Senate
12 December 1929

12^th Parliament · 1^st Session

PAPERS
QUESTION
- MILITARY TRAINING
QUESTION
- NAVIGATION ACT
QUESTION
- FINANCIAL AGREEMENT
QUESTION
- LIBRARY COMMITTEE
COMMONWEALTH BANK BILL
- Third Reading
BANKRUPTCY BILL (No. 2) 1929
- Second Reading
SEAT OF GOVERNMENT (ADMINISTRATION) BILL
- Second Reading
STATE OF BUSINESS
INCOME TAX BILL
- Second Reading
COMMONWEALTH BANK BILL
BANKRUPTCY BILL (No. 2) 1929
ADJOURNMENT
- Charge Against Mr. Theodore

The President (Senator the Hon, W. Kingsmill) took the chair at 11 a.m., and read prayers.

page 1107

PAPERS

The following papers were presented : -

Central Australia - Report by the Government Resident on the Administration of the Territory for the Year ended 30th June, 1929.

Ordered to be printed.

Bankruptcy Act- First Annual Report by the Attorney-General.

Papua Act- Ordinance No. 6 of 1929- Appropriation 1929-1930; together with Estimates of Revenue and Expenditure for the year ended 30th June, 1930.

page 1107

QUESTION

MILITARY TRAINING

Views of Municipal Councils

Senator H E ELLIOTT:
VICTORIA · NAT

– Yesterday I addressed a series of questions to the Minister representing the Minister for Defence with reference to a report that the Municipal Councils of Richmond and Fitzroy had expressed certain views concerning voluntary military service in the Commonwealth. I raised the question again on the adjournment last night and I now ask the Minister if he is in a position to furnish me with a reply?

Senator BARNES:
Assistant Minister assisting the Minister for Works and Railways · VICTORIA · ALP

– I have not yet received any information on the subject mentioned by the honorable senator.

page 1107

QUESTION

NAVIGATION ACT

Suspension of Coastal Provisions

Senator COOPER:
QUEENSLAND

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

Is it a fact that a special Commonwealth Government Gazette was issued on the 10th December permitting unlicensed British ships of not legs than 10,000 tons and of a speed of not less than 14 knots to carry passengers between Hobart and the ports of Brisbane, Sydney and Melbourne?
Will the Government extend the same facilities between Townsville and Brisbane and the ports of Sydney and Melbourne?

Senator DALY:
Vice-President of the Executive Council · SOUTH AUSTRALIA · ALP

– The Minister for Trade and Customs supplies the following answers to the honorable senator’s questions : -

Yes, such a Gazette notice was published on 9th December, 1929.
No. TheGazette notice referred to is being revoked and permits for individual vessels will be issued when circumstances warrant such action.

Senator E B JOHNSTON:
WESTERN AUSTRALIA

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

Is it a fact that the Government has suspended the coastal clauses of the Navigation Act to permit overseas snips, including British mail boats, to carry passengers between Hobart and the ports of Brisbane, Sydney and Melbourne?
Will the Government similarly suspend the operation of the said Act between Fremantle and the four ports mentioned?
If not, why not?

Senator DALY:

– The Minister for Trade and Customs supplies the following answers to the honorable senator’s questions : -

A Gazette notice was issued permitting British oversea ships above a certain tonnage and speed to carry passengers between the ports mentioned by the honorable member for a prescribed period.
and 3. No. The Gazette notice referred to is being revoked and permits for individual vessels will be issued when circumstances warrant such action.

page 1108

QUESTION

FINANCIAL AGREEMENT

Senator LYNCH:
WESTERN AUSTRALIA

asked the Minister representing the Prime Minister, upon notice -

Is it a fact that the Loan Council have unanimously decided that the Financial Agreement entered into between the Commonwealth and the States ought to be amended; if so, will the Government seize the opportunity presented by the re-opening of the Agreement to fulfil its promise to revert to per capita payments to the States when it was returned to power?

Senator DALY:
ALP

– The honorable the Prime Minister supplies the following answer to the honorable senator’s questions : -

The Loan Council considers that a minor amendment should be made in one of the machinery clauses of the Financial Agreement, so as to facilitate the working of the Agreement. The question of reverting to per capita payments is a matter of policy and cannot be dealt with in reply to a question.

page 1108

QUESTION

LIBRARY COMMITTEE

Debate resumed from 10th December (vide page 874) on motion by Senator Daly -

That a Library Committee be appointed, to consist of the President, Senators Sir Hal Colebatch, Daly, Dooley, R. D. Elliott, Millen and Sampson, with power to act during the recess, and to confer or sit as a Joint Committee with a similar committee of the House of Representatives.

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

– Following a discussion which took place in this chamber on Tuesday, I interviewed the Prime Minister, and placed before him the views which you, Mr. President, expressed, together with the views of the Senate. The position has now been rectified. Both Houses will now have the representation to which they are entitled, so there is no need for the further postponement of this motion.

Question resolved in the affirmative.

page 1108

COMMONWEALTH BANK BILL

In committee (Consideration resumed from 11th December, vide page 1020) :

Clause 2-

After section 7a of the principal act the following sections are inserted: - “7c. - 1. Where, after the receipt of a recommendation from the board, the GovernorGeneral is of opinion that it is expedient so to do, he may by proclamation prohibit the export of gold from the Commonwealth except in accordance with the provisions of the succeeding subsections of this section, and thereupon gold shall not, while the proclamation remains in force, be exported from the Commonwealth except in accordance with those provisions.

That after the word “ Treasurer “, proposed new section 7c, sub-section 2, the words “and of the board “ be inserted.

Senator Sir GEORGE PEARCE (Western Australia) [11.8]. - In view of the discussion which took place last night I ask leave to withdraw my amendment, with a view to submitting another, which I think will be acceptable to the Government.

Amendment, by leave, withdrawn.

Senator Sir GEORGE PEARCE (Western Australia) [11.9]. - I move -

That sub-sections 3 and 4, proposed new Section 7c, be left out with a view to inserting in lieu thereof the following - “ 3. The Treasurer, on the recommendation of the board, may approve of any application made under this section.”

If the amendment is agreed to, the procedure to be adopted when dealing with an application for the export of gold will be that followed with regard to the issue of the proclamation under subsection (1). It is logical that the same procedure should be followed, that is to say, that applications should be made to the board, and the board should make a recommendation to the Treasurer, who may or may not approve of it. This amendment will, I believe, meet the objection which the Leader of the Senate (Senator Daly) raised yesterday as to the power of the executive. It will retain to the Treasurer the power to grant or refuse an application coming before him from and recommended by the Board, and moreover the procedure will be consistent with the provisions in subsection 1.

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

– This morning I intimated to the right honorable Leader of the Opposition that following on the discussion which was originated last night by Senator Lawson, the Government was prepared to accept the principle that applications should be made to the Board which would then make a recommendation to the Treasurer, and I furnished him with the draft of a proposed new sub-section which would be more consistent with the language of sub-section (1) than is the one now submitted by him. Under my proposal sub-section (2) will stand as printed. I understand the Leader of the Opposition has no objection to that. Subsections (3) and (4) will be struck out. For the purposes of interpretation it is better to adhere as closely as possible to the language of the preceding sub-section as the principle contained in it is the same. My suggested amendment reacts -

Where after the receipt of a recommendation from the Board the Treasurer is of opinion that it is expedient so to do, he may in his absolute discretion approve or refuse approval to any application under this section.

Last night Senator Lawson urged that it would be inconsistent for the Government to act on the recommendation of the Board in one instance and not to be guided by its recommendation’ in another, and the honorable senator suggested that we might bring sub-section (4) into conformity, from the point of view of principle, with sub-section (1). Accordingly I instructed the Parliamentary Draftsman to prepare an amendment which would meet the objections that had been raised, and I now ask the Leader of the Opposition to withdraw his amendment, on my assurance that I will then submit the one which I have outlined.

Senator MCLACHLAN:
South Australia

– It seems to me that the amendment suggested by the Leader of the Senate (Senator Daly) contains a great deal of unnecessary verbiage - though possibly there is not a great deal of difference in principle, between it and the one submitted by the Leader of thb Opposition (Senator Sir George Pearce), whose amendment reads: -

The Treasurer on the recommendation of the Board may approve of any application made under this section.

Once a proclamation is issued under proposed new section 7c the export of gold is forbidden except under certain conditions. All that is required is approval. I suggest to Senator Daly that the draft amendment submitted by the Leader of the Opposition is really more in harmony with the position J;han that prepared by the Parliamentary Draftsman. It is difficult to gather from the language of the latter what is referred to. It reads - “ Where after the receipt of a recommendation from the Board.” A recommendation to what effect ? What is to be guarded is the export of gold, and approval has to be gained. That is the only thing to be done, not the granting of a recommendation refusing export. Wo active thing has to be done by the Treasurer until he approves. If he does not approve, that is the end of it.

Senator Daly:

– Has not the word “may” some bearing?

Senator MCLACHLAN:

– Surely the honorable senator does not propose to debate the definition of the word “ may.” The words “ in his absolute discretion “ carry the matter no further. It is for the Treasurer to say whether he approves or disapproves. The final decision rests with him. The Government’s amendment reads -

Where after the receipt of a recommendation from the Board the Treasurer is of opinion that it is expedient so to do he may in his absolute discretion . . . .

I think that that discretion is provided for in the language of the amendment moved by Senator Sir George Pearce. As it is only a matter of draftsmanship that is concerned, I hope that we shall be able to agree on the subject. If, as I believe is the case, a similar objective is in the minds of both the Vice-President of the

Executive Council and the Leader of the Opposition in the Senate, it is better to express that objective in the language of Senator Pearce’s amendment. With all respect to the gentleman who designed the amendment put forward by the Government, I submit- that it is not so clear and to the point as that submitted by the Leader of the Opposition.

Senator Daly:

– Where is it not clear?

Senator McLACHLAN:

– What is this “recommendation”? It is indicated in Senator Pearce’s amendment as a recommendation that approval shall be granted. Gold can be exported only with the approval of the Treasurer. If the Treasurer is silent or refuses to approve of the export that is the end of it. The recommendation that is here suggested is one to refuse or to approve. There is no call for that because the only active step that the Treasurer has to take is togrant approval. Refusal is simply sitting still, and is already provided for in the bill. All that we are striving to deal with are the conditions that should prevail when approval is to be given to the export of gold. I suggest again to the Leader of the Government in the Senate that the language used in Senator Pearce’s amendment is more apt, in the circumstances, than that put forward by the draftsman.

Senator Daly:

– In what way do the amendments differ?

Senator MCLACHLAN:

– That of the draftsman reads “ Where after the receipt of a recommendation from the Board,” while that by Senator Pearce reads, “ The Treasurer on the recommendation of the Board.” The Board has to recommend the approval in both cases. The amendment of the draftsman continues, “ the Treasurer is of the opinion that it is expedient so to do.” So to do what? “He may in his absolute discretion approve or refuse approval to any application under this section.” The Government is asking him to do something in the way of a refusal. There is no necessity for that. I have it quite plainly in my own mind that the positive action of the Treasurer is approval. No other action is necessary by him. In order to approve he must have the recommendation of the board. We all desire that. Is that not provided for by

Senator Pearce in the clearest and most unambiguous language? On the other hand there is dragged in a recommendation to refuse, or a recommendation to approve. I do not see that there is any necessity for the multiplicity of words employed in the amendment submitted by the Vice-President of the Executive Council.

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

– I believe that it is an established practice that if an amendment submitted by the Government is in principle the same as one suggested by the Opposition, and from the point of clarity, both are equal, the Government’s amendment is accepted. I appreciate the position in which Senator McLachlan finds himself. Senator Pearce has claimed that he has expressed his amendment in the clearest manner, and Senator McLachlan, loyal to his leader, is trying to make out a good case for the right honorable senator. I ask honorable senators to sit in judgment on the two amendments, and to decide whether ambiguity exists in that submitted by the Government.

Senator McLachlan:

– The amendment submitted by Senator Pearce is merely an effort to improve that put forward by the Government.

Senator DALY:

– I am not aware that Senator McLachlan has any greater attributes of draftsmanship than those possessed by the Commonwealth Parliamentary Draftsman.

Senator Sir GEORGE Pearce:

– I am prepared to accept the Government’s amendment.

Senator LAWSON:
Victoria

– We want to provide that a condition precedent to the export of gold is a recommendation from the Commonwealth Bank Board. I see no objection to accepting the amendment moved by the Vice-President of the Executive Council. But I suggest an alteration, and I feel confident that the honorable senator will agree to it. I suggest that the amendment should read -

Where after the receipt of a recommendation from the board for. such approval the Treasurer is of opinion that it is expedient so to do he may in his absolute discretion approve any application.

The words “ refuse approval “ are not needed because, as has been pointed out, positive action is necessary to allow any export. Otherwise the original proclamation stands. We have got to a position where all export of gold is prohibited. The Treasurer has to exercise a definite discretion in favour of permitting the export of some gold. If he does nothing, that is tantamount to saying that the proclamation stands. If the Leader of the Government in the Senate will amend his amendment in the way that I have suggested - and I may add that I have consulted the Parliamentary Draftsman in regard to the matter - I think that the phrasing will meet his desire and leave everything absolutely clear. I am sure that the Leader of the Government does not mind who moves the amendment. We all prefer that the suggestion should come from the Government, as we are anxious to co-operate with it in making the measure that which we all desire.

Senator Daly:

– I am prepared to reconstruct the amendment as suggested.

Amendment, by leave, withdrawn.

Senator Sir GEORGE PEARCE (Western Australia) [11.26]. - I now move -

That sub-sections 3 and 4, proposed new section 7c, be left out and the following new sub-section be inserted in lieu thereof: - “ 4. Where after the receipt of a recommendation from the Board for such approval the Treasurer is of opinion that it is expedient so to do he may in his absolute discretion approve of any application under this section.”

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

– A proposed amendment has been circulated by Senator Colebatch to insert after sub-section 1 of proposed new section 7c, the following words : -

Any proclamation made under this sub-section shall be notified to each House within seven days of the issue of such proclamation ‘ if the Parliament is in session, but if not in session then within seven days after the meeting of Parliament.

The Government has given consideration to this matter, and, since it is anxious to preserve all our parliamentary institutions, it has agreed to accept the amendment.

Senator Sir HAL COLEBATCH (Western Australia) [11.36 a.m.]. - My reason for not making any reference to this matter before was that we had not reached the stage at which the amendment could be moved.

The CHAIRMAN (Senator Plain).The honorable senator may submit .his amendment as a proposed new section to follow proposed new section To.

Senator Sir HAL COLEBATCH:

– It is hardly necessary for me to impress on the committee the necessity to do all we can to encourage and refrain from doing anything that would discourage the goldmining industry. An increased production of gold would be one of the readiest methods of escaping from our present difficulty. Why should we place extra restrictions upon the gold-mining industry? Honorable senators may say that this measure will not place any restriction upon it. If not, no harm will be done by the insertion of my amendment. The measure will not be restrictive if gold remains at its present price of about £4 4s. lid. an ounce, and if the Australian note retains its par value as compared with international currency. So long as those two conditions obtain, no harm will be done to the industry by commandeering the gold that is mined. The industry will continue to send its gold to the mint, and, in the natural course of events, this gold will come within the scope of this measure. But if gold should increase in value in the world’s market, which is by no means improbable, or if the Australian note should depreciate in terms of world currency, which is highly probable, any general use of the provisions of this legislation would seriously prejudice the interests of the industry. A depreciation of as much as 6d. in the international value of the Australian note would mean a loss of 2s. an ounce to the producers of gold. What is the use of the Government commandeering the product of this industry any more than the product of another industry? I do not think that any. argument could be raised against the producer of gold being given every opportunity to find the best possible market he can for his product. If the Government wants the gold produced by the mining industry, it should be prepared to buy it at its true value in the world’s market. I move -

That the following new section be added - 7e. Sections 7b and 7c of this act shall not apply to any gold produced in Australia, in the ordinary course of the gold mining industry, after the coming into effect of those sections.”

Senator DALY:
‘VicePresident of the Executive Council · SOUTH AUSTRALIA · ALP

– I trust that the committee will not agree to the amendment moved by Senator Colebatch. I have every sympathy with the gold producers of Australia, but as protection has already been afforded to the gold-mining industry there is no necessity for the amendment. The bill provides that where the Treasurer is satisfied that it is expedient for the protection of the currency of the public credit of the Commonwealth to obtain particulars of gold coin and bullion held by persons in Australia, or to require the exchange of any gold so held for Australia’s notes, he may do certain things. The Treasurer must be satisfied that it is expedient to acquire the gold for the protection of our currency. Would any member of the committee relieve the gold producers of, say, Western Australia, of their obligation to place the gold they produced in the coffers of the Commonwealth Bank if it were necessary for the protection of our currency? Does Senator Colebatch suggest that after giving the gold producers of Australia protection and encouragement the gold which they produce and which may be held by the banks or by speculators should not under such circumstances be commandeered? Under this amendment gold could be purchased and sent overseas, to China and other countries, as was done during the war when some parcels possibly reached Germany. The Treasurer, who is responsible to Parliament, has given the gold-mining industry an assurance that every consideration will be given to the industry. If it were possible to sell gold overseas at a price higher than that ruling in Australia, difficulties would arise. We are only asking the committee to give to an executive councillor the right to mobilize all gold for the protection of our currency.

Senator Lynch:

– That would be all right if the market price was paid.

Senator DALY:

– The Government will deal equitably with all interests concerned. The gold-producing companies, in a crisis, have no more right to claim a higher price for their goldthan, say, the Bank of Adelaide has a right in connexion with the gold it holds. Senator Lynch would not suggest that we were acting fairly if we told the board controlling the Bank of Adelaide that it should accept a lower rate than we were paying to a gold producing company. I see no valid reason why the gold-mining industry should be exempt. Gold will only be called up in the interests of the nation, and only under exceptional circumstances. Should the necessity arise, the gold producing companies and other interests must be placed on the same basis. Every section’s interest must be subservient to that of the nation. If the amendment were agreed to every ounce of gold produced in Australia after the passing of this measure would be exempt.

Senator Lawson:

– Has the Government given an assurance of any kind to the gold-mining industry?

Senator DALY:

Senator Sir HAL COLEBATCH (Western Australia) [12.10]. - The objection the Leader of the Senate has raised to my amendment is based on fallacious premises. He suggests that if the gold producers are allowed to send gold out of Australia they may do great injury to the Commonwealth. As a matter of fact, every ounce of gold that leaves Australia serves to stabilize Australia’s credit abroad, and to that extent reduces the necessity for legislation of this type.

Senator Daly:

– But the gold sometimes goes to China.

Senator Sir HAL COLEBATCH:

– I do not care where it goes. Wherever it goes, it brings value back. Why is it any worse to send gold to China than it is to send sandalwood, so long as we get value for it? The reasons put forward for this legislation must excite grave suspicion in the minds of honorable senators. If it is to be assumed that it is unsafe to permit any gold to go out of Australia, and that all the gold here now, and all that can be won in future, should be gathered in the vaults of the Commonwealth Bank, will not every one ask why this has to be done? And will not the answer be that which was suggested by Senator Barnes in his speech - that the Commonwealth may largely increase the issue of notes ? There could be no other object in all this hoarding of gold. But directly there is an increase in the note issue above the ordinary demands of industry, the value of the £1 note must depreciate* The gold-mining industry, by the operation of federal policy, has been harder hit than any other in the Commonwealth. It has been brought to its knees. Hundreds of mines ought to be giving employment to thousands of men, but cannot do so because to-day the cost of production is higher than the value of the gold produced. That is a natural result of any depreciation in the value of the Australian note, and as a consequence of any further inflation gold-mining can no longer be looked upon as one of Australia’s industries that can afford relief in the present situation. It could afford relief in other circumstances, and in no better way than by sending more and more gold out of Australia, thereby helping to re-establish Australia’s credit in the other markets of the world.

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

– Senator Colebatch has spoken of fallacious arguments. His own argument is certainly fallacious. He assumes that immediately the bill becomes law all gold in Australia will be mobilized, and that if we could suddenly discover a gold-mine capable of producing millions of pounds worth of gold, and could ship that gold overseas, our credit would be immediately restored.

Senator H E ELLIOTT:
VICTORIA · NAT

– Of course it would be.

Senator DALY:

– I admit that. But no government would mobilize any more gold than was necessary to carry out the expressed will of Parliament. Parliament gives instructions to the Treasurer to do certain things under specified conditions. It would not be for him to go around Australia and mobilize the whole of the gold, when it was not necessary for him to do so. He will act only when he is satisfied that it is necessary to do so for the protection of the currency, or the public credit of the Commonwealth. Senator Sir Hal Colebatch has raised an argument in respect to the price of gold. In this connexion I invite honorable senators to study a report of the Gold Production Committee, presided over by Lord Inchcape. It deals with this question of price.

Senator McLachlan:

– Did not the committee deal with the question of the payment of a bounty?

Senator DALY:

– Yes, but certain’ disabilities were placed before it, and it dealt with them, and also the point raised by Senator Lynch, the exchange of gold and notes.

In respect of the price of gold, this is what the committee said -

To give more for an ounce of gold than it ia worth in currency appears to us out of the question, except on the supposition that we want gold for the purpose of keeping it locked up and available for export; we cannot, however, see any use in acquiring gold for such a purpose.

Senator H E ELLIOTT:
VICTORIA · NAT

– That is what the Government proposes to do under the proclamation.

Senator DALY:

– But only in sufficient quantities to preserve our currency. Surely the Treasurer can be relied upon to mete out justice to the mining industy. An amendment in this or any other form suggested up to the present by Senator Colebatch will compel the Government to pay more for every ounce of gold; The provision in paragraph a of subsection 3, 7b states -

The equivalent of gold coin shall be the nominal value thereof, and of gold bullion shall be £8 17s. I Old. per ounce of the standard content of the bullion.

Senator Thompson:

– Fine gold will command a higher price.

Senator DALY:

– Yes. The currency committee to which I have referred states further -

There is one other matter on which we think it right to make some observations. There appears to exist a widespread impression that, in some way, a gold mine-owner has suffered unfair treatment, that, in the words of one of our witnesses, he has been “ damnified “ by the action of the Government. It is, apparently, widely thought that he has been compelled to deliver the whole of his products to the Government, and that he has suffered by the issue of currency notes. It seems to us that had not the Bank of England been willing to take his products, he would have been unable to market them at all during the war, or, at most, only to a very limited extent, and we have ascertained that, so. far from it being the case that any pressure was exercised upon him by the Government, he accepted readily an arrangement under which the Bank of England agreed to take the whole of his products.

– The suggested amendment of Senator Colebatch’s amendment opens up further possibilities, which will undoubtedly receive the serious consideration of the Leader of the Government in the Senate. There are one or two points connected with the arguments adduced that have given rise to some thoughts in my mind that may or may not be correct. As I understand the gold basis of currency, the standard price and the standard quality of gold are determined by the Bank of England, which inaugurated this currency, and has maintained it for a long period of years. The standard price of gold per oz. is, in the main, determined in accordance with that principle. It is true that it may be affected by certain seasonal demands or fluctuations in price caused- by a desire on the part of certain countries to hoard gold, or perhaps, as in the case mentioned by Senator Pearce, by an enemy country desiring to obtain gold from one of its opponents during a time of war. Taking it in the main, the price of gold is determined by the Bank of England on that standard £ basis.

Sitting suspended from 12.46 p.m. to 2.16 p.m.

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

, - During the luncheon adjournment I had an. opportunity to consider the amendment suggested by Senator .Colebatch, and to arrange for the Treasury officials to communicate with the chairman of the board of directors of the Commonwealth Bank, from whom the following message has been received : -

If gold bullion is shipped to London and sold to the Bank of England, payment will be made at the rate of £3 17s. 9d. per ounce of standard gold, which is equal to £4 4s. 9d. per fine ounce of gold. Gold bullion purchased from the Bank of. England is sold at the rate of £3 17s. 10½d. per ounce of standard gold, which is equal to £4 4s. lid. per fine ounce. Apart from the Bank of England there is a market for gold in London, where persons desiring gold for export bid up to £4 4s. lOd. to £4 4s. 10)d.

That is for fine gold.

And the seller thus receives id. to )d. per ounce more than he would receive from the Bank of England, and the purchaser pays from id. to Id. less than if he had bought from the Bank of England. It will thus be seen how difficult it is to assertain the market rate of gold.

That is the opinion of the Governor of the Commonwealth Bank, who is the best authority in Australia on this subject. The statement continues -

Assuming, however, that the average premium is )d. per ounce the additional amount to be paid for new production, if requisitioned by the Commonwealth Bank, would be £1,426. This is based on the production of 456,485 fine ounces in 1928. Now that the world is on a gold standard the value of gold is uniform in all countries, and the large premiums which were obtained before the return to the gold standard ave not now. obtainable.

– A much more drastic step was taken some years ago when Commonwealth notes were first introduced, and when it was said that there would be an immediate rush upon the banks for gold. The people of Australia, however, soon became accustomed to notes, and there does not seem to be any valid reason why the passage of this measure should have any effect -upon the price of gold. The further amendment suggested by Senator Colebatch is, I believe, likely to be more harmful than the amendment now before the committee, which the Government cannot accept.

Senator Sir HAL COLEBATCH (Western Australia) [2.27]. - I submit that the message from the Governor of the Commonwealth Bank, which the Minister has just read, has no bearing whatever upon the point at issue. I am not concerned as to whether the price, which was fixed, was a correct one. The point I raised is not touched upon in the communication read by the Minister. If this measure becomes operative and the export of gold is prohibited, there will inevitably be a fall in the value of the Australian notes, and the gold producers will be compelled to accept payment in depreciated currency.

Senator Daly:

Question - That the words proposed to be added (Senator Colebatch’s amendment) be so added - put. The committee divided.

AYES: 7

NOES: 15

Majority . . . . 8

AYES

NOES

Questionso resolved in the negative.

Amendment negatived.

– In theory that is the position.

Senator Sir Hal Colebatch:

– It is also the position in practice.

Senator DALY:

Senator LAWSON:

– The fact that we are legislating in respect of a particularly sensitive matter in abnormal circumstances, suggests the wisdom of a twelve months’ trial for the bill. I fail to see how the acceptance of the amendment will in any way be a disadvantage, because it will give Parliament an opportunity to review the position. Indeed, if the amendment is carried, the Government will be obliged to submit this legislation to Parliament again for review. If the bill is as effective as the Ministry believes it will be, and if the abnormal conditions which are responsible for its introduction exist at the expiration of twelve months, Parliament will renew the act and may even make’ it a permanent piece of Commonwealth legislation. This practice of limiting the operation of measures has been adopted on many occasions. The Leader of the Senate has admitted that it is an experiment designed to meet an emergency. We are all hoping that the crisis will have passed before the expiration of the term fixed in the amendment, and that then there will be no further need for the application of this remedy. All we are concerned about at the moment is the public interest. This is not a party matter, and the Senate has not discussed it from a party point of view. I hope, therefore, that the Leader of the Senate will rid his mind of the idea that these amendments are the outcome of suspicion, and that he will consider them on their merits.

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

– I regret that I have not furnished to Senator Lawson the information which he asked for yesterday. I undertook to obtain from the Treasurer a statement as to whether this legislation was, in the opinion of the board, the best possible, and whether the extracts read from a letter written by the chairman of the Commonwealth Bank set out fully the views of the board. I am assured by the Treasurer that, with the exception of certain confidential matters, which it is not desirable should be disclosed, the only references relevant to the bill contained in the letter from the board and not read were -

Apart from the measures before referred to, my board is of the opinion, for reasons already given, that the necessity of immediate curtailment of imports has become an urgent question; this may be accomplished by the incidence of the following conditions or direct methods: -

1 ) The economic law operating by the absence of availability of credit in London accompanied by the reduced spending capacity of the community through general depression.

The combined action of bankers of Australia to restrict in every practical way the provision of oversea credits.

The increase of customs duties tem porarily upon articles imported from overseas which come within the category of luxuries.

Direct restrictions under the Customs Act upon the quantity of articles imported which come within the category of goods which are nonessential for the carrying on of the national life of the community.

My board is of the opinion that the failure of the effective operation of (1) and (2) might necessitate action by your Government to seriously consider the wisdom of operating through the medium of (3) and or (4).

The difficulty of advising you more definitely in regard to the methods referred to is one which has exercised the minds of the members of the board very considerably. Naturally the board would be very loth to make strong recommendations in respect of (3) and (4) as the less interference with the natural channels of business the better. There is no need to point out to you that any dislocation in the ordinary commerce of the community affects adversely the general business of the country. On the other hand, the hoard at this stage has some dubiety as to the efficiency of (1) and (2), and it is most desirable that things do not get out of hand. The board feels, however, that it is proper that your attention should be called to these matters, and while quite willing to confer with you and tender such advice as lies within its capacity, it realizes that questions of policy are the responsibility oi Governments, and have no place in the administration of the bank.

You will naturally understand that the board stands aloof, in the affairsof the bank, from anything appertaining to political matters, and the members, as far as possible, try to view banking matters from a national and non-political outlook.

On the point raised by the honorable senator as to whether the board had actually approved of the bill now before the Senate, I desire to say that -

Immediately following the receipt of the Commonwealth Bank Board letter of 9th November, a lengthy discussion took place between the Treasurer, the Chairman of the Board of Directors and the Governor of the Commonwealth Bank. A bill was then prepared to give legislative effect to the representations contained in the Bank Board’s letter with such qualifications as were made in the subsequent discussion. The bill, as originally introduced, provided that the restriction on the export of gold should operate immediately on the passing of the act. This bill was considered by the Bank Board at its meeting on the 3rd December, and the following message was communicated to the Treasurer: -

The Board of Directors of the Commonwealth Bank having considered the bill to amend the Commonwealth Bank Act,is of the opinion that clause 7o goes further than it considers wise, and holds the view that its permanent enactment may reasonably be expected to react unfavorably on Australian finance. The board, therefore, recommends the Government’s reconsideration of this clause and amendment thereto on the following lines: -

This section to be’ brought into operation only in time of emergency and on the proclamation of the GovernorGeneral on the recommendation of the Commonwealth Bank, such proclamation to state the period during which the restriction will apply.

The bill was amended in another place to give effect to the further recommendation of the bank board. It will be seen, therefore, that the bill, in its present form, has received the approval of the Commonwealth Bank Board. The provision in the bill to restrict the export of gold by a proclamation of the GovernorGeneral on the recommendation of the bank board is in no way inconsistent with the statement in the letter from the Commonwealth Bank Board, namely, “that the last resource which should be adopted would be any course which meant even temporary departure from the operation of the gold standard on the part of Australia.”

The power in the bill to restrict the export of gold pan be brought into operation only on the recommendation of the Commonwealth Bank Board. As the board’s considered opinion is that such action should be taken only as a last resource, we may rest assured that the board will not take action under this section excepting as a “ last resource “ and in times of emergency.

The following message, telephoned yesterday by the Governor of the Commonwealth Bank to the Secretary to the Department of the Treasury, covers the point raised by Senator Lawson, as to now far the Government would guarantee that the note issue position would not be affected : -

In the event of the bill for the amendment of the Commonwealth Bank Act, now before Parliament, becoming law, the policy of the bank in regard to the note issue will not be altered. That policy is to allow the note circulation to operate according to the needs of the community. When required for seasonal purposes, such as harvesting, Christmas festivities, or the temporary requirements of banks in anticipation of payments in sight, notes are allowed to flow out without restriction. When returned to the bank, notes are cancelled and circulation reduced. Notes are not forced into circulation or kept in circulation by any artificial means. The requirements of the public and the banks are the sole guide as to the amount of notes in circulation. The proposed legislation will have no effect upon the bank’s policy in regard to circulation.

Senator H E ELLIOTT:
VICTORIA · NAT

– Senator Barnes has not advanced a single reason to convince us that we should vote against the amendment. I remind him that for over 200 years the British Army Act has been brought up annually and passed again for a period of only twelve months.

Senator Rae:

– That does not apply to similar legislation in Australia.

Senator H E ELLIOTT:
VICTORIA · NAT

– No. Do honorable senators suggest that that act is not an important one? With the advent of a Labour government, unstable trading and general financial conditions have arisen. Although there was no necessity for the introduction of a measure of this character when the BrucePage Government was in office, provision has now to be made for ensuring the stability of our currency. I supported the second reading of the bill, merely because a measure of this character was recommended by the Board of Directors of the Commonwealth Bank - our financial advisers. An endeavour has been made to improve the measure as far as possible in this chamber and to limit its more objectionable features; but I place upon the Government the onus of justifying this interference with the ordinary course of the trade and commerce of Australia. It is idle to suggest that a member of the

Opposition in this chamber could introduce a private bill for its repeal, as there is little opportunity for the consideration of such measures. The only way in which we can ensure a review of the whole financial position, is to accept the amendment moved by the Leader of the Opposition (Senator Pearce). If it is necessary that it should continue in force for another year, a short measure, consisting of perhaps half a dozen lines, could be introduced and disposed of in a day. I cannot understand why the Government is opposing this reasonable amendment, which I intend to support.

Senator O’HALLORAN:
South Australia

. - During the debate, many interesting aspects of this complex subject have been brought forward. We had a most informative and comprehensive discussion on the motion for the second reading of the bill, during which there were general expressions of agreement with the main principles of the bill. The Leader of the Opposition, in support of his amendment, said that the operation of the measure should be strictly limited, because it is experimental legislation ; but I trust that before honorable senators record their votes, they will realize that there is no significance attaching to the “ 30th December, 1930.” No evidence has been placed before the committee in support of the amendment, or to prove that the conditions which the bill purports to check will be substantially different at the end of 1930 from what they are to-day. Other nations have adopted similar proposals to protect their currency.

Senator Sir George Pearce:

– What other nations?

Senator O’HALLORAN:

– I am referring now to Great Britain, where a similar measure has been passed. I admit that much of the machinery in this bill differs from the British legislation, but the object of the British act is to protect the currency of Great Britain. It has been freely admitted by honorable senators opposite that it is necessary to protect Australia’s currency, and in order to do so they supported the second reading of the bill. Senator H. E. Elliott wishes the committee to believe that the introduction of this measure has been necessitated by a change of government. That is not in accordance with fact, as during the debate, Senator R. D. Elliott said that the present unsatisfactory position has been developing over a period of years. Even if there had not been a change of government a similar recommendation would have been made by the board of directors of the Commonwealth Bank, and the Bruce-Page Government would have submitted similar legislation. Honorable senators have stressed the point that credit is a most sensitive instrument, and that anything which tends to weaken the credit of a nation should be avoided. If that is so, why should there be an attempt to limit the operation of this measure to a period of twelve months, at the expiration of which time it would be necessary to reenact it. This would open up another lengthy debate, in which the actual financial position of Australia would be disclosed, perhaps to our detriment. We have accepted the principle that our gold reserve should be protected in order to stabilize currency, and that it is necessary, should the occasion arise, to prohibit the exportation of gold; but, as has been explained, such action would be taken only in a case of extreme emergency. There is a strong possibility that it will never be necessary to place an embargo on the export of gold. The relationship of the gold backing to our currency is influenced to an appreciable degree by the sale overseas of our exportable surplus of primary products. The principal portion of our exportable surplus of those products enables us to keep on something approaching an even keel in connexion with our financial operations with the outside world. Our wool and wheat, which form a very substantial portion of our exportable surplus of primary products, are sold in the later part of the year, and the receipts received from such sales are credited to Australia. But if the proposed limitation is imposed it will be found that this measure will expire at a time when most of these products are still unsold and when the export of fairly extensive quantities of gold may be rendered necessary. In the absence of the protection this measure affords something in the nature of a slight panic might be created in consequence of the export of gold. The primary object of the bill is to ensure that our gold reserve shall be used in settling “with our creditors overseas. It would be exceedingly dangerous to terminate the operations of this legislation at a time when our difficulties in effecting a normal settlement were probably greater than at any other period of the year.

Senator H E ELLIOTT:
VICTORIA · NAT

– Would an extension of six months be an advantage?

Senator O’HALLORAN:

– I do not think that we are competent to judge. No evidence whatever has been adduced in support of this amendment. Senator Lawson seems to think that the mobilizing on the port of gold in the Commonwealth Bank is desired because of some sinister motive of the Government in the direction of inflating the note issue. I do not wish to enter into a discussion upon inflation and deflation of the note issue, but I believe that it is impossible to force upon the community a greater currency than it needs for the normal transaction of business.

Senator Lynch:

– What was the experience of Germany during and after the war?

Senator O’HALLORAN:

– Honorable senators seem to be unable to divorce wartime expedients from normal operations. Currencies in other countries were inflated in consequence of war conditions, and that inflation continued some time after hostilities had ceased. The world has now returned to a gold standard, and anything in the nature of note inflation is practically impossible. The note issue is governed by a board which operates under a definite Act of Parliament, which the passing of this bill would not affect in any way. Even if the Government desired to do so, it could not issue one additional note as a result of the passing of this measure. It would first have to amend the Commonwealth Bank Act, and the Note Issue Act, before it could take to itself some of the powers now vested in the Note Issue Board. No provision to that end is contained in this bill, and consequently, there is no ground for the fear that has been expressed by Senator Lawson and others. Seeing that the wisdom of protecting the currency has been admitted we ought not to complicate the position, or stultify the efforts of the Commonwealth Bank Board in protecting the currency of Australia, by limiting the operation of this measure to a period of approximately, twelve months. Should amendments be found necessary later, they could be made; but if this legislation is desirable to-day, it is probable that it will be equally desirable twelve months hence.

Senator Sir HAL COLEBATCH (Western Australia) [3.48]. - The carrying of this amendment will not necessarily mean that this legislation will pass from the statute-book at the end of 1930. What is more likely to happen is that next session, the Government will bring down a well-considered measure to constitute the Commonwealth Bank a central reserve bank, and that then the whole position will be reviewed in the. light of further knowledge and experience.

Senator Daly:

– Yes. The Commonwealth Bank Board anticipated that under the legislation to be introduced there would be temporary proclamations.

Senator Sir HAL COLEBATCH.The bill provides for permanent proclamations.

Senator Daly:

– No.

Senator Sir HAL COLEBATCH:

– Can the Leader of the Senate show how a proclamation can be revoked other than at the will of the executive? If the amendment is not carried it will rest with the executive to say whether Australia will remain on the gold standard. Honorable senators would be ill-advised to vest that power in the executive. I ask the Leader of the Senate to accept my assurance that I should have adopted exactly the same attitude whatever Government had been in power.

SenatorRAE (New South Wales) [3.52]. - Proposed new section 7c (1) provides -

Where, after the receipt of a recommendation from the hoard, the Governor-General is of opinion that it is expedient so to do, he may by Proclamation prohibit the export of gold from the Commonwealth except in accordance with the provisions of the succeeding subsections of this section, and thereupon gold shall not, while the Proclamation remains in force, be exported from the Commonwealth except in accordance with those provisions.

Senator Colebatch distinctly said that the proclamation, once made, will remain for all time.

Senator Sir Hal Colebatch:

– I said that it would remain at the discretion of the executive,not of the board.

Senator Daly:

– Does Senator Colebatch suggest that the executive would do other than follow the advice of the board as to the repeal of the proclamation ?

Senator Sir Hal Colebatch:

– If the executive would in all cases follow the advice of the board, why has the board’s advice not been followed in the bill?

SenatorRAE. - Why did not Senator Colebatch suggest that when he was speaking?

Senator H E ELLIOTT:
VICTORIA · NAT

– I gathered, as the honorable senator hurriedly read the letter, that the board had stated that section 7 c went too far.

Senator Daly:

– As that section appeared in the bill, as introduced in another place.

Senator McLACHLAN:

– It does not matter whether section 7c absolutely prohibits the export of gold, except with the approval of the Treasurer, on the recommendation of the Bank Board, or whether the export of gold will be prohibited only on the issue of a proclamation; the result is the same - Australia’s credit is injured. I realize that the Senate is against me in this matter. Honorable senators seem to think that some “ smart Alec.” might get into the Commonwealth Bank, demand a certain amount of gold, and eventually get on board the Niagara, or some other vessel, and take it to another country. Such a suggestion is ludicrous. The bank would not allow it to be done. This part of the bill will injure Australia’s credit; and it is that credit with which I am concerned. I have no thought of protecting the trading banks for, with this legislation on the statute-book, they will have no gold. It is a pity that the Government should publish to the world that it is necessary to place this power in the hands of the Commonwealth Bank, when all that is necessary could be done quietly under the earlier portion of the bill. In regard to this limitation, all I can say is that we have embarked on an uncharted sea in regard to foreign credits and the stabilization of our note issue. In this bill we are providing machinery to alter the fundamental basis of our financial system; we are cutting across the gold standard, and placing ourselves in a position of financial isolation. Parliament has had this legislation under consideration for less than a fortnight. We recognize that we have to accept the statement by those in control of an institution we prize that there is need for doing something, and we have acted on the lines they have recommended; but, speaking for myself, I have done so entirely against my better judgment, because the provisions of proposed new section 7c alter the whole of the vital principles of our financial system. I think Senator O’Halloran must have been under the impression that the date upon which the amendment would have these provisions expire is the 30th September next. It is true that that would be a most inconvenient date so far as the private banks are concerned, because their seasonal inflation takes place regularly from October to the end of November. But there is really nothing in the honorable senator’s point in that regard because the 30th December is the date proposed in the amendment. If, as we hope, we do not reach that deplorable state of affairs which will render necessary the retention of these provisions, they will cease to operate at the end of twelve months; and if it be necessary to continue them all that the Government will need to do is to bring in a short bill to remove from the act the couple of lines which Senator Pearce now seeks to have incorporated in it. The matter of establishing our national credit on a proper basis is not as simple as some people would have us believe. It is not a case of what party is in power in the Commonwealth. The credit of the nation transcends the importance of any political party. The amendment will give an opportunity to review this legislation. If it works well and is still found to be necessary, it can easily be re-enacted.

If, on the other hand, it has not worked well, it should be blotted out at the earliest possible moment. As the position is at present, we are prepared to allow the Commonwealth Bank to alter the gold standard, and thus put Australia out of step with the rest of the world, but only for twelve months.

Senator LYNCH:
Western Australia

– If there is one thing more than another we have gained from the discussion we have liad, it is the assurance from the Minister in charge of the bill that his Government will not tamper with the present system of regulating the currency of Australia. That assurance removes a good deal of the mystification which surrounded this bill.

Senator Daly:

– That assurance has not been sought by any one except certain honorable senators like the honorable senator who is speaking.

Senator LYNCH:

– We are pleased to have the assurance even at the expense of being regarded as obtuse. But a further reason has been advanced by Senator Barnes for making this legislation permanent, and that is that the bill is needed for the purpose of stabilizing the currency of this country. The reason given by the Treasurer (Mr. Theodore) for its introduction was the necessity to mobilize the gold resources of the country. Between mobilization and stabilization I am afraid we may bring about a jeopardization of the welfare of Australia. I realize, however, that the further reason advanced by Senator Barnes is a subsidiary one, and that the real purpose of the bill is to enable our gold resources to be conserved so that we may trade with other countries on a reasonable footing. The gold we send overseas is the only corrective we have to bring about a reduction of the extortionate rates of exchange we are now obliged to pay, and if we have not that gold at our command, the exchange rates will go still higher. Throughout the presentation of the case by the Treasurer in another place, one thing emphasized more than any other was that we are living in abnormal times. We have got into a condition of affairs that has made it necessary for the Commonwealth Bank, in col laboration with the Government, to do something. The words used by Mr. Theodore were -

While the tendency exists anxiety is naturally caused to om- bankers.

The point I want to make is that that tendency is not of a permanent nature, and has only come about because the exchange rate has turned against us owing to our trade position. If our exports increase and our debtors in the distance are multiplied, there will be no need for the exercise of the provisions of this bill. The rates of exchange were once in favour of Australia and, instead of bills on London being at a premium, they were at a discount. If that time comes again there will be no need for this measure. Our bills will be at a discount in London, and it will pay us to send money there. But there is no need for us to provide a permanent remedy for a passing ill. We have heard Senator Rae saying that all legislation is experimental, and, within certain limits, the honorable senator is quite right. But the law against stealing is permanent, because we cannot make sure that the community will always remain honest. Experience teaches that there is no guarantee that Australian trade will not be in a more wholesome and healthier state in the future, and it will, therefore, be an anomaly to have on our statute-book a permanent remedy to meet a temporary trouble. I am not wedded to the limitation of twelve months proposed by Senator Pearce. I would prefer an extension to two years. It is absurd to expect us to make legislation permanent without giving it a trial. Would Ministers buy a team of horses without subjecting them to a proper trial ? Of course they would not ; and they should not expect Parliament or the people of Australia to do what they themselves would not do. Let this legislation prove itself before it is made permanent. When it is established that successful results have flown from it, the Government can come back to this Parliament and have it re-enacted. If it produces the fruits its sponsors prophesy for it, they can rest assured that Parliament will re-enact it; but if it does not do- what it is expected to do there is no need to allow it to continue in operation.

Question - That the words proposed to he added, be so added (Senator Sir George Pearce’s amendment) - put. The committee divided.

AYES: 17

NOES: 6

Majority . . . . 11

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Clause 2 as amended agreed to.

Title agreed to.

Bill reported with amendments.

Standing and sessional orders suspended; report adopted.

Third Reading

Motion (by Senator Daly) proposed -

That the bill be now read a third time.

Senator Sir GEORGE PEARCE (Western Australia) [4.20]. - Before the bill passes its third reading I wish to say that we on this side of the Senate regard it as the absolute responsibility of the Government. It is a measure of very great importance, and, in regard to the provisions contained in its second part, is an untried experiment. We have endeavoured to warn the Government of the dangers that must flow from interference with the free interchange of credit between the Commonwealth and other countries, and during the discussion in committee we. submitted a number of amendments which we considered would safeguard the Commonwealth. I wish to say now that although we voted for the second and will not delay the third reading, it does not follow that we believe that this legislation is either necessary or wise. The Government having taken the view that the financial position of the Commonwealth requires the application of urgent and drastic remedies, brought forward this measure to meet an abnormal situation, and, as I have said, it must take now full responsibility for its action. The amendments which we submitted will limit the operation of the bill and the manner in which the executive shall exercise its functions. We considered those provisions a necessary safeguard, and we think that the Government should accept them as such. We still have a certain amount of hesitancy and fear as to the possible effects of this legislation. Admittedly it has been brought forward to meet an emergency, but I share with Senator McLachlan the view that it is not a good advertisement for the Commonwealth, and that it will be a good day for Australia when it is repealed. Before the bill finally passes, I wish again to emphasize that the responsibility for its enactment lies at the door of the Government. This Senate has acted on its advice that a position had arisen which called for the passage of extraordinary legislation, but we endeavoured to insert in the bill safeguards which may mitigate any damage it may do.

Senator H E ELLIOTT:
VICTORIA · NAT

– I wish to direct the attention of Government supporters, and of Senators Thompson and Sampson on this side of the chamber, to a passage in the letter from the Chairman of the Commonwealth Bank, which was placed before us for the first time to-day. I refer to the statement that the last resource which should be adopted would be any course that would mean even a temporary departure from the operation of the gold standard in Australia. These words are a clear indication that in the opinion of the board the issue of a proclamation’ will mean a departure from the gold standard. Doubtless, it is difficult for some people to’ realize that the moment the proclamation is issued there will be some measure of depreciation in our currency.

Senator Thompson:

– Only in respect of overseas trade.

Senator H E ELLIOTT:
VICTORIA · NAT

– Not necessarily. When the Government of the day took similar steps in regard to pur gold reserve during the war there was an immediate depreciation of our note issue.

Senator Thompson:

– This Cassandralike business is very much to be deprecated.

Senator H E ELLIOTT:
VICTORIA · NAT

– I confess I cannot follow the honorable senator. In any case I am responsible only for my own views, and I repeat that clearly the Commonwealth Bank Board does hold the view that even a temporary departure from the gold standard would be regrettable, though such a course may have to be followed. It is with the utmost reluctance that I see this measure being passed and placed upon our statute-book, and I shall welcome the opportunity which we shall have at no distant date to reconsider it.

Senator LAWSON:
Victoria

– I do not wish to discuss the bill further. At an earlier stage the Leader of the Senate (Senator Daly) read the relevant portions of a letter from the Commonwealth Bank Board which had been asked for, and honorable senators were asked to take the balance as read.

Senator Daly:

– I had not time to read the whole of the letter.

Senator LAWSON:

– I am aware that the Minister did not wish to weary the Senate by reading the whole of the letter referred to, andI am unaware if there is provision in our Standing Orders for the inclusion of such a document as that in Hansard for the purposes of record.

The PRESIDENT (Senator the Hon W Kingsmill:
WESTERN AUSTRALIA

– It has been done.

Senator Daly:

– It will be done.

Senator LAWSON:

– I am glad to have an assurance on this point from the Minister, and to know that the course which I have suggested is being followed.

Senator DALY:
South AustraliaVicePresident of the Executive Council · ALP

– The Government takes full responsibility for the passage of this measure. I am very pleased that the Leader of the Opposition (Senator Pearce) has made it plain that it is a Government bill, because when former Labour governments passed legislation of value to the community, other parties claimed all the credit. Labour vernments have placed some of the best of our legislation on the statute-book of the Commonwealth. Yet, at election after election, other political parties have claimed that they were responsible for the introduction of that beneficial legislation. I hope that I shall never have occasion to challenge, either here or outside, the fact that Labour is responsible for this measure. When Labour finds it necessary to tell the people of Australia the truth, it does so, and when it finds it necessary to legislate to improve existing conditions, it goes right ahead. Senator R. D. Elliott must welcome this measure because, he says, the time is ripe to let the people see exactly where we are. It is to the credit of Labour that, just as it sounded a warning in connexion with migration and unemployment, it now sounds this warning about our national credit. This is not done for the purpose of prejudicing Australia overseas. It will not prejudice our credit. On the contrary legislation of this type will give the Mother Country greater confidence in the Commonwealth. It will show her that at last we have awakened to the fact that we cannot go on as we have, and that this Government is prepared to guide the destinies of the nation along proper lines. That policy is the best advertisement that Australia could possibly have.

I am thankful to honorable senators for the free and frank discussion upon the measure. I have no complaints to make about any of the issues which have been debated. The subject has been ventilated very thoroughly, and many helpful suggestions have been advanced. The Government appreciates the difficulty which must attend the introduction of legislation of this nature, and it is not unmindful of some of the advice which has been tendered to it. I can assure honorable senators that everything will be done to exercise this legislation in the best interests of Australia.

I should like Senator H. E. Elliott to rid himself of the idea that this is a Government of fanatics; a Government that believes that by waving some sort of magic wand, bank notes will appear from all directions and go into circulation. It does not believe anything of the sort. It knows, as the Commonwealth Bank Board pointed out, that you cannot force bank notes on the people if the people do not want them. Ordinary intelligence should convince anybody on that point. and I think that this Government can claim to have at least ordinary intelligence. I hope that the honorable senator will disabuse his mind of his delusion. This is a Government elected by the Australian people, upon Australian ideals and principles, and its legislation will bestrictly Australian in character. It realizes that it is unwise to tamper with currency; the currency belongs to the people. It will not deal lightly with anything of such an important nature. As promised on the hustings it will introduce legislation relating to the banking position of Australia. That might affect private banks and even the Commonwealth Bank, but it will not disturb the matter of currency. It will consult Parliament in anything that it does. It has been given, in respect of this measure only twelve months to put the ship of state on an even keel. Necessarily, if honorable senators refuse to renew the life of this legislation, it will have to bustle in its endeavours to clean up the Augean stable, in order that it may place the credit of Australia upon such a sound basis that its future will not be imperilled.

Question resolved in the affirmative.

Bill read a third time.

page 1136

BANKRUPTCY BILL (No. 2) 1929

Bill received from the House of Representatives.

Standing and sessional orders suspended, and bill (on motion by Senator Daly) read a first time.

Second Reading

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

.- I move-

That the bill be now read a second time.

This is a bill to amend the bankruptcy law, to overcome a position in which the legislature finds itself as a result of a recent ‘ decision of the High Court. Honorable senators will remember that a bankruptcy law was passed, and that, under section 77 of the Constitution Act, the legislature purported to confer federal jurisdiction upon State courts. Power was given for the appointment of officers. The State courts purported to be invested with federal jurisdiction by means of a proclamation. It now transpires, as the result of a High Court action in Western Australia, that that proclamation was not the proper exercise by Parliament of the powers conferred by section 77 of the Constitution Act, which provides- _ With respect to any of the matters mentioned in the last two sections the Parliament may make laws -

Investing any court of a State with federal jurisdiction.

The facts upon which that decision of the High Court were based are as follows : -

By proclamation dated Oth July, 1928, the State of Western’ Australia was declared a district for the purposes of the Bankruptcy Act of 1924, and by a proclamation of the same date the Supreme Court of Western Australia was specially, authorized by the Governor-General to exercise jurisdiction in bankruptcy throughout the Commonwealth. Section 78 of the Commonwealth Public Service Act 1922-28 empowers the GovernorGeneral to arrange with the Governor in Council of a State for the execution by an officer in the Public Service of the State for the Government of the Commonwealth of the duties of any office in the Common wealth service.

Their Honours, the Chief Justice, Mr. Justice Bich, and Mr. Justice Dixon, in giving their judgment, said: “When such officer was appointed in this manner, it was assumed that the office of Registrar in Bankruptcy was an office in the Commonwealth Public Service, and that assumption was clearly in accordance with the meaning of the Bankruptcy Act 1924. The act provides : ‘ There shall be in each district a Registrar in Bankruptcy and such deputy registrars, official receivers, and other officers as are necessary ‘ ; and sub-section 5 requires the registrars and their deputies to perform such duties as the Attorney-General of the Commonwealth directs. Nevertheless, the Bankruptcy Act purports to make the registrar part of the organization of the court, having jurisdiction in bankruptcy, although it is a State court. Section 12 (5) provides that registrars and their deputies shall be officers of the court. A literal application of this definition would make every registrar an officer of every court in the Commonwealth which has bankruptcy jurisdiction. It was upon this footing, no doubt, that three judges of the court delegated to the registrar the function of issuing bankruptcy notices, but the question at once arises whether the legislative power of the Commonwealth enables Parliament to regulate in such a manner the organization of the courts of the States which it invests with federal jurisdiction. The Constitution, by Chapter III., draws the clearest distinction between Federal and State courts, and while enabling the Commonwealth Parliament to utilize the judicial services of State courts, recognizes in the most pronounced way that they remain State courts. ‘’ The Parliament may create federal courts, but the courts of a State are the judicial organs of another government, and are created by State law, their existence depends upon State law, and that law determines the constitution of the court itself, and of the organizations through which its powers and jurisdiction are exorcised. Section 77 (iii) of the Commonwealth Constitution expressly confers upon the Parliament power to make laws investing the courts of the States with federal jurisdiction. To affect or alter the constitution of the court through which its jurisdiction and powers ore exercised is to go outside the limits of the power conferred, and to seek to achieve a further object, viz., the regulation or establishment of the instrument, or organ of government, in which judicial power is vested, an object for which the Constitution provides another means, the creation of federal courts.. Section 77 (iii) therefore does not enable the Parliament to make a Commonwealth officer a functionary of a State court and authorize him to act on its behalf and administer part of its jurisdiction. “We think that section 18 (I.) (6) does not answer the description: ‘A law investing the courts of a State with federal jurisdiction.’ We think it is plain that what the section purports to do is to confer upon the Governor-General, that is, the Executive Government, a discretionary power to authorize any State court to exercise federal jurisdiction, and to withhold, or to revoke, such authority. “ For these reasons we are of opinion that section 18 (I) (6) goes beyond the power conferred upon the Parliament by the Constitution. Whether the Supreme Court is, or is not, a court having jurisdiction in bankruptcy, that court has power to set aside and declare void a proceeding expressed to be issued with its authority, and in fact issued in the supposed exercise of the functions of an office assumed to exist in the court. The appeal should be allowed, and the notice declared irregular and void.”

What the legislature did was to purport to invest the State court of Western Australia with federal jurisdiction by means of a proclamation. It also purported to appoint certain officers of the court.- The decision of the High Court indicates that the issue of that proclamation was not a proper exercise of the powers conferred by Parliament under section 77 of the Constitution Act. The amending bill, as honorable senators will see, expressly confers the necessary jurisdiction upon those courts to do this particular work. Honorable senators will also notice that the words “ controlled by the court “ have been substituted for the word “officer of the court.” It has been found that in one instance Parliament did not exercise its powers correctly, and in another that it exceeded its powers. It is imperative to introduce this legislation at this juncture, because there are similar courts in every capital city, in connexion with which officers have been appointed in the same manner as they have been appointed in Western Australia. Notices in bankruptcy have also been sent out in the same way as in the case referred to, and are open to challenge. The decision of the court has a very far-reaching effect upon the operation of the Bankruptcy Act throughout the Commonwealth, in view of the fact that what has been regarded as the effectual vesting of the State Courts with Federal jurisdiction has been declared to be of no effect. The measure is designed to remedy defects in the Bankruptcy Act, which have been disclosed by the judgment to which I have referred. It is important that it should be passed without delay, as the act is ineffectual in essential particulars. I have already brought the facts under the notice of the Leader of the Opposition, with whose concurrence I moved the suspension of the Standing Orders to enable the bill to be passed without delay.

Senator MCLACHLAN:
South Australia

– I have had an opportunity to study this measure, and it does not appear to contain anything to which exception can be taken. It occurred to me when the Minister was speaking, that Parliament should not have made such an obvious error as it did when considering the Bankruptcy Bill. Section 77 of the Constitution provides that the Parliament may make laws investing “ any court of a State with federal jurisdiction.” Apparently an attempt has been made to exercise that power by way of proclamation as is provided in the act. I subscribe to all that the Minister has said regarding the immediate necessity of validating what has been done under the powers which we thought existed in the principal act. The registrar exercises certain powers and his appointment is affected, but not necessarily to the same extent as is the jurisdiction of the court. As the registrar holds an important office, and exercises jurisdiction in the performance of certain functions, it is necessary that this measure should immediately be passed.

Senator THOMPSON:
Queensland

– I offer no objection to the passage of this bill, because to me it seems only a legal method of crossing t’s and dotting i’s. But I should like to take this opportunity to say that I shall be glad if the Government will, as soon as an opportunity offers, introduce an amending Bankruptcy Bill, the need of which is being felt particularly in Queensland. At present we are finding that the Bankruptcy Act is functioning ineffectively, and many complaints have been made. I realize that the introduction of an amending measure is impracticable at this stage of the session, but I ask the Minister, who is a lawyer, and who doubtless is aware of the difficulties which exist, to keep the matter before him for consideration early next session.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 7 agreed to.

Clause 8 -

Nothing in this act shall affect the rights of any person under a judgment or order of a court given or made prior to the commencement of this act.

Amendment (by Senator Daly) agreed to -

That after the word “ rights “ the words “ or liabilities “ be inserted.

Clause as amended agreed to.

Title agreed to.

Bill reported with an amendment; report adopted.

Thirdreading.

Motion (by Senator Daly) proposed -

That the bill be now read a third time.

Senator Sir HAL COLEBATCH (Western Australia) [4.57]. - I do not take exception to the passage of this measure, as the Government has done only what is necessary. But I take this opportunity to direct the attention of the Minister to the fact that at least one individual has suffered grievous wrong because of the error made in framing the legislation which is now being amended.

Question resolved in the affirmative.

Bill read a third time.

page 1138

SEAT OF GOVERNMENT (ADMINISTRATION) BILL

Bill received from the House of Representatives.

Standing and sessional orders suspended, and bill (on motion by Senator Barnes) read a first time.

Second Reading

Senator BARNES:
Assistant Minister · Victoria · ALP

– I move -

That thebill be now read a second time.

The purpose of this bill is to safeguard the Government between the date on which it abolishes the Commission and that on which it takes over the control of the Federal Capital Territory. Upon assuming office, the Minister for Home Affairs (Mr. Blakeley) interviewed the Third Commissioner who stated that he would not embarrass the Government during the transition period. Recently, however, he tendered his resignation to the Minister. The resignation could not be received by the Minister but by the Governor-General. A meeting of the Commission was then held. The Third Commisisoner attended, and agreed to withdraw his resignation. Although he has withdrawn his resignation, he has appointed Mr. C. W. Davies to act in his stead. The appointment of a deputy is provided for in the act. The act also sets out there shall be meetings of the Commission at least once a fortnight. This bill provides that the Chief Commissioner shall have power to call meetings. The Commission will meet fortnightly if, in the opinion of the Chief Commissioner or the Minister, such meetings are necessary. The principal act provides that where the Third Commissioner absents himself from three consecutive meetings his seat becomes vacant. Under the amending bill, absence from six meetings is necessary to disqualification. It will be seen that under this amending measure in the first place, the Chief Commissioner will have the power to call meetings ; and, in the second place, that the number of meetings which the Third Commissioner may miss without having his seat declared vacant has been increased to six. Both of these provisions safeguard the life of the Commission. The Government could have introduced a bill to provide for the abolition of the Commission, but that was not considered desirable. Arrangements for taking over the Commission are well under way, and a bill to abolish it will be brought down next year. This is a non-contentious measure which will enable the affairs of the Federal Capital Territory to be carried on without any dislocation. I commend it to the Senate.

Senator Sir GEORGE PEARCE (Western Australia) [5.4]. - I have no objections to this bill being proceeded with, but I have one or two remarks to make regarding it. It is rather remarkable that the Government, which before it came into office claimed that it would not hand over its powers to boards or commissions, now proposes to hand over certain powers, exercisable by the Minister for Home Affairs, to the Chief Commissioner. Had the Minister exercised his powers he would have got over his difficulties and the introduction of this bill would not have been necessary. The Third Commissioner, apparently regarding it to be his duty to hold up the business of the Commission, decided to appoint a substitute. Had the. Minister exercised his power to give the Third Commissioner leave of absence, the business of the Commission would not have been brought to a standstill. The act provides for regular meetings of the Commission, but there is also a proviso by which the Minister can set aside those stated intervals. Honorable senators will, therefore, see that when the Third Commissioner went on strike, as he appears to have done, a proper exercise of the ministerial authority would have rendered unnecessary the introduction of this bill. I give the Government credit for considerable political astuteness, in that, notwithstanding its professed objections to boards and commissions, it has shown more courage than the previous Government exhibited in regard to this matter, and has now cast off some of the responsibility which formerly rested on the Minister. Evidently it had visions of any ratepayers waiting on the Minister’s doorstep, or of a recalcitrant, elected commissioner causing trouble. To avoid the consequences it has transferred its responsibility to the Chief Commissioner.

Senator Rae:

– The present Government did not appoint the Commission.

Senator Sir GEORGE PEARCE.The late Government appointed the Commission, but it also retained some ministerial control over it. The present Go vernment proposes to hand over that controlto the Chief Commissioner. Senator Rae had better read the bill, for I feel certain that in the recent election campaign he blamed the late Government for handing over its power to boards and commissions. This bill will give the Commission more power.

Senator O’halloran:

– It does not create a new Commission.

Senator Sir GEORGE PEARCE.I have heard that at one time there were two kings in Denmark, but so far I have not heard of there being two Commissions for the administration of Canberra. Whatever its faults, I do not think that the Government would appoint two Commissions to control the Federal Capital Territory. I shall not oppose the bill, but it seems remarkable that it should have been introduced when by a proper exercise of ministerial authority the Commission could have got along without a third commissioner.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 (Short title).

Senator McLACHLAN:
South Australia

– I think the title of the bill should be altered. The Minister, in introducing it said that it was a bill for the purpose of safeguarding the Government. I suggest that the title should be altered accordingly.

Clause agreed to.

Clauses 2 and 3 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

Sitting suspended from 5.11 to 8 p.m.

page 1139

STATE OF BUSINESS

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

. - I have no business to place before the Senate, but I have made inquiries as to the state of the business sheet in another place, and anticipate the receipt of a message very shortly forwarding the Appropriation Bill for our consideration. I know that honorable senators are anxious to have as much time as possible for the discussion of that measure. I therefore suggest, Mr. President, that you leave the chair and have the bells rung when the message arrives.

The PRESIDENT (Senator the Hon W Kingsmill:

– I shall leave the chair until I am informed that business has reached the chamber from another place, whereupon the bells will be rung to notify honorable senators.

Sitting suspended from 8.2 to 10.22 p.m.

page 1140

INCOME TAX BILL

Bill received from the House of Representatives.

Standing and sessional orders suspended and bill (on motion by Senator Daly) read a first time.

Second Reading

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

.- I move-

That the bill he now read a second time.

The taxation proposals of the Government are well known. “We had a fulldress debate upon them in the discussion of the budget and the AddressinReply to the Governor-General’s Speech, so that I presume honorable senators will not expect me to deal with them at length in submitting this measure. As honorable senators are aware, there are two acts relating to the collection of income tax - the Income Tax Assessment Act and the Income Tax Act. The former is the machinery measure. It defines the taxpayer and indicates who are liable to pay taxation. The Income Tax Act, which fixes the rates payable, is submitted to Parliament each year. The first four clauses of the bill are identical with those in the Income Tax Act of 1928, with the exception of the years stated iri clause 2. Clause 4, sub-clause 4 re-enacts the imposition of the minimum tax of 10s. payable by persons who, but for this provision, would be liable to pay an amount less than 10s. The principle of a minimum tax was introduced in the In come Tax Act 1926, when the amount was fixed at fi. That rate produced f51,200 in revenue, but, owing to many complaints of harshness in the case of absentees whose income from Australian sources amounted to only fi or slightly over, the previous Government reduced the minimum tax to 10s., which lower rate reduced the revenue from this source to an amount estimated to be not more than £20,000. Sub-clause 5 of clause 4 reenacts the former rate of tax payable by a trustee whether the trustee is a company or not. This provision was inserted in the act for the first time in 1927, following upon a decision of the High Court that a trustee company could not be taxed at more than ls. in the fi on the taxable income of any trust estate being administered by it. In many cases the rate of tax which would be payable by the beneficiary on an income exceeded ls. in the pound, and in other cases it was less than fi. As a result certain estates were obliged to pay more taxation than should have been paid, while others escaped with a lower tax than equity required. Subclause 6 of clause 4 re-enacts the existing basic rate of ls. in the fi payable by a company on its own taxable income. The proposed super tax on companies is dealt with in clause 5, paragraph b. This clause is an enlargement of section 5 of the Rates Act of last year, in order to specify the super tax on companies in what is considered to be the most appropriate place in the bill, and it also more definitely associates the trustee rate with the rates payable by individuals. Paragraph a of clause 5 repeats the words in section 5 of last year’s act, so as to reenact and continue the super tax of 8s. on the basic rate set out in the schedule to the bill. Hitherto the super tax of 8 per cent, has not been payable by companies ; it has been applicable only to individuals, and those assessable as individuals, namely trustees of all kinds. This super tax came into operation for the first time in connexion with income tax assessments for the financial year 1927-28. It represents the lowest point reached in the successive reductions in rates which began in 1922-23.

It may be mentioned that the rates of tax specified in the first, second and third schedules are the rates originally imposed in 1915. That point is an important one for honorable senators to keep in mind when they are considering the actual effect of this new income tax rates act. These rates have been adhered to by Parliament in each subsequent year of the operation of the income tax as a basic rate upon which percentage increases have been superimposed. These increases have been varied from time to time. They reached their maximum point in 1920-21 when the ruling rates represented an increase of 70§ per cent, in the basic rates. These peak rates operated for two years, in 1920-21 and 1921-22. Then there began a reduction in the’ percentage increase as follows: - In 1922-23 there was a reduction of 10 per cent., making the super tax 53i per cent, above the basic rates. That reduction also operated in 1923-24. In 1924-25 there was a further 10 per cent, reduction, making the super tax 38 per cent, above the basic rates. Honorable senators will bear in mind that by “basic rates” I refer to the rates obtaining in 1915. A further 12£ per cent, reduction ‘was made in 1925-26, making the super tax 20 per cent, above the basic rates. That reduction also operated in 1926-27. In 1927 a further reduction of 10 per cent, was made, making the super tax 8 per cent, above the basic rates. This reduction also operated in 1928-29.

Paragraph b of proposed section 5 deals with the proposed super tax on companies, amounting to a 20 per cent, increase of the present rate of ls. in the £. Let us assume that the basic rate for 1915 was 100. Last year the rate would have been 108, and it is upon that that the super tax is imposed.

Clause 6 deals with the proposed super tax on the incomes of individuals, and those assessed as individuals. The percentage increases now proposed in the existing rates, the original basic rates plus 8, represent the following percentage increases in the original basic rates: -

As honorable senators know that 10 per cent, applies to taxable incomes of £201 to £1,500 the 15 per cent to incomes of from £1,500 to £3,000, and the 20 per cent, on incomes of £3,000 and over. There has been some misunderstanding on the part of honorable senators as to what that actually means. Honorable senators have apparently been under the impression that the taxes superimposed by the Government apply to net incomes of £201 and over. This is not so. There are certain reductions to be made in the case of either married or single men. In the case of single men, before the super tax proposed by the Government is payable the personal individual concerned has to earn £450, after deducting insurance premiums and other statutory allowances. A married man, after deducting the allowances granted to a single man, plus a deduction for children, will have to pay super tax if his net income amounts to £450 and over. So that a taxable income of £201 really means that a man must in each case have a net income of £450, after deducting the various statutory allowances. The particular percentage of the new increase in rate now proposed, which will be applicable in any case, will be determined by the amount of the taxable income upon which the taxpayer will be assessed. That is, the taxable income derived by him during the year, or the period substituted therefore, immediately preceding, the financial year for which the tax is being levied. This actual taxable income is the taxable income of the last year in the averaging period by reference to which the average taxable income is calculated for the purpose of ascertaining the rate of tax payable by the taxpayer. The averaging system mentioned is expressed in section 13 of the Income Tax Assessment Act. The averaging period is five years, where that number of years exists ; otherwise it is a lesser number of years according to the circumstances.

The following are typical of possible cases, and are cited in order to illustrate the. operation of the Government’s proposal : -

Actual taxable income of the last year in the averaging period, say, £4,000.

Average taxable income of the averaging period, say, £1,000.

Present personal exertion rate of tax on £1,000 is 7.29d.

As £4,000 actual taxable income falls into the class subject to 20 per cent, increase in rate of tax, this taxpayer’s rate becomes 8.74Sd., being 7.29d. plus 20 per cent.

The tax on £4,000 at 7.29d. is £121 10s.

The new tax will be £145 16s., which represents an increase of 20 per cent, on the former amount of tax.

In the proposals of the Government the actual income earned during the taxation period will be the determining factor as to which class of super tax is to be paid. If the average taxable income of the averaging period is £4,000, the person concerned falls within the 20 per cent, category. But the actual rates upon which the percentage would be superimposed would be the rates based upon his average income, so that he will pay for the income earned during the taxable period at the rate payable for the averaging period, plus the super tax proposal of the present Government.

Take another case, that of a man with an actual taxable income for the last year in the averaging period of, say, £1,000.

Average taxable income of the averaging period, say, £4,000.

Present personal exertion rate of tax on £4,000, 19.44d.

Present tax on £1,000 actual taxable income, at 19.44d., £81.

Seeing that the actual taxable income falls into the 10 per cent, grade of percentage increases in rates, the new rate will be 19.44d., plus 10 per cent, which equals 21.384d.

Proposed tax on £1,000, at 21.384d., £89 2s.

This represents an increase of 10 per cent, in the present amount of tax payable.

Paragraphs 2 and 3 at the end of the resolution are the usual paragraphs which are required for the purpose of determining the period of operation of the new rates.

Paragraph 3 applies principally to persons who are leaving Australia during an assessment year after having derived taxable income in that year. The paragraph authorizes the Commissioner of Taxation to collect income tax from those persons at the rates then in force, although they primarily relate to income derived during the immediately preceding financial year. If the paragraph were not in the act it would not be possible to collect income tax from the persons indicated prior to their departure from Australia.

Summarized, the position is that this Government has maintained the basic rate of taxation. The increase has been made in the super tax so far as individuals’ are concerned, and the super tax has been imposed upon companies, upon which no such tax was imposed by the previous Government. As I pointed out earlier, the proposals of the Government have already been debated at considerable length on other occasions, and there should be no need for me again to traverse ground already covered. I submit the bill to honorable senators for consideration.

Senator Sir GEORGE PEARCE (Western Australia) [10.45]. - It has often been said that there are two things which are inevitable - death and taxation. Both are extremely disagreeable, and I venture to say that when the taxpayers of Australia read in Mansard, the explanation of the Vice-President of the Executive Council (Senator Daly) of these additional taxes ranging from 10 per cent, to 29 per cent, they will begin to wonder if the advent of a new Government has been such a blessing as some thought it would be. The taxation proposed by the Government is highly excessive, and comes with ill-grace from a party which twelve months ago was screaming about the heavy taxation imposed by the Federal Government at that time. If the previous Government flogged the taxpayers with whips it can truthfully be said that the present Government is flogging them with scorpions. I think the Government is unnecessarily flogging the Australian taxpayers, and it will be apparent before long that in consequence of the heavy direct taxation, and the tremendous load of indirect taxation, which will be piled upon the people as a result of the new customs duties imposed during the last week or two, there will be a tremendous surplus at the end of the present financial year. When these rates were fixed by the present Government no consideration was given to the enormous revenue to be received from the new tariff imports. It has to be remembered that in addition there is a sum of £1,200,000 under the control of the Government which it is not accounting for. It is making no proposal to extend it. There has not been any suggestion of crediting the deficit with that amount as we proposed to do. The Government is keeping it up its sleeve, and does not say whether it intends to use it to balance its accounts so that it is clear that it is taxing the people unnecessarily to the extent of at least £1,200,000. The taxpayers will perhaps, derive solace from the fact that these high rates of taxation are being imposed in order that ‘the wealthy picture producers of the United States of America shall be relieved of contributions towards the taxation of this country. If the amusements tax had been put into operation by the late Government it would have had the effect of relieving the industries of this country of having to find at least £600,000 of the taxation which the Government now propose to collect. It will not be much satisfaction to the taxpayers, loaded as they will be with heavy taxes, to know that they are making sacrifices on behalf of those big picture interests situated at Hollywood. This Government, that speaks so much of the needs of the workers, is placing this load on them in order to relieve their cousins in the United States, who are taking their toll in every civilized country in the world of this taxation. This is not the only direct taxation which must be met by the taxpayers of Australia. “When they study the States, budgets they will find that there- is scarcely a State in Australia that is not increasing its direct taxation. I should like to contrast the class of taxation which this Government is putting forward with that proposed by the late Government. We proposed a super tax on incomes; but what was it? To tax the wealthy classes of this community by imposing a 10 per cent, tax on taxable incomes of £2,000 and over. What is the proposal of the Labour Government - a Government which claims that it represents not the wealthy but the poorer classes of the community? This Government is not content with taxing men with taxable incomes of £2,000 and over, but under this measure it is bringing its taxation down to the man who has a taxable income of £201 and placing upon him a super tax of 10 per cent. This Government, which pretends to represent those who have the least of this world’s goods, is not following the example of the late Government by imposing taxation upon those who have enough and to spare, but is bringing it down to those with smaller incomes, including a section of the professional and middle classes, and the trading and higher class artisans, who will have to pay an additional 10 per cent, in order that no burden shall be placed upon the shoulders of the American picture producers. We had the spectacle the other day of a deputation of unemployed musicians, who had been discharged because picture patrons have American “ canned “ music dinned into their ears, waiting upon the Prime Minister concerning the effect of “ talkies “ with canned music upon the employment of Australian musicians. Mr. Stuart Doyle was at the deputation. I did not know that he was a member of the Musicians Union. I wonder who invited him. Did the Prime Minister ask that he should attend to give him moral support in dealing with the request? At any rate he was there, and as I have not yet heard that he is a member of the Musicians Union, I can only conclude that he attended as an ally of the Labour Government.

Senator Daly:

– The right honorable, gentleman should be certain of his facts.

Senator Sir GEORGE PEARCE:

– I have ascertained the facts.

Senator Daly:

– From what source?

Senator Sir GEORGE PEARCE.Through the medium of the press, in which a ‘report of the deputation appeared.

Senator Daly:

– It was not a deputation ; it was a conference, as stated in the press.

– He did not prove anything of the kind. The public servants of this country have never robbed the taxpayers of £150,000.

The PRESIDENT (Senator the Hon W Kingsmill:

– Order! I ask the Minister to confine his remarks to the subject matter of the bill.

Senator DALY:

– The Leader of the Opposition referred to a round table conference at which the members of the Musicians Union were present. He spoke of it as a deputation. I attended that conference, and also read the press reports which did not contain any reference to a deputation. It was a conference, which the Prime Minister attended, between the two interests concerned to see if it were possible to devise some means whereby the musicians could be kept in employment, and as far as possible this Government will see that they remain in the orchestra pits. The Government stands for the protection of every Australian industry, as well as musical art in Australia. The members of the Musicians Union will receive more sympathy, assistance, and consideration from this Government than they were ever likely to get from the previous Government. The Leader of the Opposition referred to the subject of unemployment. The Government of which hewas a member, and which was in control of the destinies of this country, did not make the slightest attempt to find work for the 180,000 unemployed in our midst by co-operating with the State Governments. The right honorable gentleman also referred to the hardships that, he urged, would be inflicted upon the people by this Government, but he should remember that we have a very unpleasant heritage, and that before we can make any progress we have to get rid of a good many of the liabilities that we had to take over as a result of the maladministration of the previous Government. The Labour party does not hesitate to tell the people the truth. If the previous administration had been honest it would have told the people twelve months ago that extra taxation was necessary, and if that taxation had been imposed we should not have been in the position that we occupy to-day. By subterfuge the previous Government endeavoured to hide the real position, but the present Government believes in doing what is right. We must balance the budget and have no hesitation in telling the people the truth. We shall impose taxation equitably, and I am sure the taxpayers will have as much reliance in the proposals of Labour today as they had in the good old days when Andrew Fisher was leader of the Labour party.

Question resolved in the affirmative.

Bill read a second time.

In committee :

Clauses 1 to 6 agreed to.

Clause 7 -

This act shall also apply on all assessments for financial years subsequent to that beginning on the first day of July, One thousand nine hundred and twenty-nine, made prior to the passing of the act for the levying and payment of the income tax for the financial year beginning on the first day of July, One thousand nine hundred and thirty.

Senator McLACHLAN:
South Australia

– A little elucidation of sub-section 2 of this clause would be acceptable to honorable senators. I am not certain what is intended, but I take it that it refers to assessments already made.

Senator DALY:
Vice-President of the Executive Council · South Australia · ALP

– I am informed by the Taxation Department that it relates to persons who left the Commonwealth before the rates were actually declared.

Clause agreed to.

Schedules and title agreed to.

Bill reported without requests; report adopted.

Thirdreading.

Motion (by Senator Daly) proposed -

That the bill be now read a third time.

Senator LYNCH:
Western Australia

– Before the curtain is rung down on this act of unequal taxation, I should like the Leader of the Government (Senator Daly) to tell the Senate what proportion of the additional £800,000 contemplated to be raised under this measure will be extracted from taxpayers with a taxable income of between £201 and £1,000, and between £1,000 and £2,000. I did not expect the second reading to be agreed to with such celerity, but apparently, honorable senators feel that they cannot amend matters here. We shall have to bide our time; and, in the meantime, point out the shortcomings, the injustice, and the inequalities of this measure. Persons of slender incomes are to be called upon to pay income tax which the previous Government would not have asked them to pay. No doubt their sense of patriotism will be greatly stimulated when they find that the Labour Government, which they believed would hold the scales evenly, demands from them taxes which, had the previous Government remained in office, they would not have been called upon to pay. If this measure increases their patriotism, it will have accomplished something. The inequality of the Government’s taxation proposals is revealed in the rates of taxation. A person with a taxable income of £201 will be taxed at the same rate as another person with a taxable income of £1,000. Even where the income ranges from £1,500 to £3,000, the rate of tax is only 5 per cent. greater. A person receiving £2,999 per annum will be called upon to pay only 5 per cent. more than a person whose income is a modest £201 per annum.

Senator Daly:

– That is not exactly the position.

Senator LYNCH:

– If that is fair play, then the term has a different meaning from what it had in the past. I always understood that the Labour party claimed to be the champion of equality in taxation, and I concluded thatit would advocate a greater difference between the rates paid by the two classes of taxpayers. If the taxpayers, who placed the present Government in office, are called upon to pay taxes, which they would not have had to pay if there had been no change of government, all I can say is that it is their own funeral. I have no doubt that the Government will offer an explanation for taxing the people of slender incomes. There is nothing that it cannot explain to the satisfaction of the electors, for they are very credulous. Indeed, the credulity of the public is the Government’s best asset. I am aware that further revenue must come from somewhere; but if it were a choice between taxing the industries of this country and the amusements of its people, I should not allow the amusements to escape by adding to the burden of men who are already at their wits end to find work for their fellow men. Under this measure, industry will be taxed, whereas no one would have been injured by the late Government’s proposal to tax the motion picture industry. I am not here to apologize for the Government. Apparently it is well able to look after itself, for the people are willing to believe anything so long as it is told in a plausible manner.

Senator McLachlan:

– They are saying some very unpleasant things just now.

Senator LYNCH:

– The recent election was not a general election, but an auction sale, where men auctioned their consciences for votes. I desire to ascertain what proportion of the £800,000 proposed to be raised in excess of the previous Government’s proposals is to come from the people of slender means. It is possible that the Minister has already supplied that information ; but I was unable to follow him in his involved explanation of the Government’s proposals. A schedule of income taxation is at any time difficult to explain. The man in the street probably does not understand it, but he will soon know that under this schedule he will be called upon to pay taxation which he would have escaped under the proposals of the last Government. We, on this side, do not believe in taxing people who cannot afford to pay; but we do believe in taxing those who can pay. ‘ Under, this measure, the salary of Mary Pickford and Douglas Fairbanks will not be taxed, whereas the working man in receipt of a taxable income of £201 a year will have to pay his share of the expenses of government. The man who is scratching for a living in the dry areas of Australia will be required to pay his share of taxation, while Hollywood stars escape. Mary Pickford will now be able to buy more rouge. To-morrow morning, as she sits before her mirror, she will be a happier Yankee than she was yesterday. She will have a high opinion and a tender regard for the Government representatives in this Commonwealth Senate - a body which springs from the loins of the people, and whose maxim is even-handed justice . to every citizen and an equitable sharing of the burden of taxation. Douglas Fairbanks will be able to smoke half-crown cigars at the expense of the unfortunate settler living in the out-back districts of Australia whose hair sticks out through his hat and whose toes protrude through his boots. And to think that this is the work of a Labour government ! To paraphrase Madam Roland’s well-known words, “ Labour, Labour, what injustice is committed in thy name!” The man whose hair is sticking through his hat will find no consolation in this bill, but poor Mary Pickford’s butcher and baker are secure! To save their own pockets those responsible for film production in Australia have painted the Nationalists as black as black can be. Is that fair play? The Senate must accept this taxation, but I disagree with the sentiment expressed by Senator Rae that there are men in this chamber who express the opinion of the dead past. The system of rotation as applied to members of this chamber was especially designed by the framers of the Constitution to secure a seasoned opinion in Commonwealth legislature, and in the control of the public affairs of this country. They recognized the wisdom of having men of experience in the chamber, and for that reason, Senator Rae, who has just been elected to this chamber, will find himself in six years’ time the victim of the very gibes he has uttered to-day. I hope that the Minister in reply, will be able to give me the graduations of income tax-payers from £201 upwards, to the stage where the 20 per cent, super tax begins to operate. That information, if available earlier, would have enabled honorable senators to give a more intelligent decision on the bill. I certainly support the third reading. There would be a hullabaloo throughout the country if I opposed it. But at the proper time, I intend to expose the hollowness of a party which pretends to hold the scales fairly and does so by increasing the taxation on the poor section of the community while allowing the Yankees to go scot free.

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

– The number of residenttaxpayers with taxable incomes between £201 and £300 is 26,330 and the number of absentees with taxable incomes between those amounts is 521. The respective figures for resident and absentee taxpayers with taxable incomes between £301 and £400 are 15,689 and 316, and in the case of those with taxable incomes ranging from £401 to £500, the respective figures are 11,288 and 231. The total of individual tax-payers whose incomes range from £201 to £500 is 54,370. To-morrow I shall lay on the table the annual report of the Commissioner of Taxation. It will give Senator Lynch all the information he requires for his campaign of exposure. I regret to have to delay honorable senators, but a charge has been made against the Government, and if no reply is made to it, the people may conclude that there is no answer to it. I doubt whether Mary Pickford or Douglas Fairbanks were liable to Commonwealth taxation during the régime of the previous Government. But I can safely say that neither artist has paid one penny in taxation in Australia.

Senator Sir George Pearce:

– Both would have paid taxation under the proposals of the Bruce-Page Government.

Senator DALY:

– Neither would have clone so.

Senator McLachlan:

– Mary Pickford and Douglas Fairbanks are merely names. The picture industry would have paid the taxation.

Senator DALY:

– The picture industry had been in existence for years before the previous Government introduced a scheme of taxation which was foreign to its policy, and put up a yarn about utilizing it to tax Americans. The Labour Government has not exempted Mary Pickford and Douglas Fairbanks, and if we could reach them at the present time we should do our best to collect some taxation from them in order to relieve Senator Lynch’s anxiety.

Question resolved in the affirmative.

Bill read a third time.

Sitting suspended from 11.25 to 11.35 p.m.

page 1147

COMMONWEALTH BANK BILL

Bill returned from the House of Representatives with a message intimating that it had agreed to two amendments made by the Senate in this bill, and had disagreed to two others.

Ordered -

That the message be considered in Committee of the Whole forthwith.

In committee (Consideration of House of Representatives’ message) :

Clause 2 -

After section 7a of the principal act the following sections are inserted: -

Senate’s amendment. - After sub-section 4 insert the following new sub-section: -

The provisions of sub-sections (1) and (2) of this section shall not apply in respect of gold held by any State Savings Bank.

House of Representatives’ message -

Amendment disagreed to for the following reason : - “ As one of the objects of the Bill is the mobilization of the whole of the gold resources of Australia in case of necessity, and, as this objective could not be attained if Savings Banks or any other institutions were excluded from the provisions of the Bill, it is undesirable that Savings Banks should be so excluded.”

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

.- I move-

That the committee do not insist on this amendment.

The amendment inserted at the instance of the Leader of the Opposition (Senator Sir George Pearce) has been considered by another place and rejected for the reasons given in the message. Honorable senators opposite have now to ask themselves whether they will stand to the amendment and give a demonstration of their strength or whether, in the light of the refusal of another place to accept the amendment, they will give it further consideration. Again I put it to honorable senators that the principle of mobilization and prohibition of the export of gold in certain circumstances, having been accepted by the Senate, there is no sound reason why gold held by any State Savings Bank should be exempted from the provisions of this bill. The gold reserve of £211,000 in the vaults of the State Savings Bank of South Australia, to which Senator McLaohlan particularly directed our attention, is being retained for no practical banking purpose what ever. It is being held merely as a reserve against the possibility of a run on the bank such as was threatened in the early years of the war. But sentimental reasons alone should not influence honorable senators in the consideration of this important issue, especially since the amendment has been rejected by the popular chamber.

Senator Lynch:

– The popular chamber ?

Senator DALY:

– It is regarded as the popular chamber just as the Senate is looked upon as the House of review, and I submit that it is the duty of honorable senators now to review their decision The Senate rejected an amendment to exempt the gold-producer from the operations of the bill. It took the view that if it were deemed expedient and in the interests of our currency and credit to mobilize the gold in the Commonwealth, the interests of the producer should be made subservient to the interests of the nation. I ask honorable senators to apply the same line of reasoning to the proposal to exempt the State Savings Bank. Can we advance any better reason for the retention of the gold by these institutions?

Senator McLachlan:

– Of course we can. The man who produces the gold disposes of it.

Senator DALY:

– It is possible to adduce stronger reasons for the exemption of the producer of gold than for the State savings banks, which hoard it in their vaults.

Senator H E ELLIOTT:
VICTORIA · NAT

– Is it not a fact that the State Governments have guaranteed the State savings banks?

Senator McLachlan:

– Of course they have; but, apparently, they are not considered in connexion with this bill.

Senator DALY:

– The Senate should not, for sentimental reasons only, stand, fast to its decision to exempt the institu tions concerned. The measure and the amendment have been carefully considered in another place and the Government has stated in unequivocal terms that it has no intention of harassing these banking institutions ; that it may not be necessary to mobilize the gold resources, but that, if the occasion does arise, the savings banks will have to take their place side by side with the gold-producer and surrender their gold reserves.

I urge honorable senators to realize that the issue is not big enough to warrant their blocking the legislation of the Government. They must realize that it is a serious matter to hold up the legislation of the Government. It is a power that should be exercised only in extraordinary circumstances. The Senate was quite in order in returning the bill with this amendment to another place, but as it has been returned for the reconsideration of the Senate, honorable senators should satisfy themselves that a vital national principle is involved before they decide to adhere to their previous decisions.

Senator H E ELLIOTT:
VICTORIA · NAT

– We have endeavoured to point out that a vital national principle is involved.

Senator DALY:

– Can the honorable senator tell me what that vital national principle is?

Senator H E ELLIOTT:
VICTORIA · NAT

– The maintenance of the rights of State Governments.

Senator DALY:

– I regret that the Government is unable to comply with the desire of honorable senators who wish to have these banks exempted, but I suggest that the issue is not sufficiently big to justify them preventing the legislation going through.

Senator MCLACHLAN:
South Australia

Senator Daly:

– I advise the honorable senator to read up his law.

Senator H E ELLIOTT:
VICTORIA · NAT

– Can Senator Daly mention a law that authorizes State savings banks to pay other than in gold?

It is the duty of this chamber to protect the interests of the States. Moreover, the framers of the Constitution must have held the opinion that at some time a difference of opinion would arise between the two branches of the legislature, and it specifically provided that the Commonwealth should keep its hands off the State Savings Bank. I do not think the committee will ever be able to get a clearer case than this on which to take a stand.

Senator DUNN:
New South Wales

– I was pleased to hear Senator McLachlan say that in company with the Leader of the Opposition and other honorable senators he heard the Prime Minister (Mr. Scullin) in another place say that there was nothing to fear in regard to the gold held by the State savings banks. Surely we should accept the words of the Prime Minister, and I cannot understand why Senator H. E. Elliott should have any doubt in the matter. I remind honorable senators that when I asked the Leader of the Opposition if he had been in consultation with Melbourne bankers in connexion with this bill, and he assured us that he had not, his statement was accepted. Senator H. E. Elliott is opposing this provision on different grounds from Senator Lynch, who, to my mind, is like a blackfellows’ dog running around the country full of fleas and barking at his own shadow. We should accept the assurance of the Leader of the Government in another place.

Senator E B Johnston:

– He may not hold that position too long.

Senator DUNN:

– Hundreds of thousands of people in Australia have accepted his word, and if it is not accepted by Senator E. B. Johnston I am not to blame.

Senator E B Johnston:

– I accept his assurance.

Senator DUNN:

– The Leader of the Opposition and Senator McLachlan were present when the Prime Minister definitely stated that the State savings banks had nothing to fear, and in these circumstances I suggest that the amendment should not be insisted on.

Senator Sir HAL COLEBATCH (Western Australia) [12.5 a.m.] - I think it would be idle to suggest that the £200,000 in gold held by the South Australian Savings Bank is of the least importance in this connexion. We should not regard this subject from the viewpoint of the Government’s mobilization scheme, or that of the commissioners of the South Australian Savings Bank. I would go so far as to say that if the confidence of depositors in South Australian Savings Banks was shaken there would be less likelihood of a run on the bank if the gold was not there to meet a demand, than if this £200,000 was available. Every one would then be making a mad rush to get his share. I hope that the committee will insist upon its amendment purely on the constitutional ground that the Commonwealth has no right to seize gold held by State savings banks. If the amendment is not pressed I hope that, should the occasion arise, the State savings banks will test before the High Court the right of the Government to act in this way.

Senator E B JOHNSTON:
Western Australia

– Very careful consideration was given to this measure by the Senate; but only two of the four amendments made by us have been adopted by another place. The two amendments inserted in the bill in this chamber contrary to the wishes of the Labour party have been disagreed to by the House of Representatives, and there has not been any suggestion of a compromise.

Senator Sampson:

– There could not be a compromise with respect to the control of the gold in the State savings banks.

Senator E B JOHNSTON:

– The operation of this law could be limited to the amount of gold at present . in the banks, but that is a compromise with which I should not agree. The attitude of the Government in this connexion is that it is not going to accept any amendment to its proposals. I fully agree with the opinion expressed by Senator Sir Hal Colebatch, that this is a matter which is vital to the interests of the States, and particularly to the smaller States. I doubt very much if it was ever intended that the Commonwealth should compete in every line of banking business, particularly in the way it is competing with State banks. It appears to me that if the banks in the sovereign States have gold reserves, or wish the gold produced in those States to be retained by them, this chamber is quite right in adopting the attitude it did. As to the assurance given by the Prime Minister, I tell Senator Dunn that I am at all times prepared to accept the word of the Prime Minister; but we are legislating for the people of Australia, and the decisions of the Prime Minister and his Ministers in such matters should be embodied in legislation. There has been no spirit of compromise, and I trust the committee will adhere to the decision which it reached a few hours ago.

Senator Sir GEORGE PEARCE (Western Australia) [12.10 a.m.]. - In view of the speeches made by certain honorable senators on this side of the chamber, when this measure was last before the committee, I voted for this amendment, but I recognize that the committee has failed to impress its necessity upon another place. We could adopt the course of insisting upon our amendment, which might mean the loss of the bill and eventually a conflict between the two

Houses. The time may come when such a situation will arise, and if it does I trust it will be on some important principle. By giving way I do not wish it to be thought that I have reversed my opinion; but this is not a question upon which there should be a conflict between the two Houses. For these reasons, I do no intend to oppose the motion.

Question - That the amendment be not insisted on - put. The committee divided.

AYES: 12

NOES: 6

Majority . . . . 6

AYES

NOES

Question so resolved in the affirmative.

Motion agreed to.

Senate’s amendment -

After proposed section 7d add the following new section: - “ 7e. Sections 7b and 7c of this Act shall remain in operation until the thirtieth day of December One thousand nine hundred and thirty and no longer.”.

House of Representatives’ message -

Amendment disagreed to for the following reason: - “As any proclamation relating to the export of gold will be made only after the receipt of a recommendation from the Board, and as any such proclamation will indicate the period for which it is to remain in force, and as the necessity for action under the Bill may arise after the thirtieth day of December, One thousand nine hundred and thirty, it is undesirable to limit the operation of the Act to any specific period.

Senator DALY:
Vice-President of the Executive Council · South Australia · ALP

– I move -

That the committee do not insist on this amendment.

The reasons I gave for not insisting upon a previous amendment apply also in this instance.

– It is a healthy indication that the Senate is, at last, gradually being recognized as a co-equal to the other chamber in the parliamentary government of Australia. Too long has it been ignored. It is entitled, to every piece of information, even down to the last syllable. But we do not want to precipitate a conflict on the matter now before us, and in the circumstances, our attitude should be to throw on the Government the whole responsibility of seeing that the measure is as good as its sponsors have assured us it is.

Senator DALY (South Australia- VicePresident of the Executive Council) ance for which Senator H. E. Elliott has asked. It is the opinion of the Government that no postponement would prove desirable. It is not a question of victory going to the other chamber; nor is it a matter over which any section can gloat. Honorable senators honestly expressed the opinion that they feared the provisions of this bill, and they asked for the inclusion of certain safeguards which another place has deemed unnecessary. There has been an honest difference of opinion. The Senate, being a chamber of review, has taken the proper attitude. Senator Pearce has prophesied a conflict between the two chambers. Speaking for myself, I cannot conceive of Labour carrying out its promises to the electors without such a conflict, and I do not think it is many months ahead. When that conflict takes place the electors must decide whether the Government, which controls the destiny of another place, shall also control the destinies of the Senate. But until that conflict arises, there is no need for us to be concerned.

Senator Carroll:

– Did Labour promise the electors that this bill would be passed ?

Senator DALY:

– Labour promised the electors that it would do everything it possibly could in their interests. If Labour thinks something should be done, it sets about doing it, and when the Commonwealth Bank asked the Government to protect the currency, it proceeded to introduce this bill. When the issue is referred to the electors, Labour will take the consequences of its actions, but the result, I predict, will be to the advantage of Labour. I am deeply grateful for the consideration honorable senators have given to this measure. I respect the opinions of those who have opposed the Government’s proposals. I know that the sentiments expressed in hostility to the bill were honest, but I ask honorable senators to credit the Labour party with possessing the same degree of honesty. It is not a question of victor or vanquished. The Government feels that it is doing the right thing in asking honorable senators not to insist on this amendment.

Motion agreed to.

Resolutions reported.

Motion (by Senator Daly) proposed -

That the report be adopted.

Senator Sir Hal Colebatch:

– I protest, Mr. President, against the adoption of the report. In committee, when the last question was put, three honorable senators called “No,” and we expected that the Chairman would have divided the committee.

The PRESIDENT (Senator the Hon.

Kingsmill). - I am afraid that it is not in my power now to rectify that matter. The honorable senator should have directed attention to it at the time.

The CHAIRMAN (Senator Plain).I may explain, Mr. President, that I heard only one” No “ called when I put the question, and I therefore declared it passed in the affirmative.

Senator E B Johnston:

– I distinctly heard three honorable senators call with the “Noes,” and I was one of them.

The PRESIDENT:

– Action should have been taken at the time in committee. Now that the bill has reached another stage, I am afraid I cannot do anything.

Senator Sir Hal Colebatch:

– We took the only action which we considered was available to us. We called “ No “ when the Chairman put the question, and before we realized what had happened, the Chairman had left the chair.

Mr PRESIDENT:

– I suggest that if there was any misunderstanding, the only available course now is for the Senate to recommit the message.

Senator Daly:

– In fairness to the Chairman of Committees, who has already submitted his report to you, Mr. President, I must’ say that he put the question and declared that as there was only one honorable senator calling with the “ Noes,” the question passed in the affirmative. No protest was made at the time. Accordingly, the Chairman signed the report and left the chair. Senator Colebatch should raise an objection, at this stage, to the proceedings in committee. However, to put the matter beyond all doubt, I ask leave to withdraw my motion.

Motion, by leave, withdrawn.

Motion (by Senator Daly) agreed to -

That the messagebe recommitted for the reconsideration of amendment No. 4.

Question resolved in the affirmative.

In committee (Recommital) :

Motion (by Senator Daly) “ That the Senate committee do not insist upon this amendment “ - put. The committee divided.

AYES: 16

NOES: 2

Majority . . . . 14

AYES

NOES

Question so resolved in the affirmative.

Motion agreed to.

Further resolution reported; reports adopted.

page 1156

BANKRUPTCY BILL (No. 2) 1929

Message received from the House of Representatives intimating that it had agreed to the amendment made by the Senate in this hill.

page 1156

ADJOURNMENT

Charge Against Mr. Theodore

Motion (by Senator Daly) proposed -

That the Senate do now adjourn.

Senator DUNN:
New South Wales

– I desire to bring under the notice of the Senate a statement made by the Treasurer (Mr. Theodore) in another place, and to put the matter as concisely as possible I propose to read an extract from the Minister’s speech.

The PRESIDENT (Senator the Hon.

Kinsgmill). - The honorable gentleman must know that it is out of order to quote or allude to the debates of the current session in another place. He must choosesome other method.

Senator DUNN:

– I refer, Mr. President, to a statement made by Senator Reid in this chamber a day or two ago under the privilege of Parliament.

Senator Reid:

– Wait until to-morrow, and I will give my version.

Senator DUNN:

– If the honorable senator is man enough to make his statement outside and publicly, Mr. Theodore will have his remedy. I have known that gentleman for the last twenty years, and I strongly deprecate the charges, which are calculated to injure him in the eyes of the people. Mr. Theodore, who has hud a long and honorable public career, is unable to defend himself against the accusations of Senator Reid, for the simple reason that they have been made under cover of parliamentary privilege. I again appeal to the honorable senator to withdraw his statements. No one on this side would think the less of Senator Reid if he withdrew his objectionable insinuation. I have made political statements in this chamber and have withdrawn them at your suggestion, Mr. President. I was engaged in the State of New South Wales as a licensed victualler, and I know that ‘that body has not financed the Labour party in its propaganda campaign. The chief source of the revenue of the Labour party for that purpose is the pockets of the trade unionists. Some honorable senators might suggest that a royal commission should be appointed to investigate the sinister motives which have prompted Senator Reid and others-

The PRESIDENT. The honorable senator must not get further out of order by imputing motives to another honorable senator, whether they be sinister or otherwise.

Senator DUNN:

– I again appeal to Senator Reid to withdraw his insinuations, which are absolutely false.

The PRESIDENT. The honorable senator must not Bay that the statements of another honorable senator are false. It is more graceful and the correct parliamentary procedure to say that an honorable senator has been misinformed.

Senator DUNN:

– I leave my appeal to the good sense of Senator Reid.

Senator REID:
Queensland

– It is not necessary for me at this late hour, to make any comments. I shall make a statement on the subject when we resume.

Question resolved in the affirmative.

Senate adjourned at 1.3 a.m. (Friday).

Cite as: Australia, Senate, Debates, 12 December 1929, viewed 22 October 2017, <http://historichansard.net/senate/1929/19291212_senate_12_122/>.

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Senate12 December 1929

PAPERS

QUESTION

MILITARY TRAINING

Senator H E ELLIOTT:VICTORIA · NAT

Senator BARNES:Assistant Minister assisting the Minister for Works and Railways · VICTORIA · ALP

QUESTION

NAVIGATION ACT

Senator COOPER:QUEENSLAND

Senator DALY:Vice-President of the Executive Council · SOUTH AUSTRALIA · ALP

Senator E B JOHNSTON:WESTERN AUSTRALIA

Senator DALY:

QUESTION

FINANCIAL AGREEMENT

Senator LYNCH:WESTERN AUSTRALIA

Senator DALY:ALP

QUESTION

LIBRARY COMMITTEE

Senator DALY:VicePresident of the Executive Council · South Australia · ALP

COMMONWEALTH BANK BILL

Senator DALY:VicePresident of the Executive Council · South Australia · ALP

Senator MCLACHLAN:South Australia

Senator Daly:

Senator MCLACHLAN:

Senator Daly:

Senator McLACHLAN:

Senator Daly:

Senator MCLACHLAN:

Senator DALY:VicePresident of the Executive Council · South Australia · ALP

Senator McLachlan:

Senator DALY:

Senator Sir GEORGE Pearce:

Senator LAWSON:Victoria

Senator Daly:

Senator LYNCH:Western Australia

Senator RAE:NEW SOUTH WALES · ALP; LANG LAB from 1931

Senator LYNCH:

Senator Lawson:

Senator McLachlan:

Senator LYNCH:

Senator Daly:

Senator Lawson:

Senator LYNCH:

Senator Daly:

Senator LYNCH:

Senator DALY:VicePresident of the Executive Council · South Australia · ALP

Senator Sir HAL COLEBATCH:

Senator DALY:‘VicePresident of the Executive Council · SOUTH AUSTRALIA · ALP

Senator Lynch:

Senator DALY:

Senator Lawson:

Senator DALY:

Senator DALY:VicePresident of the Executive Council · South Australia · ALP

Senator Sir Hal Colebatch:

Senator DALY:

Senator Thompson:

Senator DALY:

Senator Sir Hal Colebatch:

Senator DALY:

Senator Sir Hal Colebatch:

Senator DALY:

Senator LYNCH:“Western Australia

Senator Daly:

Senator LYNCH:

Senator McLachlan:

Senator LYNCH:

Senator Thompson:

Senator LYNCH:

Senator Thompson:

Senator LYNCH:

Senator Thompson:

Senator LYNCH:

Senator Daly:

Senator LYNCH:

Senator Daly:

Senator Daly:

Senator Sir HAL COLEBATCH:

Senator DALY:VicePresident of the Executive Council · South Australia · ALP

Senator H E ELLIOTT:VICTORIA · NAT

Senator DALY:

Senate
12 December 1929

Senator H E ELLIOTT:
VICTORIA · NAT

Senator BARNES:
Assistant Minister assisting the Minister for Works and Railways · VICTORIA · ALP

Senator COOPER:
QUEENSLAND

Senator DALY:
Vice-President of the Executive Council · SOUTH AUSTRALIA · ALP

Senator E B JOHNSTON:
WESTERN AUSTRALIA

Senator LYNCH:
WESTERN AUSTRALIA

Senator DALY:
ALP

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

Senator MCLACHLAN:
South Australia

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

Senator LAWSON:
Victoria

Senator LYNCH:
Western Australia

Senator RAE:
NEW SOUTH WALES · ALP; LANG LAB from 1931

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

Senator DALY:
‘VicePresident of the Executive Council · SOUTH AUSTRALIA · ALP

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

Senator LYNCH:
“Western Australia

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator O’HALLORAN:
South Australia

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator H E ELLIOTT:
VICTORIA · NAT

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

Senator MCLACHLAN:
South Australia

Senator THOMPSON:
Queensland

Senator DALY:
VicePresident of the Executive Council · South Australia · ALP

Senator H E ELLIOTT:
VICTORIA · NAT