised that all live-stock owners, who had objected to their assessments for reasons similar to those in the Cameron case, should also be dealt with in accordance with the judgment of the High Court in that case. It has been pointed out, however, to persons who have raised that issue, that if the bill provided that the judgment of the court must be applied in all of these cases, it would probably cause some, or all, of the taxpayers concerned to pay additional income tax through being thrown on to the cash basis for their assessments. In such circumstances they would be taxed on the whole of the proceeds of their sales without any deduction from those proceeds in respect of the value of the stock sold, which had arisen in previous years when the stock was acquired or bred. It was therefore considered safer, in’ the interests of the taxpayers concerned, to limit the judgment of the. court to the assessment which Mr. Cameron had brought before the Supreme Court of Tasmania inhis particular appeal. Mr. Cameron, as stated, will have the same right as other taxpayers to elect whether all his other assessments shall be amended so that his live stock shall be brought to account At market value, or at the values upon which he had actually been assessed. The foregoing information will bring under the notice of honorable senators the fact that this legislation, although it deals with a case in which the High Court has declared invalid a certain method of the Taxation Department, does no injustice to any tone, but may relieve some from hardship and increased taxation.

Senator GRANT:
NEW SOUTH WALES · ALP

– I do not think the Minister (Senator Pearce) placed the facts of this matter fully before the Senate. I should like to know how many persons will be affected by thedecision of the High Court. It appears that the act was so vaguely drafted that one taxpayer, who was a little more astute than others, brought the matter before the High Court, and succeeded in defeating what the Government believed to be a valid provision of the act. Iam not at all in favour of retrospective legislation. This bill is considered necessary because an act was so carelessly drafted that one taxpayer was able to get the court to support his contention. Instead of endeavouring to validate a wrong, the proper course to adopt was. to make the necessary refunds to taxpayers. I understand that the amount would be fairly substantial, but the sum in question is not at issue. When Parliament passed the measure it was thought that its intention was conveyed in unmistakably clear language, but a taxpayer took his case to the court, which decided that, as he was in the right, ho was to be relieved from paying the tax imposed. If that is so, those who paid the tax, possibly under a threat from the Commissioner, should have the amount paid refunded. I understand certain taxpayers are to be dealt with somewhat differently because they threatened to take action.

Senator Pearce:

– Not in similar circumstances.

Senator GRANT:
NEW SOUTH WALES · ALP

– If that is so, the information I have received is incorrect.

Senator Pearce:

– Cameron’s was the only case.

Senator GRANT:
NEW SOUTH WALES · ALP

– I appeal to the Government to introduce an amending bill at the earliest opportunity to repeal this vexatious legislation. Any one engaged in farming pursuits, in raising livestock, and generally increasing the wealth of the community, has sufficient hardship to undergo without being harassed by additional taxation. Thousands of persons actively engaged in these industries find it necessary to employ assistance in order to protect themselves against the Commissioner, who compels them to pay fines every year. I would welcome the introduction of a bill to entirely exempt from income taxation all those engaged in primary production. It seems utterly absurd that persons who increase their flocks and herds should be pounced upon every year by the Commissioner and fined in proportion to the value of the service they render to the community. The cost of wool, meat, and other products is increased, and everything possible is done to make it uncomfortable, unpleasant, and costly to those engaged in rural pursuits. I do not know how long the Government intend to adhere to this system of taxation’. Fortunately this section of the Income Tax Act was set aside by the Supreme Court of Tasmania and the High Court, but apparently the Government is determined to minimize the effect of that decision as much as possible. The time is opportune’ for a review of the position. Commonwealth finances are in a healthy state, and since the revenue from Customs will continue to increase, no matter what may be done, there should be no necessity to tax the incomes of those engaged .in primary production. It is a mo3t harassing tax and should not be tolerated for a moment. I am surprised that honorable senators who are, or have been, engaged in primary production, should vote for the continuance of a measure of this description.

Question resolved in the affirmative.

Bill read a second time.

In committee :

Clause 1 -

This act may be cited as the Income Tax Assessment (Live Stock) Act 1924.

Senator GRANT:
NEW SOUTH WALES · ALP

– I move -

That the words “Repeal Act” be inserted after the word “ Act.”

It was never intended by the framers of the Constitution that the incomes of the people should be taxed by the Commonwealth, but the High Court decided that, the Commonwealth had complete power to impose taxation of this description, and unfortunately that power has been exercised, in my opinion, to the great detriment of the people.

The TEMPORARY CHAIRMAN (Senator Payne:

– The honorable senator is not in order in referring to the income tax. His amendment will affect only the live stock section of that act.

Senator GRANT:
NEW SOUTH WALES · ALP

– That is all I wish at the present moment. The proposal’ to tax a primary producer on the increases in his live stock is a pernicious one. Unfortunately we have deliberately laid it down in our legislation that any primary producer who dares to increase the number of his live stock will be immediately pounced upon by the Income Tax Department every year and taxed in proportion to ‘ the industry he displays in bringing about an increase of his flocks and herds. It is an entirely wrong scheme of taxation.

Senator Crawford:

– What is the right scheme?

Senator GRANT:
NEW SOUTH WALES · ALP

– I will tell the honorable senator, though I am under the impression that he knows,’ just as well as I do, what is the correct method. According to Henry George, the best method for the raising of public revenues is that which conforms most closely to the following conditions: -

  1. That it bear as lightly as possible upon production - so as least to check the increase of the general fund from which taxes must be paid and the community maintained.

Henry Ford has also recently pointed out that the more that is appropriated by the Government for governmental purposes the less there is -left to be expended on industrial enterprises.

  1. That it be easily and cheaply collected, and fall as directly as possible upon the ultimate payers - so as to take from the people as little as possible in addition to what it yields the Government.

We have an enormous Income Tax Department. In Hamilton-lane, Sydney, there is a large number of highly-educated, keen, shrewd officials employed in a perfectly legal manner, it is true, laying down schemes to rob fellow citizens of their hard-earned income -

  1. That it be certain - so as” to give the least opportunity for tyranny or corruption on the part of officials, and the least temptation to law-breaking and evasion on the part of taxpayers.
  2. That it bear equally - so as to- give no citizen an advantage or put any at a disadvantage as compared with others.

It is well known that hundreds, if not thousands, of people who should furnish returns fail to do so every year, and evade the tax. The right system of taxation is a tax on land values, without graduation or exemption, returning to the community the full value given by the community to the land. That is the proper system of taxation. Unfortunately, it has been carefully avoided by this Government. At the present time we are collecting only a paltry £2,000,000 a year from that source, and as a result the Government is obliged to levy a tax on the people who patronize picture shows, theatres, or attend race meetings, and other forms of outdoor amusement. I enter my emphatic protest against the continuance of the system of taxation laid down in this bill. In imposing it we slavishly followed the system which has been in operation for so long in Great Britain. I have looked through the records, and I have failed to ascertain when this infamous tax was first imposed in the Mother Country. It is now one of her main sources of revenue, and, apparently, because it had been imposed it must be levied on the people in Australia. The time has gone by when Australia should follow the example of Great Britain in taxation measures. It has been a complete failure there. The wealthy people are becoming wealthier, and they are certainly not becoming poorer in Australia. It is a most objectionable tax. We go to the trouble of passing legislation to encourage the exportation and marketing of fruit, meat, and other commodities, and then, under legislation of this nature, we make careful inquiries about the incomes of people who engage in the business and tax them accordingly. This is a direct tax upon industry, and would not be tolerated for one moment in a’ community in which everyone understood the principles of taxation as laid down by Henry George. Unfortunately, the system of income taxation appeals to a large number of people. In conversation with a gentleman the other day, I said that I felt that the burden of income taxation must fall heavily on some people. He replied, “ I had to pay £5,000 myself last year.” It is difficult to arouse sympathy in the mind of a person who can afford to pay that large sum as a tax on his income. Usually the exclamation of the person to whom such a remark is made is, “I wish I were in your position.” Every £1 that we take from a person or a company by way of income taxation is £1 removed from production. No question is of more importance than that of taxation. Every bill introduced into this chamber - whether to give preference to Canada, to control the export of dried fruits, or to impose a duty on manufactured sulphur - if analyzed carefully, will prove to have been a bill devised to make the other fellow pay. While it is not generally understood, it is nevertheless a fact that the moment we take from a man, or a company, money by way of income tax, we deprive him, or it, of the opportunity of investing that money in directions which would provide employment, and establish new industries, resulting in benefit to the country. I do not agree with the idea frequently expressed that a government can spend money better than an individual can. In some instances a government, or a municipality, may be able to do so, but the people generally prefer to spend their own money. In Sydney, recently, there was a painful procession of people who marched down the street, ten abreast, to hand in their income tax returns to the authorities there. This form of taxation is especially injurious to our primary industries.I ask the Government to consider the hardships endured by stock-owners in the Northern Territory, and the other portions of the Commonwealth, when droughts and other unforeseen calamities overtake them, and to wipe out entirely the provision in the act enabling the commissioner to tax these persons on the increase of their live-stock.

Amendment negatived.

Clause agreed to.

Clauses 2 and 3 agreed to.

Clause 4 -

This act shall not apply to any assessment in respect of which the person to whose income the assessment relates has, before the thirtieth day of June, One thousand nine hundred and twenty-four, obtained a judgment of the High Court in his favour in respect of the value of live-stock included in that assessment.

Senator GRANT:
NEW SOUTH WALES · ALP

– I ask the Minister to explain this clause. It appears to me that, concealed behind it, there is a good deal that the Minister could disclose to us if he so desired. How many persons are affected by it ?

Senator Pearce:

– Only one - Mr. Cameron.

Senator GRANT:
NEW SOUTH WALES · ALP

– Is it proposed to make it retrospective.

Senator Pearce:

– I explained the whole matter thoroughly in my secondreading speech.

Senator GRANT:
NEW SOUTH WALES · ALP

– I accept the Minister’s explanation.

Clause agreed to.

Title agreed to.

Bill reported without amendment.

Standing and Sessional Orders suspended; report adopted.

Motion (by Senator Pearce) proposed -

That the bill be now read a third time.

Senator GRANT:
NEW SOUTH WALES · ALP

. - Unlesshe specially wants the bill passed; to-day I should be glad if the Minister would allow the third reading to stand over until to-morrow. It is worthy of more consideration than has been given to it.

Senator Pearce:

– The bill is wanted today.

Bill read a third time.

page 5036

AUDIT BILL

Second Reading

Senator PEARCE:
Minister for Home and Territories · Western Australia · NAT

– I move -

That the bill be now read a second time.

Until 1921 the salary received by the Auditor-General was £1,000 per annum, but in that year an. additional £500 was placed on the Estimates as an allowance, in view of the decreased purchasing power of money between that time and the time when the salary of £1,000 was fixed. It is thought to be undesirable that the Auditor-General should be dependent for his salary or allowances on an annual vote placed on the Estimates. It is felt that his salary should be fixed by an act of Parliament, so that it will not besubject to annual review when the Estimates are being prepared. That is the only purpose of the bill.

Senate Grant. - Is the AuditorGeneral required to pay income tax on his salary?

Senator PEARCE:

– Yes.

Senator GRANT:
NEW SOUTH WALES · ALP

– The tax payable by him would be £43 3s. 5d. I ask the Minister whether the Auditor-General will be entitled to a pension when he retires ?

Senator PEARCE:

– He comes under the provisions of the Superannuation Act, and retains any rights that he may have possessed when he was transferred to the Commonwealth Service from Tasmania.

Question resolved in the affirmative.

Bill read a second time.

Bill reported from committee without amendment.

Standing and Sessional Orders suspended; report adopted.

Bill read a third time.

page 5036

CANADIAN PREFERENCE

Debate resumed from 1st October (vide page 49 16) on motions by Senator Wilson, for the application of certain preferential duties to Canada (vide page 4910).

Senator GRANT:
NEW SOUTH WALES · ALP

– This is part of our glorious policy of protection.

Senator Reid:

– Henry George was an authority on protection.

Senator GRANT:
NEW SOUTH WALES · ALP

– Irrespective of a policy of freetrade or protection, we have in the large numbers of unemployed in our midst evidence of the evil’s which are inseparable from our present system. While the motion professes to give a preference to Canada, it will really give that preference to citizens of the United States of America. The New South Wales Country Press Association some time ago considered this matter in all its aspects.

Senator Wilson:

– Does the honorable member refer to Mr. Shakespeare ?

Senator GRANT:
NEW SOUTH WALES · ALP

– Thomas Mitchell Shakespeare, M.L.C., is the secretary of the organization. .

Senator Wilson:

– Is he the secretary of the re-organization of the old company?

Senator GRANT:
NEW SOUTH WALES · ALP

– I understand that he is. This organization, representing a very important industry, not only in New South Wales, but throughout the Commonwealth, is absolutely opposed to preference being granted to Canadian newsprint manufacturers. It has put forward facts and figures, that I think are so important that the Senate should hesitate before it agrees to include newsprint in these preference proposals. This matter was dealt with at the annual conference of the association held in Perth in October, 1923. The conference was supplied with figures showing the, imports of newsprint by the Commonwealth for the previous five years. Those figures: afford a very clear indication of. the trend of the Australian trade in newsprint. Many persons in Australia are prepared to grant preference to the United States of America rather than to Great Britain. I am not one of them. I should rather grant preference to Great Britain. The action of the United. States of America in imposing a poll tax upon. Australians who enter that country, and its refusal to admit more than a certain quota annually, are to me entirely distasteful, and I would not grant any preference in its case. It may be said that this proposal does not embody the granting of preference to the United States of America. Any one who has studied the matter, however, must have realized that in Canadato-day there are many natives of the United States of America, and a very large proportion of the money invested in paper mills in Canada is American money. Although this is professedly a preference to Canada, actually it is a preference to the United States of America. I am not at all satisfied that Australia will be able to send very many commodities to Canada, and I do not think that we can send very many to the United States of America. The return which I have regarding the imports of newsprint is as- follows : -

Those figures indicate to me very clearly that the imports from the United Kingdom are substantially increasing, whilst those from Canada are considerably decreasing. The Provincial Press Association comprises persons who are directly concernedin this matter. They are engaged in the very useful work of disseminating throughout Australia the most reliable news, and their views should be given consideration. The objections of the association to this proposed preference are, briefly, as follows : -

The following is a listof objections lodged by this association to the Federal Government granting preference to Canadian newsprint: -

That theAustralasian Provincial Press Association adheres to its policy, viz., that, with a view to seeing trade developed with the Mother Country, as well as. in preventing a monopoly ofthe newsprint trade in Australia, first preference, should be given to British-made newsprint.

That for these and following reasons, members of the Australasian Provincial Press Association are opposed to preference being given to Canadian newsprint by the Commonwealth Government.

That without affording any benefit to Australian consumers, preference to Canadian newsprint would seriously interfere with, if not destroy, the British newsprint trade with Australia.

That preference was given by the Commonwealth Government to help the United Kingdom and its paper industry. If now, preference be given to Canada, Britain will not be able to sell newsprint here. Canada, on the other hand, can always successfully compete in this market without preference.

That the present preference to Britain has resulted inan increase of newsprint imports from the United Kingdom of from 14,547 tons in 1921 to 32,011 tons in, 1922.

That Britain is able to supply the needs, of the Commonwealth with the whole of its newsprint requirements, and is relying on its nonpaper producing portions of the Empirefor her export market.

Senator DUNCAN:

– Can the honorable senator tell us what assistance the British paper manufacturers gave to Australia when the Australian preference proposals were before the British Parliament?

Senator GRANT:
NEW SOUTH WALES · ALP

– I cannot supply the honorable senator with that information. A further objection of the association is -

That preference to Canada on newsprint will greatly reduce the Commonwealth revenue.

Senator Wilson:

– How do they work that out?

Senator GRANT:
NEW SOUTH WALES · ALP

– That is the conclusion at which the- association has arrived. Other objections that it puts forward are -

That preference to Canada on newsprint will enable the mill-owners of that country to enjoy the concession by adding amount of preference to the price of paper; without conferring any benefit on Australian consumers.

That members of the Australasian Provincial PressAssociation prefer to pay duty on the existing basis, viz., £3 per ton on all newsprint other than that manufactured in the United Kingdom, which is duty free, rather than see trade with the Mother Country interfered with, or am increased price afforded Canadian paper-makers.

That Britain has to importthe whole of, the wood pulp used in the manufacture of newsprint from other countries; and draws her largest supplyof this from Canada.

Senator Wilson:

– Is the honorable senator aware that the gentleman whose opinions he is quoting visited England, with his fare paid for him,, in order to secure agencies for paper?

Senator GRANT:
NEW SOUTH WALES · ALP

– At the present time paper is not manufactured in Australia to any extent.

Senator Mcdougall:

– It would be,if reasonable opportunities were afforded. If preference is given to Canada there will be no chance of its being manufacturned, in Australia.

Senator GRANT:
NEW SOUTH WALES · ALP

– This is a preference not to Canada, but to the United States of America.

Senator Wilson:

– It is absolutely a preference to Canada.

Senator GRANT:
NEW SOUTH WALES · ALP

– Another objection is -

That if, with a view to reprisalsor of injuring the Britishpaper industry, the Canadian Government should place an export duty on paper pulp exported to the United Kingdom, British manufacturers may be induced to establish a mill or mills in Australia in order to meet the challenge.

It is important that mills for the manufacture of paper should be established in the Commonwealth as soon as possible. If Canada retaliates by imposing an export duty on the pulp sent to Great Britain it may see its way clear to extend its operations as suggested. The association also raises the objection -

That Canada already enjoys a natural preference of over more than £2 per ton over newsprint manufactured in Britain, through being a producer of the raw material from which newsprint is made, namely, wood pulp, and having water power facilities which Britain has not.

American mills have always been able to produce newsprint from their own grown wood pulp at $4½ per ton less than British mills.

In addition, Canada, owing to its proximity to Australia, also enjoys the advantage of lower rates of freight, and quicker transit.

That 91 per cent. of the newsprint mills in Canada, and all of those at present supplying the Australian market with Canadian paper are controlled by United States of America capitalists, and, as proved in the criminal proceedings instituted by the American AttorneyGeneral in 1917, the Newsprint Manufacturers’ Association (of which it was charged that thirteen of the Canadian manufacturers representing 91 per cent. of the Canadian tonnage) were members of an unlawful combination in restraint of trade. Preference to Canada would, therefore, be an indirect subsidy to the United States.

I think Mr. Shakespeare could have said it wasa” direct “ subsidy. He is very modest in calling it an “ indirect “ subsidy.

Senator Wilson:

– Having read the file I cannot agree with the honorable senator that Mr. Shakespeare is very mild. From what I know of him I should not expect him to be mild.

Senator GRANT:
NEW SOUTH WALES · ALP

-I should. He says further : -

That before the war, newsprint could be purchased at competitive prices from a number of Canadian mills through agents in Australia. The export of Canadian newsprint is now in the hands of the Canadian Export Paper Company, which fixes the export rate and rigorously restricts competition.

That there is only one firm in Australia representing the mills forming the Canadian Export Paper Company. On the other hand, British mills are represented by several agents who afford competitive prices.

That the natural market for Canadian paper is the United States,to which it exported 968,000 tons of newsprint during 1922, out. of a total of 1,082,000 manufactured. Britain is virtually precluded from the United States newsprint market on the score of price.

That, notwithstanding the duty of £3 per ton, Canadahas, since preference was granted to the United Kingdom, supplied newsprint to Australia at less than British prices.

That an example is afforded in New Zealand of Canada’s ability to underquote the lowest possible rate at which the United Kingdom can profitably supply, and indeed is supplying that Dominion, at the present moment, with newsprint reels at a price considerably below Great Britain.

That if preferencebe given to Canada, it is only reasonable to have an advantage of over £2 per ton (referred to in paragraph 12), in undercutting the United Kingdom sufficiently to secure the trade to the exclusion of the Mother Country.

It would be difficult to ascertain exactly how much of themoney invested in Canadian mills is held by capitalists of the United States of America.

Senator Drake-Brockman:

– Is the honorable senator suggesting that the extension of preference to Canada will have the effect of increasing the price of newsprint in Australia?

Senator McDougall:

– The honorable senator is not making that suggestion, but the giving of this preference will not lead to a reduction in the price of newsprint in Australia.

Senator GRANT:
NEW SOUTH WALES · ALP

– My objection is that as the Canadian mills are owned and controlled by capitalists in the United States of America, the action of the Government is really giving preference to the United States of America as against Great Britain.

Senator Drake-Brockman:

– The provincial press of Australia are not opposed to extending this preference to Canada.

Senator GRANT:
NEW SOUTH WALES · ALP

– They are. I have just read nineteen reasons which they submit for opposing this preference.

Senator Drake-Brockman:

– Those reasons are advanced by one individual only.

Senator GRANT:
NEW SOUTH WALES · ALP

– Efforts have been made to take the preliminary steps to manufacture newsprint in Australia, and no doubt Australia will later on manufacture newsprint; but, in the meantime, it is dependent on supplies from abroad. Despite all the efforts made in various directions, Great Britain supplied Australia in 1922-3 with £857,564 worth of newsprint - practically half our importations of the article. It is probably quite true that the great bulk of the pulp used by British manufacturers comes from Norway and Sweden.

Senator Drake-Brockman:

– I understand that all of it comes from Scandinavia.

Senator GRANT:
NEW SOUTH WALES · ALP

– It comes partly from Scandinavia and partly from Canada; but the process of manufacture is completed in Great Britain. The people who control the manufacture of newsprint took very full advantage of the conditions which existed during the war. Although the price fluctuated to a certain extent, it went up to an enormous figure. It is the opinion of people who are associated with the sale and use of newsprint that 91 per cent, of the capital invested in Canadian mills for the manufacture of newsprint has been provided by the United States of America. As a matter of fact, 95 per cent, of the product of these mills goes into the United States of America. Therefore, while it is proposed to give a preference to Canada, it is actually giving a preference to the United States of America as against Great Britain.

Senator Drake-Brockman:

– If that is the case, why should the Canadian Government ask the Commonwealth Government for a preference on newsprint?

Senator GRANT:
NEW SOUTH WALES · ALP

– I presume that the facts presented to me by the secretary of the Country Press Association in New South Wales are reliable. I have known this gentleman for a considerable number of years and have always found him straightforward and honest. I do not think he would attempt to mislead me in a matter of this kind.

Senator Wilson:

– Is the honorable senator referring to Mr. Shakespeare?

Senator GRANT:
NEW SOUTH WALES · ALP

– Yes. He has informed me that 91 per cent, of the capital in the Canadian mills is American capital, and that 95 per cent, of the product of the mills goes to the United States of America. .1 do not suppose that there is any other man in the Commonwealth better informed on the subject than is Mr. Shakespeare. The proposal to give a preference to Canada on the off chance that we can send some of our products to tha dominion to the advantage of our fruitgrowers and others, will not have a very far-reaching effect, except that it will seriously inconvenience many people, and at the same time injure the exportation of newsprint from the United Kingdom to the advantage of the United States of America. If any preference is to be given it should be given within the Empire. I do not regard preference within the Empire as the cure for all evils, but it is certainly a step in the right direction. However, the preference proposed to be given to Canada, in the matter of newsprint is really a preference to the United States of America, and for that reason I am not prepared to support the motion.

Senator MCDOUGALL:
New South Wales

– As the business of the Senate has been disposed of much more rapidly than I anticipated, I shall have to speak to this motion without being as fully prepared as I otherwise would have been. I am distinctly and completely opposed to the Commonwealth extending trade preferences of any kind to ‘ the Dominion of Canada, because, on the figures available, Canada imports only lj per cent, of our exported products, while we import 18J .per cent, of Canada’s exportable surplus. It is apparently the desire of the Dominion of Canada to extend its secondary industries, and under the proposed agreement we shall give preference to Canada’s secondary products, while she will give preference to our primary, products.

Senator Payne:

– Does the honorable senator think that a duty of 120 per cent can be regarded as a preferential rate?

Senator MCDOUGALL:

– I am entitled to express my opinions without interruption, and I remind the honorable senator that this is a solo and not a duet, and his instrument is very much out of tune. I would prefer to be without his assistance. Australia can progress, and our population substantially increase only by extending our secondary industries. In the countries in which secondary industries are established and fostered the population has always rapidly increased, whereas in those countries where agricultural pursuits are chiefly followed the rate of progress is comparatively slow. During a period of 100 years, when” the people of Great Britain devoted the most of their time to agricultural pursuits, the population increased by only a few millions, but when Great .Britain became a manufacturing .country fah© number of inhabitants increased from 8,000,000 -to 37,000,000 during -a similar period. This clearly indicates that secondary industries are ‘largely instrumental in increasing population. If Australia is to progress in the way we all desire, it will be necessary to secure the advice of experts from other parts of the world to assist us in establishing new secondary industries, and to suggest means where’by those already in existence can “be extended. ‘Commonwealth and State Governments as well as private firms have sent their officers to other countries to ‘-become acquainted with the most improved methods of manufacture, and if that policy were extended our industries would be developed to such an extent that there would ‘be .no occasion to give preference to Canada in an endeavour to obtain markets for our surplus production. To show the difference in the volume of trade between Australia and Canada and Canada and Australia, I may mention that the average value cif ‘Canadian goods imported annually into Australia over a period .of Eve years was £3, 600., 000., whilst the average value of the goods exported .annually from Australia to Canada .during the same period was only £400,0.0.0. We are seeking additional .markets -for our surplus primary (produce, whilst Canada .is finding .additional outlets for her secondary products. Canada is sacrificing the interests of her primary producers to benefit secondary industries. The Minister for Trade and Customs (Mr. .Pratten), in submitting this motion in another place, said., M Our primary producers may expect too much -from the concessions which we have gained from Canada..1” The .words of the Minister suggest that Australian primary producers are likely to make a sacrifice dm >order ito improve the secondary industries in Canada. Evidently the Government -are not sure of the -outcome of the concessions proposed to ‘be granted, er they would .not have .’any $ea>r of what oar primary producers would say. , under the .proposals embodied in the agreement, concessions will actually be granted to America, and not to ‘Canada, as many of the manufactories in that dominion are controlled bv American capita-lists. ^Canada is ‘to grant Australia preference on fourteen items, and Aus- tralia is to grant concessions to Canada on twelve items. According to information at my disposal,, ‘Great Britain -takes about 90 per cent, of our -exports of the articles mentioned in the agreement, and although ‘Canada takes only an infinitesimal portion .of the remaining 10 per cent. , w.e are to give her preference over the Mother Country. If concessions are to be granted, increased preference .should be .given .to Great Britain, which has done so much to protect and assist Australia. During the war., some of the Canadian industries which we now propose to assist charged excessive prices for some of the commodities we obtained “from that country. Canadian manufacturers of newsprint, for instance, imposed such excessive rates that provincial newspaper proprietors and others found it difficult to continue in business. Notwithstanding the huge profits made at our expense, we are now asked to give additional preference to ‘Canada. During the financial yeal’ 1921-2, taking the main items in the agreement upon which Canada offers Australia preference, excepting tinned fruits, tinned vegetables, pears, and honey, Great ‘Britain purchased £12,900,000 worth, and Canada only £68,000 worth. Canada did not purchase from us .such -products as .lard, cheese, .tallow, dried fruit, .glue, .and beeswax . Most of ‘our .importations! of general goods came from Great Britain, and it is evident .that Canada is to be given preference at the expense of .Great Britain. Is it fair to give preference to ‘Canada, particularly on newsprint.? .Not only are many of the Canadian .factories .owned and controlled by American capitalists, but Americans axe actually regulating the prices of some of -our products, hath primary .and .secondary, in .consequence of the manner in which they manipulate the markets. The firm .of -Swift and Company is operating in Australia, -and controlling the price .of many of our meat products. .According to the figures quoted by the Minister for Trade and Customs, we give preference to Canada to the extent of £200,000 or more per annum, but the value of the preference which Canada gives to Australia,, the Minister said, could .not be estimated - probably because all the advantage is on one side. The .Minister also said that ‘ the agreement provided .an excellent opportunity fox the entry into a large and profitable market, of which it is hoped our primary exporters will be able to tate full advantage.” Although this hope is expressed, it may reasonably be assumed that Canada will derive all the benefit. The most important item in the schedule deals with newsprint. It is well known that British and Australian interests have been endeavouring to establish that industry in Australia with the object of utilizing Australian timber. The Minister, in another place, stated; definitely that he was not in a position to say what advantage Australia would get out of this preference to Canada on. newsprint. He believed that it would not result in an increase in the price but he could not say that, as a result of this proposal, Australia would be able to get newsprint more cheaply than at present. This matter is of very great importance to the Australian people. The preference given to Canada of £2 10s. a ton is very substantial, and, unfortunately, it will seriously affect British trade with Australia in newsprint. According to figures furnished by the management of the Commonwealth Line of Steamers the freight on newsprint from Great Britain represents about £100,000 a year to the line. If the preference is effective, and Canada secures the trade, that revenue will be lost to the line, because we have no Commonwealth steamers on the Canadian run, and newsprint from Canada will be shipped to Australia in Canadian liners, which are not always, manned by Europeancrews. Representatives of the paper trade section of the Australian Association of British Manufacturers, in a circular sent to all members of the Commonwealth Parliament, have made an urgent appeal on behalf of the British manufacturers. This is not the association referred to by Senator Grant. The Minister (Senator Wilson) stated that Mr. T. M. Shakespeare, whose name has been mentioned in connexion with this debate, had been sent to Great Britain for the purpose of obtaining agencies for British paper.

Senator Wilson:

– The minutes of the meeting at which he was instructed to proceed to GreatBritain state distinctly that his visit was for the purpose of obtaining agencies for British paper.

Senator McDOUGALL:

– I am not satisfied that the Minister knows, everything in connexion, with that matter. The association asks the Commonwealth Government for a fair deal. The circular states -

The paper trade section of the Australian Association of British Manufacturers and their representatives, representing £10,000,000 capi tal, desires to bring under the notice of honorable members, in the few hours allowed them, some plain facts in regard to the serious damage that will be done to the British paper trade; if the suggested reciprocity treaty with Canada is rushed through.

I also protest against this policy of rushing proposals through this Parliament without- allowing honorable senators reasonable time for their consideration. Preference to Canada in newsprint will mean a loss to the Commonwealth Government Line of Steamers of about £100,000 a yearin freight on British paper, audi the advantage given to Canada will enable manufacturers there to fight British Manufacturers for the Australian trade. The circular states that there is no truth in the assertion that Canadian competition in the Australian trade will affect chiefly Scandinavian manufactures. As a matter of fact Canadian paper will come into competition with the British paper, and because of the advantage given to Canada, the Motherland, whichhas done so much for the dominions, will be unable to retain the trade. Altogether this is a very high-handed proposal, which will not meet with the approval of the people of Australia. They should be consulted by referendum. Thisis one of the most important, subjects that could engage their attention, and they should certainly have an opportunity to voice their opinion in a constitutional manner. Since the Government has not the confidence of the people, it has no right to enter into an agreement of this nature. The circular states further -

No inquiry has. been made by the Tariff Board amongst my members (representing £10,000,000) as to effect of suggested alterations in Customs tariff on British trade. Surely honorable members are entitled tothe facts, and to require a full inquiry and report by Tariff Board.

Is that statement correct? Are we to understand the Tariff Board has not made a recommendation in connexion with this matter ?

Senator Wilson:

– The report of the Tariff Board was tabled in another place yesterday, and I laid it on the table of the Senate to-day.

Senator McDOUGALL:

– Does that report deal with the proposed reciprocity agreement ?

Senator Wilson:

– It deals with this question.

Senator McDOUGALL:

– There has been altogether too much haste over this business.

Senator Wilson:

– It has been under consideration for the last eight or nine years.

Senator MCDOUGALL:

– Am ‘ I to understand that this statement made by the paper trade section of the Australian Association of British Manufacturers is incorrect? It is stated definitely that representatives of the association have not had an opportunity of appearing before the Tariff Board. If that is correct, then the report of the Tariff Board can have no value. We are further informed by the association that, in respect of the assertion that British newsprint is 65 per cent, foreign material, if an inquiry be held, evidence could be submitted to prove that Empire materials and wages represent 80 per cent, of the United Kingdom selling price of the product. If the statement of the association is not true, the Minister should deny it. The circular contains the following paragraph:

The Prime Minister coined recently a striking phrase, “ political blackmailers.” In view ot the fact that the British, paper trade now threatened so seriously has not been heard by the Tariff Board, my members are wondering as to the application intended by the right honorable the Prime Minister when he uttered the term quoted.

I do not connect the expression “ political blackmailers “ used by the Prime Minister with matters of trade preference to other countries. I am firmly of the opinion that when he made use of that term he was referring to the Country party, which was forcing upon the Government legislation for which there was no warrant. If the association of British manufacturers considers that the term was used in connexion with trade preference, T do not agree with it The circular continues -

Co-operation has been initiated between England and Australia for the manufacture nf newsprint in Australia. Australians are now on route to England to secure necessary technical help and capital. If, unheard by Tariff Hoard or any one else, the British paper trade (in “ news,” in printing papers, and in writing papers) is to be caused irremediable damage iti favour of Canada, then the seeking of suggested capital in England for extension of Australian paper making will be prejudiced very seriously.

Here, again, we see evidence of the “ clutching hand,” which this time is working on behalf of the paper mills in Canada. Those mills are practically the property of residents of the United States of America, who. know that the introduc tion into Australia of £10,000,000 of British capital to make paper from Australiangrown materials would mean the loss of their trade. They have succeeded in obtaining, from an Australian Government, a guarantee against any losses which they might incur in fighting the British investor, who is endeavouring to advance the interests of Australia by manufacturing in this country the newsprint which we . require. This association will not appeal to me in vain to do anything that I can to prevent these outside interests from operating to the detriment of Australia. I am an Australian, and believe that everything that can be manufactured in Australia should be manufactured here. Let us put up the same” barriers that Canada has erected against the importation of manufactured articles into her territory. She has created high tariff walls, which effectually debar the entry into her country of Australian iron and steel. All machinery and other goods which Canada uses, and which require iron or steel in their manufacture, must be made of Canadian steel. In Australia we have some of the finest steel in th, world, but because of the barrier set up by Canada, none of it finds an entrance into her territory. The whole of the iron and steel work required for the NorthShore Bridge at Sydney should be manufactured in Australia. It will, however, not be made here, but will be imported from another country, in opposition to the desires of the people of Australia generally. In South Australia we have a great mass of iron ore, which- would meet our requirements for hundreds of years; and at Newcastle, in New South Wales, we have great works close to the coal-fields which can produce all the steel that is required in Australia. Why do we not make better use of these iron deposits and factories? It is because of these foolish preferences that we give to manufactured articles from other countries. People who desire to invest their money in industries in Australia will not do so unless they can see a reasonable return for their investment. In connexion with the construction of a cruiser for the Australian Navy, the Government said that if it would cost £1,000,000 less to purchase the vessel from Great Britain or Japan than to build it in Australia, it should be purchased there. The £1,000,000 that would be saved by purchasing the vessel outside Australia would be lost to this country in other ways. The money would have to be borrowed, and for the first year we should have to pay about ?126,000 for the right to use the credit that would be granted to us. We would receive no money, but bank credit only. Instead of being paid in gold, we should have to take goods in payment. We cannot demand gold, yet the United States of America not only demands it, but gets it. The cause of the slump in British manufactures is that her gold must be exported across the Atlantic. If we were to say that every steel article required in Australia must be manufactured in Australia, from Australian steel, we should be doing something to advance the secondary industries of this country. We should follow the lead of other nations which have prohibited in their territories the use of any manufactured goods but their own. Unless we do that, we shall have no chance of competing with them, and Australia for all time will be a “wood and water joey” for the other countries of the world. To maintain her place among the nations of the world, Australia must strike out in the direction taken by other countries.

Sitting suspended from 6.30 to 8 p.m.

Senator McDOUGALL:

– I occupied some time before the dinner adjournment, to secure an opportunity for further inquiry, to meet a statement made by the Minister concerning the report of the Tariff Board. I have, in the interval, perused the report, and it clearly shows that the board is absolutely opposed to the granting of this preference. We can trade with Canada only in currants and raisins, and om the price that the Canadians are receiving in the United States of America for their currants and raisins, that trade is absolutely of no use to Australia. A Montreal correspondent to the Trade Journal of New York had the following to say regarding Imperial preference: -

The defeat of Imperial preference meant a win for American paper interests. Their representatives in Australia would now be able to bring off a successful deal. Their agents, A. L. Dawe and Sir John Willison, had been in close consultation with the Australian Government, and cables from Australia to Canada indicated that the result of the mission had been favorable, and that the Australian Government would not delay working out the commercial treaty with Canada.

That clearly shows who is going to benefit. The granting of preference to Canada in respect to paper practically means giving a concession to America. A commission from a great British paper-making factory visited Australia. It was accompanied by experts in the business. It inspected the Tasmanian timbers to ascertain whether they were suitable for pulpmaking. Its report was couched in favorable terms. The Tariff Board informed it that there would be no interference with the British trade. On its return to England, the paper-making works were enlarged in anticipation of the trade that it was expected would be done with Australia, and arrangements were also made for the establishment of a factory in Tasmania. If this preference is given to Canada, 26,000 British workmen will be thrown out of employment, and a sm’aller number will obtain employment in Canada. Since the war, every country has been responsible for overproduction of almost all commodities, and the world’s markets to-day are so crowded that preference will confer no benefit on Australia. Australia can grow as good a prune as any country in the world, yet the value of its imports of that fruit from Canada ‘ is almost ?’1,000,000. Raisins and currants are the only fruits that we can send to Canada. Reciprocal trade means that each country shall be placed as nearly as possibly on an equality in its interchange of exports and imports. That will not be the case with Canada and Australia under this agreement. I have figures that were quoted by Mr.- Donald MacKinnon, showing the absolute impossibility of that end being achieved. The late Senator E. D. Millen was one of the brightest men opposite whom I had ever sat, and .1 was always willing to accept his opinion on a matter, when I had not formed one for myself. In 1921, when the tariff was under discussion, he said -

Canadian manufacturers have no claim upon our gratitude. There is a very strong reason for assuming that there is a very close intimacy between American and Canadian manufacturers.

Mr., then Senator, Pratten said ;

My vote will be governed very largely by the knowledge that the request will help Great Britain.

Senator WILSON:
SOUTH AUSTRALIA · NAT

–

I admit Canadian manufacturers are not entitled to expect very much from us at the present juncture.

Asa . -amendnieait was moved by Senator Wilson to reduce the intermediate tariff, but At was withdrawn. Senator Duncan said -

We : have ‘had a very rough spin from -.the newsprint manufacturers of Canada.

Senator Vardon, who was in the printing business and had had a great dead ‘of experience, said -

My experience teaches me that British newsprint is the best in ‘the world, and that the British manufacturers are the . most . satisfactory to deal iwith.

Mr. Lovekin., proprietor of the Perth * (Daily News.,* reoently stated publicly that -while dn iCam-ada as a idelegate to the Empire JPorees Conference, he visited the paper -making districts, . and was informed that (the >prdce of newsprint f.o.b. mills, was -3 cents per . lb. He asked for paper,, and the a-eply was that the . mills did not . supply any now,, but . that the selling was <gi-ven ; to another . company, and that the . price would -be . a little more than -the 3£ cents. When -he -went to the Canadian Export (Company, which was -the selling company, he was informed that the price would be : &i cents. He asked who was the Canadian . Export Company., and he was assured that it was the mill-owners under another name. In the course of conversation he discovered that . 3$ cents w.as a big . price at the mills, but that they scould not -ask for more, because the mill employeels wouid come out -for higher rates and the taxation would be heavy. Therefore- . they floated the -Canadian Export Company. On inquiry he found that the selling price was . 6$ cents ; but he was told that they could not sell -to Australia, and that lie would have to go to the packing company to obtain . supplies. He found that the packing company was . the same people under still another name. He was also told that the price for export to Australia was 12$ cents. Mr. Lovekin is not . connected with the . Labour movement. The facts which he . has stated clearly . prove that America, and not Canada,, will ^benefit by ithis preference. The British Paper-maker, . a trade . journal, on 21st April, 1921, stated that of 50,000 employees engaged in the paijer making industries ‘26,000 were out . of employment, and 1-6,000 were working half -time. It is well known that the British paper-makers give to their employees better conditions than axe enjoyed -by ‘the workmen in Canada. They have made big profits, but a certain amount of those profits Jias been used for the benefit of -the workmen,, in the erection of model houses . and the establishment of model villages. The Yankee trust does not treat its employees in . that way. Australia should give preference to the British manufacturer . and the British workman. It is claimed that we could not exist as a nation without the protection of the British guns”. Let us, then make some return for that service. An ex-Prime Minister of Australia has said that by fjh’is preference it is intended to stab Britain in the back. I do not want to do that, . and I do not think that any other ‘honorable senator does. If our actions are directed towards keeping the British workmen in employment, we -shall fee doing something for our own kith and kin. This is not a party matter, and we . on this ; side do ; no.t intend . to make it such. K ibeliev.e in building up tariff wall that will keep out . of . Australia manufactured articles from other . countries. . That will . enable -us to build up our population rapidly and provide us with , a sufficiently large force to place in the . field should the necessity to do so arise. We are all agreed . that Australia’s empty . spaces . should be filled. We shall not help to fill them if we continue to give large orders to other countries for manufactured -goods, and jallow those countries to reap the benefit of the money that is Taised in Australia. Unless an -outlet is found ‘for the over-production that fias -taken place throughout the world, the ‘land that is now being utilized for primary production would have to be devoted to something else. We should build up -our population try manufacturing as much as possible in Australia, and keeping our workmen constantly employed.

Senator WILSON:
South AustraliaHonorary Minister · NAT

– Senator McDougall has stated’ that the Tariff Board is not in accord with the proposal that is now before the Senate. I shall not weary the Senate by reading the whole of the recommendations of the ‘Tariff Board. Its report has been tabled and honorable senators can peruse -it for ‘themselves. . 1 -shall content myself with the quotation of the following portion of the report : -

The Tariff . Board recommends that the application of . the British Preferential Tariff aifd the Intermediate Tariff . in the Customs Tariff 1921-4. to the Dominion of Canada, . is, . to the extent set out in the Government’s proposal, desirable in the interests of the Commonwealth. . . … The proposals therefore present promise of material advantage to Australian export trade, and their adoption is accordingly recommended by the Tariff Board.

I looked into this matter very carefully, and I listened closely to the views of those who in Canada are interested in the paper making trade.Honorable members can say that it is United States capital if they like.

Senator Reid:

– Is it?

Senator WILSON:

– Not that I am aware of. Of course, it is not for me to Bay that it is not, but I can say that the shareholders of the mills and those permanently interested in the manufacture of newsprint are people living in Canada and under the flag of the Empire.

Senator GRANT:
NEW SOUTH WALES · ALP

– The majority of them ?

Senator WILSON:

– The whole of them. But where they borrow their money is a very different matter. I suppose they follow the market in. that respect.

Senator GRANT:
NEW SOUTH WALES · ALP

– My information is different from that.

Senator WILSON:

– While I was in Canada three deputationswaited on me. I discoveredthat there was af eeling there that Australia had not played the game, and when I returned I made exhaustive inquiries into the position. I found in the files nothing to the discredit of Canada, but a great deal that did not reflect credit on certain people who have filled Australia with propaganda. Before we imposed a duty of £3 a ton on newsprint, Canada was doing a very large trade in. newsprint with Australia, but after the imposition of the duties that trade necessarily passed to Great Britain. It is just about time honorable senators realized the position. The newsprint manufacturers of Great Britain enjoy a preference of £3 a ton on the paper they send to Australia. A careful search of thefigures shows that although Australia has given Great Britain a preference of £3 a ton on newsprint, no less than 170,000 tons of newsprint is imported into Great Britain each year, free of duty.

Senator Drake-Brockman:

– And how much newsprint does Great Britain send to Australia?

Senator WILSON:

– About 60,000 tons.

Senator Duncan:

– It is quite evident that Great Britain makes no effort to preserve its own market for its own manufacturers of newsprint.

Senator WILSON:

– What astonished me was that the persons we. expected to be very energetic in helping to secure preference for Australian products remained silent when we needed their assistance very badly. The Prime Minister (Mr. Bruce) made no secret of the fact that Australia was obliged to look for markets, and yet these people -did not utter one word in favour of preference within the Empire. They let the fight be carried on by some one else. In our efforts to find markets for Australia’s primary products we have entered into this agreement with Canada. Senator McDougall says the matter has been hurried. As a matter of fact, negotiations have been in progress for years. I think it is four or five years since Senator Pearce visited Canada on the very same mission that I recently undertook,and Mr. Robb, the then Canadian Minister for Customs, paid a visit to Australia with the same object in view, and spent six months here while the last federal elections were in progress nearly three years ago. Therefore, the matter has not been hurried; on the contrary, every care has been exercised. Surely it is no sin to trade within the Empire. The policy laid down by theImperialConference wasthat everything possible should be done to develop trade within the Empire, and, although this agreement with Canada is merely carrying out that policy, the Government is condemned by honorablesenators opposite. The longer I am in this Parliament the more I come to the conclusion that any old stick is good enough to whack the dog with.In su bmitting this motion I said that Canada had a certain trade with Australia, and that Australia’s trade with Canada was in the nature of a gamble. Mr. Mackinnon certainlysaid that he did not think that we would ever be able to compete inthe Canadian market, but he was not making allowance for any concession of1½d. a lb. in duty. That1½d. a lb, on raisinswill makeall the difference It will give Australia the opportunity to hop in and secure a share of the Canadian trade. TheGovernment has done nothing but what it considers is in the best interest of Australia. It had to secure markets, and when it had the opportunity to secure reciprocity with Canada it at once took steps to bring it about. When the Prime Minister and I were in Great Britain fighting for preference for Australia in the British market, did those people who represent the British newsprint manufacturers, and send printed documents to honorable senators in opposition to this reciprocal arrangement with Canada, do anything to assist us in our fight? We did not find any one very anxious to help us. to secure preference for Australian goods in Great Britain. The Government has been obliged to enter into this reciprocal agreement with Canada in order to secure markets for the production of the flesh and blood of those who refused to give us preference in Great Britain. I cannot mention the number, but there are many ex-British soldiers who have settled in Australia, and are having a very trying time. Yet Great Britain has refused to extend a preference to the dried fruits they produce. I know the day is not far distant when that preference will be secured.

Senator McDougall:

– We do not object to it.

Senator WILSON:

– But the Australian Labour party has not done very much to help Australia to get it. Senator McDougall says that the only thing to do is to people Australia. I was delighted to hear him say so. We must people this country, but we must also market the stuff the people produce. If we are to relieve the position in Great Britain, where there is a surplus population of 2,000,000, we must find markets for the increased production that must follow in Australia. Speaking on the second reading of the Dried Fruits Export Control Bill, I said that it would be a long time before Australia could produce sufficient to meet Great Britain’s demand for dried fruits. I was told that if we had no markets for the people we were placing on the land we ought to stop production. If we stop production we shall not hold Australia. It is a certainty that we cannot hold this country unless we develop it. Within the last few days we have seen the writing on the wall warning us to be careful, and warning us to people this country. This we canonly do by developing it. But if we take people from Great Britain, and settle them on the land in Australia, the Old Land must do its share by giving preference within the Empire. We cannot push on with our production without finding markets. During the last few weeks we have done a great deal to find them. Great Britain has nothing to complain of from Australia’s attitude. The preference we give to British manufacturers is worth £8,000,000 a year. Honorable senators opposite speak as if we were asking for an increased duty on dried fruits that would serve to increase the cost of living in Great Britain. We have not done so. Honorable senators opposite seem to have lost sight of the fact that Great Britain is not a free-trade country. We pay a duty of £1 13s. 8d. a ton on the currants, and £7 a ton on the sultanas and lexias we send to Great Britain. The Prime Minister did not ask Great Britain to impose a higher duty on dried fruits. He asked that the existing duties should remain, but that dried fruits produced within the Empire should be admitted to Great Britain free of duty. He was not asking for too much. We shall have to find a market for 32,000 tons of dried fruits. Personally, I think that if they are carefully marketed in Great Britain they can be disposed of. The market is there for them. I have already given the figures of Great Britain’s consumption, to which the quantity we can supply is a mere bagatelle.

Senator GRANT:
NEW SOUTH WALES · ALP

– Does the Government propose to admit Canadian-made motor cars free of duty?

Senator WILSON:

– No. I have already explained that it was never intended by Australia that cars made in the United States of America should come into Australia at a lower rate of duty than was imposed on Canadian cars, but owing to the “ domestic value “ tariff regulations that anomaly has existed.. It has now been remedied by a reduction in the duty so far as Canada is concerned. To that extent preference within the Empire has been accomplished in the reciprocal agreement, which the Senate is now asked to confirm. When a deputation waited on me in Ottawa, I asked them if they took exception to the preference given by Australia to Great Britain. Mr. Thompson, the leader of the deputation said, “ No, we admire it.” There was openly expressed admiration from the representatives of the manufacturers of Canada at the stand Australia had taken in giving preference to Great Britain. They did not ask that we should remove it for their motor car trade. They were prepared to admit that they wanted the trade kept within the Empire. Their attitude was quite foreign to the attitude that Senator Grant would seem to think they take up when he talks about the United States money invested in Canadian manufactures.

Senator GRANT:
NEW SOUTH WALES · ALP

– My information is that 91 per cent. of the capital employed in the newsprint industry in Canada belongs to the United States.

Senator WILSON:

– The honorable senator has obtained his information from a certain gentleman who went to Great Britain to secure agencies from British manufacturers. According to the minutes of the Country Press Association of New South Wales it was resolved that in readily granting the requisite leave of absence to Mr. Shakespeare on full pay to attend the exhibition, the shareholders hope that in addition to bringing the boundless resources of Australia under the notice of the British manufacturers, Mr. Shakespeare be empowered to secure’ any direct agencies in newspaper lines.

Senator GRANT:
NEW SOUTH WALES · ALP

– That is all right.

Senator WILSON:

– Of course, it is all right. That is the milk in the coco-nut. He has an axe to grind. He very likely did secure British agencies. Let me go back further to the original paper company which was handling this newsprint. We find that when a difficulty occurred in a contract some little time ago a verdict of the court was given against it, and the company went into liquidation. The same people then purchased the asset’s of the old company.

Senator GRANT:
NEW SOUTH WALES · ALP

– Why does not the Minister give the full facts?

Senator WILSON:

– I could easily do so. I do not blame a man for “ pushing his own barrow,” but I think honorable senators should know that the gentleman who is so concerned in the question of newsprint is an interested party, and that the statement he has made is an ex parte one. As a representative of the Commonwealth, it was my privilege to interview those engaged in the newsprint trade in Canada, and when I returned from that country I was able, from the information with which I had been supplied to make further investigations into the whole matter. In my official capacity I studied the whole subject, and came to the conclusion that a totally wrong impression exists in the minds of many people concerning the Canadian newsprint manufacturers. I have quoted the tonnage of paper imported into Great Britain free of duty, and the fact that Canada has been paying an import duty of £3 per ton on newsprint sold in Australia. The ramifications of these commercial transactions are of such an extent that it takes one considerable time to fully investigate and digest them. Notwithstanding the preference which is being extended to Canada on newsprint, I believe that Great Britain will still continue to do a considerable volume of business with Australia in this commodity. The paper pulp used in British manufactories is not of British production, but is imported from Scandinavia. Under the agreement, we are not extending any preference to Canada, but merely placing her on a basis of equality by allowing importations from Canada to come into Australia at the British preferential rate.

Senator GRANT:
NEW SOUTH WALES · ALP

– Preference nominally to Canada, but really to the United States of America.

Senator WILSON:

– I interviewed many of the newsprint manufacturers in Canada, and, of course, it cannot be disputed that American interests are involved, but to what extent I cannot say.

Senator GRANT:
NEW SOUTH WALES · ALP

– Can the Minister say to what extent American capitalists are interested in Canadian paper mills?

Senator WILSON:

– I do not know.

Senator GRANT:
NEW SOUTH WALES · ALP

– It would give the whole case away if the Minister was able to elucidate that point.

SenatorWILSON. - I inspected some of the works.

Senator GRANT:
NEW SOUTH WALES · ALP

– Only some of them?

Senator WILSON:

– I believe I inspected three. They are well equipped, but if those controlling them needed an overdraft I cannot say who would give them accommodation.

Senator Payne:

– Are Canadian workmen employed?

Senator WILSON:

– British workmen are engaged in the factories. Apparently some honorable senators are under the impression that Canada is being used as a backdoor for the export of motor cars, newsprint, and other commodities manufactured in the United States of America. I visited a number of the works, accompanied, in some instances, by Ministers of the Crown, and concluded that the establishments were legitimate Canadian, concerns, and that the goods being exported to this country were of Canadian manufacture. Under the present rates of duty, an American Ford car can be brought into Australia for £1 14s. 8d. less than a car of the same make manufactured in Canada. By granting the preference embodied in the agreement, Canada will be able to compete with the United States of America on terms of equality. At present, Canada exports annually approximately £5,000,000 worth of goods to. Australia.

Senator GRANT:
NEW SOUTH WALES · ALP

– Is it expected that that will be doubled?

Senator WILSON:

– No. Our export trade to Canada is valued at only £300,000. It will therefore be seen how difficult it was to enter into reciprocal trade arrangements when there was such a difference in the value of the goods exported from the two countries. Commodities of material value to us are of equal value to Canada, and Canada can increase her trade with the Commonwealth without any great harm being done to any one.

Senator GRANT:
NEW SOUTH WALES · ALP

– To what extent will our tradewith Canada be increased in consequence of this arrangement?

Senator WILSON:

– I am looking to the future with a good deal of interest, and the extent to which trade is developed will depend to a large extent upon the manner in which advantage is taken of this agreement. We have opened the door to admit additional trade, but we shall have to seek it and not wait for it tocome to us.

Senator GRANT:
NEW SOUTH WALES · ALP

– Can the Minister give the current retail prices in Canada of the articles which we propose to export’ under these preferential rates?

Senator WILSON:

– I cannot, at the moment, give the retail prices in Canada of the articles specified in the schedule; but if any honorable senator cares to call at the office of the Department of Trade and Customs, I shall submit samples and prices of certain commodities I purchased at Ottawa, Montreal, and other Canadian cities. I believe sultanas are sold at 1s. 4d. and currants at1s. 2d. a lb. There is, of course, in Canada, as there is in other countries, a great difference between the wholesale price and that which the consumer pays. I followed up a line: of currants purchased in New York at 4¼d. a lb. wholesale, and ascertained that they were retailed at1s. a lb. The wholesale price of our currants in Canada, after allowing for duty, would be about 5½d. per lb. California will, of course, be our strong competitor, and. Australian producers must pack and market their goods in the best possible manner if they are to successfully compete with theCalifornian produce. The Californian producers will not lose their market if they can help it.

Senator GRANT:
NEW SOUTH WALES · ALP

– The Minister knows that will be so.

Senator WILSON:

– I admit it. Honorable senators are aware that this agreement may be terminated on either Government giving six months’ notice.

Senator Foll:

– The whole agreement?

Senator WILSON:

– Yes.

Senator J B Hayes:

– Does the Minister mean that the whole agreement must be terminated if one of the items mentioned in the schedule is withdrawn?

Senator WILSON:

– In such circumstances this agreement would be terminated, but another could be entered into. We cannot accept this agreement in part. Although we have given Canada the British preference rate on newsprint, if, in keeping with our protective policy, we can establish a paper-manufacturing industry, the Government will not hesitate to impose an additional duty on. British importations-. Canada would then bo placed on the same basis as Great Britain.

Senator Drake-Brockman:

– But that would not abrogate this agreement.

Senator WILSON:

– No. If an Australian industry were established, it. would have to be protected.

Senator GRANT:
NEW SOUTH WALES · ALP

– Canada has really been given preference over Great Britain in the supply of newsprint.

Senator WILSON:

– No.

Senator GRANT:
NEW SOUTH WALES · ALP

– Canada is underselling Great Britain at present.

Senator WILSON:

– It has been officially stated that Great Britain can, even under this agreement, retain a reasonable proportion of the trade. Senator Grant, when quoting from a pamphlet, stated that there would be a tremendous loss of revenue. Some time ago we imported 26,000 tons of newsprint a year from Canada, a little later the quantity was 2,000 tons, and last year it was practically nil.

Senator GRANT:
NEW SOUTH WALES · ALP

– It is proposed to feed Canadian commerce at the expense of Great Britain.

Senator WILSON:

– We are doing nothing of the kind. We are merely placing Canada on the same footing as Great Britain. I trust the motion will receive the unanimous support of the Senate.

Question resolved in the affirmative.

Motion agreed to.

page 5049

APPROPRIATION BILL 1924-25

Incommittee (Consideration resumed from 24th September, vide page 4687) :

Second schedule -

Proposed vote (miscellaneous services), £3,066,433, agreed to.

War Services Payable out of Revenue.

Proposed vote, £1,445,572.

Senator GRANT:
NEW SOUTH WALES · ALP

– I wish to take advantage of this opportunity to direct the attention of the Minister representing the Minister for Repatriation, to the difficulty of securing, within the limit allowed by the act, tenders for the erection of homes for returned soldiers. The trouble is, no doubt, due to the increased cost of materials, and probably also to the increased cost of land. Widows and relatives of deceased soldiers are. being very seriously inconvenienced on account of the excessive costs of transfer and other legal charges. A case came under my notice recently of a widow who had lost two sons at the war. Desiring to become the owner of a war service home she. purchased a small block of land. Unfortunately for her, as it was under the old title in New South Wales, she was obliged to pay a preliminary fee of £3 and subsequently additional fees amounting to £11 18s. for the transfer of the, land from the old title to the Torrens title. Her case is typical of many others in New South Wales. One would have thought that the legal fraternity, of which Senator Drake-Brockmam is a shining example, would be satisfied with £1411s., but a further demand for £7 15s. 6d. has been made by the War Service Homes Department.

Senator Drake-Brockman:

– Why blame the lawyers when the trouble is due to the land system of New South Wales?

Senator GRANT:
NEW SOUTH WALES · ALP

– The honorable senator knows very well that in the early days the South Australian lawyers did all they possibly could to prevent Torrens from putting through his title, and since then no effort has been spared by them to make the transfer of land as costly as possible. They charge £3 3s. for about five minutes’ work.

Senator Crawford:

– I am informed that the department makes no legal charges whatever in connexion with transfers; that all the charges are levied by the state authorities.

Senator GRANT:
NEW SOUTH WALES · ALP

– Unfortunately for the Minister, my statement is absolutely correct. The sum I have mentioned has been paid to the department in. New South Wales, and a further demand for £7 15s. 6d. has been made.

Senator Crawford:

– If the honorable senator will furnish me with the name of the person concerned, I shall have inquiries made forthwith.

Senator GRANT:
NEW SOUTH WALES · ALP

– I shall certainly do so, because, in my opinion, the demands made are an outrage of the first order. The fees are exorbitant. I know what I am talking about, because the widow to whom I refer placed the matter in my hands, and I paid the fees on her behalf. This kind of business brings the department into disrepute. Many other matters in connexion with war service homes should also receive attention. The foundations for cottages are strong enough to carry palatial buildings. This, of course, means additional cost.

Senator Pearce:

– And if the foundations were not adequate, and the buildings cracked, the honorable senator would howl with indignation.

Senator GRANT:
NEW SOUTH WALES · ALP

– I know something about the building, trade, and I repeat that the foundations for war service homes are unnecessarily costly. The widow whose case I have mentioned has not yet secured her home. This delay is unreasonable. The whole business ought to be inquired into and action taken to ensure the transfer of land at a more reasonable rate. It appears to be the policy of the administration to “harass and fleece and inflict injury upon any one who attempts to become his own landlord. Legal charges, registration fees, stamp duties, and other charges are unreasonably high.

Senator H Hays:

– Does the honorable senator suggest that there should be no stamp duty?

Senator GRANT:
NEW SOUTH WALES · ALP

– I do, indeed. I have repeatedly mentioned what, in my ©pinion, is the best method to raise revenue. To secure war service homes for soldiers and their dependants we have at times voted considerable sums of money, and it is unfair that anything should be done to prevent the expenditure of that money in the best possible way. I say nothing against the gentlemen who are administering the act, but the fees that I have mentioned are excessive and should be reduced. I hope, also, that steps will be taken to make land available for these people in suitable localities, where transfers can be effected at a much lower cost than at present.

Senator CRAWFORD:
Honorary Minister · Queensland · NAT

– As I have already stated, no legal fees are charged by the department. Any fees that have to be paid are to meet charges made by the states. I understand’ that in connexion with some war service homes, where the department had the mortgages, the state of New South Wales, until recently, charged mortgage fees in addition to the fees for the transfer of the land. The present New South Wales Government has agreed to forgo all charges in connexion with mortgages, which action will result in some relief being granted to those persons who acquire war service homes. The delay in connexion with the titles occurs only where the land is held under an old-fashioned title. It takes some time to convert those titles into Torrens titles. I have here a statement showing the cost of war service homes in the different states, both as to the cost of the land and the construction of the houses. In New South Wales, the cost last year averaged £814 9s. 4d. In Victoria, the houses built by the commission averaged £767 12s. 4d., which price included the value of the land. Those built in Victoria by the state savings bank cost £802 13s. 5d. In Queensland, the cost averaged £704 5s. 3d. ; in Tasmania, £785 6s. 9d. : in Western Australia, £768 16s. 5d. ; and in South Australia, where they were built by the state savings bank, the cost was £699. The average for the Commonwealth last year was, for construction only,- £703 9s. Id., and for land and construction, £763 3s. 2d. When we take into consideration the cost of homes generally, throughout Australia, it will be seen that the homes built for returned soldiers were constructed at a very moderate cost. With respect to the particular case mentioned by Senator Grant, if he will give me the name of the person concerned, investigations will be made forthwith.

Proposed vote agreed to.

Second schedule agreed to.

Preamble and title agreed to.

Bill reported without request; report adopted.

Motion (by Senator Pearce) proposed -

That the bill be now read a third time.

Senator NEEDHAM:
Western Australia

– The sum of £4,000 is set aside for (repairs and maintenance to the Royal Military College at Duntroon. In the past money has been voted for work at the college, but the commandant has not been given the opportunity to spend it on the college as the money has been expended in other directions. The result is that the college to-day needs money to maintain it in a proper state of repair. I ask the Minister if this £4,000 will be at the disposal of the commandant of the college, under the direction of the military board, to be spent as intended when placed on the Estimates. The joint committee of Public Accounts, in the course of its inquiries, ascertained that, not only in connexion with the military college at Duntroon, but also in the case of the Jervis Bay naval college, money voted by Parliament for special purposes was expended in other channels.

Senator WILSON:
Honorary Minister · South Australia · NAT

– I did not ex.pect that questions would be asked tonight, and as I only represent in this chamber the Minister for Defence, and have no intimate knowledge of the affairs of his department, I am unable, in the absence of departmental officers or books, to give the honorable senator the information he desires. I shall, however, place the honorable senator’s representations before the Minister for Defence, and a reply will be sent to him without delay.

Question resolved in the affirmative.

Bill read a third time.

page 5051

ESTIMATES AND BUDGET PAPERS

Order Discharged

Order of the day for the resumption of the adjourned debate on the Estimates and Budget papers (on motion by Senator Pearce) discharged from the paper.

Senate adjourned at 9.10 p.m.

Cite as: Australia, Senate, Debates, 2 October 1924, viewed 22 October 2017, <http://historichansard.net/senate/1924/19241002_senate_9_109/>.

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