Senate
29 September 1932

13^th Parliament · 1^st Session

PERSONAL EXPLANATION
QUESTION
- SALES TAX
QUESTION
- SHEET GLASS
QUESTION
- WHEAT BOUNTY
QUESTION
- WIRELESS BROADCASTING IN WESTERN AUSTRALIA
QUESTION
- UNIFORM CUSTOMS DUTIES
QUESTION
- TARIFF BOARD’S REPORT
BILLS FROM THE HOUSE OF REPRESENTATIVES
FINANCIAL EMERGENCY BILL 1932
- Second Reading
GOLD BONUS
- London, 27th September
HOW FAR WILL BUTTER SPREAD?
- London, Sunday
QUESTION
- GROWTH OF IMPORTS
PRINTING COMMITTEE
STATE GRANTS BILLS
SOUTH AUSTRALIA GRANT BILL 1932
- Second Reading
WESTERN AUSTRALIA AND TASMANIA GRANT BILLS
FINANCIAL EMERGENCY BILL 1932
SALES TAX ASSESSMENT
- Second Reading
SALES TAX ASSESSMENT BILL (No. 1) 1932
SALES TAX ASSESSMENT BILLS
SALES TAX ASSESSMENT BILL (No. 9) 1932
SALES TAX ASSESSMENT BILLS
PERSONAL EXPLANATION
PAPERS
DISARMAMENT CONFERENCE
- Report of Australian Delegation
LEAVE OF ABSENCE
SPECIAL ADJOURNMENT
SALES TAX BILL (No. 6) 1932
- Second Reading
FINANCIAL EMERGENCY BILL 1932
SALES TAX ASSESSMENT BILLS
ADJOURNMENT

The President (Senator the Hon. P. J. Lynch) cook the chair at 11 a.m., and read prayers.

NEW BUSINESS AFTER 10.30p.m.

Motion (by Senator Sir George pearce) agreed to by an absolute majority of the members of the Senate -

That Standing Order No:68 be suspended up to and including Friday, September30th, fur the purpose of enabling new business to becommencedafter 10.30 p.m.

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PERSONAL EXPLANATION

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I rise to makea personal explanation. I understand that during my temporary absence from the chamber last night, Senator Collings, while speaking on the Financial Emergency Bill, almost exhausted his vocabulary in denouncing what he termed my cowardice in absenting myself from the chamber while he was speaking. I have boon in the public life of Australia for 25 years, and last night was the first occasion on which I have been accused of cowardice. My experience has taught me that generally the courageous man is he who does and says the unpopular tiling becausehe believes it to be right, and the cowardly man is he who says and does what ho believes to be popular, although he knows it to be wrong. How- ever, I had a good reason for my absence from the chamber last night, and I had, as an act of courtesy, informed the Leader of the Opposition - Senator Collings’ leader - early in the evening that, although I was in charge of the Financial Emergency Bill, it would be necessary for me to leave the chamber for a short period during the debate. The Premier of New South Wales (Mr. Stevens) had come to Canbnrra to confer with me regarding important loan conversion operations in London, and we both conversed by radiophone with Mr. Bruce in London. It was for that purpose that I left the chamber.

Senator Sir George Pearce:

-I ex- plained that to SenatorCollings while he was speaking.

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QUESTION

SALES TAX

Pastoral Oils

Is it the intention of the Government to remove the sales tax from wool marking oil andsheep branding oil in view of the compulsion imposed upon every flock ownerto brand his sheep?
If not, why not?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The answers to the honorable senator’s questions are - 1 and 2.In view of the difficulties of administration,and the small cost involved, it is not proposed to remove the sales tax from these items.

page 871

QUESTION

SHEET GLASS

Is not the re-imposition of a prohibition against the importation of sheet-glass in opposition to the reportof the Tariff Board, a breach of Article 12 of the Ottawa agreement? 2.Does not the duty recommended by the Tariff Board - without any prohibition - constitute a full measure of protection as contemplated by Article10 of that agreement?

Is it a fact that grave disabilities have been imposed upon users ofsheet-glass in Western Australia and elsewhere by the failure of the Australian Glass Company to make deliveries in. accordance with its undertakings - vide Tariff Board report,19th August, 1932, page 5, column 2?

What guarantee has the Government obtained that the re-imposition of the prohibition will not subject users of glass to serious loss and inconvenience?

Will steps be taken to protect the interests of importers of glass who placed orders during the time the embargo was lifted ?

Has the attention of the Government been drawn to the statement by the managing director of the Australian Glass Company, in theSydney Morning Herald of recent date, reading: - “The directors having received a strong request from Mr. E. G. Riley, M.P. for Cook, in which district the factory operates, not to close the window-glass factory pending ratificationof the tariff,owing to the serious hardship to employees which would result from such closing down, have decided to carry on until Parliament has an opportunity of determining the fate of the industry”?

Is it a fact that an appeal by the Prime Minister to the company to refrain from dismissals provoked no public reply.

Was there a private reply? 9.If so, is it available?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

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

It jb not considered so.
The matter has been again referred to the Tariff Board for further report.
Deliveries in thu past have been complained of, but a very great improvement in this respect has taken place.
The prohibition provides for importations by consent of the Minister, and inconvenience can by this means be avoided.
This aspect nf the case is receiving immediate consideration. «. Yes.
The appeal was addressed to manufacturers in general, and not to this company in particular, 8 and 9; No.

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QUESTION

WHEAT BOUNTY

Sales Tax on Flour.

Senator E B JOHNSTON:
WESTERN AUSTRALIA

asked the Minister representing the Treasurer, upon notice -

Has the Government taken any steps to give effect to the resolution of the Senate, carried on the 30th July, 1031, in connexion with the Wheat Marketing Bill (No. 2) asking that a tax bv levied on wheat and Hour used for Australian consumption, and the proceeds utilised in assisting the wheat farmers of Australia?
lias, the Government considered the desirability, pursuant to that resolution, of adopting the Perkins plan for a sales tax of H 4a. per ton on flour, and the1 distribution of the resultant revenue in giving a. substantial bonus .on all wheat produced in the coming harvest, on an all-Australian basis?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The answers to the honorable senator’s questions are - 1 and 2. Careful consideration is being given to the position of farmers, but it is too early in the season to form any reliable estimate of the probable yield of the harvest, or the price which will be obtainable for it; therefore, ho decision can be made at this juncture.

page 872

QUESTION

WIRELESS BROADCASTING IN WESTERN AUSTRALIA

Senator E B JOHNSTON:

asked the Minister representing the Postmaster.General, upon notice -

When is an advisory committee to be appointed in the State of Western Australia under the provisions of the Australian Broadcasting Commission Act 1932?

Senator Sir GEORGE PEARCE:

– It is understood that the Broadcasting Commission has not reached a decision in this matter.

Senator E B JOHNSTON:

asked tie Minister representing the PostmasterGeneral, upon notice -

When is it intended to commence the erection of the Class A broadcasting station, approved some time ago for erection at Katanning, Western Australia?

Senator Sir GEORGE PEARCE:

– It is not possible to any when a commence ment will be made, but it is hoped to invito tenders within the next few weeks.

Senator E B JOHNSTON:

asked the Minister representing the PostmasterGeneral, upon notice -

Will the announcement made by the 1’(,st, I Department that the alterations to Broadcasting Station 6WF, Perth, would be completed by the end nf this month, be. carried into effect?
If not, when will this station, with its new apparatus, be available for broadcasting?
Is it a fact that the plant originally ordered for the reconstruction of Station 6WF Perth, has been diverted to the two new relay stations which arc being erected in Tasmania?
When is Western Australia to bc provided with one relay station?

Senator Sir GEORGE PEARCE:

– The answers to the honorable senator’s questions are- 1 and .2. It is hoped that the station will be available during December.

No.
See answer to similar question asked by the honorable senator to-day.

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QUESTION

UNIFORM CUSTOMS DUTIES

Senator PAYNE:
through Senator Sampson

asked the Minister representing the Minister for Trade and Customs, v-pom notice -

Has he given consideration to the possibility of amending the Customs Act so as to remove the anomaly that exists whereby different rates of duty can be imposed on goods consigned to various States in the one vessel?
Tf so, what decision bas been arrived at?
If not, will the Minister give early attention to this matter?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The matter is still under consideration and the department is in consultation with the Associated Chambers of Commerce.

page 872

QUESTION

TARIFF BOARD’S REPORT

Senator O’HALLORAN:
SOUTH AUSTRALIA

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

Can the Minister say when the sections nf the annual report of the Tariff Board, with- held (pending consideration by the Government) when the balance of the report was tabled recently, will be made available to honorable senators?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– These sections of the report deal with tariff recommendations and the reports themselves will be placed before Parliament when they have boon finally considered by the Government.

page 873

BILLS FROM THE HOUSE OF REPRESENTATIVES

The following bills were received from the House of Representatives: -

South Australia Grant Bill 1932.

Western Australia Grant Bill 1932.

Tasmania Grant Bill 1932.

Standing and Sessional Orders suspended and bills (on motion by Senator Greene) read a first time.

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FINANCIAL EMERGENCY BILL 1932

Second Reading

Debate resumed from 28th September, (vide page813), on motion by Senator Greene -

That the billbe now read a second time.

Senator E B JOHNSTON:
Western Australia

. -I listened with a great deal of interest to the secondreading speech of the Minister (Senator Greene). Whether or not we agree with the Government’s proposals - I violently disagree with some of them - we must, I think, compliment the Minister upon his lucidity, and the comprehensive array of figures which he presented in support of the measure. I regret, however, that he was very much astray in his facts with regard to the proposed repudiation of the gold bounty, and, for that reason, I feel that I cannot accept at their face value many other arguments used by him in support of the bill. Measures of economy are always unpopular. This bill is no exception to the general rule. Its purpose is to effect reductions in the maternity allowance, invalid and old-age pensions, parliamentary allowances, public servants’ salaries; to limit the wine export bounty to£96,000 a year, and to repudiatethe payment of the gold bounty, which has already been reduced by 50 per cent.

Originally a maternity allowance of£5 was paid to all mothers claiming it. The Scullin Government reduced the payment to£4, and limited the allowance to persons whose family income did not exceed £260 a year, or £5 a week. In the then circumstances of the Commonwealth that alteration was. probablyfair. When the principal act was passed in this Parliament, a Labour representative in the Western Australian Parliament applauded the Federal Government, and said that one of the merits of the scheme was that the highest lady in the land could claim the allowance, and her right to it would not be questioned. But, as I have shown, the allowance was reduced, and limited by the Scullin Administration to persons whose family income did not exceed £5 a week. This is a relatively low wage in the outlying portions of the Commonwealth. I regret that the allowance is to be withheld from residents of our gold-fields areas, and in the north-west of Western Australia if the wages of the breadwinner exceeds£4 a week, because the purchasing power of £5 outback is certainly not greater than that of £4 in Melbourne or Sydney. The arrival of the best immigrant of all - the Australian baby - imposes a heavy burden on parents whose income is not more than£5 a week. For this reason. I entirely disapprove of the proposed reduction from £260 a year to £208, and I shall vote for the retention of the existing income limit.

Turning now to the proposed reduction of invalid and old-age pensions, I remind the Senate that the pensions system was introduced by the Deakin Government, and that the BrucePage Government increased the rate, first from 15s. to 17s. 6d. a week, and later from 17s.6d. to £1 a week. I sympathize with the Scullin Administration which, owing to financial stringency, was obliged to reduce the pension from 20s. to 17s. 6d. a week. The original intention of this Government was to reduce it to 15s. a week. In comparison with other proposed economies, this would have been unjust, for while ministerial salaries had already been reduced by 25 per cent., and the parliamentary allowance by 20 per cent., the first proposal to reduce invalid and oldage pensions, represented a reduction of 12½ per cent. as against a further red action of 5 per cent, in parliamentary and ministerial allowances. However, the Government, recognizing the injustice of the scheme, amended it to provide for the continuance of the pension of 17s. 6d. to pensioners with no other source of income. I commend the Ministry for its action in this respect, but think it might very well exempt blind pensioners from any further economies. I have no doubt that all honorable senators have received copies of the communications which have reached me from institutions for the blind, protesting against the proposed reduction in pensions to their inmates. These are comparatively few in number, and because of the great disabilities which blind persons suffer, I am entirely opposed to any further alteration or reduction of their pension. I hope that the Government will recast its proposal, and exclude blind pensioners from the operation of this bill. In future children or near relatives of invalid and old-age pensioners will, if they are in a position to do so, be required to assist in their maintenance; and if a pensioner becomes possessed of property, a charge will be made by the department against it upon the death of the pensioner. This form of taxation cannot be included in this bill. I shall vote against it in committee. If ‘it becomes law, , I hope that this new arrangement will be administered with great sympathy and understanding so that injustices may be avoided.

– At all events, I am not in favour of any limitation of the wheat bounty. I desire its continuance.

I contend that, in any scheme for the financial rehabilitation of the Commonwealth, the parliamentary allowance should have been reduced to the pre-war basis of £600 a year, and the whole costs of Government correspondingly reduced. The Government might very well have followed the patriotic lead given by Mr. Hawker. I hope that it will adopt my suggestion to reduce parliamentary salaries to £600 per annum, and so make possible the reentry into the Ministry of a gentleman who possesses a wide knowledge of, and deep sympathy with, our primary industries. His absence from the Ministry is a great loss to the’ Commonwealth.

I regret that the Government has committed such a blundering act of repudiation in connexion with the Gold Bounty Act.. I despair of the future of an administration which so recklessly desires to abolish the only bounty ever paid by the Commonwealth that has been entirely justified. An increased production of gold, more than anything else, is urgently needed to ensure the financial and economic rehabilitation of the Commonwealth. There is an unlimited market for gold. The- Scullin Administration, largely through the influence of the honorable member for Kalgoorlie (Mr. A. Green) brought in the measure under which the bounty became payable. It certainly was not in the precise form desired by the industry. No other bounty granted by the Commonwealth has been payable on such a conservative basis, namely, the excess production over the average production in 1928-29-30. Bounties on cotton, iron and steel, flax, wine and other commodities have covered the total production. Not so the gold bounty, although the industry asked for a bounty on that basis. At the time it was granted, our gold output was gradually declining, and those associated with the industry were given to understand that if they wished to participate in the bounty, they would have to set to work in a wholehearted manner to increase production. How successfully the bounty has assisted to prevent the decline of the industry is demonstrated by the following figures relating to gold production in Australia : -

-No ; I do not think so, but will deal with that later. The Gold Bounty Act provided for the payment of a bounty for ten years, and was rightly accepted by the industry as a definite contract for that period. This Government fought the last election as an opponent of repudiation. Already it is treating the contract. to which I have referred as a mere scrap of paper. In good faith, with the belief that that ten years’ contract would be honoured by both parties, gold-mining companies, individual prospectors, and mine-owners spent tens of thousands of pounds on machinery and plant to develop their properties. The repudiation of this contract will result in a loss of confidence in Australian Governments both overseas and throughout the Commonwealth. Since the Gold Bounty Act came into operation 2,500 additional wage-earners have been employed in the industry, and that does not include hundreds of men who are engaged in prospecting, and thousands in associated industries. The wages paid to the additional 2,500 men employed in Western Australia alone since the Gold Bounty Bill was passed amount to approximately£750,000 per annum. Had those additional men not been employed by the gold-mining industry, no other Australian industry could have absorbed them. The dole payments to them would have cost more than the£89,000 paid by way of gold bounty for the whole of the Commonwealth last year. Gold is the one exportable product for which there is an illimitable market and no fear of overproduction; yet the Government has singled out the bounty granted to this industry for destruction. I admit that the gold industry has bene fited largely by the exchange; but the exchange has fallen 5 per cent. as between Australia and Great Britain since the reduction of the bounty by 50 per cent. Moreover, other export industries have benefited equally with the gold-mining industry from the exchange premium. I have here a small national balancesheet published by the president of the Mining Association of Western Australia, Mr. Allen, and the chairman of the Gold Industry Council, Mr. de Bernales, showing the position of the nation since the gold bounty was first paid. This novel document, which contains figures relating to the mining industry, shows clearly the immense value of gold to Australia. It reveals that during the twelve months ended December, 1933, the shareholders in the national mining venture - the taxpayers of Australia - for an investment of £89,000, that sum representing the amount contributed in the form of the gold bounty, received a direct return through dividends of£363,345. I ask permission to incorporate this balancesheet in Hansard. [Leave granted.] -

This balance-sheet shows that the gold bounty has been a wonderful investment for the Commonwealth. I also desire to quote a statement by Mr. de Bernales in relation to the value of the ten-year plan -

The wisdom of the company’s management in introducing and unhesitatingly carrying out the ten-year development and re-equipment plan cannot be too strongly supported and applauded. The plan calls for a very large capital expenditure, particularly in the introduction of new methods, development work, and the installation of up-to-date machinery. This expenditure is, however, in every way warranted, as the objectives aimed at are the securing of maximum efficiency and the reduction to a minimum of working costs. Only in this way can the low-grade ore bodies be economically and* profitably treated. What is aimed at is the handling of ore in bulk quantities and the mass production of gold. Owing to the impossibility of over-production and its freedom from marketing difficulties gold is the one world product which can safely he mass-produced. The whole of the profits of the company plus large sums of new capital must be utilized by head office and the branches to perfect the ten-year plan, but the final result should be not alone of great value to the company, but of national importance and widespread in all sections of the Commonwealth. The abandonment by the company of “ selective mining “, although a drastic departure “ from previously accepted custom, was in every way warranted. Selective mining from a national point of view was nothing less than a calamity. The support accorded the Australian gold industry by the taxpayer shareholders through the Gold Bounty Act made the abandonment of “ selective mining “ possible. The Gold Bounty Act is not only the magnet which inspires the Australian gold industry to develop and re-equip its mines, but is the safeguard to the Australian people that the gold resources of the Commonwealth will be mined in such a proper, efficient and economical manner as to extend the lives of the mines to their maximum and distribute the greatest amount of gold to the benefit of the Commonwealth.

A perusal of the full statement of Mr. De Bernales, a copy of which has, I understand, been sent to every member of this Parliament, makes it clear that the retention of the gold bounty for a period of ten years would be amply justified. In his second-reading speech, the Minister, perhaps unconsciously, conveyed to honorable senators the impression that the gold-mining industry had agreed to the reduction of the gold bounty. That is incorrect; every section of the gold-mining industry in Australia has strenuously opposed the reduction. After the Minister had concluded his speech, I searched some of the Western Australian newspapers to prove that his statement was incorrect. The Kalgoorlie Miner, of Tuesday, the 2nd August, 1932, contains a report of a meeting organized in opposition to any reduction of the gold bounty. At that meeting every section of the gold-mining industry was represented; apologies were received for the absence of the Honorable A. Green and myself. The Mayor of Kalgoorlie moved -

That this public meeting of the citizens of the gold-fields enters a most vigorous protest against any contemplated action of the Commonwealth Government to reduce the payment of the gold bonus as provided for in the Gold Bounty Act, that there is no justification whatever for the suggested reduction of the bonus, assince its granting the increased production of gold and the consequent increase of employment has amply compensated the Government both directly and indirectly for its payment. That such action, if persisted in, will bring lasting disgrace and dishonour upon the Commonwealth, and will shatter the confidence of the investing public of Australia, England, and the Continent, in the gold-mining industry of Australia. We, therefore, request the Prime Minister and his Cabinet to refrain from interfering with the provisions of the Gold Bounty Act, which, after most careful and exhaustive inquiry, was placed upon the statute books by their predecessors in office for a period of ten years.

The motion was seconded by the Mayor of Boulder, and supported by Mr. J. H. Cummins, vice-president of the Kalgoorlie Chamber of Commerce, and Mr. J. Warrick, representing the Western Australian Chamber of Mines. Mr. Warrick is also manager of the Great Boulder Mine. If there is any voice which the Government should heed, in dealing with the gold bounty, it is that of the Western Australian Chamber of

Mines. Mr. Warrick said -

The Commonwealth Government promised the gold bonus for ten years, but it was not very long before it had been reduced by 50 per cent. It was gold-mining that had placed Western Australia on the pedestal at the very beginning, and it would still keep her there with judicious assistance. The wonderful Golden Mile had produced about £140,000,000 in gold. They were told during the war that they must produce gold, for it was an essential for victory. They were also told that every man who worked in a mine was doing as much as the men at the front for the successful prosecution of the war.

The motion was also supported by Mr. C. G. Elliott, representing the Eastern Goldfields Tributers Association, an important section of the gold-mining community. These tributers, working in places which large companies do not. find it profitable to work, produce a great deal of the gold won in Western Australia, at considerable risk to themselves. Mr. F. C. Smith, M.L.A., representing the Eastern Gold Fields District Council of the Australian Labour Party, and other influential men, supported the motion, which was carried unanimously. That meeting voiced the opinion of the gold-mining industry of Australia in relation to the Government’s proposals. I say, unhesitatingly, that the whole of the people of Western Australia associated with the gold-mining industry are opposed to the Government in this matter. Indeed, the opposition extends beyond the borders of Western Australia, for the Melbourne Chamber of Manufactures has also joined in the protest. It may well do so, for the gold-fields market is a splendid outlet for the products of the secondary industries of the eastern States. The people of Western Australia are united in their opposition to any reduction of the gold bounty; but they are agreed that if they were relieved of the burden of taxation placed upon them by the tariff, they would not want any gold bounty at all. Western Australia asked for the gold bounty, largely because of the burden placed on the mining industry through the tariff policy of the eastern States. If Western Australia were given the right to frame its own tariff for a period of 25 years, as was recommended by the royal commission which inquired into the disabilities of that State, this dole, so grudgingly granted, and so quickly withdrawn, would never again be required.

Senator Rae:

-What about the other financial assistance granted to Western Australia ?

Senator E B JOHNSTON:

-The rest of Australia robs Western Australia of millions of pounds, and then grudgingly grants that State£500,000.

I wish now to refer to the speech of Senator Daly, the Minister who introduced the Gold Bounty Bill into the Senate - a measure which was agreed to by 18 votes to 3. On the11th December, 1930. Senator Daly said-

The extendedterm of ten years has been selected in order to give stability to the industry, and to encourage capital investment.If a shorter period were stipulated the economic attraction would notbe present. Miningcompanies will have to install large quantities of expensive machinery, and if a shorter period than ten years were fixed their opportunities for a return of capital investment wouldbe obliterated.

-No ; but we will endeavour to restore it. The remarks of Senator Daly should be taken in preference to those of Mr.Forde. In any case, a. real contract is contained in the act of Parliament itself. Mining companies and private persons have spent large sums of money in order to develop our low grade ore deposits; yet this Government repudiates the contract which a previous government had entered into with them. The present Government has perpetrated a confidence trick on the mining population, the mine-owners and the gold prospectors of Australia. It is well known that three Ministers in another place - Messrs. Gullett, Latham, and Parkhill - opposed the bill, and tried hard to have the term of the bounty reduced from 10 years to 5 years. On the 11th December, 1930, Mr. Gullett, speaking in another place, said -

To terminate the bounty would be to commit a breach of a contract, the making of which may have attracted investors.

Senator E B JOHNSTON:

-This Federal Parliament deliberately decided by vote in the other House of 35 against 13, to reject Mr. Bailey’s amendment to the effect that the term should be five instead of ten years. Surely the period of ten years, as stated in the act, means something.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– And it still remains in the act.

Senator E B JOHNSTON:

– This contract should continue for its full term of ten years’ actual assistance, and the Minister knows that. I expect to be told that the gold-mining industry has accepted this suspension of the bounty because of reports to the effect that Mr. Bruce has discussed this subject in London with half a dozen directors of big mines who represent British investment in the industry. I am not concerned with any reluctant acquiescence that those gentlemen may have given to Mr. Bruce when he pointed the pistol at their heads and threatened to abolish the bounty altogether. That acquiescence does not amount to anything so far as the goldmining industry of Australia is concerned. I represent not those influential and moneyed mine-owners, but hundreds of local Western Australian mine-owners, leaseholders, prospectors, tributers and miners who are earning their living from the production of gold. These people have not been consulted by the Government in respect of this proposal, and their organizations and associations in Western Australia, at meetings at Kalgoorlie and throughout the gold-fields, protested against this stupid Government policy of repudiation. The whole of the gold-fields population are outraged by this violation of a contract to which they have honorably stood, and which was rendered doubly necessary by the burden which the federal tariff and policy generally have placed onthe gold-mining industry. Every section of the community, and every gold-field centre in that State, has protested against this proposed suspension of the bounty. I should like to read to honorable senators a leading article which appeared on the4th September in the Perth SundayTimes, a newspaper which is widely Circulated throughout Western Australia. The article, which is headed “ Good-bye, Gold Bonus!” reads -

The axe has fallen. Notwithstanding the united protests of all parties in Western Australia, the Federal Government has suspended the payment of the gold bonus after the 30th of this month. It is a most unwarranted discrimination against this State, which produces 85 per cent. of the gold output of Australia, a valuable economic asset to the Commonwealth, for although we are off the gold standard, gold is still absolutely necessary to adjust adverse trade balances. And it can be taken for granted that the gold bonus has gone for ever. The suspension is to continue until the mint price of gold falls to£5 per fine ounce. The present mint price is £76s.11d., so the drop will have tobe£2 6s.11d., which is utterly unlikely - indeed impossible - inside the eight years that remain under the Gold Bonus Act….. Even with the total 25 per cent. and 30 per cent. reductions of ministerial and members’ salaries the cost of the Federal Parliament is over£400,000 a year, more than any other three parliaments in Australia combined. They could easily have saved£100,000 on the Canberra extravagance, and, with other economies suggested, could have economized to the extent of at least £2,000,000, not to mention relieving the people of £7,000,000 in excess cost of sugar. If the gold bonus had benefited Queensland to the same extent as it benefits Western Australia, would they have suspended it? Not they. It is significant in this connexion that the great majority of the United Australia Party and Country party at Canberra supported the repudiation - so far as disclosed, only Western Australian members protested.

The following conclusion is the most important part of the article: -

After this flagrant injustice to the State, is there any man, woman or child in Western Australia who is not for secession ? Our case was unanswerable before, but this is the climax, and should make the State absolutely united and unanimous in a realization of the Dominion League’s claim for complete freedom. Now let the Government put through the Referendum Bill without further delay, and see what the answer of the people will be. It will be overwhelmingly for a withdrawal from a hopeless bondage.

I doubt if Western Australia has ever been more stirred than it is to-day about this manifest exhibition of injustice. The proposed saving of£30,000 this year, or even £130,000 for a. whole year, is paltry, when compared with other federal expenditure. The Government’s action will destroy confidence in our legislation unless adequate compensation is given for breach of contract. If we make a small saving in this direction, the effect on London investors in our securities will probably cost us 100 times that amount in respect of our loan conversions.

Senator Foll:

– Did not the mining companies in London agree to a. suspension of the bounty?

Senator E B JOHNSTON:

– They did not. A few directors may have been in agreement. I sympathized with Mr. Bruce, for whom I have the highest regard, when he had to explain the Government’s proposals to mining interests in London. The protests against this legislation are not. confined to Western Australia. The Sydney Bulletin, in its issue of the 20th January last, condemned the Government’s action in an article headed “ Another Scrap of Paper “, portion of which reads -

If the Bounty Act is treated as a scrap of paper, those Westralians who have hitherto been loyal to the Commonwealth will despair of it. Do federal politicians also consider that they have a right to violate contracts when the contracts have become - or seem to have become - inconvenient? The new Government, the new Parliament, ought to leave that sort of thing to Lang.

This Government condemned Mr. Lang, but it is following the Lang plan in this legislation. In saying that I could offer no stronger objection to the proposed suspension of the gold bounty. The Government is playing the part of political bushrangers. The bushrangers of the old gold-fields days did have it to their credit that they, with great personal courage, faced their victims. To-day, however, this Government is sniping and despoiling the gold escorts and producers of Kalgoorlie and Wiluna from the remote fastnesses of distant Canberra.

Senator Sampson:

– It is long-range shooting.

Senator E B JOHNSTON:

– It is just as effective as the shooting of the bushrangers who operated at Collector in this district 70 or 80 years ago. I do not know if it is. the atmosphere, Mr. President, which is responsible for the prevalence of bushrauging instincts in this locality. In bygone days, bushrangers roved the plains around what we now know as Canberra, and to-day we have a bushranging government, with a common objective of gold. This Senate has during the last three years stood firmly in opposition to inflation, repudiation, and dishonest politics, and its actions in that aspect have undoubtedly earned it a high place in the regard of the Australian people. I hope that it will show consistency by defeating this attack on the gold bounty and the repudiation of the ten years’ contractgiven to the gold-mining industry by the Federal Parliament.

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[12.10].- Ilistened last night to the speech of Senator Collings, and the first impression upon my mind was that, in the crisis in which this country to-day finds itself, men who are elected to responsible positions in this Parliament should be something more than mere critics.

Merely to criticize proposals that are designed to assist the financial position of this country does not discharge one’s responsibility; yet any one who listened to the speech of Senator Collings last night knows that it was absolutely destitute of any proposal whatever to make good the deficit in our finances.

Senator Sampson:

– It was good soapbox stuff.

Senator Sir GEORGE PEARCE Probably it was. Senator Collings also refused to face the alternative, that any failure on our part to bridge the gap - and he made no suggestion for bridging the gap - would mean that the money to pay pensions, not merely at the reduced rate provided for in this bill, but also at the existing rate, would have to be provided by overdraft. The muchabused bankers whom the honorable senator is so fond of vituperating, would have to provide the money to enable him to carry out his grandiose schemes of relief by way of pensions. In other words, he is prepared to be generous with other people’s money. During this discussion on pensions, we have heard a good deal about the unfortunate pioneer. It is always the pioneer who is to suffer. But is it to be assumed that every pioneer is a pensioner? There are some pioneers who are not pensioners, and I know thousands of them. I refer to old men and old women who, while others have not restricted their pleasures.- have denied themselves luxuries and enjoyment during the whole of their lifetime. They have scraped, starved and saved so that they need not draw a pension in their old age. Yet. they are among the very people who, through taxation, have to find the money foi- pensions. When we were dealing with the special tax of 10 per cent, on property over and above ordinary taxation, I and many other honorable senators received letters from these very people - these old pioneers who have, by exercising thrift and self-denial, obtained just sufficient property to provide them with an income equivalent to a pension. Because of that additional taxation, their income has been so reduced that they are, unfortunately, not now in receipt of the equivalent of a pension. Yet Senator Collings has not the slightest sympathy for those people; he sympathizes only with that section of the pioneers which, in many cases, because of its thriftlessness has -had to draw old-age pensions. 1 admit that some pioneers who exercised thrift during their lifetime have been compelled, because of unforeseen circumstances, to fall back on the pension; but there are many others who, because of their thrifftlessness and because they have never denied themselves every form of pleasure and luxury, have, by their own act, brought themselves within the pension class. One would think from the honorable senator’s speech that he has intelligence and is capable of studying these subjects from every viewpoint, but there is another factor that he absolutely ignored, although it is one that no responsible member of the Senate can ignore. At the time when the rate of invalid and old-age pensions was fixed at 20s. a week - it was subsequent!^ reduced to 17s. 6d. a week - the national income of this country was £650,000,000 a year. It is now £200,000,000 less than that. The money with which pensions are paid is not obtained from the air or by some mysterious waving of a wand. It is taken out of the income of a nation, and if that income is £200,000,000 less to-day than it was when pensions were at the higher level, it should be obvious to those possessing intelligence, even of the lowest or meanest order, that the Government cannot afford to spend at the same rate as when its income was £200,000,000 higher. Yet this honorable senator, who is supposed to have some responsibility as a legislator, absolutely ignored that fact - he did not take it into consideration at all. We admire the honorable senator’s command of language, but I could not help thinking that his speech consisted of a perfect whirlwind of words. It is a scientific fact that in the centre of a whirlwind there is always a vacuum. Listening to the speech of the honorable senator it seemed to me that there was a vacuum. in its centre. The honorable senator exhausted his vocabulary, if that were possible - at any rate he did use it to the extent of 100 per cent. - in criticizing the principle imported into this bill, and which I regard as very important, and that is the responsibility of children to their parents. The honorable senator seems to think that it is a vicious and obnoxious principle. Yet heis a member of the Labour party, as he has told us so often, that has been in power in Queensland on several occasions since 1914-15, and during recent years, has had no Legislative Council to obstruct the legislation passed by the lower chamber. During those years, there has been upon the statutebook of that State legislation which gives effect to the same principle and carries out the very obnoxious - if it may be so regarded - principle contained in this bill. The statute to which I refer is the Interstate Destitute Persons Relief Act, which provides for the relief of persons whose relatives are liable to support them, and who reside in another State of the Commonwealth and for other purposes. That act was assented to on the30th October, 1914.

Senator Collings:

-The Labour party was not in power in1914.

Senator Sir GEORGE PEARCE:

-I know that, but it has been in power several years since then, and has had ample opportunity to repeal this legislation. As it did not do so, it must be assumed that it wished it to remain on the statute-book, and that it has administered its provisions. I have been informed by an honorable senator from Queensland that instances can be given of its being administered while the Labour Government was in power.

Senator Collings:

– He cannot do so.

Senator Sir GEORGE PEARCE.The honorable senator complained about interjections. Apparently that is a law be applies to others and which he does not, apply to himself. I hope that he will listen to me with some patience because what I have to say is for his good. The honorable senator is in a new environment and should be a little more careful in the assertions he makes in this chamber. Sections 6 and 7 of the act to which I have referred read -

Whenever in another State -
1. (i) Any husband leaves his wife; or
1. Any parent leaves his or her child under the age of eighteen years, whether legitimate or illegitimate; or
2. Any child over the age of twenty-one years leaves his or her parent; or
3. Any person liable to support, or contribute towards the support of, another person leaves such other person, in any such case without adequate means of support; or
4. An order has been made by any justice or justices or by any court, not being a court of record, and such order remains unsatisfied wholly or in part; and in any such case -
5. Such husband, parent, child, or person, or the person by such order adjudged to pay or make provision (each of whom is hereinafter referred to as “ the defaulter “ ) comes to reside or resides, either temporarily or permanently in Queensland, any summons for relief or any process to enforce such order, granted or issued in such other State by any justice or justices or by or out of any court (not being a court of record) upon application by or on behalf of the wife, child, parent, or person so left, or by or on behalf of the person for whose support such order was made, and against or directed to the defaulter, may be served in Queensland.
– (1.) Whenever in Queensland -
1. Such husband, parent, child or the person, or the person by such order adjudged to pay or make provision (each of whom is hereinafter referred to as “ the defaulter “ ) goes to reside or resides, either temporarily or permanently in another State, any justice for Queensland, may, upon application by or on behalf of the wife, child, parent or person so left, or by or on behalf of the person for whose support such order was made (each of whom is hereinafter referred to as “the complainant”), sign and issue a summons directed to the defaulter to show cause why he or she should not support or should not contribute towards the support of the complainant, or should not pay any moneys due and to become due under such order, as the case may require.

Although that has been the law in Queensland while a Labour Government has been in power and when there has been no legislative council to interrupt its legislation, the honorable senator who boasts of his association with the Labour party comes here and denounces the Commonwealth Parliament when it proposes to provide something of the same kind in connexion with the support of aged persons in the Commonwealth. In the light of these facts, there is only one term which can apply to statements such as those we listened to last night; but it is one which the Standing Orders of this chamber will not permit me to apply to the honorable senator.

Before leaving the subject of pensions, 1 wish to quote an interesting article which appeared in the West Australian on the 19th of this month, written by Mr. S. E. Solomon, Lecturer in Statistics nt the University of “Western Australia. In it he analyses the operations of the pensions legislation, and brings out a point which I do not think has been brought forward by other writers on the subject. After dealing with the growth of the population and the cost of pensions, he goes on to say -

Working on this basis, the following results were obtained: - Compared with 1010-11, the relative extent of dependence upon pensions had increased by 29 per cent, in 1914-1.5, 38 per cent. 1919-20, 00 per cent, in 1924-25, 100 per cent, in 1929-30, and 133 per cent, in 1931-32. The meaning of all this is that the proportion of old and infirm people who are unable to provide for their old-age or incapacity is greater now than it was in 1910-11. In fact, the proportion is more than twice as great as it was at the beginning of this largo scale attempt at outdoor relief.

The simple fact is that the proportion of the people who are unable or unwilling to provide for their own support in old-age or sickness has become 2 1-3 times as great as it was when the old-age and invalid pensions were introduced in Australia.. .To sum up, the following points seem beyond dispute: -

Pensions have increased in cost, since their inception, from f 2,000,000 to £.1 1.000,000, or from 9s. to 34s. per head of population.

The pension has now (at 17s. 6d.) a far greater purchasing power than had the original pension, and even the proposed reduced pension ( 1 5s. ) would have a purchasing power greater than was originally intended. This, let it be noticed, is while real national income in Australia has decreased greatly.

At the same time, the extent to which pension privileges are needed (or perhaps one should say, “availed of”) has more than doubled.

The alarming part of the matter is in conclusion 3. Two suggestions as to its cause may bc made. In the first place, some of the increase, particularly at the present time, may be due to what is really concealed unemployment. The failure of industry to absorb all the labour available must bc causing some persons to cease work and live on the pension tit an earlier age than they would have done had work been available. But a consideration of the probable number of persons who, at the ago of 05 years, still retain the power and desire for strenuous work will suggest that this factor is not likely to bo very important. The only possible explanation of the greater part of the increasing reliance upon State generosity is that Australians are dashing to the ground the oft-expressed official hope that increased thriftlessness would not be the public response to the offer of pensions.

Whether we do or do not. agree with these conclusions they are those pf a scientific mim, and should be carefully studied. No one can say that it is a good thing for the community that the primary virtue of independence which goes to make up moral fibre should be sapped. No one can read those figures without coming to the conclusion that there is a lessening of that spirit of independence that makes a nation great and self-reliant.

I wish now to say a few words with respect to Senator E. B. Johnston’s criticism of the action of the Government in connexion with the gold bounty. In the first place, I suggest that the honorable senator has been guilty of using most extravagant language in dealing with this subject. Had the price of gold been what it is to-day, not one of us would have supported the payment of a bounty. It would never have been suggested, or even dreamt of. It would have been scouted by every reasonable person in the community. It is extravagant language to speak of breaking contracts and to say that the portion of the measure dealing with the gold bounty is aimed particularly at Western Australia, and is an act of vengeance against the State. I suggest that it is not wise to use such language in discussing this proposal, particularly when we realize the difference between the present price of gold and that offering when the request was received from Western Australia that a bounty should be paid. Again, in this connexion, can any responsible person ignore the present financial position of the Commonwealth? When the demand for the payment of a bounty on gold was first made I subscribed to it on the ground that it was necessary to offset the burden placed upon the mining industry by the tariff, and I could still subscribe to it on that ground. But the balance has been long ago taken up by the increase in the price of gold in consequence of the exchange position and the departure of Great Britain from the gold standard. Had the position in this respect been similar when the demand for this bounty was first made many other industries would have had . a much stronger claim for assistance than the gold mining industry, and I certainly would not have advocated the bounty. The price of gold to-day is nearly double that of normal times, but Senator Johnston seems to have entirely ignored this important fact.

Senator E B Johnston:

– Then why was the period for the payment of the bounty fixed at ten years?

Senator Sir GEORGE PEARCE:

– It is the practice to provide a specified term for the payment of any bounty for which legislation of this kind is introduced. But I remind the honorable senator that in introducing the measure now before the Senate, the Minister in charge of it (Senator Greene) quoted a statement made by Mr. Forde, who introduced the original measure in tho House of Representatives. That honorable gentleman said quite unequivocally that if the price of gold increased in consequence of an alteration in the exchange position, the Government of the day hold itself free to reconsider the whole situation. That statement may not have been repeated when the bill was introduced into this chamber, but it was definitely made on the floor of another place. It must be realized, therefore, that, though the period of the bounty was fixed at ten years, i t was definitely declared that under certain circumstances the whole subject would be reviewed. No one at that time could foresee that Great Britain would go off the gold standard, or that the exchange position would, alter so materially. In these circumstances to use the word “ repudiation “ in connexion with the gold bounty provisions of this bill is a mis-use of terms, and indicates that the honorable senator was guilty of the grossest extravagance in his language.

Senator Johnston was also in error in attributing the revival of the gold mining industry to the provision of the bounty. As a matter of fact the value of the bounty distributed over the whole of Australia’s gold production is equivalent to only about 4s. per oz. It is therefore ridiculous to say that this bounty has caused a revival in the industry. This satisfactory achievement can be attributed to several much more important factors. One of these is the same as that which led to the discovery of Coolgardie, namely, adversity and depression. In such times, when unemployment is rife, men go out in search of gold and other metals in. preference to relying on public charity.. The history of the gold mining industry of Australia proves this beyond doubt. The other factor is the great increase in the price of gold due to the departure of Great, Britain from the gold standard and the altered exchange position. The value of this factor is very .many times that of the gold bounty. In this respect also Senator Johnston was guilty of using most extravagant and unjustifiable language.

I shall place before honorable senators some opinions expressed by responsible men in the gold mining industry who are competent to speak with authority. The following report appeared in the West Australian of the 23rd September -

Kalgoorlie, 22nd September.

When passing through Kalgoorlie this afternoon by the Great Western express on his way to Perth from Canberra, where he interviewed federal Ministers on matters connected with gold-mining, Mr. H. E. Vail, consulting engineer to the Wiluna Gold Mine and Lake View and Star Limited, said that circumstances had compelled tho Federal Government to suspend the gold bounty temporarily. The Ministers were reluctant to take it away, but as a result of negotiations with London and mining companies in Australia, an improved basis for restoration has been secured. At first it was intended to restore the bounty when gold had declined to £5 an ounce, Australian money, but now the bounty would be restored when gold was £5 an ounce, English money, or approximately £5 10s. an ounce, Australian money. The Government seemed very sympathetic to the gold-mining industry and had granted considerable relief in regard to sales tax and import duties. It was his firm belief that the Federal Government was not antagonistic to the industry, but had been compelled by circumstances to suspend the payment of the bounty.

Senator Sir Hal Colebatch:

– Can the right honorable senator tell me how the difference between £5 an ounce English money and £5 10s. an ounce Australian money was arrived at?

Senator Sir GEORGE PEARCE:

– I cannot say. The statement which I have just read was made by a gentleman vitally interested in the gold mining industry in “Western Australia, who is re- garded in that State as a leading authority on the subject.

In the Melbourne Argus of the 28th September, the following report appeared : -

page 886

GOLD BONUS

REPLY to “ FINANCIAL News.”

London, 27th September

Mr. F. H. Hamilton, chairman of the Associated Gold Mines of Western Australia, in a letter to the financial News in reply to a comment published on the Australian gold bounty, says that the interpretation placed on the official statement is correct, but that particular combination is not likely to occur. If the Australian price of fine gold is above ?5 10s. an ounce no bounty will be payable, whatever may be the sterling price.

Mr. Hamilton adds “ The settlement confers no exaggerated benefits on the goldmining industry, but it does afford a guarantee for the next eight years, and will make it possible to bring into profitable production medium and low-grade ore deposits which otherwise would bc unpayable.”

That also is a statement from one who is intimately acquainted with the goldmining industry of Western Australia. These statements, I submit, are a complete answer to the extravagant observations of Senator Johnston.

Senator Sir GEORGE PEARCE.He does not do so. This is shown by reference to the Financial News report which Mr. Hamilton mentioned. The Financial News asked whether the official statement meant that if the sterling price of gold fell to say 95s. an ounce and the Australian price was only 115s. an ounce no bounty would be payable. It added -

The fact that the bounty will reappear when the exchange improves will tend to prevent Australian currency from ever returning to parity with gold.

It must bo realized therefore that Mr. Hamilton is of the opinion that a fair settlement of this question has been reached.

I am sorry to differ from my Western Australian colleague, but in my opinion the changed circumstances to which I have referred entirely justify the action of the Government. For Senator Johnston to talk about repudiation and to use such extravagant language in doing so is unfair to the Government. In the light of the facts which I have stated, the honorable senator’s criticism was unreasonable in every respect.

Senator DUNCAN-HUGHES:
South Australia

– I listened with interest last night to the speeches made on this measure by several honorable gentlemen opposite. While not agreeing with the remarks of the Leader of the Opposition, I was impressed by them. In regard to the speech made by Senator Dunn, I can only hope that the “ facts “ he gave were a little more accurate than his statement that the scene of the play, “ Romeo and Juliet “, was laid in the lagoons of Venice. As a matter of fact, the scenes of that play are laid in Verona and Mantua where lagoons ave not plentiful.

From 1917 to 1921, the number of invalid and old-age pensioners increased from 1.20,000 to .140,000, or by nearly one-sixth of the total number, while the increase in population during the same period was from 4,982,793 to 5,”)U).229, or less than one-ninth, so that the pensioners are increasing much more rapidly proportionally than thu general population. In my opinion, the increase both in number and expenditure will he much larger in the future. So far, only those have become eligible who. when pensions wore instituted, were nf middle-age. When those who are brought up with thu idea, that at a certain ago they will be provided for by the State take full advantage of the privilege, the rate of increase must be vastly greater. Wo are already paying nearly £0,400,000 in old-age and invalid pensions, as shown on the 30th Mee last year. .

Any money that is available is required for national reproductive works. . . .

I said that remission of taxation, in my opinion, ought to precede any increase in old-age and invalid pensions, and I alluded to the effect which this governmental intrusion on a large scale into the field of social services was likely to have on the charitable institutions of Australia.

– We have already done so, but the example has been so hopelessly overdone thateven the last Government most reluctantly reduced the pension, admitting that had it not done so, there would not have been sufficient money in the Treasury to pay the pensioner more than. 12s. a week. For such is the inevitable result of fixing the amount of the pension at a figure disproportionate to a country’s financial resources. In my speech nine years ago, I indicated clearly that unless this Parliament took a firm stand, the time would come when it would be unable to continue providing social services on the scale then laid down. That time arrived last year. In New Zealand, a relatively small contribution is made by the ordinary taxpayer to the cost of the invalid and oldage pensions - about 20s. per head of the population compared with 34s.1d. in Australia - and it may be due to the fact that New Zealanders largely come from Scotland wherethe people, in the main, are too independent to desire to accept pensions. Otherwise, pension conditions in New Zealand are very similar to those in Australia, yet there is this very great difference in the total cost.

That Australia cannot afford these increasing charges for social services is shown by the budget, and that statement, made in the budget speech, was repeated yesterday by the Minister who introduced this bill. The matter of meeting the debt payments which have been postponed by Great Britain, and also the interest payments postponed by the Hoover moratorium, will have to be faced if the moratorium expires at the end of the year.

Between 1917 and the present date, pensions have been increasing at a still more rapid rate than has the population. The population has increased by less than onethird, but the cost, of pensions has doubled. It ought not to be necessary to emphasize once again the importance of national reproductive works. We are surrounded on all sides by unemployment. Is it not desirable that money should be made available to put men back to work, instead of simply distributing relief funds to persons who may be deserving recipients of it? No remission of taxation is provided for in the budget. For that, I am not criticizing the Government, but taxation in Australia is exceedingly heavy, and a large section of the community is staggering under the burden. It is practically impossible for a great many people to increase thenumber of their employees as they would willingly do, if they had the necessary means. Urgent appeals are made for an extension of industries, and the employment of additional men, but most employers simply cannot afford to do it. Unless we face up to the situation boldly, I see no reasonable chance of an abatement of taxation in the immediate future. Without a remission of taxation, how is the unemployment problem to be solved?

SenatorRae. -Our taxation is now lower than that of Great Britain.

SenatorDUNCAN-HUGHES. -After the war, Great Britain suffered under a staggering load of taxation which certainly resulted in the impoverishment of many of her people: I do not think that taxation in Australia is greater than it is in the Mother Country. And surely honorable senators know that an enormous number of our people are operating on no profit at all. Many are endeavouring to beep their employees at. work by drawing on their capital.

Senator Daly:

-And waiting for the restoration of confidence.

Senator DUNCAN-HUGHES:

-The honorable senator’s interjection reminds me of a remark made by Sir Granville Ryrie, when a member of another place, that the Labour party hada slidingscale, but it operated in only one direction. I might go further And show that a pension of11s.11d. will now purchase commodities which, in 1920, would have cost 15s.

Senator Rae:

-That is a fairy tale.

– No one knows what the other fellow’s bank balance is to-day. But even assuming that we are rich men, I have never held the opinion that a man who is not personally affected by a question is a worse judge of what is right than one who is affected by it.

Senator Daly:

– His task is easier.

Senator DUNCAN-HUGHES:

– I may be wrong, but I believe that a man who is not deeply concerned personally is all [lie more likely to view a question impartially.

Senator Crawford:

– It is easy to be philosophic in regard to other persons’ troubles.

Senator DUNCAN-HUGHES:

– There may be something in that.

Senator Daly:

– There is no law to compel a member to draw his salary.

Senator Dunn:

– I suggest that the honorable senator should draw only £600, and hand back the remaining £200 to the Government to bo placed in the Consolidated Revenue.

Senator DUNCAN-HUGHES:

– I will not necessarily do that. I have no desire to boast, but the interjections of honorable senators constrain me to say that some years ago I did distribute to various charities in my State for three years the difference between what I considered was a fair allowance to members and the £1,000 I received. I did not hand it back to the Commonwealth, because I thought that institutions in my own State should derive the benefit of my action. I make no promise in regard to the future, and have no desire to refer to my action of some years ago, but am justified in giving in the Senate the same answer that I have already given on public platforms to questions on the same subject.

I am sorry to have taken up so much of the time of the Senate in dealing with this question of pensions. I realize that a man’s remarks arc frequently misunderstood, or even misconstrued and’ used against him. I am always prepared to hear the other man’s point of view, for I believe that it is essential that matters of national importance should be discussed fully from all points of view, so that our decision may be a wise one, in view of all the circumstances. In the matter of pensions, we have to decide what thi3 country can reasonably be expected to pay, having regard to the fact that the money has to come from people who in many cases are worse off than those who benefit.

Senator BROWN:
Queeusland

– I have been interested in the remarks of

Senator Duncan-Hughes, and later I may have a few words to say in criticism of them. The honorable senator is typical of those who support to the full the present economic system. He is one who is prepared to groan, and moan, and to see some of the people starve, notwithstanding that there is in the country sufficient for every one in it. If the nation were at war, we would find some means of providing for our soldiers so that they could go on with the work of destruction. It is a sad commentary on our boasted civilization that, with nature so bounteous that we have everything at our hands, we should be discussing whether we should or should not penalize the aged persons in our midst. If we had the same enthusiasm in the interests of the down-trodden and unfortunate as we exhibited during the late war, not one old person in this country would go short of the necessaries of life.

The Leader of the Government (Senator Pearce), in his somewhat unconvincing reply to Senator Collings, said that we must act as responsible men, not merely as critics. I agree with him. Every legislator should endeavour to place before the chamber some constructive ideas. I am reminded of the. statement of the Prime Minister (Mr. Lyons) in another place a few days ago upon a question relating to the time to be allowed to discuss a certain important matter. He said that, even if the House met on Sunday, it would make no difference to the decision that would be registered on the measure then under consideration, and other measures associated with it. He was confident that, if honorable members were to continue to debate for a further month, the result would be the same as if the vote were taken on the following day. Apparently, the same view i? held by Ministers in this chamber, even if expression is not given to it openly. It appears useless, therefore, for honorable senators sitting in opposition to offer any constructive criticism of the measures that come before them. I am convinced that, if only we had the opportunity to do so, we could improve the existing situation in Australia, and not continue to moan and groan about what is going on in other parts of the world. If we depended more on ourselves there would be plenty for all. If the criticism of honorable senators has no influence on the Government, it would appear to be useless to continue the debate. The position is like that of the boy who was eating an apple, when a companion came along and asked for a bite. He was refused. He then asked if he could at least have the core, but was told “ Thereaint going to be no core.” In certain journals the action of the Government in connexion with pensions has been described in somewhat lurid language. It has, for example, been said that this Government is pandering to plutocracy by pilfering the pensions of the poor. Senator Colli ngs has been credited with having a wonderful vocabulary. It may be that, by the time I have reached his present age, I shall be able to deal with the various subjects that come before me in the able manner of the honorable senator.

It has been said that, in providing these social services, we are pampering democracy, and indulging the poor. I agree with those who say that, if the Government were in earnest in its desire to help the less fortunate in the community, there would be no need to penalize the sons and daughters of pensioners. But the Government prefers to remit taxation instead of doing the fair thing by the aged in the community. Nations as well as individuals must be judged by the way in which they treat the aged and infirm. I remember reading a book written by Nansen in which he says that it is a custom of the Eskimos to throw their aged people over a cliff so that they may be dashed to death on the rocks below. Nansen tells of a girl who came to him and told him with pride that she had thrown her father over the cliff. She regarded it as an act of moral courage. Fortunately, we in Australia have gone beyond that stage. This Government does not propose to throw the aged in our midst over a cliff or over the railing of the Sydney bridge, but by the method it is adopting in this bill it is driving many of our aged people to an early grave. We have to deal with facts. During the last few days quite a number of aged persons - aged people are usually very timid and afraid - have told me that they are fearful of what is likely to hap pen to them. One old lady who will shortly be entitled to a pension, asked me if she should sell her property.I told her to wait; that possibly as a result of the influence of Senator Collings and some other honorable senators on this side of the chamber, the Government might adopt a different attitude. One honorable senator mentioned that the pension system was first introduced at the instigation of the late Mr. Alfred Deakin. I think I am safe in asserting that the Labour movement has at all times fought vigorously for an invalid and old-age pension system, and I believe that it was largely as the result of the action of the Labour party and the Labour movement generally that pensions legislation was placed on the statute-book of the Commonwealth. As far back as 1903, Mr. King O’Malley advocated the payment of an old-age pension. Quite recently I read a publication entitled Australia’s Awakening by Mr. Spence, who was once a Labour man, but afterwards changed his political views. Referring to the activity of the Labour party in bringing about old-age pensions, Mr. Spence says -

Outof the crisis we secured the passage of an Invalid and Old- Age Pension Act. It is the most advanced of its kind in the world. Labour had been urging the matter for eight years, and only secured it then by first pointing out to the Government how the necessary funds could be raised. On 24th June, 1903. Mr. King O’Malley asked Mr. Barton “Whether in view of the large surplus of the Commonwealth revenue, as shown by him yesterday he will immediately bring in a bill to establish a system of national old-age pensions.” Barton replied to the effect that the surplus went to the States, and to keep it would lead to the financial embarrassment of the States: and that there was not sufficient anyhow. At various times, Labour members have made other suggestions. Senator Pearce suggested taking over the tobacco monopoly and letting the profits provide for old-age pensions, and his motion embodying that idea was carried.

It is a pity that at this period in our history the right honorable gentleman has not some more helpful suggestions to make. Mr. Spence continues -

At last, Mr. Fisher revived the idea of setting apart and saving up the surplus revenue, and the Government agreed to it and introduced a bill accordingly, which went through the Parliament quickly. The bill for Invalid and Old-age Pensions followed it and went through the House of Representatives on3rd June, 1908, in one sitting, and passed theSenatenext day without amendment.

I believe twoyears lapsed before effect was given to that legislation. Honorable senators have been supplied with a good deal of information with respect to the history of the invalid and old-age pension system. According to The Australian Encyclopedia a bill providing for the payment of old-age pensions, introduced in the Victorian Parliament by the then Premier, Sir Alexander Peacock, came into force on the17th December, 1901. We have been informed, through the press, that there was some argument in t he ranks of the United Australia Party after the present Government’s first proposals were drafted, and that the Attorney-General (Mr. Latham), with the genius which he possesses, got his brains to work and formulated the amended scheme now under consideration. A paragraph in the Herald reads -

He was againsteven the appearance of surrender; but once agreement was reached bent his genius to a formula that conceded all critics could reasonably ask and which yet preserved the original saving on the pensions vote.

Apparently the Attorney-General was able to meet the criticisms of the members of the United Australia Party caucus, and at the same time effect a sufficient saving to enable the Government to balance its budget while remitting some of the taxation paid by those who, it is said, cannot afford to pay, but who are in a much better position to contribute to Consolidated Revenue than are the invalid and old-age pensioners. The measure introduced by Sir Alexander Peacock is similar to the pension provisions of this hill. On this point the encyclopedia gives us this information -

This act is notable for thenumber of its precautions and reservations, and for the care with which it tried to confine pensions to the enfeebled and utterly necessitous. It retained the clause in favour of those whose health had been injured by an unhealthy occupation -but no pension was to be paid under this section until the State treasurer had approved of it in writing. All claims were to be heard in open court.

I understand that certain action is to be taken if this measure is enacted, and that claims willbe considered in camera. The description of the Victorian system continues

In this Victoria followed New Zealand, not New South Wales, but the examination was to be before commissioners, not magistrates.

Notice of the hearing was to be sent to the police and to all charitable institutions in the neighbourhood, and the “ fullest evidence may be taken - whether strictly legal or not - as to the claim of the claimant “. The pension granted was a sum sufficient to bring a pensioner’s income from all sources up to8s. a. week; an exemption of 2s. a week was allowed; on earnings from personal exertion. If a claimant appeared capable of earning, or partly earning his living, the pensions commissioner could either refuse the claim, or could grant less than8s. a week. To be entitled to the two shillings exemption, the petitioner must have no more than£25 in goods of any kind. Applicants had to prove that they had made reasonable efforts to maintain themselves and, if they had a family, must show “ that the husband, wife, father, mother, or children of the claimant, or any or all of them, are unable to provide for or maintain the claimant”.

In discussing this measure this morning, the Leader of the Government in the Senate quoted certain legislation placed on the statute-book of Queensland, in 1914, and which is at, present in operation. I can go back further than that. From a Brisbane paper which is always opposed to any reform, I quote the following: -

In effect the principle upon which the Federal Government proposes to act is not new to English law. The Poor Belief Act of 1601, provided that every person shouldbe bound to provide necessary maintenance for his father and mother, but no liability to provide maintenance was imposed on any person who was not able to do so out of his own property or by means of his labour.

The Victorian scheme was launched in 1901. The Leader of the Government referred to what was done in Queensland in 1914, but the paragraph which I have read goes back to 1601. This press article goes on to showwhat was in the minds of tories centuries ago. Tories such as Senator Duncan-Hughes are always harking back to the “gold old days”-to the days i n which it was reasonably possible to pay old-age pensions, and when the taxation was much lower than it is to-day. Those whoare moaning and groaning should realize that to-day the world is richer and bettor than it has ever been. The members of the Labour party stand for the development of our economic system and for the proper organization of industry. Personally, I do not care if a man is paid£10,000 a year providing he is worth it. If the people of Australia work in unison there is no reason why the old-age pensioners should not receive a higher rate, why the basic wage should not be increased, and why some men should not be paid salaries of£10,000 a year. Senator Hardy believes that, by tampering with the exchange, we shall be helped out of our difficulties.

Senator Hardy:

-It will help everyone.

Senator BROWN:

– Has the honorable senator read the report of Sir Robert Gibson?

Senator Hardy:

-Yes, and I am satisfied with it.

Senator BROWN:

-In criticizing the speech of Senator Collings, the Leader of the Senate used the same words that . I heard 30 years ago. He spoke about destroying the moral fibre of the nation. As a boy I attended a meeting in the Old Country which was to be addressed by a real live lord. We have only had one lord in Australia; he was a fine gentleman, an eminent citizen. When the meeting to which I have referred was being addressed by this important personage, interjections were heard, which I do not like to repeat. This little weed of a lord, in a highpitched voice and with a cultured accent, told 2,000 colliers who day by day were engaged in winning coal from the earth, that if the workers of England and Scotland were paid 5s. a week upon attaining the age of 70 or 75 years, the moral fibre of the nation would be destroyed. To-day that same type of tory uses an identical plea. There is nothing derogatory in the acceptance of a pension. Judge Lukin. at one time a justice of the Supreme Court of Queensland, upon being placed on the retired list, became entitled to a pension, in addition to which he at the present time is drawing£2,000 a year as judge of the Commonwealth Bankruptcy Court. I suppose that his hand does not shake when he signs for his salary, and his moral fibre is not sapped by the drawing of a pension. What difference is there between him and the worker who has spent a lifetime in his occupation ? I do not wish to be accused of displaying bathos or of unloading sentiment on the Senate; but in my opinion the pension is a right and nota charity. This Government is giving it the appearance of charity, and by in stilling fear into the hearts of the people is making them disinclined to apply for it. Senator Dunn has referred to the “ pimps “ who are to be employed to pry into the private lives of the people. That is no figment of the imagination; it is stern reality. Possibly some work will be found in this direction for the members of the Commonwealth Police Force, if that body is still in existence.

I listened closely to the very able speech that was delivered on this measure by the Minister (Senator Greene). That speech, if analysed, will disclose the fact that there is very little fear of a deficit in the public accounts during the current year. The revenue that has been obtained during the first two months of this financial year has exceeded the estimate by £2,000,000. If that condition of affairs continues, the Government, as Senator MacDonald has stated, will have money to play with. Meanwhile, however, old-age pensioners and their families must suffer; and when a surplus is returned at the close of the financial year, it will be absorbed by a reduction in the taxation imposed. It is well known that when Mr. Scullin was Prime Minister, he was confronted with tremendous difficulties. He has been accused by our friends on the extreme left of having taken action similar to that which is now proposed. In fairness to him, however, it must be admitted that the difficulties which he had to surmount were far greater than those that have been encountered by the present Government. There was a considerable difference of opinion on the matter in the Labour movement throughout Australia, and thousands of good honest Labour supporters were bitterly opposed to the action which their Government took. Mr. Scullin, however, courageously accepted the blame for what was done. When the rate of pensions stood at £1 a week, inmates of charitable institutions received5s. 6d. a week, and when it was reduced to17s. 6d. their payment was lowered by 6d. But the present Government proposes to take a further1s. 3d. from them, thus reducing the amount to 3s.9d. That is not just to them, nor fair to the institutions in whose care they are placed. In many institutions some of the privileges that formerly were enjoyed have been withdrawn. That is the case at Dunwich, in Queensland. The Moore Government deprived the inmates of that institution of many amenities, including the supply of tobacco.

I contend that too much power is being placed in the hands of deputy commissioners, and that too much responsibility is being placed on their shoulders. The whole scheme rests on the provisions of the proposed new section 52m 1, which reads - lu order to ascertain whether or not any of the relatives (namely, the husband, wife, father, mother, or children over twenty-one years of age) of a pensioner are able, unci ought to contribute towards the cost of the pension of the pensioner, a Deputy Commissioner may, from time to time, send by post a notice to every such relative requiring him within the time limited in the notice, to make a proposal in writing for a voluntary contribution towards such cost, or furnish in a prescribed form a declaration as to his means and ability.

It appears to me that we propose to com pel a Deputy Commissioner to say whether or not a man or woman should receive a pension. It is grossly unfair to place this responsibility upon an officer, in view of the danger that some members of this legislature may be able to exercise influence that is not possessed by others in the direction of obtaining pensions for certain people. There is another point that ought to be mentioned. A Deputy Commissioner, after perusing the report that has been furnished to him, may say to the relatives of a pensioner, “ You cannot afford to contribute towards the maintenance of your father and mother, because you are spending what might be saved.” Let us suppose that instead of sending his children to a State school, a man has them educated at his own expense at a private school. There are thousands of parents in Australia who adopt that practice. I did so at one time with my three young Australians. Will a Deputy Commissioner, or any officer who has the right to say whether or not a man shall contribute towards the upkeep of his father or mother, be allowed to say to that man, “ You must send your child to such and such a school?” Let us take another case. A man may’ have his life insured for a greater sum than a Deputy Commissioner may consider is warranted, and he may be told that by changing over to a cheaper policy that will involve him in less expense, he will be able to contribute towards the support of his mother or father. I want to know definitely from tho Minister whether or not power will be vested in a Deputy Commissioner to act along those lines. If it is to be, every righteous man in the community must oppose it, and insist upon being allowed to allot his means in the way that he thinks best. There are some persons who begrudge the worker the enjoyment of a picture show entertainment. A Deputy Commissioner opposed to this form of entertainment might say, “You are spending too much on picture shows; you must spend less and contribute towards the upkeep of your father and mother.” I do not know whether these things will happen, but the possibility exists, and we must deal not only with the facts as we know them, but also with all the possibilities. For instance, Senator Daly’s father incurred considerable expenditure in his education as a member of the legal profession. Throughout Australia there are thousands of other parents who are animated by the same purpose, and desire to spend their money on the education of their children, so that they may have a better opportunity in life than their fathers had. This hill will penalize them very severely. It is really a form of dual taxation, because every working man in the community pays . taxation, either directly or indirectly, and is entitled to his just reward for his efforts in developing the country. Why should the thrifty section of the community bo called upon, as it will be under this measure, to bear additional taxation ? The man who has been a loafer and who. has no heed for the morrow will escape, but the thrifty citizen will be required to pay double taxation. I do not agree with the right honorable the Leader of the Senate that the man who is poor has necessarily been thriftless, and I submit that he should not be penalized as is contemplated under this bill. The royal commission appointed in 1906 to inquire into the establishment of a system of invalid and old-age pensions, made this recommendation -

Your commissioners are of the opinion that it should be distinctly laid down in the proposed Commonwealth legislation that oldage pensions should bo granted of right and not as a charity.

– That is so. We are all aware of the forces that were at work a few years ago to bring pressure to bear on the Labour Government. The Minister in charge of the bill said yesterday that the man who was prepared to do the unpopular thing was sometimes more courageous than the man who took the easier course. That may be said of the Labour Government in its attitude towards our social services. Distasteful as the task was, it had the moral courage to face the issue and do what, it believed to be right. But we are dealing with the present conditions, and have to consider the effect on our invalid and old-age pensioners of recent actions by this Govern ment. Relatives of pensioners will be expected to make voluntary contributions towards their maintenance, and if they do not comply with the act, they will bc severely dealt with. .1 am wondering if, in the administration of the law, contributions made by sons or daughters for the maintenance of their aged parents will be allowable as deductions in the assessment of income taxation. Since contributions _ to charitable institutions are allowable, a similar course should be followed in respect of contributions under the Invalid and Old Age Pensions Act. We have been told over and over again that taxation accentuates the unemployment difficulty, and the Minister in charge of the bill said that we should take the long view so that we might be able to get our people back to work. Actually we are all saying the same thing. I have made many speeches in which I have said exactly what the Minister said in support of this bill. We must get. our people back to work. Apparently this Government believes that we can become richer by .becoming poorer, and that we can get our people back to work, by sacking them. Surely it is obvious to every one that a policy of false economy means a lowering of the purchasing power of the community. Can any honorable senator supporting the Government, demonstrate to us that this policy of continually economizing will get us out. of our troubles? Quite recently, the West Australian, in an article dealing with unemployment, pointed out that the figures for Australia in the fourth quarter of 1930 were 23.4 per cent. In the first quarter of 1931, they had risen to 24.8 per cent., in the second quarter to 27.6 per cent., in the third quarter to 28.3 per cent, and in the fourth quarter to 28 per cent. For the first quarter of this year, the percentage was again 28.3 per cent, and for the second quarter 30 per cent. These figures prove conclusively that, despite all this economizing by governments in order to g-nt back to prosperity which, we are to’.d. is just, around the corner, we arc worse off to-day than we have ever been. If this Government’s policy is to be continued, how can we expect to improve our position? What is urgently needed is the adoption of a constructive policy which. will, make it possible for our people to become productive units again. We should take less cognizance of what lias happened in other parts of tho world. I admit that we cannot ignore what is happening elsewhere, but we should devote our energies to the re-organization of our economic forces. The Labour party has a policy which, if it could be put in operation, would release the economic forces of Australia and make it possible to increase greatly the wealth of this country. Can any honorable senator say that there is in the budget any proposal of a constructive nature likely to lead to an increase in the production of wealth?

Senator Johnston referred at some length to the efforts that were being made to increase- the output of a certain commodity, which is looked upon in the Old World as of real value. I speak of the output of gold. While we on this side of the chamber have our own ideas about financial reform we recognize the importance of the gold standard in our present system of capitalism. We are off gold parity; but gold as a measure of value has not beon destroyed. While we on this side desire to effect certain reforms, we realize that we must face facts. One of the outstanding facts is that gold is the commodity par excellence. If we had statesmen in charge of Australia, they would utilize the available labour to win more gold, in order that we might meet, our obligations to our citizens. Eather than pay the dole to men to perform work which is not essential, it would be better to employ them in producing that commodity which can be transferred to any part of the world, and bc exchanged for more wealth. Despite what is said to the contrary, the world is going ahead, and we must find some way of utilizing our surplus wealth. We must realize that Australia cannot move ahead steadily and evenly, providing employment for its people, by following a policy of economy which does not take into consideration all the facts of the case. Some years ago an out-of-work artist approached me, and asked for a commission to draw a cartoon for a newspaper with which I was associated. Although the paper did not make a habit of producing cartoons, I offered to do my best to find him a job which would return him a few guineas.

He said that, although good at drawing, he was short of ideas, and asked for suggestions. At. that time the “No Coat League” existed in Brisbane, its object being to show how men could economize in dress. I therefore asked him to draw a series of pictures; the first, to depict a worker dressed in all his best clothes; the second showing him without a hat; the third, without his coat and vest; the fourth without boots or seeks. The sixth picture was to depict him without any trousers, and the next almost as the Creator made him. The last picture was to be that of a draper standing outside his shop, on the windows of which was the sign “ Bankrupt stock for sale “ in large letters. My idea was to illustrate the danger of a false system of economy. We may economize to such an extent as to pauperize the community and drive business people into the Bankruptcy Court, in which case our second position is worse than the first. We on this side do not stand for economies of that kind; we recognize that false economy is bad for the nation. Instead of taking away from people, a sound economic system gives them more. The Government and its supporters have no other remedy than “ Take away, take away, take away.” The price of wool is down, and we are told that people cannot afford to buy suits because of the diminution of their purchasing power. The effect is to reduce still further the purchasing power of the community ; and thus the nation’s position becomes worse. At present Australia is dependent on the outside world to a considerable extent, chiefly in order that we may meet our obligations. We should be more self-contained. The newspapers a few days ago contained a paragraph intimating that Mussolini’s aim is to make Italy independent of the rest of the world in regard to wheat supplies. It pointed out that the production of wheat in Italy had increased by 250 per cent, during recent years. That is a most significant statement. Should Italy become independent of the rest of the world in regard to wheat, the world’s market for bur wheat will be restricted. Indications point to the Australian wheat crop this year being at least equal to that of last year. What will be the position if that wheat has to be sold in a glutted market? We should see to it that our secondary industries are more fully developed, so that a home market will be provided for our primary products. A few days ago I came across a newspaper paragraph which I think will interest the Senate. It reads -

page 900

HOW FAR WILL BUTTER SPREAD?

London, Sunday

Measuring the extent to which butter can be spread is among the activities of the National Physical Laboratory. The first step is towards comparing accurately the ability to spread butter after various treatments with u view to enabling the housewife to economize in butter.

In cold weather butter is squirted through a hole like a tooth-paste tube, the pressure required to force it through being measured with a delicate instrument.

That experiment should be of interest to the Government, and also to the old-age pensioners. This economy Government might even consider the preparation of a pamphlet and its distribution among the old-age pensioners in order to show them how they can spread their butter more thinly on I heir bread, and thereby assist in the rehabilitation of Australia. Certain scientists have told us recently that the people of Australia are now in better health than formerly, because they have eaten less since a Tory government came into power. [Extension of time granted.] The Minister in charge of the bill quoted figures in an effort to show how the poor of this country are being penalized in order to pay invalid pensions. I suggest to the honorable senator that if a referendum were taken there would be an almost unanimous vote by the poor of the community that no pension payable to the aged and infirm should be reduced. The poor are good to the poor. If we had a government of poor men in office, old-age pensions would not be reduced, nor would the relatives of pensioners be harassed. It is interesting to compare the expenditure on old-age pensions with that incurred in paying interest on our public debt. In 1912 invalid and old-age pensions cost approximately £2,2.16,000, and in 1931, £11,121,500. For the same years the interest on our public debt amounted to £10,465,000 and £51,747,000 respectively. To that £f>l,747.’000 there should be added £7,150,000, representing exchange charges on the £28,000,000 interest payable over seas. Honorable senators opposite have a good deal to say regarding the increase in the cost of invalid and old-age pensions, but very little about the interest on our public debt. Mr. Davidson, of the Bank of New South Wales, told us recently that Australia is paying in goods double what was paid five years ago to meet our obligations overseas, yet no effort has been made by the Government to reduce the interest Australia pays to the Old Country. Every year those payments drain from Australia over £28,000,000. The position is even worse when computed in goods. During the war the note issue was inflated many times. The money was not actually subscribed - credit was advanced by the banks - yet we to-day are called upon to pay the price. If we are to continue in this way it is the first duty of any government that has any regard for its aged people to come to some arrangement with the bondholders in the Old Country, so that we shall not have to reduce further our social services. The Government asks; what we would do. I suggest that the first thing to be done should be to approach the bondholders in Great Britain and demand a reduction of the interest charges. We should tell them that it is our bounden duty to look after our aged people in a proper way. The invalid and aged, as well as the institutions so eloquently referred to by Senator Duncan-Hughes, should have the first claim upon the financial resources of the Commonwealth. I charge the Government with a grave dereliction of duty, in that it has so far refrained from any attempt to bring about a diminution in the economic drain which is bringing so much injustice upon our own people.

Senator Sir HAL COLEBATCH (Western Australia) [4.17]. - The Leader of the Government in the Senate (Senator Pearce) has complained that other speakers have indulged almost entirely in destructive criticism. I do not claim that any effort of mine will be entitled to rank as constructive criticism, but I do propose to lay down, so far as I can, the lines that I think we ought to be following at present. They are to some extent in conformity with the proposals now before us, but in a way run counter to them. I look forward to the day when we shall hear the last of emergency legislation - the last of this and that expedient put forward to get us out of one difficulty, only to land us in another. Our troubles arise largely from the fact that we are more inclined to regard the present position as a passing emergency than lookupon it as more or less a fixed condition - an inevitable consequence of errors of the past. I do not think that the troubles arising from that condition will be removed until we have adjusted those errors. It is said that in nature there are no laws and no punishment, but only consequences; the inevitable consequence of folly is disaster. Australia, in common with the rest of the world, has been involved in disaster as an inevitable consequence of folly - not only the folly of war, but also the methods adopted to finance tho war. I shall not waste time at this juncture in a condemnation of war; but I propose to say a few words concerning the methods adopted in financing it, because I regard them, as being primarily responsible for the trouble in which we find ourselves to-day. It used to be recognized that there were three ways in which war could be financed- The first, and by far the best in the long run, is that of levying taxes. During tho Napoleonic and Crimean wars, one-half of the cost to Great Britain was raised in that way. There arc two other methods, not quite so sound, and upon which the nations of the world did not rely to finance the late war. Because of their failure to do so, we are paying the penalty to-day. These two methods are: borrowing direct from the people of the country and borrowing abroad, of which the former is the preferable. It has to bc recognized that all money borrowed for war purposes is unreproductive, and, therefore, throws an added burden upon posterity. But none of these three methods was relied upon during the recent war. Had any one of them been adopted at the outbreak of war and relied upon throughout some countries would have crumbled up through lack of finance. “We did not, however, bargain on the employment of two entirely new methods, that of borrowing from the banks, or from people to whom the banks were prepared to make advances for the purpose; and that of the direct creation of currency by the issue of paper money. The method Of borrowing from people who had borrowed from the banks operated in this way: If a person had saved up £1,000 and invested it in a war loan ho would receive a bond for that amount. Then when the Government wanted a further loan a person holding a bond for that amount could raise another £1,000 against it and lend that also. In those circumstances such a person would lend £2,000, although ho possessed only £1,000. The inevitable consequence was not only in this, but in the Old Country also, that the value of money decreased, and, consequently, prices rose. Australia’s total expenditure in connexion with the war was £340,000,000, and of that amount £70,000,000 was paid out of revenue, and £213,000,000 was borrowed locally, largely by borrowing and re-borrowing money that did not exist, and £50,000,000 was borrowed overseas. It is quite obvious that during the war the earnings of the people were smaller than at any other period in our history. It is equally clear that our expenses as a nation were very much greater because of the necessities of transporting and maintaining a huge army overseas and providing for the soldiers’ dependants at home. Yet, in spite of reduced earnings and heavier spending, wo seemed to become richer than ever. We know quite well that many individual fortunes were made, and that the savings of the rank and file increased. As a matter of fact, in 1914 the savings bank deposits in Australia amounted to less than £17 per head of the population. By 1919 they had increased to £25. The deposits in the trading banks on the eve of the war amounted to £163,800,000 or £34 per head of the population. But” at the termination of hostilities these deposits had increased to £249,000,000 or £48 per head of the population. Thus, with reduced earnings and heavier expenditure, every one was becoming richer. That was due to the fact that we refused to meet our war expenditure as it was incurred. But worse followed. The soldiers were coming back and it was recognized as an obligation on the community that something should be done for them. Had it been put to the people that they would have to renounce something and put their hands in their pockets for the soldiers’ benefit, I have no doubt that that would have been done. But we had learnt the fatal lesson that we could spend more than we were earning and still grow richer. Quite a number of persons believed that as we could borrow locally some £200,000,000 to prosecute the war, and at the same time increase the deposits in the banks, we should be able to do the same in order to help the returned soldiers. And we proceeded to do so. We provided £27,800,000 for the soldiers’ gratuity. We did not ask the community to renounce anything in order to provide that money. We inflated the currency to the extent of about £5,000,000, and met the balance by the issue of treasurybills. The result was a boom in industry, wages went up, prices increased, and we all became richer. The community was not called upon to renounce anything. Our method of settling returned soldiers on the land followed similar lines. Properties were purchased, land values increased, and business was stimulated in all - directions. Then, in the matter of soldiers’ homes, it was not a question of asking the community to give up something. War service homes were erected, wages increased, and the price of building material went up. It was not long before we found that homes that before the war cost £400 were costing £800, and to-day they are not worth the equity which the owners have in them. This is simply due to the fact that we gave the soldiers their homes under a method which enabled the rest of the community to get richer. And they were getting richer. Our savings banks deposits which had, during the war, increased from £17 to £25 per head, increased from £25 to £35 7s. 7d. per head in 1929. That is to say, the savings which had taken our people a hundred years to accumulate were doubled in fifteen years. Similarly the deposits in the trading banks increased until in 1929 they were just about double what they were in 1914; Is it any wonder that, when practically every country in the world was following this method of financing the war, Ave should have complete disaster at the finish? It is necessary for us to recognize that fact clearly before there is much chance of our getting on the right track in the matter of remedying the position in which we find ourselves to-day. Why is it that this depression is so prolonged and threatens to dra_g on still further? I do not intend to labour this point, but it is a fact, I think, well known to every honorable senator that there is not in any country, including that which is regarded as the high protection country of the world, the United States of America, a single economist who does not say that the prolongation and the intensity of this depression are due to the raising of tariff barriers by one nation against another, and that there will never be a sign of real return to prosperity until the nations resume normal trading with one another. What are we doing in Australia? It is unhappily a fact that while every one seems to admit the truth of what these economists say, no one is prepared to act. I do not think any one will dispute the fact that trade between the nations must be resumed before we can have prosperity. I do not know of any responsible person who will contradict that. Senator Brown referred to -the fact that Italy is now growing its own wheat. It is not the only European country that, because of this stupid policy, is growing its own wheat. Germany is doing the same but it is not a country suited to the production of that cereal. German wheat is so weak in gluten that a loaf of bread from which it is made crumbles when cut. That is an example of what is occurring all over the world. Every country is attempting to do what it is entirely unfitted for. Each may succeed in looking to itself but there can be only one consequence, and that is a tremendous lowering of the standard of comfort enjoyed by people all over theworld. I was interested in the remarks, of Senator Collings in that connexion.. To me they illustrated the extremelyclose association that exists to-day .between socialists and protectionists. Thesocialist, whether he be right or wrong, is perfectly logical. I cannot see how a man can be a socialist without being alsoa protectionist. I am confident that theprotectionist who believes that he is not a socialist has a very unpleasant awakening before him. Two or three years ago,.

Iquoted in this Senate an opinion from which I have not since had reason to withdraw my adherence. It was that of aFrench philosopher who, no fewer than 200 years ago, said -

The basis of civilization is the recognition of the rights of property. In so far as protective tariffs interfere with exchange and detract from the rights of property, protection and civilization are incompatible.

I firmly believe that we in Australia will find that our system of civilization, which is based upon the rights of property, is incompatible with the protectionist policy to which we are adhering. We saw in Melbourne the other day that the price the Labour party was prepared to demand for its support of a protective policy, is the socialization of all industries. Such an attitude is logical and reasonable. The affairs of Australia are being financed to-day by the adoption of the socialistic policy of the creation of credit by the Government.

SenatorRae. - It is a bogus socialism.

Senator Sir HAL COLEBATCH.That may be so. But I remind the honorable senator that it is about two years since the Commonwealth Bank informed the Federal Government that it had gone as far as it was safe to go in the direction of creating currency by the issue of treasury-bills.

Senator Sir HAL COLEBATCH.But the honorable gentleman and his colleagues are practising it, and that is very much worse.

Senator Sir HAL COLEBATCHIt applies also to the Commonwealth. The honorable senator has told us that the Government is dependent not only on the hypothecation of last year’s imaginary surplus, but also on the action taken by Great Britain and the United States of America in connexion with our war debts. In addition, the Commonwealth is making provision for the deficits of the States and providing loan money for them to spend in the relief of unemployment, by this utterly unsound agency, of issuing treasury-bills.

Senator Sir HAL COLEBATCH.The honorable senator is hardly fair to Professor Copland. Over and over again that gentleman has issued warnings against the continuance of this practice. I know that he says- and I am inclined to agree with him - that it is not so immediately disastrous as the actual inflation of our currency by the issue of notes. But even in that respect we have gone a tremendous distance. It is worth remembering that on the eve of the war the total issue of notes in Australia was£10,000,000, of which £5,000,000 were in the hands of the banks and only £5,000,000 were needed for the wants of the people. To-day, the issue amounts to £50,000,000, and there is very little gold backing to it. Consequently, we are really practising those two unsound methods of finance that have been responsible for all our troubles.

When the Minister interrupted me,I was about to make a few remarks following on points raised by the last speaker in regard to our war debts. It is a pity that there should be used by public men and others statements such as that we should demand certain concessions from our creditors or that we should refuse to do this or that. “We should make much more progress if “we acquainted our creditors and others with the exact position. To my mind, two factors must operate in regard to all borrowing, whether by an individual or by a nation, if it is to be sound. The first is that it shall be done in a stable currency in order that, when the time for repayment arrives, an equivalent value shall meet the value handed over. The second is, that the money shall be so spent that it will create sufficient new wealth to discharge all the services of the loan. Any private individual who borrows money in an unstable currency, and has to repay in real value more than he borrows, or who spends the amount borrowed in such a way that it does not increase his wealth, is bound to go to the wall. I am satisfied that the same thing applies equally to a country. All our war borrowing offended against those principles. Loans were raised in an inflated currency, with the result that the commodities we obtained were priced at double the value of those by means of which the loans must be repaid. It is also clear that the money then borrowed was spent in such a way as not to produce the new wealth necessary to discharge all the services of a loan. Coming to post-war loans, we have to admit that they were borrowed in an unstable currency. The second condition also applied very largely; not a single public works whether carried out by Commonwealth or State, a Nationalist or a Labour Government, has created sufficient wealth to discharge the services of the loan.

Senator Sir HAL COLEBATCH.Expenditure on a post office may be met by charging so much rent and increasing the rates paid by the public. Iam speaking of public works.

Senator Sir HAL COLEBATCH.If a post office which should cost£1,000 costs£2,000 or £3,000, it is absolute rubbish to say that the work is repro ductive if the only means of paying for it is by increasing charges. I am speaking of reproductive works that earn sufficient to pay the interest on capital expenditure. In many cases new postal buildings are erected in places where the existing building is capable of rendering the service required for many years, and should be made to do so.

Senator Sir HAL COLEBATCH.I remind the right honorable senator that when the Postal Department was taken over by the Commonwealth, the cost of running it was less than16s. perhead of the population, and that in 1929, before the reductions that have since been made came into operation, it was£2 10s. It is idle to say that the moneys that have been borrowed and expended on postal works have been reproductive.

The fact that borrowing is unsound for either of the reasons that I have mentioned means two things : it is disastrous for the debtor to repay and equally disastrous for the creditor to receive. That is evident in the case of the debts owing to the United States of America and of those that we owe to Great Britain. What is the position in America to-day? That country has all the gold that it can get from others. It refuses absolutely to take the goods of other countries. The only means by which a country can compel the payment of debts and at the same time refuse to take the goods of its debtors is by force. That is the curious position in which the people of the United States of America are placed to-day. They have to maintain a big army for two purposes, first, to prevent their debtors from repudiating their debts, and, secondly, to prevent those debtors from paying their debts. What is the position between Great Britain and Australia? Until a couple of years ago we did not, as a general rule, pay our interest. When a loan fell due, it was converted, and the annual interest was practically equivalent to the amount that we each year borrowed. We were able to buy from Great Britain approximately as muck as we sold to her in the year. What has happened in the last two years? We have been paying our interest by sending to the Old Country £30,000,000 or £40,000,000 worth of goods in excess of those brought to Australia. That has led to the undoing of both of us. It cannot be pretended for a moment that it is advantageous to Great Britain to receive from us in the form of goods £30,000,000 or £40,000,000 more than she sends to us. It is a fruitful cause of unemployment in the Old Country. Nor can it be pretended, except by shortsighted people, that it is of benefit to any country to export every year £30,000,000 or £40,p00,000 worth of goods in excess of those that it receives. Your imports are your receipts, and your exports what you give away. One cannot grow rich by giving away more than one receives. I know that the strange theory is held by some people that good is done to a country by the prevention of imports, because work is thereby provided locally. But, as one economist pointed out many years ago, there is nothing that a high tariff can do in that direction that cannot bc done very much better by a first-class earthquake. What is the position to-day in Australia, as well as in every other country in the world? livery reduction that has been made in the volume of imports has been accompanied by an increase in unemployment and by a corresponding reduction in local production. In 1930 we imported £94,000,000 worth of goods. In 1931 our imports were down to £43,000,000 worth, less than half the value of goods imported in the previous year, and we gloried in the fact that we had balanced our trade; we took pride in the knowledge that if imports were less, we were manufacturing more goods in this country. But what are the facts? Instead of the position being as stated by the Leader of the Opposition (Senator Barnes) last night, there was in 1931 an actual decrease of 1,000 in the number of factories at work in Australia, a reduction of £22,000,000 in the wages paid, to their employees, a decrease in the number of employees from about 417,000 to 338,000, and a decrease of over 24 per cent, in the value of the output of those factories as compared with the previous year. These are matters with “which we should concern ourselves instead of being content to pas3 emergency legislation which, after all, is merely a palliative and so much fiddling with the real business that should be taken in hand. Our first concern should be to correct the errors of policy which have brought us into our present position.

Something has” been said by one or two speakers this afternoon about our Australian standard of ‘ living. The honorable gentleman who has just resumed his seat (Senator Brown) emphasized the necessity for keeping up wages in order to maintain the purchasing power of the community. No more monstrous fallacy could be enunciated either in Australia or anywhere else in the world. When the depression struck the United States of America, the employers, led. by Mr. Henry Ford, probably one of the biggest employers of labour in the world, believed that, the situation could be met by keeping up wages and thus maintaining the purchasing power of the people. The Labour leaders and politicians naturally accepted that same view, and the two political parties endorsed it, thinking it was an easy way out of the trouble. But notwithstanding the enormous wealth of the United States of America, the unemployment problem steadily grew worse. Why? Senator Brown supplied the reason, although he did not realize it, when he said that what was wanted was the adoption of some system that would move evenly along. In America, like Australia, one half of the population is dependent upon wealth raised from the soil, and with the reduction of prices that followed on the financial methods adopted during and after the war, the income of the primary producers was cut in half. We should have avoided a great deal of our unemployment trouble if there had been a corresponding reduction in costs of the things made by secondary industries, because then the purchasing power of that half of the population to which I have referred, although it was cut in half, would still have been sufficient to enable as much to be bought as was bought before. Naturally, there has been stubborn resistance in all sheltered industries against any reduction in “wages. Our arbitration courts have been appealed to for the purpose of maintaining high wages in the belief that if we could only keep up prices we should be better off. But while our arbitration courts and industrial organizations have been keeping up wages in sheltered industries, unemployment has been increasing from day to day. We have done one or two small things to meet the trouble. One was the devaluation of the Australian pound. Then the reduction in wages which has taken place has had the effect of reducing to some extent the prices of manufactured articles, and by that means has increased the purchasing power of men whose income cannot increase because it comes from the soil. That even progress to which Senator Brown referred will never be achieved until our industrial leaders get into their heads the fact that what is wanted is reasonable equality between all sections of the community so that the things made by one section may be purchased by another.

I should be the last to indulge in criticism of a judge, but I cannot help reminding honorable senators that one of our Arbitration Court judges, when dealing with the application of the Australian Glass Company the other day, pointed out that as the company was in the enjoyment of a monopoly, and was making big profits, its£1 shares being quoted in the market at 44s. 6d., it should be compelled to pay its employees a good wage. The point that should be emphasized is that it will be impossible for our industries to progress until they can produce in competition with the rest of the world. What we have to do is to devise means by which we can protect our primary producers, the men who have to depend upon the world’s market for the profitable sale of their produce.

Senator Sir HAL COLEBATCH.I donot care. It was the argument employed by the judge, and upon which be placed some reliance. I am not quarrelling with it. I recall what I said a little while ago, that the protectionist who fancies that he is not a socialist is due for a rude awakening. It seems to me clear that if the boss or shareholder inan industry is to take his full share, there is no reason why the worker should not get his share. But my objection is that if we are to have that even progress to which Senator Brown referred, we cannot continue the policy of paying high wages’ in sheltered industries regardless of their effect on the unprotected industries. Unless the purchasing power of that big section of our community represented by our primary producers is increased, there will be nobody to buy the things which we manufacture. If the Government realized the danger, if it took action to correct its currency errors and the difficulties due to the erection of barriers against trade with other countries, we should get out of much of our trouble. Arbitration cannot function without a high tariff, and it is a demonstrable truth that high costs in some industries and low prices in others mean a reduction in purchasing power. Only by correcting these errors can we hope to bring Australia back toprosperity.

Our first duty should be to set our economic house in order. Percentage reductions in expenditure are really of not much use so far as the Public Service is concerned. What . the Commonwealth should do is to retire gracefully from those activities which it was never contemplated should be undertaken by the central government. I believe that this Government is doing something in that direction.

One step to be taken is a return to the convertible note. Every authority on finance in every country has emphasized the extreme danger of control of governmental finance with a nonconvertible note issue.

Senator Sir HAL COLEBATCH.Yes. Gold is the only available basis of convertibility.

Senator Sir HAL COLEBATCH.Whatever the feeling may have been a year or two ago with regard to gold as the standard of value, it is practically the settled opinion of financiers and economists the world over that whatever imperfections it may have, gold is the only standard to which we can return. The gold delegation of the League of Nations endorses this opinion. The idea that the gold supply of the world was insufficient has disappeared. No authority of any standing now takes that view. I have said that we should return to the convertibility of the £1 note, and T. am asked on what basis is should be converted. To return to the old basis of 113 grains pure gold would be ethically monstrous and economically impossible because we have to keep in mind the fact that one-half of the currency in the form of deposits in bank balance-sheets, &c, never was real. In this way, we have been doing an injustice, as between debtor and creditor. The soldier settler should have restored to him hi3 equity in the property which he is buying. The Government Kas given some consideration to proposals for relief, but these have not touched the fringe of the problem. It has given a temporary - I was about to say paltry - relief <to these men. The fact is that, through currency expansion, many of our soldier settlers have been deprived of their equity in their properties. Until we restore that equity to them, .and wccan do that only by returning to the gold standard on a reasonable and proper basis, we shall not be doing the right thing. I suggest, also, that there is grave danger in leaving the home buyer or the buyer of farms without a just proportion of his equity in his property. In the United States of America, an outstanding danger is the fact that a people accustomed to a high standard of comfort will not accept poverty as readily as a continental community accustomed to a lower standard. We in Australia have felt that we were removed from the danger of communism and bolshevism, because so many of our people own their farms or are purchasing their homes. We cannot refrain, from restoring the value of the equity of the home or farm buyer without endangering our social system. Whatever we do, we cannot avoid doing an injustice to some one; we cannot commit these abuses and put’ them right without causing hardship. We have to consider what, in all the circumstances, is right for us to do. I have no hesitation in saying that inasmuch as we practically doubled our currency during, and after the war and put into circulation money that did not exist, we ought either to stabilize our £1 at the present time on a right basis, or else allow it to reach its ordinary level by withdrawing those restrictions on trade which now give it an exaggerated value. My own opinion is that the former course would be the better one to pursue.

Senator Sir HAL COLEBATCH.There never will be stability in conditions until it is done. All business is hamstrung by this uncertainty as to the value of currency. I say emphatically that we shall never get governments to economize until they are forced to redeem their currency. Only in that way will we stop the issue of spurious money. My opinion is that a proper basis is considerably below the present value of our £1. I know that it has been contended that because we have met our obligations at Home, our exchange is too high, and that our Australian £1 is valued at too low a figure. Against that I would say, first, that we have had two good seasons, and that a primary-producing country must always make allowance for bad seasons by building up a reserve; and, secondly, that if we are to regard exchange as the value of a nation’s currency, it can only be done by allowing a normal flow of trade. If the producer for export were able to spend his money in his own way, and buy in the market in which he has to sell, there would be such an increase of imports into Australia as to destroy the present large balance of exports over imports. It would demonstrate that the valuing of the Australian £1 at £125 to £100 sterling is over-valuing it. I do not care much which step we take - whether we remove the restrictions on trade, and allow producers to buy as they like, in which case we should see to what extent imports increased and whether we could maintain our present values; or whether we should take the bold, and in my opinion the right step of restoring the value of our note to a basis which we can maintain. If we took the second course, we should find that the value of the note would not be much more than one-half of the nominal value of 113 grains of gold to the pound. If we were to pass an act embodying the same principle that applied to the redemption of Bank of England notes, we should find where we stood. I am confident that neither now, nor at any other time, has it been safe for any person, government or private banker, to have authority to issue currency without the obligation to redeem it in something of world value.

I shall not deal at length with the details of the bill. I take it that all honorable senators are agreed that it is regrettable that the country can no longer continue to pay pensions on the old scale. Whether we like it or not, we have to put the finances of the country in a sound position, otherwise the most deserving pensioner will not be able to get what we consider he is entitled to receive. I shall support the bill largely because I have all along advocated governmental economies. I shall continue to do so, notwithstanding that I may not be in agreement with the processes to be adopted. I see a very real danger in these proposals. In the first place, they are likely to add to our existing army of public servants. It will be necessary to have a considerable staff to hunt, around to find out whether relatives are able to contribute to the support of their parents. Moreover, the administration of the act will probably prove complicated. There is a likelihood of its being administered differently in various parts of the Commonwealth. It is indeed questionable whether the saving that will be effected will compensate for tho new army of public servants. I spent an interesting week-end recently at Griffith, where there is provided a splendid illustration of the wonderful achievement of individual effort and initiative and the paralysing consequences of governmental interference. I learned that there is at Griffith an army of public servants engaged in doing nothing else than keeping an account of the amounts owing by people who do not pay them, and never have paid them. Not’ only are these people an expense to the country because they do not pay what they owe, but their non-payment also means expense in paying an army of public servants to record their shortcomings.

While not called upon to express my own opinion at this stage, it should be made clear whether the old-age pension is a right or a privilege.

For the generous strength of the arm which labours you . have substituted tha shameful power of the hand which begs. Wo have already the unemployment of riches: you have created the unemployment of poverty - a hundred times more dangerous to itself and to others.

Senator Sir HAL COLEBATCH.If the Assistant Minister reads the cables which appeared in the press - I am thinking more of the correspondence I have had with Mr. Hamilton - he will find, I think, that they are opposed to the price of £5 10s. I trust that the Assistant Minister will let us know definitely whether the investors in England are entirely satisfied, and I am thinking of them more from the viewpoint of keeping faith with them. We do not want it to be thought that we are running away from our acts of Parliament. If we can satisfy them that we are doing a fair thing many of the objections with respect to the suspension of the bounty will disappear.

I trust that these two points which I have brought under the notice of the

Government will be further considered. The first is that the bounty shall be continued for a full ten years when it is re-established, and the other is that, if we are to set an Australian and British limit, it should be in conformity with the exchange rate as it exists at present; is should be based on a difference of 20 per cent., and not the 10 per cent. provided in the bill.

On the general question of bounties, I trust that the Government, as a means of putting its financial house in order, will give serious consideration to the suggestions made with respect to assistance to other industries which are equally prejudiced, and which would not claim a bounty but for the burden placed upon them by our unnecessarily high protection policy, the Navigation Act and other similar enactments. In this connexion, I refer more particularly to the wheat industry in Western Australia. I take the responsibility, without having consulted my constituents, of strongly recommending for federal consideration the suggestion made by the South Australian Wheat Producers Freedom Association, which, if adopted, would cost the Government less than the amount paid in the form of a wheat bounty last year. That suggestion provides for a bounty on superphosphates similar to that in operation in New Zealand, and which, I think, would be a means of more justly distributing the benefits among the growers of wheat. It would also have the other effect, at which we are all aiming, an increase of production. That is the chief merit of the gold bounty. It has increased production, and consequently increased employment. I believe that that is unanswerable. Those engaged in the wheat-growing industry are entitled to further consideration, because of the burdens placed upon them by means of the Government’s fiscal policy.

Senator Sir HAL COLEBATCH.That may be so. There are some details which would have to be more fully considered, but if superphosphate were available at a cheaper rate, the production of wheat per acre would be greater. The objects set forth in the document to which I have referred appeal very strongly to me.

Briefly, the best way in which to get out of our present troubles is by some realignment of our politics, lt is not a question of Labour or antiLabour ; we are all more or less labourers. It is a question of an absolutely clear division of opinion as to what is the best policy under which the country can carry on. Most of my friends in Opposition know where they stand. They believe in the socialization of industry, while I believe in a system of civilization based on the rights of property. I contend that ;such a system is best for the whole world. *[Extension of time granted. * There should be some clear division between political parties. There should be one party advocating development on the principle of the rights of property and another the development of Australia by the complete socialization of industry.

Able senator suggest that we should overcome the divergent view3 with respect to greater production with less labour?

Senator Sir HAL COLEBATCH..One has no right to create currency un less one is prepared to redeem it on demand. But to return to my point: there is not the slightest doubt that if, for instance, the ex-Treasurer (Mr. Theodore) submitted a measure providing for the nationalization of banking, it would be immediately turned down, because every one knows that he is a socialist. But the action taken in New South Wales of making the rural bank an ordinary trading bank is not causing any one to worry. It is not regarded as socialism, because it is being done by Mr. Stevens. The troubles brought upon the people in this way will be the same as they have been in connexion with all other socialistic experiments. It does not matter whether the result is war or financial depression, these socialistic theories break down. What has happened in the past? We have ‘’ collared “ the leaders of our political opponents and made them our leaders. There has been such leadership under Mr. Ramsay MacDonald, Mr. Hughes? and Mr. Lyons. They have been, or are now, leading anti-socialistic parties. They contend that they are as good Labour men as ever they were ; but that is beside the point. I do not. care whether they are good Labour men or bad. What I want to know is whether they have abandoned their faith in State socialism, and are endeavouring to lead Australia in the right way. While the right honorable member for North Sydney (Mr. Hughes) was leading the anti-socialist party, he was fruitful in the introduction of socialistic nostrums, such as the coal vend, the purchase and construction of ships, the sugar embargo, and other activities which were consistent only with the carrying out of a socialisticpolicy.

We have a clear definition of socialism ; it means the control of economic forces by political power ; but I want to reverse the order by seeing that whenever we find control of economic forces by political power we should suspect socialism. I am grateful to the Senate for having granted me an extension of time. I have nothing further to say, other than to emphasize the point that we should get rid of these emergency measures - these expedients for getting out of our troubles - and get back to the straight track. Personally, I would sooner see our friends in Opposition in power trying to put Australia on the track by a policy of socialism, than those who, although professing opposite doctrines, introduce State socialistic theories into their policies.

Senator RAE:
New South Wales

– The speech of the honorable senator who has just resumed his seat is in many respects most enlightening; but its value is considerably discounted by his extraordinary definition of socialism.

Senator Sir Hal Colebatch:

– That is the dictionary definition, not mine.

Senator RAE:

– I have hunted through a score of dictionaries and have not seen such a definition, Certainly I said “ Hear, hear!” when the honorable senator stated that anti-Labour governments had given effect to socialistic nostrums. The world is full of such nostrums, but they are not socialism. Whether or not we are entitled to the treatment that is meted out to Communists, of being deported, imprisoned or fined, unquestionably we should not have fastened upon us in the name of socialism that which is nothing of the kind. If we are to be condemned at all, let it be on our merits or demerits, and not according to a false idea of what constitutes socialism.

The honorable senator said that protection and socialism were inseparable.

It is beyond refutation that if we had a socialistic world tariff barriers would be entirely abolished. Instead of socialism being synonymous with protection, the reverse is the case. I am not one of those who look upon fiscalism from either angle as being founded on some fundamental principle. On the contrary I regard it as an expedient. Great Britain professes to have adopted a measure of protection largely with a view to enabling her to bargain with other nations. I realize that in a protectionist world a freetrade country may be given a particularly bad deal. But the present tendency of different countries to keep in watertight compartments and, while declining to take the products of others, seek to dispose of theirs outside their own borders must lead only to greater disaster.

– And what a mess they made of things !

Senator RAE:

– They won the war. I admit that there was some extravagance due to the general inflation, but governments did what private enterprise could nOt do. Indeed, they embarked on these undertakings only because private enterprise had failed. I do not say that in every case the governments made a huge success, but they succeded where private enterprise had failed. When a nation is faced with disaster, governments can do what private enterprise finds impossible. Private enterprise does not organize military forces or wage war ; those things are done by governments. Wrong though its purpose may be, there are no more perfect organizations than the military or naval forces of the great powers. History has shown that where a government has supreme power, it can do things effectively. There is no more despicable individual than he who takes advantage of the helplessness of the blind or the poor. Society regards more highly the courageous murderer, whose enterprise requires some pluck, than it does the sneak thief who robs the blind, the aged and the helpless. Occasionally, we hear of a person so brutal that he is prepared to knock down a poor old lady to steal her handbag, or of one guilty of robbing a child or a blind person. Such a person causes in all decent citizens a feeling of utter disgust because of the despicable nature’ of his crime. This Parliament is asked to rob the sick, the maimed and the blind by reducing their pensions. Aud at the same time we talk about the sacrifice made by others!

I do not pose as one who would, in certain circumstances, vote for the reduction of the allowances of members of Parliament, for I do not believe that they are at all extravagant; but I should be willing to be even more heavily taxed than I am rather than that further demands should be made on the old-age and invalid pensioners. There is no justification for reducing the allowance to members of Parliament, but if it is essential that a sacrifice shall be made, I maintain that those whose physical and mental faculties are in good condition, can better endure hardship than can those who are suffering from infirmities, either of sickness or of old age. We talk glibly of equality of sacrifice. In the minds of many honorable senators it would appear that equality of sacrifice means that all surrender the same amount. That is a wrong conception ; the real measure of equality is not what is surrendered but what is left. A man with an income amounting to some thousands of pounds a year may give away many hundreds of pounds; but his sacrifice is not nearly so. great as that of another person who, out of an income of a few pounds, hands out as many shillings. We ought to recast our ideas about equality of sacrifice. I should like to see the income of every person in the community brought down to the basic wage, or below it; I would let none escape. That in my opinion would be equality of sacrifice. Many of the commercial men in our cities have incomes amounting to thousands of pounds per annum. I would bring their net income down to that of the working man. My proposal would not mean any interference with their business, since it would effect only their net income. If I can live on £600 a year, so can Sir Samuel Hordern.

Sitting suspended from 6.15 to 8 p.m.

Senator RAE:

Senator O’HALLORAN:

-If, in February of last year, we had received loyal support from that section of the Labour movement known to-day as the New South Wales Labour Party, and from its leader, we could have successfully forced the issue. I well remember what happened at the Premiers Conference in Canberra at about that time. The proposals agreed upon, representing the policy of the Federal Labour Government, were accepted by Mr. Lang, the then Premier of New South Wales, on one day, but on the following day he informed the conference that he had evolved a plan of his own.

To-night, I do not intend to transgress the Standing Orders by advancing arguments with reference to the Lang plan. All that I need say is that it was not the plan of the Australian Labour movement. The policy of the Scullin Government had been accepted by a majority of the Labour Premiers at the conference, and if our colleagues from New South Wales had also given it their loyal support, as they should have done in the circumstances, the fight which Senator Rae suggested should have been made over the issue could have been successfully launched and much of the travail through which many good supporters of our movement have since passed, as well as much of the recrimination that has been indulged in, would have been avoided.

The alternative to the late Government’s financial proposals was partial default on all payments with resultant chaos throughout the Commonwealth. As the result of the great efforts then made, and of the sacrifices accepted by all sections of the community, some of them absolutely unjustifiable, the position today is entirely different. The present Government inherited from the Seullin Administration a surplus for the last financial year of £1,300,000. It is true, as the Assistant Minister (Senator Greene) stated yesterday, that this stirplus is only a book surplus. There is still a deficit of approximately £17,000,000 in Commonwealth accounts which the Australian taxpayer will be called upon to discharge at some future date. The late Government produced a surplus last year by ignoring our responsibility for the payment of £4,900,000 to Great Britain, representing interest due on the war debt owing to the British Government which we were not called upon to pay because of the provisions of the Hoover moratorium having been extended to Australia. The setting aside of that commitment for the time being is justified. Australia is not the onlY country which is not meeting its war obligations. Germany is not making her full reparations payments; Great Britain is not collecting the amounts which she lent to her allies during the war, nor is she, in turn, paying to the United States of America interest on the large sums borrowed from that nation. The whole question of war debts and reparations is the subject of negotiations, and in the meantime payment has been temporarily suspended.

Let us now deal with those factors which cannot be avoided. The budget reveals that had the Government maintained the scale of expenditure and receipts set down by the previous Government, there would have been, no deficit this year. I do not charge the Government with having inflated expenditure; I do charge it with having deflated receipts. Notwithstanding that one of the cardinal principles underlying the Premiers plan was that the maximum of economy should he exercised, and the greatest possible amount of revenue obtained by all the governments of Australia over a period of years until budget equilibrium was achieved, the present Government, scarcely twelve months after the plan was agreed to, proposes to depart from it in a material manner in so far as revenue collections are concerned. The budget speech informed us that remissions of customs duty, estimated at approximately r.3i] £800,000, are to be made during this financial year. Remissions of sales tax after allowing- for an increase in the amount to be derived from this source, are estimated to be £175,000. The total remissions of sales tax and primage duty are expected to be about £450,000; but additional revenue is anticipated in other directions, making the net reduction about £175,000. The Government claims to be making these remissions in the interests of primary producers. I know that these people are experiencing one of the most difficult periods in their history; but if a ballot of primary producers were taken, I feel confident that it would reveal that they would not accept any remission of sales tax or primage duty at the expense of the old-age pensioners of this country. Not only does the Government propose to make remissions of taxation totalling about £1,200,000 ; but it has also been unduly pessimistic regarding the estimates of revenue from other sources. It anticipates receiving £356,000 less “from land tax this year than last year. The Prime Minister told a deputation recently in Canberra that one of the first taxes which ought to be reduced was the federal land tax. Suggestions have been made that, pending a reduction or remission of taxes, taxpayer^ should avail themselves of the hardship clauses of the act and seek immunity from payment for the time being. Are taxpayers to be encouraged to seek immunity from taxation, whether they can pay or not, because of possible remissions of taxation at a later date? I am reminded that a similar procedure was adopted some years ago in connexion with Crown leaseholds.

Senator Dunn:

– Was Sir Sidney Kidman affected by that decision?

Senator O’HALLORAN:

– Yes. He and other big land-owners in Australia benefited considerably from the action of the then Government. Compared with last year’s returns, the estimate of the receipts from income tax this year shows a big falling off. Last year nearly £14,000,000 was derived from income tax by the Commonwealth; this year the estimated revenue from that source is about £3,481,000 less. Supporters of the Government are urging that the rate of income tax should be reduced. The returns available disclose that already the receipts from all sources are approximately £2.000,000 more than the Treasurer anticipated, showing that his estimate was not even an intelligent guess. I wonder if this underestimate is the Government’s way .of justifying remissions of taxation to certain privileged sections of the community on the ground that if the budget is balanced the remissions should be made. I agree with the Minister that reductions of taxation are desirable, and should be made at the earliest possible moment; but I do not agree that they should be made if it means that the burden of balancing the budget is transferred to the aged and the infirm of this country. Who would benefit from any reduction in the land tax, or in the income tax on incomes derived from property? Since under the land tax property of an unimproved value of £5,000 is exempted, only those with large holdings would benefit from any reduction. The exemption in the case of income derived from personal exertion is £300, and in the case of income derived from property, £200, together with other statutory considerations in each case. Thus, a person who holds sufficient property to require him to pay federal land tax or income sufficiently great to render him liable to pay federal income tax, is more fortunate than the great bulk of the people of this country. The poor investors and the lower-paid workers, particularly those on the basic wage, would not benefit from any remission m the federal income tax on incomes from property, and not one of the smaller farmers and graziers would be affected. The Minister attempted to justify the Government’s proposal by saying that in two years the Commonwealth had imposed new taxation amounting Co £16,000,000 ; but he failed to explain that that new taxation was not rendered necessary by any increase in expenditure. If we had first increased expenditure by £16,000,000. and then increased taxation by a similar amount, we might be justified in accepting the advice of the Minister to consider whether some reduction in the outgoings from this Parliament is not possible. But what is the actual position? The Premiers plan was founded on the revenue and expenditure for the year ended the 30th June, 1929. Most of the Minister’s comparisons were based on the figures for that year. The expenditure from revenue in that year was £77,253,774, while this year the estimate is £67,287,622, a reduction of approximately £10,000,000. Those honorable senators who speak of the need for rigid economy must be forced to realize that, considering the limited sphere available to this Parliament to economize, substantial reductions have already been effected; and they were made, not by this Government, but by the previous Administration.

In. the matter of loans, the expenditure on behalf of the Commonwealth in 1929 was £8,231,000, and this year it is proposed to expend £1,706,000, so that the total reduction in revenue and loan expenditure since 1929 is approximately £17,000,000, showing either that the Government in power in 1929 was guilty of wilful extravagance, or that today we are, as a result of the efforts made by the late Government, exercising the most rigid economy. I venture to say that a combination of both these circumstances has produced the condition to which I have referred. In examining thetotal expenditure of the Commonwealth, we find that huge sums are earmarked for such matters as these: Payments to or for the States, including expenditure to meet disabilities experienced by some of the States; interest and sinking funds on State debts under the Financial Agreement; payments towards the construction or maintenance of roads under the federal aid roads scheme; pensions to soldiers and their dependants; interest and sinking fund on Commonwealth debt, and many other items which are either irreducible or that thisGovernment maintains shall not be cut. In view of all the circumstances, it must be admitted that Parliament has done well. If it were necessary to make further reductions to balance the budget, it is the obvious duty of the Government to spread the sacrifice over nil sections of the community, as was done by the late Government. No attempt has been made to do this.

Senator Daly:

– The preamble of the principal act suggests that it should be spread over the whole of the community.

Senator O’HALLORAN:

– Yes. Many important and effective provisions in the principal act have been . amended ; but the preamble, if it is to remain, will be a mockery and a sham. The act as amended in the manner proposed will not secure the equality of sacrifice intended under the principal act, but will impose undue hardship, sacrifice, and suffering upon only one section of the community.

Four sections of those entitled to payments from the Federal Treasury have been selected by this Government in order to effect the proposed saving of £1,420,000, which we are told is necessary if the budget is to be balanced. Of this amount invalid and old-age pensioners are to contribute £1,100,000, the Public Service £240,000, those in receipt of the wine and gold bounties £74,000, and beneficiaries under the Maternity Allowance Act £60,000. Here, again, we have a. striking example of the inequality of sacrifice which will accrue from the adoption of these proposals. The Scullin Government, facing a. deficiency of £20,000,000, spread the percentages of sacrifice in such a way that invalid and old-age pensioners were asked to bear 1 per cent, of the burden, and the other sections 92$ per cent. This Government, however, restricts the avenue of sacrifice to the four sections mentioned, and asks the invalid and oldage pensioners to hear 75 per cent, of the total sacrifice. It will be a lasting disgrace if a measure so shockingly inequitable is placed upon the statute-book.

The Assistant Minister (Senator Greene) attempted to justify the reduction in pensions and the maternity allowance by referring to the growing cost of social services in Australia. He compared the figures for the current year with, I think, those of 1912. Let us examine the position. Even admitting that there has been a striking reduction in the national, income during the last three years, that income to-day is still double what it was in 1912. Is thi3 Parliament and this Government so ‘incompetent that it cannot pass on to the aged and the infirm, and to all those in need, at least some of the benefits of the increased productivity brought about by the use of modern inventions ? Are these unfortunate people to be treated in such a way that, as Senator Brown suggested, their butter must be spread through a force pump? A few years ago the condemnation of the Labour party consisted principally of accusations that the workers were indulging in a “ go-slow “ policy. We were told that by adopting modern methods and increasing production the standard of the workers would improve, and that they would enjoy better social services. In recent years the workers have broken many records; they have increased production as a result of the mechanization of industry; but now we are told that the benefits which were to be available are not to be theirs. The Assistant Minister did not mention that, as a result of increased production, there bas been a glut in certain commodities, and a tremendous volume of unemployment necessitating last year the expenditure of £12,000,000 upon relief. Unemployment is” largely responsible for the present cost of our social services. I agree with the contention of Senator Colebatch that the Government is, in effect, attempting to patch a rusty tank with a piece of new iron. Years ago we were told that if production was increased there would he new hope for the workers. The assistant Minister, in defence of the Government, referred to what was done in 1921. In that year, he said, there was an increase in the rate of invalid and old-age pensions, which he attempted to justify by saying that in that year a -surplus of £2,500,000 was carried forward from the previous year. If the Minister were logical, he would admit that as there was a surplus of £1,300,000 last year pensions should not be reduced this year. He also dealt at some length with the increase in the number of pensioners, both in the aggregate and in proportion to our population. He contended that when the pension rate became more attractive the number of applicants increased. That is an unworthy suggestion. The real reason is that simultaneously with each increase in the rate of pension there was an increase in the maximum income which the pensioner was entitled to receive. That has been the case with every increase in the pension. Under the original act the maximum income permitted to a pensioner, including the pension, was £52 a year. By various amendments of the act the pension was increased from 10s. to £1 a week, and the maximum income to£84 10s. a year. Consequently, each increase in the pension, with the consequent raising of the maximum income, automatically enlarged the number of those who were eligible for some pension.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

-The difference was caused principally by the raising of the pension from£26 to£52 a year. The income that a pensioner could earn was increased on only one occasion, and then by only£8.

Senator O’HALLORAN:

-Spread over all pensioners, that made a considerable difference.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– It made very little difference.

Senator O’HALLORAN:

– The greatest increase in the ratio of pensions occurred during the last three years, and that was due principally to unemployment. I have in my hand a table that completely disproves the Minister’s contention that our people have become less thrifty as a result of the pensions provisions being made more attractive; that they are not endeavouring to provide for their old age as they were forced to do before the system was introduced. On page 120 of the budget papers, there is a table which shows the age of the pensioners who were admitted during the year ended the 30th June, 1931.With a few exceptions, males become entitled to a pension on attaining the age of 65 years, and females on attaining the age of 60 years. Adopting a twoyears’ margin, I find that out of a total of 12,405 admitted last year 6,822 were 67 years of age or over, a considerable proportion being more than 70 years of age. The position is even more pronounced in the case of female pensioners. Out of a total of 12,730 who were admitted, 7,245 were 62 years of age and over, the age of one lady being 97 years. Thus out of a total of 25,135 pensioners who were admitted during that year 12,828 were entitled to the pension for two years or more before it was granted to them. That proves that our old people to-day possess the splendid independence that has always characterized Australians, and that the reason why so many are now seeking pensions is that, owing to the depression and consequent unemployment, they have been deprived of other means of support that up till now they have enjoyed. This measure, and the unkind remarks of some honorable senators, are their only reward for the splendid independence that they have shown.

In considering the proposals of the Government, the first question to be decided is, whether the pension is a charity. If it is, it occupies the same plane as the destitute relief that is afforded under the various forms of legislation that is in operation in the several States, and no one can complain if similar conditions are applied to it. The State affords relief only when all other avenues of maintenance have been exploited. The father, mother, sister, brother, and other relations by blood or marriage, can be called upon under State. Acts to contribute towards this form of dependence. I have searched the Hansard reports of the debates that took place when the pension scheme was first introduced, and can find no indication that it was to be regarded as a charity. The debates on the original scheme, and on the various amendments that have been made to it, definitely negative any such suggestion. During the consideration of this measure in another place Sir Littleton Groom, who, I believe, was Attorney-General in the government that introduced the original scheme, supported this contention. He said that it was never intended that the pensions should be regarded as a charity ; it was to be considered as a right. Sir George Reid, who cannot by any stretch of the imagination be thought to have had designs on the budget, or to have been in favour of increasing the cost of this or any other social service, speaking on the original bill said: -

I wish to heartily commend its character in so far as it removes any suggestion of an old-age pension being a charitable allowance. Such an idea degrades a system of old-age pensions. I should look upon a person who qualified under this act to receive a pension as being just as fully entitled to it as is a Commander in Chief of the British Forces or the Chief Justice of Great Britain or of any other part of the Empire to receive a pension under any other system. … I am glad that the bill has not, as far as I can see, any taint or suggestion of charity in connexion with the system for which it provides.

Where do we find in the speeches of the present Prime Minister, when he led the Opposition in another place prior to the last election, any suggestion that if his party were returned to power this right, which wa3 established over 20 years ago, would bo converted into a charitable dole? He made no such suggestion. The Government has no mandate to give effect to the proposal that we are now considering. Had this policy been disclosed prior to the last elections, the party that now occupies the treasury bench would not have been placed in a “position to introduce such a monstrous proposal.

Let us examine the principle that underlies the pensions scheme. Is it not this: that the individual members of the community contribute by means of taxation a certain amount per annum to guard against the possibility of their having to seek charity or relief in their oldage? Was it not intended that a part of the scheme should be to build up a distinct nationhood, not the least important feature of which would be its independence? That is what we on this side are fighting to-night to maintain. Does not this proposal, despite protestations to the contrary, reduce the pension to the level of a State’s destitute relief scheme? I am not, for the moment, discussing whether we can afford to maintain our pension system.. I have already disposed effectively of that aspect of that matter. But I am concerned with these proposals, which, I understand, we shall be called upon later to-night to deal with in their true perspective in committee. Are we to destroy the one characteristic which distinguishes thi3 from State schemes? Are we to perpetuate the idea which the framers of it had in mind, or te turn it into a pauper’s dole?

Coming nearer home, let us consider what was said when the first proposals were made for reducing the cost of this social service. In his original statement, Mr. Lyons made no reference to the proposals upon which we are now deliberating; nor was any reference made to them by Mr. Latham, when he justified the Government’s first proposal to reduce all pensions by 2s. 6d. a week, on the ground that there had been a reduction in the cost of living. A very estimable gentleman, one of my colleagues in another place, Mr. Hawker, who has resigned from the Ministry for some mysterious reason, when defending the Government’s proposals in Adelaide three weeks ago, gave no hint that they were tainted in the manner now disclosed. He justified them on the ground that, because of the reduction in the cost of living, these people would be better off under the reduced pensions than they were under former conditions. It would appear, however, that this Government nas surrendered to the United Australia Party caucus. Its supporters, when in opposition, criticized our party on the ground that its Government was caucus-ridden. The same charge can now be levelled against them. The Government’s present proposal is worse than the original scheme. The caucus of the United Australia Party must take the responsibility of branding the old-age pensioners of this country with a stigma that will be implanted on them if this legislation is carried.

The PRESIDENT:

I do not agree with the honorable senator who said that the proposal to reduce the allowances of members of Parliament is pharisaical. I regard it as a proper one. sincewe are calling on others to make sacrifices; but I suggest that there should be some differentiation in favour of members from distant States. They should be granted something in the nature of a travelling allowance if their parliamentary salary is reduced still further. With the allowance brought clown to £600, I say, candidly, that it would be impossible for members from distant parts to carry on unless they had other sources of income. I assure honorable senators opposite that we, on this side of the chamber, are not all wealthy men. Some of us would willingly exchange positions with Senator Collings, and be no worse off financially. I intend to support the Government’s proposal, because I believe that it is reasonable, although compared with the reductions in the emoluments of members of State Parliaments, the cut is more than fair. The finances of the Commonwealth have been sorely strained to find money for some of the States whose members of Parliament are much better off, financially, than are the members of the National Parliament. While I shall vote for the Government’s proposal, I do not intend to support any amendment for a further reduction.

Inconclusion, I again commend to the Government my suggestion in regard to the gold bounty, namely, that the period of its suspension should not be regarded as a portion of the ten years term. I repeat also, that I cannot accept the proposal to reduce to £208 the income of persons eligible to receive the maternity allowance. I shall support the other proposals of the Government only because I believe that they are essential to the financial solvency of Australia.

Senator PAYNE:
Tasmania

.- Statements have been made by honorable senators opposite which call for a reply in order that the people of Australia may know the true position. I regret the necessity for the introduction of a bill of this character, but I realize that the time has arrived when we must put our house in order. We must face facts. At last we have been compelled to recognize that we in Australia have been living in a veritable fool’s paradise. We have evolved a system of living which no country can afford. The collapse had to come. Honorable senators opposite have endeavoured to show how it is that Australia is in its present position. The Leader of the Opposition (Senator Barnes) said that the cause of our troubles was the extravagant administration of the Bruce-Page Government. He quoted figures, but not’ facts, when he said that that Government left to the Scullin Government a deficit of £20,000.000. That the Leader of the Opposition in the Senate of Australia should make such a statement, when the facta are so easily ascertainable, indicates that the honorable gentleman’ is prepared to do anything to discredit the party in opposition to him.

Senator COLLINGS:
QUEENSLAND · FLP; ALP from 1937

– He did not make the statement which the honorable senator attributes to him. He was talking about the unfavorable trade balance; not the deficit.

Senator PAYNE:

– He may have meant the unfavorable trade balance; but he mentioned deficits; and in fairness to the party with which I am associated, I want to make the position clear. So far from the Bruce-Page Government leaving a deficit, it actually left to its successors a handsome surplus. It is true that it left a paper deficit of approximately £6,000.000 ; but Mr. Theodore, the Treasure in the Scullin Government, stated in another place that the Bruce-Page Government, over a period of seven years, had paid into the sinking fund more than £14,000,000 in excess of the amount it was compelled by statute to pay. The Scullin Government was relieved of the necessity to find that sum.

Senator Daly:

– Does the honorable senator expect the people to believe that statement?

Senator PAYNE:

– I have given facts which any intelligent individual will believe. Instead of the administration of tbe Bruce-Page Government being the cause of our present trouble, those troubles are with us, mainly because those to whom I am politically opposed have exercised over the people of Australia who wanted to do their job, an influence which prevented them from doing it. The Australian workers are all right if left alone; but they have been at the mercy of their organizations. That is the chief cause of our financial troubles. Let me give the Senate a few facts. Between 1926 and 1930, organized industrial disputes in Australia numbered 1,530, involving 569,000 workers, who lost a total of 9,773,000 working days, representing a loss in wages amounting to £10,029,000.

Senator Hoare:

– The honorable senator is not dealing with old-age pensioners.

Senator PAYNE:

– Every honorable senator opposite who has spoken has dealt with the causes of the present depression. I am stating causes which the Opposition would be glad to forget. The facts, however, will not be forgotten by intelligent individuals who are prepared to accept the official figures. These figures show that, asa result of strikes and industrial disturbances generally, Australian workers lost £10,000,000 in wages within a period of five years. Do honorable senators opposite suggest that a country with a population of 6,500,000 can stand such a heavy economic loss?

SenatorRae.- It was not a loss; the money remained in the bosses’ pockets.

Senator PAYNE:

– Honorable senators opposite do not like to hear the facts, but they must be given so that the public shall not be entirely deceived by such specious utterances as we have heard today from the opposite side of the chamber. Senator Colebatch said this afternoon that the additional administration involved, if this measure is enacted, will possibly be of such a nature that no savings will be effected. I suggest to the Assistant Minister (Senator Greene) that such a contingency may be obviated by requiring public servants to work five and a half days a week instead of five days, as at present. Surely, at a time when the finances of the Commonwealth are so strained and almost every section of the community is bearing additional burdens, it would not be unreasonable to ask tho public servants to work a few extra hours, particularly if, by doing so, the difficulty which Senator Colebatch mentioned could be obviated. Honorable senators opposite suggest, as a way out of the difficulty, the imposition of additional taxation. One honorable senator went so far as to say that there are many persons in Australia who could well afford to pay it. Surely honorable senators opposite realize that additional taxation is immediately followed 6v a diminution of trade and increased unemployment! The imposition of every additional £1,000 of taxation necessarily impoverishes the community. Money cannot be taken from its legitimate channels without inflicting hardship upon other than those from whom it is collected. Additional taxation indirectly affects the poorer section of the community, whom honorable senators opposite profess to represent. There are many other phases of this subject that I should like to discuss, and which I would have debated at greater length had I felt fit to do so. I intend to support the Government in its effort to meet its obligations in the direction indicated, although I deplore, as much as any other honorable senator, the necessity for the introduction of this measure.-

– When the old-age pension was first granted, it was not on the basis of the cost of living, but was paid because the Parliament of the day considered that it was deserved. Therefore, the honorable senator’s interjection has no point. Had the Government desired to do the right thing, it would have avoided any discrimination between pensioners. Surely neither a soldier nor any one else wishes to escape at the expense of an old-age pensioner. Senator Duncan-Hughes said that he would not reduce a soldier’s pension, but he would that of the parents of a returned soldier. I fail to see any consistency in that argument. Why allow the children to go free and place the burden on the parents, who are not as well able to bear it? Had the honorable senator expressed the view that is in most persons’ minds, he would have said that the soldiers’ pension scheme should be revised.

SenatorFoll. - Soldiers’ pensions are being revised all the time by two tribunals.

Senator HOARE:

– There are many returned men who have not lost a day’s work, and yet are receiving a good pension, while others, who are not able to obtain employment, are refused even the smallest amount. There is in my neighbourhood quite a large number whose nerves are shattered, but, because they cannot prove that their present condition has resulted from war service, their claims are rejected. Men who belonged to friendly societies, and who never had had occasion to avail themselves of the medical attention to which they were entitled, must have been healthy when they left these shores, particularly as they had to pass a medical examination before enlisting. Therefore, it is idle to say that in such cases their present state of health is not due to their war service. I know some old-age pensioners who were unable to pay their rent and maintain themselves even when the pension was £1 a week, and the rent was paid bytheir sons. The son of one pensioner whom I have particularly in mind is a public servant, and he has paid the rent of his parents for many years. Although his salary has been reduced under the financial emergency legislation, he may be compelled to contribute the full amount of the pension. That is not fair. Is it consistent of the Government to reduce pensions on the one hand, and on the other to make a gift of £400,000 to the primary producers? If it is so poverty-stricken that it has to rob old-age pensioners, it should not reduce taxation.

I come now to the proposal to reduce the allowance of members of Parliament. Some members are in a position to give their services without remuneration. I believe, however, that every member should be paid for what he does. But for that, the Labour party would have no representation in either this or any other Parliament in Australia. It ill becomes men who are financially independent to advocate further reductions. If one feels that his conscience will not allow him to accept £750 a year, there is nothing to prevent his handing back to the Treasury £150 a year. If that will salve his conscience, my advice to him is to do it as speedily as possible. For myself, I can only say that since the parliamentary allowance was reduced from £1,000 to £800, I have not been able to save one penny, and I feel sure that I live more modestly than the great majority of honorable senators. I am a teetotaller and a non-smoker. Many people are under the impression that £1,000 a year is an enormous salary. Possibly it would be adequate remuneration if one could sit at one’s back door and did not have to travel for it. But it costs me, on the average,17s. 6d. per day while away from my home in Adelaide, and since we were in session for approximately eight months of each year of the Scullin Administration, 17s. 6d. a day for the whole of that time would make a considerable inroad upon the allowance. On top of this, we have to provide for income taxation on a fairly heavy scale, and have other obligations, so that at the the end of the year there is little left. “ The labourer is worthy of his hire.” If the people of this country desire to have honest legislators, men who are prepared to remain in Canberra and do their duty conscientiously, they should be prepared to pay them a decent salary. It has been urged that the Scullin Government took similar action ‘with reference to our invalid and old-age pensioners. The circumstances were entirely different. That Government was faced with a deficit of £20,000,000, and the sacrifice it demanded of the pensioners represented 7 -J per cent. ; whereas this Government, faced with a deficit of £.1,460,000, is calling upon our invalid and old-age pensioners to carry ‘75 per cent, of the sacrifice necessary to make good the deficit.

The maternity allowance should not have been interfered with. I regard the act under which it is paid as the most humane legislation that has ever been placed on the statute-book of the Commonwealth. Thousands of women who died in motherhood would have been alive to-day if the maternity grant had been available to them in their time of need. Without this allowance, it is almost impossible for the wife of the average working man to obtain adequate medical attention and nursing assistance. If, as has been estimated, each immigrant to Australia represents an addition to the nation’s wealth of £S per head, .surely the Australian-born immigrant is worth at least, £5. Like Senator Carroll, I consider this proposal most unjust, and I shall vote against the bill.

Senator Johnston spoke strongly in favour of the gold bounty and adduced arguments to show that it was responsible for increased production in this country.

Senator E B Johnston:

– I said it was one of the factors.

Senator HOARE:

Senator Herbert Hays:

– At Ottawa, we’ were not bargaining with foreigners.

Senator DOOLEY:

– There is more foreign capital than British invested in the. Argentine, aud possibly also in Australia, and where profits are concerned, patriotism counts for very little. I need not delve into the dark pages of history to prove that foreign investments in this country are very considerable. During the war, we discovered that German capi tal invested at. Broken- Hill exceeded British investments, and we know that there was more foreign than Australian or English capital; invested in Grace Brothers, Sydney. Let us not delude ourselves that foreign investors are not interested’ in British enterprises, in either the Mother Country, or the dominions, to say nothing of the Bank of England itself. We have a duty to perform to the people of this country, and if we are to discharge it honestly, we must. not pander to financial interests which have been in the habit of dictating the policies- of successive governments in this country. I say definitely that, when instructions are given to a Ministry by financial or banking institutions, it Ls the duty of the Government to protect the interests of the people, and to see that all sacrifices demanded of them are borne equally. As a member of the Scullin Administration, 1 introduced the financial emergency legislation-. I told the Senate then that we were faced with an adverse trade balance of £62,000,000’, and that we were rapidly drifting from bad’ to worse, largely because previous administrations had indulged in lavish expenditure on developmental schemes without submitting them to- mature prior consideration. I mentioned, among other works, the Hume weir project, which bas cost many millions of pounds, and referred in some detail to the £34,000,000 migration agreement, under which employment was- to be provided in Australia for a certain number of British migrants. This agreement was made because the foreigner had accumulated credits in this country, and had persuaded the Bruce-Page Government to use the m;oney in” a .number of developmental schemes. When the Scullin Government, came into office, those credits had been exhausted, and the foreign investor was asking for his money.

Confronted as it was with the gravest of difficulties, that Government decided on a bold policy of prohibiting importations and encouraging our primary and secondary industries. It took the view that, if possible, everything required in Australia should be produced in this country. That there is need for protective measures was evidenced a day or two ago, when a question was asked in another place with reference to the marking on lead pencils manufactured in Bavaria. The wrappings bore the “ Kookaburra “ brand, and the purchaser would be led to believe that they were manufactured in Australia. I understand that the Customs Department has taken the necessary action to prohibit the further importation of that particular brand of lead pencil, unless it conforms to the departmental regulation dealing with country-of-origin markings.

Despite the action taken by the Scullin Government to check importations, recent figures published by the Customs Department show that an unfavorable trade balance is again being established.

Previous administrations indulged in a great deal of extravagance. This was much inevidence at Canberra. In the early days of its development, I was in Canberra representing the Australian Workers Union, and, simply because there was so much public money to spend, I had no difficulty whatever in obtaining any rates of pay or conditions of employment that I liked to demand. When the fund of wealth provided by the foreign investor had been exhausted, the Bruce-Page Government was glad of the opportunity to leave office, and the right honorable member for North Sydney (Mr. Hughes), who was largely responsible for its defeat, is now so much in favour that, in all probability, he will be a member of the next Cabinet, as a reward for past services.

I regret to know that this Government is proceeding along the path followed by the Bruce-Page Administration. Trade figures are going heavily against us. In Victoria alone, the adverse trade balance for one month has increased by almost £2,000,000. An informative article on this subject appeared in the Melbourne Age of yesterday’s date. Prom it I take the following extract: -

page 939

QUESTION

GROWTH OF IMPORTS

Victoria’s Trade

Adverse Balance Again

Already Nearly £2,000,000

The adverse trade balance of Victoria con tinues to mount, and may be expected to expand more rapidly when the tariff reductions take full effect.

The return for August, 1932, prepared by the Government Statist (Mr. A. M. Laughton), was issued yesterday. Imports of merchandise for August,1932, were £1,949,439, or £669,318 more thanfor August, 1931, and allowing for bullion and specie, the increase was £689,535. For two months of 1932-33 imports of merchandise were £3,620,212, or £1,186,062 more than for July-August, 1931-32, and with bullion and specie included the increase amounted to £1,213,474.

Exports of merchandise for August, 1932, were £1,004,399, or £223,601 in excess of those for August, 1931. Including bullion and specie, the increase was reduced to £212,399. For two months of 1932-33 merchandise exports were £2,223,335, or £274,575 more than for July-August, 1931-32, but with bullion and specie included the decrease was £1,037,633. Shipments of bullion and specie were only £3,404 in July- August, . 1932-33, against £1,315,672 in July-August, 1932-33.

Sitting suspended from 11.45 p.m. to 12.30 a.m. (Friday).

Friday30, September 1932

Senator DOOLEY:

– The Government’s action in reverting to the Bruce-Page tariff has done much injury to Australia. The imports for August last into Victoria alone were valued at £2,000,000 more than the imports for the corresponding month of last year. The Government has not tackled the problems of the country in a proper manner. If it continues to allow this country to be flooded with goods from other countries, it will only be a year or two before we shall be where we were during the Bruce-Page regime, and a change of government will again be necessary to clean up the mess. Senator Daly and I know what a trying time the Scullin Government had in cleaning up the mess that that Government inherited. Notwithstanding the difficulties confronting it, the Scullin Government put the ship of state on an even keel again; but the people did not appreciate what it had done, and placed the present Government in power. They will not be deceived so easily again. They were persuaded that, with a change of government, confidence would be restored, money would again circulate, and unemployment would disappear. The present Government wishes to trade with foreigners at the expense of the manufacturers and workers of Australia, as well as the men on the land. In considering the problems confronting us, we must not lose sight of the fact that the best market our primary producers have is the home market; but with so many thousands of our people out of employment there can be no proper home market. We shall not make any progress towards recovery until employment is found for our people. Our representative in London (Mr. Bruce) has agreed to limit the amount of frozen mutton and lamb that we may send overseas. He has done so in the interests of those who have invested money in the Argentine. A comparison of Australia’s exports of mutton and lamb for July and August, 1931, with the exports for July and August, 1932, provides food for thought. Our exports of mutton and lamb for July and August, 1931, were valued at £112,189; for the corresponding months of this year they were valued at £77,780.

Senator Sir George Pearce:

– There has been a “ go-slow “ strike in the trade.

Senator DOOLEY:

While I agree with the views expressed by some of my colleagues that it would be better to spend the money voted for the payment of the gold bounty in the production of food or clothing-

Senator Carroll:

– It has been the means of providing men with work.

Senator DOOLEY:

– That may be so, but gold is used mainly as a backing to our note issue which, after all, is only a myth. When the previous Government introduced a measure providing for the issue of fiduciary notes, honorable senators opposite strenuously opposed it. Some time later, they agreed to the exportation of £15,000,000 worth of gold to meet certain overseas commitments, and, to that extent, were glaringly inconsistent. Instead of having a backing of £30,000,000 to our note issue, we now have only £15,000,000, and consequently, our fiduciary note issue has been increased by 50 per cent. The people of Australia erroneously believe that they can receive gold in exchange for notes. With another £30,000,000 worth of gold, we could issue a larger number of notes, but so long as the people know that notes will obtain for them what they require they are satisfied. Instead of having gold buried in the vaults of the Commonwealth Bank, would it not be far better to use it in providing irrigation schemes that would enable us to produce more abundantly and more cheaply? Bather than send men into the bowels of the earth to mine gold that is of no commercial value, would it not be more profitable to apply the expenditure to some more useful purpose ? But seeing that, by the promise of a gold bounty, we induced a number of persons to invest large sums in the gold-mining industry, is it not a dishonorable act of repudiation to refuse to continue that bounty until the obligation that we undertook has been fulfilled?

I am not very greatly concerned about the proposed reduction of members’ allowances. I shall be astonished if, at the end of my term, I have made any profit out of what I have received. That, I think, applies to every member. I agree with a great deal of what has been said by Senator Rae. If a sacrifice is necessary, let it be made equally by every one. Those who receive £8, £10, or £12 a week, are in a much better position to make a sacrifice than is the person who has worked for a lifetime on the basic wage. Take the case of a man who, in 1929, on a wage of £5 a week, entered into a contract to purchase a home costing £1,050. He still has the same rate of interest and the same local government taxation to meet, although his wage has been cut in half. Unless all cost3 are reduced proportionately with the reductions that have been made in incomes, we should revert to the 1929 price levels. It is useless to expect to get all that is required by the Government from those who are unable to hit back. Interest will have to be reduced ; rates, taxes, and rents will have to come down. The Government is tackling the question from the wrong end. If it wishes to see justice done, it must first of all effect a reduction in the prices of commodities, and then regulate wages proportionately. Let us start at the top, and work downwards. Every application to the Arbitration Court for an increase in wages has been on the ground that the prices of commodities have increased. If interest, rates, taxes; rents, and all other items were lowered, a worker would be just as well off on £2 10s. a week as he was formerly on £5 a week.

Senator Sir Hal Colebatch:

– On a point of order, I submit that this bill in its present form offends against section 55 of the Constitution and is an infringement of the rights of this Senate.

Clause 18 of the bill imposes upon certain individuals in certain circumstances the obligation to contribute money to the Consolidated Revenue account. Such imposition, not being in the nature of a fine or other pecuniary penalty, or a fee for licences or services, as contemplated by section 53 of the Constitution, is a tax.

Section 55 of the Constitution provides that laws imposing taxation shall deal only with the imposition of taxation. Inasmuch as this bill imposes taxation and also deals with other matters, I contend that it offends against the lastmentioned section. The inclusion of a provision imposing taxation improperly limits the rights of the Senate in considering this bill.

I raise this point because 1 consider that it should be settled. If I am right in contending that this is taxation, and the bill is passed in its present form, it will be so much waste paper and we shall have wasted our time in dealing with it.

Senator Sir George Pearce:

– The carefully written statement, to which we have just listened sounded like a judgment of the High Court of Australia; but I am afraid that when the question comes to be considered it will be found that there is not very much in it. Section 53 of the Constitution reads -

Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions’ for the imposition or appropriation of fines or other pecuniary penalties or for the demand or payment or appropriation of fees for licenses,, or fees for Services under the proposed law.

The PRESIDENT (Senator the Hon. P. J. Lynch). - Senator Colebatch has raised the following point of order : -

That the bill, in its present form, offends against section 55 of the Constitution, and is an infringement of the rights of the Senate. Clause 18 of the bill imposes upon certain individuals in certain circumstances the obligation to contribute money to the consolidated, revenue account, such imposition not being in the nature of a fine, or other pecuniary penalty, or fee or licence for services .is contemplated by section 53 of the Constitution. Section 55 provides that laws imposing taxation shall deal only with the imposition of taxation. Inasmuch as this bill imposes taxation and deals with other matters it offends against section 55.

Needless to say, the point taken is a very important one. Previous occupants of the chair have been extremely careful in giving rulings embracing an interpretation of the Constitution, and it has been suggested to-night that the point now raised should be dealt with by the High Court, the one institution in this country whose special function it is to interpret the Constitution. But as obviously a reference to the High Court would mean delay and would dislocate the work of this chamber, which must go on, I deem it incumbent upon me to give a ruling upon the point.

I am asked by Senator Colebatch to say that the bill before the Senate is a taxing bill, and as such offends against section 55 of the Constitution. A cursory glance at the measure shows that it is a very composite bill. It purports to amend no fewer than six measures, namely, the Maternity Allowance Act, the Invalid and Old-age Pensions Act, the

Ministers of State Act, the Gold Bounty Act, the Public Service Act, and the Wine Export Bounty Act. It cannot be argued, therefore,, that it is a taxation bill in the ordinarily accepted sense of that term. Senator Colebatch has also argued that because certain provisions of the bill may cause a minor court of this country to oblige some citizen to contribute sums of money to the revenue, the bill must be regarded as a taxation measure. But it may happen that no such decision is gwen. Persons may avoid all liability to prosecution by meeting their obligations. That is another reason why the bill cannot be described as a taxation measure in the accepted sense of that term. If it is necessary to reinforce that view, I point out that the bill provides for a reduction in the maternity allowance, the granting of additional powers to the Commissioner of Pensions, and the reduction of the amount payable to old-age and invalid pensioners, and the amount payable under the Ministers of State Act. It also proposes to apply to the services of the State, certain insurance moneys recoverable in certain circumstances, in respect of property belonging to old-age pensioners. Further, it provides - and this is really the provision upon which Senator Colebatch has based his contention - that people who are not prepared voluntarily to discharge their obligations must pay certain sums of money towards the upkeep of their relatives. Other provisions of the bill relate to the reduction of the amounts of bounty payable under the Wine Export Bounty Act and the Gold Bounty Act. Strictly speaking, the bill is one which seeks to lessen, rather than increase, the burden upon the taxpayers. It cannot, therefore, for this reason, be described as a taxation measure, unless, of course, the word “ taxation “ is to be given a new meaning altogether.

I shall now refer honorable senators to an ordinary taxation act. I direct their attention to the Income Tax Act of 1930, which is printed in Commonwealth A.cts, Vol. XXVIII. The marginal notes in this measure are as follow : - “ Short Title,” “ Incorporation,” “ Imposition of Income Tax,” “Rates of Income Tax,” “Additional Tax,” “Super Tax,” “Further Tax,” “Tax payable by certain companies and partnerships,” and “ Levy of Income Tax,” and then follow the schedules. In that measure everything has to do with taxation. If honorable senators will compare it with the bill now before the Senate, they will at once realize that there are vast differences between the two. There is no standard of comparison whatsoever. I must, therefore, decide against the contention of the honorable senator, that this bill is out of harmony with section 55 of the Constitution, aud rule that it is properly before the Senate.

Senator Daly:

– Is the contribution referred to in clause 18 a penalty?

The PRESIDENT:

– -Whatever it is, it is not a tax.

Senator MacDONALD:
Queensland

– Now that the storm has passed, I ask honorable senators to direct their attention again to the bill. When the Minister in charge of his measure furnished certain interesting particulars to the Senate relative to the increased amount of money spent on pensions over a period of years, he might have made some mention of the altered value of money since 1911. Had he done so, it would have been realized that the socalled increases were much less than his statement suggested. I endorse the view of certain honorable senators who have spoken in this debate that the financial gap which the Government had to bridge was not sufficiently wide to justify the attack that has been made on our old-age and invalid pensioners, the Public Service, and those who have* been entitled to apply for the maternity allowance. I was particularly struck with the speech of Senator Duncan-Hughes in regard to taxation. Some people say that taxation is government, and others that, government is taxation, but the honorable senator from South Australia forcefully reminded us to-day that the occupants of the ministerial benches in. this chamber regard taxation as everything. They do not mind how much taxation is heaped upon the suffering masses of this country so long as the wealthy classes can be relieved of certain obligations. Senator Duncan-Hughes rang several changes on this subject. He said . that State taxation was so heavy that the people were staggering under it. I am not staggering under heavy taxation. I should be very glad if I had to pay £1,000 or £2,000 in income tax and £2,000 or £3,000 in land tax every year. I remember an old friend of mine complaining 30 years ago, that he had to pay £600 a year in harbour dues. I was only young at that time, but I can call to mind the feeling that came over me that I would be quite prepared to pay £60.0 or £1,600 in harbour dues if 1. owned property which justified the imposition of such taxation. Instead of introducing a bill of this kind, the Government should have imposed taxation on the people best able to bear it. It must be quite within the knowledge of honorable senators opposite, that some years ago, before the depression struck Australia and the exchange position was as it is to-day, many of our wealthy people visited Europe and America regularly, and spent in those countries between £30,000,000 and £40,000,000 a year. Senator Duncan-Hughes said that he could see no sign of any abatement in taxation, but surely he knows that remissions of taxation have occurred which, if they had not been made, would have rendered the introduction of this bill unnecessary.

Senator Duncan-Hughes:

– I was speaking of taxation generally, and not in relation to any particular class of person. I do not want the honorable senator to put words into my mouth which I did not use.

Senator MacDONALD:

– I do not wish to do that, but I am entitled to accept the statement of the South Austraiian colleagues of the honorable senator, who have intimated that he speaks for the wealthy class of this country. We all know that such people are unfavorable to direct taxation such as land and income taxation which hits the rich section of the community hard, and are favorable to the imposition of customs duties and other forms of indirect taxation which place a burden upon the working classes. The main idea of the Government seems to be to reduce direct taxation and increase indirect taxation.

Senator Sir George Pearce:

– The President has just ruled that this is not a taxation measure.

Senator MacDONALD:

– Seeing that we have just spent half-an-hour in discussing that very point, I feel confident that the President, notwithstanding the ruling he has just given, will allow me reasonable latitude to discuss this aspect of the subject. The policy of the Government for’ meeting the present financial situation seems to be to allow its wealthy political supporters to escape taxation and to wring the withers of the workers. The attitude of the Government confirms the view expressed to me recently that it has been urged, if not instructed by a large Melbourne financial group of great influence in this country, to take drastic measures to reduce the social services of this country. As in the case of the Tory press, the finances of this country are getting into fewer hands as the years pass. Those who control the finances of this country have given a powerful direction to the Government in regard to the legislation to be passed by this Parliament. There is no justification for subjecting the workers to further attacks, or for attempting to balance the budget at the expense of the aged, the infirm and the mothers of the country. It is not that there is no money in Australia; there* is ample evidence that it is here in large quantities. Even in these times banking institutions and insurance companies in Brisbane have had sufficient money to erect ornate and expensive buildings. Money has been put into bricks and mortar at the expense of the social services of the country.

One wonders what the Government intends to do ultimately with the maternity allowance. It is getting more and more to be a charitable gift instead of a right. If this bill becomes law, no mother whose income, together with that of her husband exceeds £208 per annum will in future be entitled to the allowance. When the act providing for the maternity allowance was first passed it was clear that the payment was not to be regarded as a charitable gift and. that no sense of shame, and no stigma of any kind, was to be associated with it. That is to be altered, and in future the payment will be regarded as a gift. Maternity is to be repauperized. I hope that the Government will reconsider its proposals in connexion with this allowance. I am proud to say that on three occasions my wife claimed die maternity allowance. . As I have reared three children and as each new citizen at 15 years of age costs £600 to rear, there has been some return to the State, as in hundreds of thousands of other . cases. I was not then earning a large salary; but had the position been different that would not have prevented me from regarding the allowance as the right of every mother. There have been instances of wealthy people claiming the allowance and then making a gift of a similar amount to some deserving institution. On the other hand, in many thousands of homes throughout Australia, the maternity allowance has proved a veritable godsend. I regret exceedingly that it is proposed to limit it to those in receipt of ah income below a certain amount. No section of the community is so proud as those who may best be described as the honest poor. Many of them will in future not claim the allowance, although chey may need it, because their pride will prevent them from accepting anything in the nature of charity. It is disgraceful that, in a country so wonderfully blessed by nature, a grant to the mothers of our best immigrants should be regarded as a charity. I hope that, before long, this reproach will be removed from the statutebook.

As in the case of the maternity allowance, I regard the old-age pension, not as a charity, but as a right. It has been so long in operation that it has become a part of our national rights and practically amounts to a contract. There is only a certain amount of wealth in any country to be shared by its people; and, with a few exceptions, a mau cannot obtain more than his share without taking it. from others. Only too frequently those possessed of great wealth have obtained it by undesirable means. Professional men, inventors and others may earn more than the average amount of wealth honestly - “rent of ability,” whether in initiative or powers of superintendence or organization, deserves special recognition - but after all they are only a small proportion of the community. The great bulk of the people have to be satisfied if they can make a decent living and enjoy a reason able measure of comfort. A man who has reared a family has very little money at his disposal when he reaches the age of <>5 years, and it is some comfort to him to know that in his old age he may claim a pension. I have yet a number of years to go before I reach the age which would entitle me to a pension; but if, when that time comes, I am without funds, I shall certainly regard the pension as my right, and apply for it. I view with disgust the Government’s amended proposal after its first proposal had been defeated in the party caucus. The Government was not game to attack the pensions of soldiers, because the soldiers are organized; but it was prepared to take 2s. 6d. a week from the defenceless oldage pensioners. Had it not been for the supporters of the Government who, for a time, hold Labour seats, the Government would have had everything its own way. There was a good deal of anxiety on the part of the people generally in regard to the Government’s proposals. They did not know whether demands would be made on distant relatives, or only on those of the immediate family, of the pensioner. They have been relieved to learn that the Government’s proposals do not go so far as they feared. It may be that, at some later date, uncles, aunts, grandsons and grand-daughters and cousins to the forty-second degree, will be required to contribute to the upkeep of their relatives. But that would make the system of collecting from them even more cumbersome than it will be under this measure. Nothing can justify the action of the Government in seeking to bridge the gap between its estimated revenue and expenditure by slashing at the social services of the country. That action can be understood only when we reflect that the Government is controlled by certain financial interests in this country. The reduction of the pension does not affect me personally, because my parents are provided for, but I know of many persons in the community not so well situated, on whom this legislation will bear heavily. I hope that, in committee, the bill will be amended to make it more acceptable.

I now wish to deal with the provisions relating to reductions in public servants’ salaries. I have been a public servant and know that, particularly in times of depression, both Commonwealth aud State public servants are expected to submit to very substantial reductions.’ Contrary to the opinion which exists in the minds of a large section of the community, the members of the Public Service, generally speaking, are not over paid. In many instances highly capable officers are not receiving a remuneration commensurate with the duties they have to perform. Moreover, when one considers the salaries paid, there are not many “ plums “ in the Service. Quite recently I had a conversation with a member of the Public Service who is a qualified accountant, and who also holds a high military rank, who is receiving only £450 a year which is subject to a reduction previously made, and who will also have to bear a further reduction if this measure is enacted. A large number of officers in the Public Service possessing qualifications and ability equal, if not superior, to some honorable senators, are receiving from £300 to £400 a year. Those who speak unfairly of public servants are doing them a great injustice. Tho representatives of certain organizations within the Service have brought the matter under the notice of honorable senators. CI have before me a statement supplied by the combined federal organizations. In it is stated, among other things, that -

To continue a campaign of reduction in the face of rising revenues, is considered to be nothing more than an attempt to accentuate and prolong the depression. This policy is not in accord with the declaration by Mr. Bruce at Ottawa that Australia had reached her limit with reductions. It should be borne in mind also that the Federal Government waa the only Government in Australia to show a surplus for the financial year ended the 30th Juno, 1032.

Senator Dooley, who devoted some time to the Public Service matters, showed the extent to which certain departmental activities had extended, necessitating an increase in personnel for which no allowance is made. I do not wish to repeat the figures quoted by the honorable senator. I shall select a few that may be of interest to those who read Hansard, or who are particularly interested in the Public Service affairs. The total number of permanent and temporary employees in the Commonwealth Public

Service in 1927 was 47,841, but since then there has been a progressive reduction as will be seen from the following figures: - -For the years ended the 30th June, 1928 to 1931, the totals were - 1928, 45,000; 1929, 37,000; 1930, 36,381 ; and 1931, 32,312. Between those years the number of employees decreased by 15,529, or one-third of the total number. By further reducing public servants’ salaries, the Government is inflicting an unnecessary hardship upon a section of the community which is rendering a very valuable service to the people. I think it can be said that owing to the examination which they have to pass, and the qualifications generally which they possess, the members of the Service must be regarded as a picked band. They must be specially selected, as their duties in many instances bring them into close contact with the public. I trust that when the measure is in committee, the provisions relating to the Public Service will be amended. There are a number of other matters which, if time permitted, I would bring under the notice of the Senate, but in view of the lateness of the hour, I shall confine myself to one or two of outstanding importance. I have been informed that-

In addition to the reduction of salaries and other payments, monetary compensation for overtime, and for work performed on Sundays and public holidays, and in certain other directions has been abolished in favour of time-off. Postal employees are frequently required for overtime, and for work on Sundays and public holidays in order to meet the requirements of the public, but instead of receiving extra monetary compensation for this work, which is the general rule in private employment, they are compensated by way of time-off at a later date. In many instances, they are required to take the time-off when, it is of no real value to them.

In common with other honorable senators, I have received letters asking for special consideration for blind workers. Included in these is a communication from the Blind Federal Council of New South Wales, in which a special plea is made on behalf of these unfortunate people. The chief point in that communication reads -

The proposal that parents aud relatives of blind pensioners may bo required to contribute to their maintenance is particularly harsh, more especially in the case of blind people, who are dependent upon those with whom they live for a certain amount of care and attention in their daily life, and if they are to be rendered an additional burden to those who are willing to help them, it is equivalent to a penalization of those connected with blind pensioners.

Honorable senators must realize the great disadvantages of those of our citizens who are not permitted to view the beauties of nature, to see the faces of their loved ones, or to derive entertainment and enlightenment from, reading the valuable books and publications available to others more favorably placed. It seems unreasonable that the Government should include in its legislation any provision whereby these unfortunate people “will be harassed, and further obstacles placed in the way of them receiving the full pension.

With respect to the proposed suspension of the gold bounty, I may say that Queensland possesses potential gold-fields equal to those in Western Australia, which has produced such large quantities of gold. As I have travelled through the various parts of Queensland, though not as a miner, I know the good the gold bounty has done, particularly to many hundreds of prospectors searching for gold. Many of these are men of a fine type, and are members of the organization of which the Leader of the Opposition in this chamber is the president. They are doing a valuable work in areas which up to the present have been seldom visited by prospectors. They are doing work which should be encouraged. Unlike Senator Colebatch, I am not one of those who contend that the gold standard is of any great virtue, although we have to recognize that, under the present capitalist system, the discovery of gold in large quantities would be of great benefit to the Commonwealth generally. We! know the benefit the mines at Mount Morgan, Gympie, Charters Towers, Ballarat and Bendigo have been to Australia. The discovery of a rich gold mine would assist us a long way along the road towards financial recovery. If we were to discover oil in Australia it would not be long before there would be a marked change in our financial position. I should like the production of gold in Australia to be increased, not for the benefit of overseas investors, but in the interests of the pros pectors and the community generally. I was surprised to find that the Government proposes to suspend the gold bounty, particularly in view of the fact that a higher price for this metal will prove a strong incentive to those searching for it. Honorable senators are aware that the silver lead deposits at Mount Isa, which was only discovered a few years ago, have been of inestimable value to Queensland. We should not do anything to discourage the search for gold. There are some who still believe in the gold standard, but many of us do not see a sovereign from one year’s end to the other. Notwithstanding the strong following which the Government can command, I trust that the proposed suspension will not be adopted, and that the bounty at the present rate will be continued at least for a few years. Honorable senators opposite are opposed to the imposition of heavy customs duties. They believe in the importation of goods from overseas. Even with a low tariff, the same amount of revenue would be derived as was obtained in the days of the Bruce-Page Government, when there were floods of imports and plenty of money was available to waste on commissions and similar extravagances. I hope that it will not be long before this bill, which is the result of the Government’s panicky fears and its desire to help its friends by the remission of taxation, will be repealed. It certainly will be when the next Labour government comes into power.

Senator Daly:

– Before that occurs, the High Court will have held it to be ultra vires.

Senator MacDONALD:

– I shall not join issue with my friend, Senator Daly, or any other legal light in this chamber, on that aspect of the matter. During my 15 years’ experience as a journalist in the law courts, I saw so many, important judgments upset that I do-not now take any opinion very seriously. If the High Court does not upset this legislation, a Labour majority in the next parliament certainly will.

I conclude by saying that I believe that the object of the bill is to save the wealthy friends of. honorable senators opposite. There is no need for the cutting of pensions, or the reduction of the maternity allowance. The assertion that the present position is analogous to that which confronted the Scullin Government is ridiculous. That Government had to bridge the enormous gap of £20,000,000 between revenue and expenditure. Australia was then on the bring of bankruptcy, and it was a case of “ do or die,” “ neck or nothing “, with the result that some of Labour’s most cherished principles had for the time being to be abandoned. In this case a paltry £2,000,000 or £3,000,000 is involved. In the days of the Bruce-Page Government, that high spending, free-and-easy Government, which is still the admiration of honorable senators opposite, £2,000,000 or £3,000,000 was a mere nothing.

Senator Barnes:

– They took it in their stride.

Senator MacDONALD:

– I believe that Government in its last vear left a deficit of £7,000,000 or £8,000,000. The present Government also is dominated by Mr. Bruce, and, as an outcome of the Ottawa Conference, is likely to be more completely subject to London influences. I say that without any particular disrespect for the interests of the Old Country. We should run Australia in the interests of Australians. Every decent citizen will reprobate this legislation, which hits very hard our “most cherished principles, and attacks reforms that have been embodied in the laws of this country for the last 20 years. If I did not protest against it I should deserve severe castigation at the hands of ray constituents in Queensland. I owe to Australia the duty of condemning what I regard as a disgrace to this country.

Senator SAMPSON:
Tasmania

– I regret that a bill of this importance has to be considered in a limited time. The sooner we get” into committee on it, the better, because it needs very careful study clause by clause, some of its provisions being rather contentious.

I should not have spoken at this early hour of the morning had I not wished to disabuse, in a perfectly friendly way, the minds of recent arrivals in this Senate of some of their erroneous assumptions and inferences. One would think that an election was on the horizon or not far distant, because in the main the speeches to which we have listened have been typical hustings speeches. What I wish to assure my new friends from Queensland is that it is altogether wrong to assume that, because a man sits on this side of the chamber, he is absolutely devoid of the bowels of compassion, has never known the effects of the direst poverty, has hosts of wealthy friends, or belongs to the type that wears stiff white collars. Senator Collings yesterday went rather far in assuming that he is about the only person who, on Judgment Day, will be able to meet the old-age pensioner and take him by the hand. I know that on Judgment Day I shall not be asking for justice, but shall need all the mercy that I can get. I ask honorable senators to face facts. Many times to-night we have heard it said that Australia is bursting with money, that it is inordinately rich. That assertion has been made for the last 20 or 30 years. What has enabled us to pay pensions, if it has not been borrowed money? Why have we this bill before us, if it is noi; for the simple reason that we can no longer borrow? The action proposed is distasteful and unpleasant to all, but it must be taken if a worse fate is not to befall us. A great deal of tommy-rot and nonsense has been indulged in about our having turned the corner. I am inclined to think that around the corner old man drought is waiting, not the chap called prosperity. We must remember that in the terrible period of world crisis and difficulty through which we have been passing, we have, fortunately, been blessed with exceptionally good seasons. The fact is inescapable that we are now unable to pay pensions on the scale that has ruled in previous years. If we study the rapid growth that has been made, and assume that the same rate of progress will be maintained, in nine years this country will have to pay, in pensions, about £23,500,000. Although the Scullin Administration last year decreased the rate of pension, that decrease was not proportionate to the reduction that had taken place in the cost of living. My statement in that respect is supported by the remarks of the Auditor-General on pages 14 and 44 of his last report. Is it not reasonable and just to expect that, as wages have fallen with the decline in the cost of living, pensions should be reduced in like proportion? The “rise in the cost of living” argument was used in 1923 and 1925, in support of the suggestion that the rate of pension should be increased; and it was increased in those years by the Bruce-Page Government. During the last two years the cost of living has decreased. The figures issued by the Commonwealth Statistician in connexion with old-age pensions prove that, on the basis of the cost of living, an old-age pensioner would be better off to-day on a pension of 15s. a week than he has been, with the exception of one year, at any time during the last 20 years. It is a matter for regret that the original proposal of the Government was not adhered to. I am afraid that the present proposals will lead to the gathering together of a big staff. I should have preferred a straightout cut, because a cut, like an operation, would ha ve been more likely to give satisfaction that the methods adopted by this Government. The present proposals will bc a source of great irritation to the people concerned. My experience of the pensions officials confirms me in the belief that, with possibly one or two exceptions, our pensioners can depend upon receiving the most sympathetic consideration. But I do not like this business of prying into the private affairs of pensioners and their relatives. The better course, I repeat, would have been to take the plunge and make the cut, because we are not by any means out of our difficulties, and we should face the position courageously. I am afraid that some of the provisions in the bill, besides being a source of constant irritation, will prove unworkable. Administration difficulties will be so greatly increased that there will bea danger of setting up a strong bureaucracy - a condition of affairs which I cannot contemplate with complacency. When the measure is in committee I hope it will be considered carefully clause by clause, so thatwhen it is passed we shall know precisely what it means and how it will operate.

– It may be, but I have no doubt that any claim on that ground would be disallowed.

Honorable senators interjecting,

Senator Sir George Pearce:

– I rise to a point of order. I ask whether honorable senators opposite are in order in continuing a chorus of interjections when a Minister who is not well is struggling to make himself heard ?

The PRESIDENT (Senator the Hon. J. P. Lynch). - Honorable senators who are interjecting always prefer to be heard in silence when they are addressing the Senate, and it is not fair for them to interject as they are doing while the Assistant Minister is speaking.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I shall not continue my speech.

Question - That the bill be now read a second time - put. The Senate divided. (President - Senator the Hon. P. j. Lynch.)

AYES: 19

NOES: 8

Majority . . 11

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

I n committee :

Clauses 1 to 5 agreed to.

Clause 6 (General reduction of salaries and wages) -

Senator BARNES:
Victoria

– Section 10 of the principal act which this clause seeks to amend, provides among other things, that -

the annual salary of an adult male officer or employee or of a married male officer or employee who is not an adult shall not be reduced under this section below one hundred and eightytwo pounds per annum.

Yet this clause subjects such an officer to a levy of 18 per cent of his salary. It seems an extraordinary provision. The basic wage is supposed to be £182 per annum; this reduction will bring it down to about £150 per annum.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– That is not the meaning.

Senator BARNES:

– I cannot understand the desire of the Government to break down a principle which has already been established, namely, that persons in receipt of less than the basic wage shall not be taxed. Although the Scullin Government imposed heavy burdens of taxation on the people, it made special provision that persons receiving only the basic wage should be exempt from taxation. That was the reason for including paragraph (ii) of sub-section (1) of section 10 of’ the principal act. So far as I can remember, there was no opposition to that provision. I should like the Minister to say why this amendment of the principal act is thought necessary.

Senator GREENE (New South Wales - Assistant Minister [3.8 a.m.]. - The original act provided that no salary should be reduced below the then basic wage of £182 per annum. The basic wage is now £174 per annum. It is true that this measure removes that bar; but no salary of an adult male will be reduced below the new basic wage of £174 per annum.

Senator Barnes:

– Has it anything to do with the £8 cut in the salary of public servants ?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– That is a cost of living adjustment consequent in the fall in the basic wage.

Senator Barnes:

– I am opposed to it.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– When this bill was in course of preparation the Government considered whether it would insert in it a provision similar to that in the principal act. It decided that it was inadvisable to do so because every alteration of the basic wage would involve an amendment of the law. The Government wanted to provide that, with every alteration of the basic wage, there would be an automatic adjustment of salaries. That is all that this clause does.

Senator BARNES:
Victoria

– Paragraph (i) of the proviso to sub-section 1 of section 10 of the principal act, provides that -

The annual salary of any officer or employee which is less than £251 shall not be reduced under this section by an amountwhich is greater than 18 per centum of that salary.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– That does not apply any longer.

Senator BARNES:

– Why does the Government want to strike out paragraph (ii) of the proviso unless it is to enable it to impose taxation on persons receiving the new basic wage of £174 per annum? I want to prevent that from being done.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I assure the honorable senator that that is not, and will not be, done.

Senator BARNES:

– I shall vote against the Government in order to be safe.

Question - That the clause be agreed to - put. The Committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 18

NOES: 8

Majority . . . . 10

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 7

Section eleven of the principal act is amended -

by omitting from paragraph (i) of the proviso the word “ and “ (second occurring) ; and
by omitting paragraph (ii) of the proviso.

Section proposed to be amended -

The salaries of all officers and employees shall, after the reductions as provided in the last preceding section have been effected, be further reduced by the deduction of an amount to be ascertained in accordance with the method set out in the first schedule to this act.

Provided that -

the annual salary of an adult male officer or employee or of a married male officer or employee who is not an adult shall not be reduced under this section below One hundred and eighty-two pounds.

Senator BARNES:
VICTORIA · ALP

– The clause provides for the deletion of paragraph (ii) of the proviso to section 11. The Government is now seeking authority to reduce such salaries from £182 to £174. I am strongly opposed to that being done.

Question - That the clause be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 18

NOES: 8

Majority . . . . 10

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 8 (Variations and reductions).

Senator BARNES:
Victoria

– This clause differs from those already passed by the committee in that it empowers the Minister to determine the rates to be paid to military officers. Section 10 of the principal act provides that the annual salary of any officer or employee which is less than £251 shall not be reduced under this section by an amount which is greater than 18 per cent. of the salary. As this clause gives authority to some one to make a further reduction of 18 per cent., I intend to oppose it.

Question - That the clause be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 18

NOES: 8

Majority . . . . 10

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 9-

After section12 of the principal act the following section is inserted: - 12(a) Any power of the Minister under this part to give a direction shall, notwithstanding anything contained in this part, be exercisable from time to time as the Minister thinks fit.

Senator BARNES:
Victoria

– This clause gives the Minister complete control over the officers in the naval, military and air forces. Will the Assistant Minister explain the provision?

Senator GREENE (New South Wales

Section . 12 of the act makes the following provision : -

) The last two preceding sections shall not apply to officers and employees to whom this section applies and the salaries of such officers and employees shall be subject to reduction as follows: -
1. The salaries of members of the permanent, naval, military or air forces shall be reduced in such manner as the Minister directs:

It will thus be seen that the same position was taken up last year by the Government of which the honorable senator was a supporter. The section goes on to make the following proviso : -

Provided that any reduction so determined shall approximate as nearly as practicable to the amounts by which salaries (corresponding in amount to the salaries of members of the forces) of officers and employees are respectively reduced under the last two preceding sections;

We propose to insert the following new section : - 12a. Any power of the Minister under this part to give a direction shall, notwithstanding anything contained in this part, be exercisable from time to time as the Minister thinks fit.

Under the law as it stands at present, once the Minister has given a direction he cannot give another. As honorable senators know, the pay of members of the naval and military forces, particularly of the lower ranks, includes rations, uniforms, and so on. These allowances vary among the different ratings. The Minister wants the power to make a further direction if circumstances arise which, in his opinion, make it advisable to vary one that he has already given.

Senator DALY:
South Australia

– I understand the point that has been dealt with by the Minister. From our point of view, however, the concluding portion of the provision contains a somewhat unhappy choice of language. The words “ as the Minister thinks fit” might easily be construed as giving him the power to depart from the general policy of the act. It is obvious that the intention of Parliament was that the Minister should act in accordance with the principles of arbitration.

Senator Sir George Pearce:

– When the law was passed last year, it was thought that the Minister would have the power to give a direction “ from time to time.”

Senator DALY:

– I suggest that if the proposed new section concluded with those words, the Minister would have the power that we thought we were conferring. But the addition of the words “ as the Minister thinks fit “ might make it possible for the power to be exercised capriciously and not in accordance with the general policy of the act. Having in the act what, in effect, is a recommendation from Parliament, that so far as possible the principles of arbitration shall be adhered to,I am not prepared to agree to the proposal that, notwithstanding that direction, the Minister shall exercise his discretion as he thinks fit. I do not mind his giving directions from time to time. I therefore move -

That the words “as the Minister thinks fit “ be left out.

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[3.39 a.m.]. - I hope that it is not our intention at this hour of the morning to fight shadows. I assure honorable senators that this is a shadow. We merely propose to do what the last Government thought it had done. A committee was set up, of which the Minister for Defence was the chairman. When we came to operate the provision, however, it was found that when the committee had met once, and the Minister had given a direction, its powers were exhausted, and it could not be called together again, although it became necessary to take that action. The words “ as the Minister thinks fit,” I am assured by the Attorney-General’s Department, do not have the meaning that Senator Daly suggests. They govern, or are governed by, the words “ from time to time.” That is the only thing concerning which the Minister exercises his discretion. The provision has no ulterior motive. Rations are a part of the pay of the forces, and they fluctuate in value according to their cost. Periodically, the value has to be altered in the regulations, and the Minister must give a direction to vary the amount of the deduction that is made from the pay. Otherwise, an injustice would be done, particularly to the lower ratings. I appeal to Senator Daly not to press his amendment.

Senator DALY:
South Australia

– In view of the undertaking given by the Minister, I have no desire to press my amendment. But I still adhere to the contention that, on a proper interpretation of the proposed new section as it stands, the words “as the Minister thinks lit” do more than qualify the words “from time to time.” However, wc shall he succeeding this Government in office, and will have the administration of the law. It will he perfectly safe in our hands. I ask leave to withdraw my amendment.

Senator Rae:

– I object.

Leave not granted.

Senator RAE (New South Wales) 3.42 a.m.]. - The Leader of the Senate objects to what he terms “fighting shadows “. The present hour is the most appropriate for shadows :. make their appearance. Even on the Minister’s explanation, this provision is objectionable, and certainly unnecessary.’ All that he wants is to exercise the power from time to time. Why should lie exercise arbitrary control in a matter that is supposed to be dealt with by the arbitration tribunal that has been set up?

Amendment negatived.

Clause agreed to.

Clause 10 (General reduction of salaries).

Senator DUNN:
New South Wales

– I regard this as the most dangerous provision in the bill from the point of view of employees in the Commonwealth Public Service, numbering approximately 80,000. The right honorable ike Leader of the Senate (Senator Pearce) is accustomed to refer to Public Service employment as a sheltered occupation. The same might be said of public services in all civilized countries. This clause inserts new section 18a, which reads -

Notwithstanding anything contained in this act the amount of salary, pay, fee or allowance, to which the provisions of sections 10, 11, subsection (1) of section 17, or section 18 apply, shall, subject to this section, in addition to the reductions effected by one or more of those sections and that sub-section, he reduced as follows: -

Then, it goes on to state that, in the ease of an officer who is not an adult or who is an adult unmarried male officer performing duties ordinarily performed by an officer who is not an adult, the salary reduction will be £4 per annum. Honorable senators will recall the debate in this chamber only a few weeks ago in connexion with the treatment meted out to junior employees in the Postal Department. When they reach the age of 21 years they are dismissed or, if they continue in the Service, are paid an amount less than the basie wage. In the general reduction scheme relating to officers on the basie wage; officers in receipt of £216 per annum in March, 1931, were reduced to £198 as from April, 1931, a reduction of £1S, and from the 9th July they came down to £182, a further reduction of £16. Under this bill their salaries, from the 1st October, will be £174, a reduction of £8, or a total of £42, so that the basic wage in the case of such officers will be about £2 10s. per week. The proposed reduction from the 9th July, 1931, does not represent 20 per cent, on peak salary. It actually represents the amount by which the index number fell during the quarter ended July. That is to say an officer on the basic wage was cut in accordance with the index number, but it must be borne in mind that his salary was cut that, amount on the 9th July, 1931, instead of on the 1st July, 1932. In this way he contributed £16. During the last New South Wales election it was stated that the intention of the Stevens Government was to bring the basic wage in that. State down to £2 lis. 6d. It has remained for the Lyons Government to beat the New South Wales Government to the post, because as I have shown it has brought the basic wage down to £2 10s. It is also well known that adjustments in Public Service salaries were made three months before they were due for revision by the board. We are determined to carry on the fight for the lower paid officers of the service - technicians and labourers in the Postal Department and others - and we are also prepared to fight on behalf of officers in a higher grade. Index figures produced by the Commonwealth Statistician are really so much dope to mislead the general public. The Prime Minister stated in the press that the basic wage would be” £181 a year, but I have shown that in certain federal instrumentalities under this bill it will actually be brought down to £2 10s. per week. This clause also provides that reductions shall not, unless the Minister directs, apply in respect of an officer or employee stationed outside Australia. This means that officers in Nauru, Papua and the Mandated Territories of New Guinea, will really be under the jurisdiction of the Minister, and that the Public Service Arbitrator will be powerless.

Senator O’HALLORAN:
South Australia

– Owing to the courtesy which I have willingly extended to a Minister absent on public business, I am not able to vote against this clause; but I take this opportunity of recording my strong protest against it. In my secondreading speech, I expressed my opposition to a perpetuation of the cuts made in Public Service salaries last year under the stern necessity which then existed, and pointed out that this necessity did not, in my opinion, any longer exist. If it does exist, the Government should have called for sacrifices in a general way in the manner adopted by the previous Government, and should not have attacked certain sections of the community. As a matter of fact, this Government has reversed the policy of the previous administration which was to restore as early as possible, the cuts made last year. The Leader of the Government (Senator Pearce), in reply to a question which was asked him this afternoon, made it clear that the Government does not intend to. restore wages and salaries to previous standards, but, on the other hand, intends to make additional cuts. I register the strongest possible protest against the adoption of such a policy.

Senator DUNN:
New South Wales

– I wish to refer to proposed new sub-section 18b, which provides for the automatic adjustment of salaries in accordance with the cost of living. Apparently whenever the cost of living falls, salaries will be reduced.

Senator MacDonald:

– Is provision made for increases in accordance with increase in the cost of living?

Senator DUNN:

– This Government is making no provision for any increases. Proposed new sub-section 18c provides that-

The salaries of members of the permanent Naval, Military, and Air Forces, at the rates payable immediately prior to the commencement of this section, shall be subject to reduction to such extent, and’ in such manner, an are prescribed:

Provided that the amount of reduction under this section in any such salary shall not exceed that which would have been effected under section 18a of this act had that section applied to that salary.

The Government obviously intends to balance its budget at the expense of officers of the permanent Naval, Military and Air Forces, knowing full well that they are prevented by strict rules and regulations from -fighting for themselves. If a few of them gather on the quarterdeck of a vessel, or in some secluded corner of a naval depot, they are immediately treated as rebels and enemies of the Crown. I know what I am talking about, for I spent some of my younger years in the navy. But if these officers and men are unable to fight for themselves, we shall certainly fight for them on the floor of this chamber. If ordinary officers of the Public Service, and trade unions agitate for an improvement of their conditions, or resist unfair cuts in their salaries and wages, they also are regarded as communists and enemies of the State. I wish to show how the salary of a fifth-class clerk, the lowest paid officer of the Service, has been reduced. The salary of such an officer in March, 1931, was £318 per annum. It was reduced by £18 to £300 from April, 1931, and further reduced by £46 to £254 from the 9th July, 1931. It is now proposed to reduce it by another £8 to £246 from the date of the passage of this bill. The total reduction, therefore, in a little over twelve months, has been £72 The induction to £300, which occurred in April, 1931, should not have been made until the 1st July of that year. The reduction of £46 represents a cut of 20 per cent, on a salary of £318. It was generally understood by the service at the time the Financial Emergency Bill was passed that any future cost of living adjustments would not operate while the amount deducted under the bill was in excess of the total amount to be deducted under any cost of living adjustment at a subsequent date. If this is not so, any fall in the cost of living will be of no use to the -officers of the Service, and strengthens the argument that they have been singled out for class taxation. The Premiers plan provided for a 20 per cent, all-round reduction. The public servants in receipt of more than the basic wage are, however, to do more than their share. Have they not the right to balance their budget, or must they, perforce, lose any equity they may hold? The reduction in the salary of the clerk on £318 will be 221/2 per cent. It must also be remembered that the public servants are being called upon to make additional sacrifices. Overtime, for instance, is not now paid for. Time off in lieu of overtime is granted, and not always when it is desired. Privileges, such as excess travelling time, have been curtailed, and instead of payment time off is also granted.Public servants cannot, like men in outside employment, augment their salaries by doing other work.

In spite of the treatment meted out to public servants, many officers in Canberra doubtless rushed to join the special police force organized here some months ago to resist an expected march of the unemployed of New SouthWales on this city. No doubt those officers would have used batons in the interests of this Government.

The CHAIRMAN (Senator the Hon Herbert Hays:
TASMANIA

– The honorable senator is not in order in referring to that matter.

Senator DUNN:

– I do not wish to take undue advantage of the Chair.

The CHAIRMAN:

– The Chair will take care that the honorable Senator does not do so.

Senator DUNN:

– No doubt the public servants of Canberra, who thought to protect themselves in this way, have discovered that it was. a mistake to support this Government.

Question - That the clause be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 18

NOES: 8

Majority . . . . 10

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 11 (Claimants for maternity allowances).

Senator BARNES:
Victoria

– Already the maternity allowance has been reduced by £1, and now it is proposed in this clause to make it payable only in the case of a mother whose income, together with that of her husband, is not more than £208 per annum. Previously it was £260. It is also provided that if either the father or the mother receives a present of, say, £100 from any source, making the income more than £208 per annum, the allowance shall not be paid.

Senator Sir George Pearce:

– Where is there any provision to that effect?

Senator BARNES:

– In the principal act. This clause amends section 29 of the principal act by substituting £208 for £260. Sub-section 4 of section 29 of the principal act reads -

For the purposes of this section “ income “ includes any moneys, valuable consideration or profits earned, derived or received by the claimant or her husband for her or his own use or benefit, from any source whatever, whether in or out of the Commonwealth.

Senator Sir George Pearce:

– That is a provision of the principal act introduced by the Scullin Government.

Senator BARNES:

– It appears to me to be a ridiculous provision, and I shall vote against it. Let us suppose that my daughter has occasion to apply for the maternity allowance and that her income and that of her husband does not exceed £208 per annum. In that case she would be entitled to claim the allowance; but if I were so proud of my grandchild that I gave her a gift of £100, that gift would be regarded as income, and she could not claim the allowance. I shall oppose the clause.

Senator COLLINGS:
Queensland

– I oppose this clause because if there is anything in this shameful bill of which we ought to be ashamed, it is that part of it which deals with the maternity allowance. At this hour I shall not make a lengthy speech; but I cannot afford to let the opportunity of opposing this clause pass for fear that the public’ might think that we on this side allowed it to go without a protest. Surely there is some decency, some sense of manhood, left in the champions of this measure.

The CHAIRMAN (Senator the Hon Herbert Hays:

– Order! The honorable senator is not entitled to reflect on other honorable senators in the way that he has done. It is fair to assume that members of this Senate are decent. His language is not parliamentary.

Senator COLLINGS:

– You, sir, have chosen a most unfortunate “ time to call attention to my unparliamentary language, because, during this debate, we have had to listen to worse language from honorable gentlemen opposite. However, I have no desire to say anything which might reflect on the occupant of the Chair. I shall fight to the last ditch in the only way that I know to prevent this clause from being passed. I shall at least make it clear that I protest vigorously against it.

The CHAIRMAN:

– The honorable senator is entitled to do that.

Senator COLLINGS:

– There is no reason why I should use adjectives in denouncing the bill, for the measure is self-condemnatory of the manhood, dignity and decency of the Government which introduced it. I regret that I wasted words, because the bill bears its own stigma, particularly in those provisions which attack the defenceless motherhood of this country. We ought to be ashamed of every clause in the bill, particularly the provision now before us. Having said so much, I shall resume my seat for fear that I may hurt your feelings, sir, if I continue. I have at least registered my protest. If I thought that any good purpose would be achieved thereby, I would be prepared to fight this thing until this day week - if we could hold out that long. I think that I could accept my share of the strain.

Senator DALY:
South Australia

– I shall not record a silent vote on this clause. It is regrettable that it. has been inserted, in the bill, for

I cannot see what purpose the Government can have, other than that of trying to convince the public that it is balancing its budget. When the maternity allowance was first granted, all mothers could claim it, but this bill stigmatizes as a pauper every person who claims it. I know that it is difficult to change the mind of the Leader of the Government when he has an assured majority behind him. Nevertheless, I appeal to him to agree to the clause being negatived. If my appeal falls on. deaf ears, the right honorable gentleman will not be able to say that no appeal was made to him to keep the statute-book free from this provision.

Senator DUNN:
New South Wales

– I also appeal to the right honorable the Leader of the Government not to press for the acceptance of this clause. The maternity allowance is something which should be paid to every mother in Australia, irrespective of her financial circumstances. The existence of a financial depression is no justification for withdrawing the allowance from any mother in the land. The Sydney Morning Herald, a paper held in high repute by the wealthier classes of New South Wales, said recently that if certain reductions were made in the interest rates on overseas loans, a saving of £5,000,000 per annum, could be effected. It would be better to seek a reduction of interest rates than to deprive the mothers of Australia of the assistance which this allowance means to them. Should the Minister accede to the suggestion of Senator Daly, his action would be welcomed by every member of the Opposition.

Senator MacDONALD:
Queensland

– It would appear advisable to provide more generous treatment for n mother who has a number of children than for one with only one or two children. A salary of £208 per annum does not go far in a family of six or seven children. At present all mothers are treated alike. A differentiation should be made in the case of mothers with large families, and I hope that the Government will do something for them. It may be possible to provide a sliding scale.

Senator RAE (New South Wales) principal act by providing that those qualified to receive the maternity allowance shall not receive more than £208 a year - a reduction of 20s. a week. We have been informed in connexion with other provisions in the bill that reductions are being made owing to the reduced cost of living. I am not one of those who believe implicitly in the method by which the cost of living is determined. I regard it as a gigantic fraud, and all the statisticians in the British Empire, or in any other part of the world, could not convince me that the cost of living has dropped to the extent indicated by the Statistician’s figures. liven if it has been reduced, surely the Assistant Minister docs not maintain that it has dropped to the extent of 20s. a week, and on that account those qualified to receive the allowance must not bo in receipt of more than £208 instead of £262 as provided in the principal act. I had the pleasure of rearing a family of seven children, and I adopted another in order to make the number even. Unfortunately the members of my family were born before this legislation came into operation. The proposed reduction is out of all reason, in that the income of persons entitled to the allowance must not exceed £208, which is less than a fair basic wage. I do not intend to appeal to the Minister, because such appeals fall only upon deaf ears; but I register my emphatic protest against this cheeseparing and paltry method of saving a few pounds here and there by this plundering and hungry Ministry, which is robbing the poorer section of the community whenever possible.

Question - That the clause be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 16

NOES: 9

Majority . . . 7

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 12 agreed to.

Clause 13 (Delegation by Commissioner).

Senator DUNN:
New South Wales

. - This clause provides for the insertion of the following new section in the Invalid and Old-age Pensions Act: - 6a. (1 ) A commissioner may, by writing under his hand, delegate to a deputy commissioner all. or any of his powers or functions under tin’s act (except this power of delegation ) so that the delegated powers or functions may be exercised by the Deputy Commissioner with respect to the matters specified in the instruments of delegation.

The effect of this proposed new section is to give a deputy commissioner, when so directed by the Commissioner, power to act as a pimp, to visit the homes of the children of applicants for pensions and generally to inquire into their private lives. He will also have the power to ask whether the father or mother is in receipt of a pension, if they are at work, what remuneration they are receiving, and whether they own property. Section 17 of the Invalid and Old-age Pensions Act is also to be amended by inserting a paragraph to provide that the Commissioner shall have authority to inquire whether a claimant for a pension has not, with the period of five years preceding the date of his pension claim, transferred, otherwise than by bona fide for value, property of any kind exceeding in value the sum of £100. If a person should, for sentimental reasons, transfer a property to a member of his family, the Commissioner will have the power to make a full inquiry into the circumstances of the transfer. There are other proposed new sections which are equally objectionable, and unless they are deleted it is my intention to oppose the clause. By this action, the Government has scaled its political doom.

Senator Sir HAL COLEBATCH (Western Australia) [4.46 a.m.]. - I should like the Minister to inform me whether any estimate, no matter how rough, has been made regarding the addition to the staff and to administrative expenditure that is likely to result from this new method of regulating pensions? So far as I can see, the administrative staff consists of 165 persons and costs £80,000 per annum. Now that we are embarking oh a new method, ostensibly with the idea of saving money, the Government should have some idea as to the additional cost that will be involved in the conduct of the proposed investigations and inspections.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– It is not considered that much additional staff will be involved. Powers will be delegated to clerks of court and other persons of that character, whose services will be utilized so that there may be no occasion for pensioners to travel unnecessarily. As far as possible, we shall employ State officers who already do a certain amount of investigating work for us. It is solely in the interests of claimants for a pension that there should be this power of delegation, so that they may not have to travel and be put to expense and inconvenience in establishing their claims. It is impossible to say definitely what the extra expenditure will be, but it is not thought that it will be very much. What the Government hopes to save will, of course, offset very materially the extra expenditure.

Senator RAE:
New South Wales

– I am not concerned very greatly with what the additional cost is likely to be. I should be very glad if it were ten times as great as the saving that was otherwise effected, and if it caused the act to break down by reason of its own weight. But the powers which the clause confers are about the worst that are to be found in what can only be described as an absolutely rotten measure. The provisions in relation to investigations are not, in my opinion, in the interests of the persons concerned. I am aware that a certain amount of investigation is carried out at the present time. I have no sympathy with those who attempt to impose upon the public revenues; but I am acquainted with many cases in which persons who are justly entitled to a pension are prevented by the administration from obtaining it. Much more evil has been wrought by the administration of the act than by the act itself. Cases that I have endeavoured to have rectified have convinced me that, acting under the instructions of the Ministry itself, the officers go further than the act provides, in an attempt to have claims rejected. In one case that came under my notice recently, a poor woman had had her invalid pension withdrawn. When I visited her she was in bed with influenza, in a room that she was renting. She looked a woeful sight, being haggard, miserably thin, and obviously in very bad health. No notice was given by the department of its intention to withdraw the pension.

Senator Sir Hal Colebatch:

– Was no reason given ?

Senator RAE:

– She was advised that, upon reconsideration of the state of her health, it was considered that she was capable of doing light work. She told me that she could not obtain light work. Honorable senators know how difficult it is for persons who are physically healthy and strong to procure employment. What chance, then, has one who obviously is weak and ill?

Senator Foll:

– Surely the pension would not be withdrawn without a medical examination.

Senator RAE:

Senator DUNN:

– The persons to be appointed under this provision at provincial centres will have certain powers. For example, the agent - I will use that term if it meets with the approval of the Minister - appointed at Wagga will make all thenecessary inquiries of the sons and daughters of pensioners or persons making application for the pension. The Minister has just saidthat such persons will be appointed in the interests of the pensioners. With all due respect to the honorable gentleman, I tell him that we are not going to swallow that story. I agree with Senator Colebatch that the appointment of agents or inspectors will add to the administrative costs of the department. In the discharge of their official duties, these agents will require pensioners and relatives to appear before them on a given date to furnish detailed information with regard to their private affairs. As a matter of fact, the whole business may be likened to a mystery hike on the part of the pensioners and their relatives to tell the agent all about their private lives, and satisfy him that the pension should be paid.

Question - That the clause be agreed to - put. The committee divided. (Chairman -Senator the Hon. Herbert Hays.)

AYES: 18

NOES: 8

Majority . . . . 10

AYES

NOES

Question so resolved in the affirmative

Clause agreed to.

Clause 14 (Limit of invalid and oldage pensions) -

Senator SAMPSON:
Tasmania

– In view of the statement made on. behalf of the Government that the pension is to remain at 17s. 6d., will the Minister explain why the words “Fortyfive pounds ten shillings “, are being altered to “ Thirty-nine pounds “, which is 15s. a week?

Senator RAE:
New South Wales

– I should also like to know how this clause carries out the promise of the Government that the present rate of 17s. 6d. a week will not be interfered with except in certain specified cases?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The clause provides that the pension shall be £39-

Provided . . . that where the Commissioner or Deputy Commissioner is satisfied that a pensioner or claimant has, or will have, no income other than a pension, and is, or will be, entirely dependent upon pension granted to him under this act, the preceding provisions of this sub-section shall be applied as if for the words “ Thirty-nine pounds “ (wherever occurring) there were substituted the words “ Forty-five pounds ten shillings “.

The Government has undertaken that the payment to all pensioners, except those in asylums and those who have income at present, shall not be reduced below17s. 6d. a week until such time as the Commissioner satisfies himself that a particular pensioner is not entitled, under the law, to a greater pension than15s. a week.

Question - That the clause be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 18

NOES: 8

Majority . . . . 10

AYES

NOES

Question so resolved in the affirm a tive.

Clause agreed to.

Clause 15 -

Section thirty-six of the principal act is amended by omitting the words “Five shillings “ (second occurring) and inserting in their stead the words “Three shillings and nine pence”.

Senator RAE:
New South Wales

– This clause has reference to pensioners in institutions.1s1s. 3d. a week to be taken from the poor people who need the money to provide themselves with a bit of tobacco and the like? Does the Government refuse to “ let up “ even on this provision? Does it intend to out-Herod Herod in meanness by plundering these poor people of1s. 3d. a week ?

Senator COLLINGS:
Queensland

– I have no desire to harass the Minister in charge of this bill. I was surprised to hear an hour or so ago that he is unwell and I regret it; but I must register my protest against this clause and the two which follow it. They provide that pensioners in benevolent institutions and asylums shall be penalized to the extent of1s. 3d. a week. Will blind people also be penalized to this extent? I have received a letter from a most capable blind person in my home town which really should be read.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I am informed by the pension authorities that no blind people will be affected by this provision.

Senator COLLINGS:

– At what stage will we be afforded an opportunity to discuss the position of pensioners in institutions who have dependants and who willbe seriously embarrassed if their pension is reduced? I do not wish to lose the opportunity to address myself to that phase of the subject. Does the Minister say definitely that1s. 3d. a week will be taken from all these old people?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– That is so.

Senator COLLINGS:

– I regret it very much and so, I believe, does the Minister. The further we go with this measure the more ashamed I feel of it, and the more hopeless and degrading the whole thing becomes.

Senator DUNN:
New South Wales

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The cost of maintaining pensioners in asylums is not so great as it was.

Question- That the clause be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 16

NOES: 10

Majority . . . . 6

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clauses 16 and 17 agreed to.

Clause 18 -

After section 30 of the principal act the following section is inserted in Part V. : - “ 39a. After section 52 of the principal act the following sections are inserted in Part VII. : - 52a. (2.) Any pensioner who fails to comply with the requirements of the last preceding sub-section shall be guilty of an offence and shall, upon conviction be liable to a penalty not exceeding Fifty pounds and in addition the Commissioner may cancel the pension granted to him.

Senator COLLINGS:
Queensland

– I register my emphatic protest against this clause, which is the climax of all that has gone before. In our endeavour to make sure that all the relatives of the unfortunate citizen who applies for a pension shall be harassed to the limit of the capacity of a great nation to harass them, we have provided penal clauses. When we consider some of ‘the fines that are inflicted on people for other crimes, it is almost a staggerer to see in this bill that the penalty for failing to make the requisite return which would put the applicant’s relatives on the rack, is a fine not exceeding £50. Realizing that it is useless to appeal to the Government, I merely register my protest. I . had thought that the representations of members on this side would receive some recognition from the Government, if only in the direction of making the penalties less severe. When this bill becomes law, pensioners will be in a worse position than formerly, and we may expect an increase of the number of suicides of old people. Should that be the case, their blood would be on our bends.

Senator FOLL:
Queensland

– I should like some information regarding the property of a pensioner reverting to the Crown at the death of the pensioner in cases in which the pension has been granted as a loan against the estate. Proposed new section 52h, paragraph b, provides that the home of a pensioner shall not revertto the Crown in the event of the pensioner’s wife being also a pensioner, or if she is entirely dependent on the income of the pensioner. Why should there be an age limit of 55 years in the case of a female? It seems anomalous to provide that in the case of a wife less than 55 years of age, the property shall revert to the Crown on the death of a pensioner when it does nol do so if she has reached that age.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The reason is that it is desired to avoid what, may be termed fraudulent marriages. There must he some restriction, otherwise the property might never revert to the Crown. It is necessary to make provision to meet cases that may arise, although in normal circumstances the property will pass to a. relative.

Senator Daly:

– Then why not insert the word “wilfully” as a safeguard?

Senator Sir GEORGE PEARCE.Honorable senators opposite have spoken of the sympathetic treatment which pensioners receive at the hands of departmental officials. Therefore we can trust them in this matter, and be quite sure that they will not launch a prosecution against any person who makes an honest mistake. The person whom it is desired to check is the dishonest pensioner or applicant who seeks to conceal the fact that he or she has an interest in property. How will it be possible to do this if the department is required to prove wilful intent? As many other provisions in the bill relate to liability in respect of property, if we amend this proposed new section, we shall have to insert similar amendments in other portions of the .bill. As it stands it will not inflict hardship on an innocent person.

Senator COLLINGS:
Queensland

– I invite honorable senators to visualize what will happen under proposed new section 52a. It provides that every pensioner and every claimant shall, within such time as is prescribed, furnish to the Commissioner the prescribed particulars relating to real property owned by the pensioner or claimant, or in property in which he has an estate or interest. How will it be possible for the average pensioner or claimant to fulfil all the conditions of this proposed new section ? We know how complicated are some of the forms to be filled in. I have no doubt that even the Leader of the Senate would, in certain circumstances, find it difficult to supply the precise information demanded in the form which has to be filled in by applicants for the pension.

Senator Sir George Pearce:

– I should have no difficulty in furnishing particulars about my father, mother, brothers or sisters.

Senator COLLINGS:

– How can a pensioner or claimant be expected to give particulars relating to real property in which he may have an interest or estate, and how many of them know what is meant by the word “ estate “ in relation to property? A pensioner may, unknown to himself, have an interest or estate in property belonging to his wife, or near relatives. I have no father or mother, but I have some relatives, and I am unaware if they possess property, or if I have any interest or estate in it. How then could I fill in an application for an old-age pension without being guilty of an offence under this legislation ?

Senator Sir George Pearce:

– The honorable senator would not be required to supply that information.

Senator COLLINGS:

– Why should the Minister in charge of the bill refuse to insert the- safeguard suggested by Senator Daly? Obviously, the Government’s intention is to get its grasping hands on the £50 penalty. If that is the idea, why not go the whole distance and enact that any person who fails, whether intentionally or otherwise, to supply information with regard to property, shall be guilty of an offence? Let the Government make it quite clear that it is determined to catch these unfortunate people who apply for the pension.

Senator DALY:
South Australia

– When the right honorable the Leader of the Senate’ (Senator Pearce) makes a statement with regard to taxation he should bc sure of his facts. All that I am asking is that the committee shall concede to invalid and oldage pensioners a safeguard similar to that provided for merchants under the Sales Tax Assessment Act. Under that legislation any person who fails or neglects to furnish any return or information or fails to comply with any requirement of the Commissioner shall be guilty of an offence, but it provides that it shall be a defence to a prosecution if the defendant is able to prove that the false particulars were given or the- false statement was made through ignorance or inadvertency. .1 shall be satisfied if the Leader of the Senate will agree to the insertion of that safeguard in this measure.

Senator Kingsmill:

– This is surely a matter of administration.

Senator DALY:

– This Parliament is defining rules of conduct and the mode by which those rules shall be enforced. It Ls iniquitous to place a pensioner in a more unfavorable position than a merchant simply because of failure to furnish a certain return. If the provision of the Sales Tax Assessment Act to which I have referred were included in this measure I should be satisfied, and if the Government inserted it nothing would be given away. A pensioner should not be punished for an innocent act nor should he be dragged into court merely to say that his failure was an innocent one.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I do not know whether the honorable senator is trying to mislead the Senate, but I refer him to section 66 of the Income Tax Assessment Act, which provides that -

Any person who -

fails or neglects to duly furnish any return or information or give the security required by sub-section (5.) of section fifty-four of this act, or to comply with any requirement of the Commissioner as and when required by this act or the regulations, or by the Commissioner; or

without just cause shown by him refuses or neglects to duly attend and give evidence when required by the Commissioner or any officer duly authorized by him, or to truly and fully answer any questions put to him; or to produce any book or papers required of him by the Commissioner or any such officer; or

makes or delivers a return which is false in any particular or makes any false answer whether verbally or in writing.

It further provides in sub-section 4 th at- it shall be a defence to a prosecution for an offence against paragraph c of sub-section 1 of this section if the defendant proves that the false particulars were given or the false statement made through ignorance or inadvertence.

The provisions of the Sales Tax Assessment Acf and the Income Tax Assessment Act in this respect are identical. The provision to which the honorable senator is objecting relates to failure to furnish a return and not to falsity.

Senator DALY:
South Australia

– I am sorry that the Assistant Minister cannot discuss this matter without heat. Surely he realizes that sub-section 1 of proposed new section 52a provides that -

Every pensioner and every claimant shall, within such time as is prescribed, furnish to the Commissioner the prescribed particulars relating to the real property owned by the pensioner or claimant, or in which he has any estate or interest and relating to his relatives, being husband, wife, father, mother or children as are prescribed.

I take it that that means what it says.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Of course it does.

Senator DALY:

– Proposed sub-section 2 provides that -

Any pensioner who fails to comply withthe requirements of the last preceding sub-section shall be guilty of an offence and shall, upon conviction, be liable to a penalty not exceeding £30, and in addition the Commissioner may cancel the pension granted to him.

– I do not. My deceased wife had a little property in her name, and although she had made a will, it could not be found after her death. Consequently, the property was treated as an intestate estate. I do not know how ranch of it is mine, and how much belongs to the other members of the family. To ascertain the information I should have to approach a lawyer or the Public Trustee. I do not know why a man when he becomes a Minister should regard every one who disagrees with him as a fool. Why should it be beneath the dignity of a Minister to accept a reasonable suggestion from any honorable senator?

Senator DUNCAN-HUGHES (South Australia). [6.47 a.m.]. - Since my opinion has been asked I am prepared to give it. I have no liking for these very complicated provisions, as I indicated yesterday. The scheme is so complicated that of necessity the provisions also are complicated. I recognize that a pensioner is naturally a person who is not likely to be very good at making out returns. Nevertheless, there is a rule of law that ignorance of the law does not excuse a person who breaks it. I do not see how we can justify making any distinction between the oldage pensioners and other persons of the community in regard to that rule. I agree that it is farcical in these days when the country is overloaded with laws and regulations, for there is probably not one person in Australia who knows the laws of the country in which he lives. We must, however, be consistent. I agree that the word “ wilfully “ could properly be included, because its inclusion would throw the onus of proof on the department, and the few cases it brought before the court would probably break down. Looking at the matter broadly, my own view is that there is no intention on the part of the Government, or the department, to be unreasonable or unjust in dealing with these unfortunate people. The very fact that, for the most part, they are uneducated, is bound to make the Commissioner lean to the side of the applicants. I am sure there is no intention of fining them £50, or of taking away their pensions. Rather do I believe that the authorities will administer this legislation leniently, reserving its provisions for use in really bad cases.

Senator COLLINGS:
Queensland

– Obviously, the members of the Opposition can do nothing; their most reasonable request is unheeded. Now we shall have to fight. The real fight has not yet commenced. What the Senate has experienced in the last eighteen hours is only a foretaste of what the Opposition is capable of doing if its mettle is tested. I give notice of ray intention to move that in sub-section 2 of proposed new section 52a, the words “Fifty pounds” be left out, with a view to inserting in lieu thereof the words “ One pound”.

Question - That the word proposed to be inserted (Senator Daly’s amendment) be inserted - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 8

NOES: 18

Majority . . . . 10

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Motion (by Senator Collings) negatived -

That the words “ Fifty pounds “ sub-section 2, of proposed new section 52a, be left out with a view to insert in lieu thereof the words “ One pound “.

SenatorFOLL (Queensland) [7 a.m.]. - According to proposed new section 56c a pensioner who inherits a property after receiving a pension is compelled to pay from the proceeds of the sale of the property so inherited the amount of the pension he has received. If a pensioner unexpectedly inherits a property, will he be called upon to make good to the department the amount he has previously received in the form of a pension?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The proposed new section is quite clear. When a pensioner becomes the owner of a property, not including the home in which he resides, of a value exceeding £400, he shall repay to the Commissioner the amount of pension paid to him to the extent by which the value of the property exceeds £400. There is a similar provision covering a husband and wife, both pensioners, but in that case the value is set down at £800.

Senator RAE:
New South Wales

– I cannot see anything in this proposed new section which prescribes the period in which the property shall be sold. If, in compliance with the act, the property has to be disposed of immediately, manifestly it may be sold at a sacrifice, with the result that little will be left for the pensioner. There should be some way in which the sale could be deferred rather than having a forced sale.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– This is a matter for those responsible for the administration of the act. The Commissioner, in the exercise of his duties, would not, in the interest of the department, quite apart from those of the pensioner, make a forced sale. The proposed new section merely gives to the Commissioner the right to sell, and necessarily the discretion to handle the property in the way he desires when it comes into his hands.

Senator Rae:

– There are numerous instances in which war service homes have been sold under the conditions I have mentioned.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Those are cases in which there is a contract in regard to the payment of interest and principal. Such considerations do not arise under this section.

Senator HOARE:
South Australia

– If a pensioner had received £250 from the department and a property realized only £200, would the Pensions Department call upon the family to make up the deficiency?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– No.

Senator DUNN:
New South Wales

– I know of a family feud which has been going on for some time in connexion with a property valued by the Valuer-General of New South Wales at £400. Owing to the dispute, the property has not been let and the windows and fences have been seriously damaged. When the husband died some time ago the widow became eligible for a pension, and desired to sell the home, for which no one would offer more than £100. Assuming that the property was sold for that amount, what is the position of the widow pensioner who has received £125 from the department?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– If the sale was bona fide and the Commissioner, irrespective of the value of the ValuerGeneral, sold the home for £100, the widow pensioner would receive £100in cash, but her pension would be reduced in respect of £50 of that amount.

Senator E B JOHNSTON:
Western Australia

– I have circulated an amendment to proposed new section 52b, concerning which the Assistant Minister (Senator Greene) made some comments when replying to a point raised by Senator Lawson. I do not think that the procedure suggested by the Assistant Minister will overcome the difficulty. It is much easier for persons dealing with real estate when they are able to ascertain if any liabilities have accrued against a property. The Minister quoteda judgment of the High Court to the effect that the Commonwealth Parliament cannot compel a State authority to register in relation to a title a right obtained under a Commonwealth statute. I submit that there is nothing to prevent the Commonwealth from registering a caveat in the ordinary way under the State law in the same manner as a private individual having a claim, mortgage or lien would do. If the Minister can accept the amendment which I have circulated, which permits of that being done, it could be provided by regulation that the Pensions Department could submit a claim in the same way as would an ordinary person having a claim under State legislation. That would be much easier than compelling full inquiries to be made by the unfortunate agent or purchaser, and would be a protection to the pensioner against the temptation of trying to sell. It would also avoid incurring some of the heavy penalties provided. I move -

That after sub-section1 of proposed new section 52d, the following new sub-section be inserted : 1a. Upon receipt of such undertaking, the

Commissioner shall lodge a copy thereof with the Registrar-General, Registrar of Titles or other proper officer of the State or part of the Commonwealth in whcih the property is situated.

Senator DALY:
South Australia

– I suggest that Senator Johnston should seriously consider the effect of his amendment. Under the

Real Property Act in South Australia only registerable documents can be lodged. The only conceivable way in which the difficulty could be overcome would be for the Commissioner to caveat the title. But that cannot be done by a person having an interest in the transaction. If an undertaking were given, and the Government did not take steps by way of regulation to provide that the instrument executed was a registerable instrument, any person who purchased for value without the knowledge of the Commonwealth’s interest in the property, could take action against the Commonwealth. Senator Johnston having indicated what is in his mind, the Government will no doubt provide that its interest in a property will be protected. That cannot be laid down as a hard and fast rule in this legislation. Whatever action is taken will have to be by way of regulation.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I hope that Senator Johnston will not press his amendment. The considerations to which Senator Daly has just referred have been before the Government. It has a full appreciation of the desirableness of making it as convenient as possible for a conveyancer to make sure that there is no charge against a particular property with which he is dealing. The question would never arise in connexion with a large number of properties, but in the case of others it undoubtedly would. One of the difficulties that present themselves is that the Real Property Act is not the same in all the States. We wish to make a further investigation before moving in the matter, and to deal with it by way of regulation.

Senator Johnston:

– In view of the Minister’s very courteous explanation of the Government’s intention, I ask leave to withdraw my amendment.

Amendment - by leave - withdrawn.

Senator SAMPSON:
Tasmania

– The proposed new section 52m, which provides that relatives may be required to contribute to the support of a claimant or a pensioner, is the most obnoxious feature of the bill. I have heard of sowing dragon’s teeth and breeding trouble. That is particularly evident in these provisions. The pity of it is that this portion of thebill is entirely unnecessary. I presume, however, that the Government is committed to it, and proposes to go ahead with it. It will he remembered that not very long ago this Parliament passed a bankruptcy bill. At the time, a number ofhonorable senators expressed the fear that it would lead to the building up of another department. They were informed that that was not contemplated; that there would be only a registrar, and perhaps a clerk. I invite honorable senators to look up the returns and to see the extent to which this activity has grown. I am quite satisfied that the experience will be repeated in connexion with these provisions. They are utterly repugnant to me. If relatives are worth their salt, and are in a position to do so, they will voluntarily look after their old folk. A most harassing, irritating system is to be set up. We boast of the freedom that we enjoy in this country. Where is there evidence of it in these provisions? I am unshakeably opposed to them.

Senator DUNN:
New South Wales

– I intend to make my intentions absolutely clear. I tell the Minister right now that, in my opinion, relatives of pensioners who are called upon to furnish returns ought to tell the Government to mind its own business. I shall repeat outside what I say in this chamber. One of the Government’s own supporters, in the person of Senator Sampson, has warned it that this proposed new section is full of trouble. Because a citizen has been made a justice of the peace and an honorary magistrate, that does not give him the right to sit in judgment on persons who may not have complied with the wishes of the Deputy Commissioner of Pensions. Under sub-section 5 the onus of providing that a person summoned is not a relative of the pensioner is to be on the person so summoned. Sub-sections 7 and 8 give the court power to order relatives to contribute towards the cost of the pension of a pensioner. Sub-section 13 lays it down that a court shall hear in camera any case arising under the section. Sub-section 12 gives power to the court to order not only the payment of a fine not exceeding £50, but also imprisonment for a period not ex ceeding three months. The members of this Government went on the hustings only five or six months ago. They did not say then that if the people of Australia could not pay a fine of £50 in pursuance of. an order made under legislation proposed to be enacted, they would be placed in the booby hatch for three months, and be obliged to masticate crushed corn. Is there any quality of mercy in the members of the Cabinet? I am beginning to believe that the hardest part of Ministers is their teeth. They are getting their political teeth into the majority of the people of this nation, who placed them on the treasury bench to effect social and other reforms. Does the Government propose to solve the unemployment problem in the different States by engaging men to build more gaols, in which to place people whose imprisonment is ordered by a magistrate under this legislation? If ever the Minister in charge of the bill goes on the hustings in New South Wales to give the electors an account of his stewardship, especially in connexion with our social legislation, I shall be near at hand to tell the people what I think of his attitude.

The CHAIRMAN:

– The honorable senator must confine his remarks to the section under consideration.

Senator DUNN:

– I agree with Senator Sampson’s objections to this drag-net provision, and I warn the Government of the trouble that will confront it if it goes ahead with this proposal.

Senator DALY:
South Australia

– I am opposed to this proposed new section for reasons whichI gave in my second-reading speech. Senator Colebatch was quite right in his opinion that this is a taxation measure. If it is tested before another tribunal more learned in the law than this chamber is, I shall have no doubt of the result. I was twitted with having given an opinion to the Senate in connexion with the New South Wales trouble which the High Court subsequently dealt with. On that occasion I erred in very good company, namely, that of the Chief Justice and Mr. Justice Evatt, who constituted the minority and expressed an opinion similar to that which I gave in this chamber. But the Senate has already given its endorsement to the principle contained in this legislation, and I now appeal to honorable senators to insert in sub-section 7 proposed new section 52m, a declaratory provision in terms outlined by me earlier in the debate. I therefore move -

That after tho word “him” first occurring, sub-section 7 of proposed new section 52ai the following words be inserted : - “(in eluding any amount or amounts paid by him towards the education, maintenance or wellbeing of his children, and the advisability or the necessity of the payment of which said amount ov amounts shall not bo questioned)’1.

If this amendment is adopted it will be laid down in clear and’ unequivocal language that if the relative of a pensioner or applicant satisfies the court willi regard to his means and the cost of supporting others dependent upon him, it shall not be possible for a special magistrate to say that he shall send his children to a cheaper home or a cheaper school.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– With the most sincere desire in the world to help the honorable senator, I cannot accept the amendment, because, under it, if a parent desired or thought it worth while, he could make such provision for his children that, he would have no money to give to anybody ‘else. If a man went into the honorable senator’s office and represented to him that he did not wish to contribute towards the cost of the pension for his father or mother, but desired to use the money for the education or wellbeing of his own children, it would be a simple matter, if this amendment were adopted, to come to an arrangement having that end in view. The AttorneyGeneral tells’ me there is no doubt that the ordinary schooling of children is provided for in the act as it stands.

Senator Daly:

– It could be considered. T wish to make certain that expenditure incurred in that way would be allowed.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I give the honorable senator an undertaking that if the point which he has discussed arises, and if it, cannot be dealt with by administration, it will bc put right in the act.

Senator Daly:

– I accept the Minister’s undertaking.

Amendment - by leave - withdrawn.

Senator COLLINGS:
Queensland

– I should like to know if it is possible to meet a situation similar in many respects to that mentioned by Senator Daly. An old-age pensioner may have a son with a family of three boys. The son may be having a hard struggle, but has a sincere desire to give his boys the best education possible in his financial circumstances. I do not know the scholastic procedure in the other States, but in Queensland thousands of workingclass families give their children educational facilities which, judged by the ordinary conception of what working children are entitled to, would appear to be extravagant. Boys in some working-class families in my circle of friends, having won scholarships, have gone on to grammar schools and thence to the university. In my own immediate circle of friends there is at least a score of working-class parents who are making a desperate struggle to keep their boys on thi* advanced education track. If the forms filled in by a claimant, for the old-age pension record the fact that the applicant has a married son so circumstanced, inquiries will be made and possibly it will be claimed that the education which he is providing for his boys is on the extravagant side having regard to his station in life. An order may be issued calling upon him to contribute towards the pension of his relative.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I do not think that there is any likelihood of such a thing happening if a person is struggling against great difficulties to keep at the university a child who has won a. scholarship. The use of the words, “ Having regard to his means and the cost of supporting others dependent upon him “, are broad enough to cover such a case.

Senator COLLINGS:
Queensland

– Early in my married life, when I knew the intensity of the struggle of a worker on a low wage to make provision for his future and that of his wife, I did everything I could in that direction by way of insurance. I was not extravagant in ways that are sometimes regarded as discreditable to workers, but. some people may have thought that I was extravagant in my insurance premiums. Unfortunately, my wife died many years ago, and I now ‘ have only a daughter dependent upon me. But if earlier in my life my mother and father had been dependent upon me, and an inquiry had been instituted into my position, would I have been ordered by a magistrate to surrender some of my insurance in order to provide for them? Half the magistrates that I know would undoubtedly have said that I was. spending too much money in insurance.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– If the amount that the honorable senator was spending in insurance premiums had been very heavy, it is possible that a magistrate might have said that he was able to do something towards assisting his parents.

Senator Collings:

– That is the very thing that is going to happen in many cases.

Senator HOARE:
SOUTH AUSTRALIA · ALP

– The provisions of subsections 1 and 8 of proposed new subsection 52m seem to me to be contradictory. Sub-section 1 reads - (1.) In order to ascertain whether or not any of the relatives (namely, the husband, wife, father, mother, or children over twentyone years of age) of a pensioner are able and ought to contribute towards the cost of the pension of the pensioner, a deputy commissioner may, from time to time, send by post a notice to every such relative requiring him, within the time limited in the notice, to make a proposal in writing for a voluntary contribution towards such cost, or furnish in a prescribed form a declaration as to his means and ability.

Sub-section 8 provides that - (8.) The court may make an order against any relative or relatives although it may appear that other relatives mayalso be liable under this section to contribute towards the cost of the pension of the pensioner.

I should like to know what relatives will be compelled to comply with the provisions of sub-section 1.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– An order of the court under sub-section 8 can apply only to the relatives mentioned in sub-section 1.

Senator Sir HAL COLEBATCH (Western Australia) [7.52 a.m.]. - I do not intend to argue against the ruling given by the President at an earlier stage in the discussion of this bill, but I must reiterate my opinion that the validity of the measure, particularly in regard to sub-section 7 of proposed new section 52m, is highly questionable. If the Government were to provide a contributory scheme of pensions, in acordance with the terms of the Constitution, it would be necessary to introduce two bills, a machinery measure and a taxing measure. I do not desire to set my opinion against that of any honorable senator, but we have to act according to our convictions in these matters, and my conviction is that a strict interpretation of the provisions of this proposed new section must be that it is a taxing measure. And if that is so, the whole bill will be rendered invalid. I regard the method which the Government is proposing of dealing with this situation as highly objectionable. If it must be adopted, every effort should be made to see that it is adopted legally. I cannot see how a payment by a relative into the ConsolidatedRevenue Fund for the maintenance of a pensioner can be regarded as other than a tax. Since this point was considered earlier in this sitting, I have consulted a number of authorities. To my mind Quick and Garran makes the position absolutely clear, setting out circumstances which led to the practice of not introducing certain bills in the Senate, and showing that by usage the House of Lords has been excluded from the power of initiating bills which impose penalties.

Senator Sir George Pearce:

– Does the honorable senator suggest that it would be improper to introduce into the Senate bills which provide penalties which must be paid into Consolidated Revenue ?

Senator Sir HAL COLEBATCH.Not at all. We have purposely widened the power of the Senate as compared with that of the House ofLords in that respect. I submit, however, that the test as to whether this is a taxing bill or not is whether the measure could have been originated in the Senate. Quick and Garran makes it abundantly clear that taxing bills should not be originated in the Senate.

The CHAIRMAN (Senator the Hon Herbert Hays:

– To what provision of this clause is the honorable senator directing his remarks?

Senator Sir HAL COLEBATCH.To sub section 7 of proposed new section 52m, which specifically states that money raised under that provision shall be paid into the Consolidated Revenue Fund. I do not know what money paid into that fund can be called, if it is not a tax.

Senator Sir George Pearce:

– I rise to a point of order. The honorable senator raised this issue earlier in this session, and the President ruled upon it. I submit, therefore, that the honorable gentleman is not in order in discussing at this stage the constitutionality of the clause.

Senator Sir HAL COLEBATCH.I have made my remarks simply to clarify my position, and having clone so, I am satisfied.

SenatorCOLLINGS (Queensland) [ 7.58 a.m.]. - I wish to know whether 1 shall have an opportunity to discuss the position of blind pensioners. Perhaps I may be allowed at this stage to read the letter to which I made reference earlier in the morning.

The CHAIRMAN:

– I am afraid that the honorable gentleman has missed his opportunity to discuss that subject. If he desires to ask the Minister in charge of the bill a question relative to blind pensioners I shall permit him to do so.

Senator COLLINGS:

– I should like to know what is the position of blind pensioners who have dependants to maintain ?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The matter referred to by the honorable senator certainly does not arise under this clause, and I do not know under what clause the honorable senator could discuss it.

Senator DUNN:
New South Wales

– Is it the intention of the Minister, on the passing of this measure, to recommend to the Government that this provision be brought before the notice of the people of Australia through the medium of every daily newspaper in this country and the Government Gazette?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The intention of the Government is, of course, to give the fullest publicity to the provisions of this legislation so that the people of Australia may know the extent of their liability.

Senator Dunn:

– Will publicity be given through the daily newspapers?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– We shall take whatever course may be considered desirable. I cannot at the moment say exactly what will be the form of the advertisement.

Question - That proposed new section 52m stand as printed - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 15

NOES: 11

Majority . . 4

AYES

NOES

Question so resolved in the affirmative.

Clause put and agreed to.

Clause 19 agreed to.

Clause 20-

After section fifty-three of the principal act the following section is inserted: - “53a. - (1.) Notwithstanding anything contained in the Gold Bounty Act 1930-1931 and the last preceding section, no amount of bounty payable under that act shall be distributed, under paragraph b of section eight of that net, to producers of gold in respect of gold produced by them after thethirtieth day of September, One thousand nine hundred and thirty-two and prior to the date of publication of a notice in pursuance of the next succeeding sub-section. (2.) If at any time the Minister is satisfied

that the price, in Australian currency, of fine gold at the Melbourne branch of His Majesty’s Royal Mint, does not exceed Five pounds ten shillings per ounce, he shall, by notice published in the Gazette, so certify.

Senator E. B. JOHNSTON (Western opposed to this clause. I hope that the Minister will accept or move an amendment designed to place the relation between Australian and English exchanges on a proper basis. It is provided in this clause that when the price, in the currency of the United Kingdom, of fine gold at the London mint does not exceed £5 per oz., the bounty shall* be restored, and also that when the price in Australian currency of fine gold at the Melbourne mint does not exceed £5 10s. per oz., the bounty shall be restored. The Minister knows that under the existing exchange rate, £5 in English currency has the same value as £6 in Australian currency, yet it is provided in this measure that the restoration of the gold bounty shall depend on two different values.

Senator E B JOHNSTON:

– -It is a most extraordinary position, and so as to place the two values on an equal basis under the existing rate of exchange as between Australia and London I move -

That in paragraph 6, sub-section 2 of proposed section 53a, the words “Five pounds ten shillings “ be left out with a view to insert in lieu thereof tho words “ Six pounds “.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

’. - I regret that I cannot accept the amendment. The intention of the Government is not to continue to pay a bounty on gold if the price is above £5 10s. an oz. in Australia. I am trying to act generously and fairly in the circumstances. When the bounty was first granted, the value of gold in Australia was more like £4 12s. an ounce.

Senator Sir Hat Colebatch:

– It was, I think, £4 9s. an ounce

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– When the Gold Bounty Act was passed in December, 1930, exchange stood at £109, the net price of gold being £4 lis. 6d. per fine ounce. We are now to all intents and purposes saying to the gold-mining interests “ We shall give you another £1 per ounce, and if the value of gold in Australia falls .to a point at which it is practically £1 above the value on which the bounty was granted, we shall restore the bounty at 16s. As I have already promised Senator Colebatch, I shall read the telegrams which passed between the Government and Mr. Bruce on this matter. The only reason that it was taken up in London at all was that the Australian representatives of the London interests came to Canberra, and saw the Prime Minister and myself, and asked that this matter be taken up with their London representatives. When Mr. Bruce arrived in London, one of his first jobs was to see the London representatives in order to inform them of what this Government had in mind, and to ask them if they thought that its proposal was a reasonable settlement of the question. The following is a copy of a cablegram to Mr. Bruce dated the 16th- September, 1932:-

Your telegram of the 14th September, Gold: You may inform people with whom negotiating that Government proposes amending Financial Emergency Act suspending gold bounty with automatic restoration when mint sterling price London fine gold falls to £5, provided Australian mint price is not in excess of £5 10s. Australian currency. Clause existing law providing for automatic increase in amount bounty as exchange falls from 130 is not disturbed. The effect of this is that if sterling price £5 and Australian £5 10s. bounty would be 10s. per ounce of excess production. If Australian currency moved to parity with sterling and sterling g price gold remained £5 amount of bounty would be £1 per ounce. Government cannot agree extend term beyond existing period.

The following is a copy of the reply from Mr. Bruce received on the 24th September, 1932:-

Gold: Agreement has been arrived at with the companies on the basis of your telegram of 16th September. Have advised their Australian representatives, and a letter from Hamilton will appear in London papers Monday morning expressing satisfaction with arrangement as an equitable settlement and their appreciation of generous assistance and encouragement afforded by the Government. Suggest you give concurrent publicity to the arrangement.

Something has been said in the course of the debate about the tremendous value of the bounty to the gold-mining industry. In the early stages the bounty did have some definite value, particularly to the large mining companies which were opening up big deposits of low-grade ore. It gave them some stability at the time, and a slight advantage in respect of the London price. What is now giving an impetus to the industry is undoubtedly, not only the exchange rate between Australia and London, but also the break between sterling and gold. The combined effect of these two things has raised the price of gold £2 per ounce above the ordinary mint price of gold. It is that fact, and not the 2s. or 3s. which the bounty provides, which is giving a great impetus to the gold-mining industry.

Senator KINGSMILL:
Western Australia

– I shall support the amendment, and if I thought that there was any chance of achieving my object I would move later that the clause, as amended, be struck out, but I do not think that that could be carried. The Minister underestimates the effect that this bounty has had ; not so much its actual as its moral effect. Before the exchange assumed its present proportions the offer of this bounty resulted in scores, and even hundreds, of persons commencing to prospect again in the State which I have the honour to represent, and a. very large number of men were induced to prospect in other States as well. In this Senate it seems to be counted to Western Australia for unrighteousness that it should eagerly seek the retention of the gold bounty. Some blame seems to be attached to it for having in the past produced great wealth in gold, not for Western Australia only, but for Australia as a whole. That State is still winning gold, and there are excellent prospects of its continuing to do so in the future. I would do all that I could, not merely to keep this important primary industry at a stationary level, but to improve its position, if possible. That will be done, not by the big companies so much, as by those who, before the stimulus of a bounty was given to the industry, had threatened to become a vanishing race - the prospectors. Through the goodness of this Parliament in agreeing to the gold bounty, and because of the general depression which has made it difficult for men to find employment in other walks of life, some vigor has been restored to gold-mining, an industry which has done much for Australia during now nearly a century. I regard this amendment of great importance both to Western Australia and to the Commonwealth as a whole. Even a modification of the gold bounty, and, of course, the wiping out of if, would cause a chill wind to pass over what has become again an attractive proposition, not only in Australia, but also in the Old Country, whence we must obtain the funds necessary for the development of our mines as they should be developed. At the back of the whole matter is the need for encouraging prospecting. While the States, as a rule, are willing and anxious to do this, and the action of the Commonwealth Parliament in giving this gold bounty has had a most stimulating “ effect on the industry, I hesitate to think of the effect which the news that the bounty was being seriously interfered with would have on those investors in London from whom we must draw our capital.

Question - That the amendment (Senator Johnston’s) be agreed to - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 12

NOES: 14

Majority 2

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Senator Sir HAL COLEBATCH (Western Australia) [8.22 a.m.]. - I hope that the Government will accept an amendment along the lines indicated by me in my second-reading speech. A telegram has been read by the Minister in charge of the bill in regard to the attitude of the London mining directors. I am well acquainted with practically all those directors, and I know the spirit in which they are acting with regard to the industry. Among them are men who have been interested in gold-mining in Western. Australia since the early days. Their operations have been carried on for many years without profit, and immediately a little profit comes their way it seems that they are to be deprived of it. They were ready to assume the most generous attitude to the States and to the Commonwealth. They were willing, not only to accept whatever the Government proposed, but even to put the matter before the public in such a way that there would be no suggestion that Australia had repudiated its offer of a bounty. They were prepared to do this in order that no harm might be done to a country in which they had taken a keen interest; in many instances without profit to themselves. Many gold mines have been carried on entirely without profit for years. The granting of the gold bounty has not meant dividends to the shareholders. Up to the present time, it has resulted merely in putting more money into the work of developing the mines. Large sums have been spent in equipping them, and, therefore, this Parliament should show an equally fair and generous spirit. I move -

That, after proposed new section53a, the following new section be added: - “53b. Sub-section 1 of section 5 of the Gold Bounty Act 1930-1931 is amended by adding at the end thereof the words - “ “ and thereafter for such further period as is equivalent in the aggregate to the period or periods during which by virtue of section 53a of the act, no amount of bounty payable under the Gold Bounty Act1930-31 is distributed.

Personally I doubt whether this provision will have any effect, because I do not think that we shall ever see sterlingdown to £5 per oz., and Australian currency down to £5 10s. ; but if this provision be agreed to, it will at least give an indication that in the event of this happening the bounty will be continued for a full period of ten years, as contemplated under the original act. Ministers, in relying, as they are entitled to rely, on the telegrams that they have received, will recognize the spirit in which the directors are acting, and they should be prepared to respond in a similar spirit.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Senator Colebatch has submitted his proposal in such an agreeable way that I would be glad to be able to comply with his request; but the Government feels that it cannot commit this Parliament to a possible continuation of the bounty into the indefinite future. The bounty act still has eight years to run. I am inclined to think that it is very unlikely that at the end of that time we shall have reached a point at which the bounty will become payable ; nobody can say when that stage will be reached. The Government informed London quite definitely that it did not propose to extend the operation of the act. Parliament, at any time, if circumstances justified doing so, could reestablish the bounty, and, on the other hand, it could repeal it; but the Government does not consider that it would be right to put a provision in the law which would be quite indefinite as to time, and which might begin to operate in circumstances which cannot be visualized at the moment.

Senator DALY:
South Australia

– I hope that the Senate will view this amendment in its true perspective. Every State of the Commonwealth has to thank some government or other for governmental assistance in the form of bounties, embargoes or agreements. The gold bounty was granted by the last government, and the gold-mining industry was properly organized to enable full advantage to be taken of it. A representative gathering was held in Melbourne, and it. was attended by every Minister of Mines and every Director of Mines in the Commonwealth. It was a most representative conference of the mining industry of Australia. A council was established for the deliberate purpose of making the bounty unnecessary at the expiration of ten years. The Scullin Government, on the advice of departmental officers, decided that the industry should not be allowed to organize itself, and the proposal of the council was refused. No suggestion has been made that the assistance granted to the sugar, galvanized iron, and paper pulp industries should be limited to a definite period. This Parliament adopts a generous attitude towards industries that do not trouble to organize themselves; let us mete out the same measure of justice to an industry which is more enterprising. The gold-mining industry was promised a bounty for ten years so that it might have an opportunity to rehabilitate itself and introduce capital and machinery for dealing with low grade ores. While the high rate of exchange continues, and gold is at a premium, the richer deposits in the mines will be exploited, and when, later, attention has to be given to low grade ores, the necessity for a complete organization of the industry will be even greater. The representatives of the industry voluntarily accepted a reduction of the bounty, and the amendment that Senator Colebatch has proposed would be a very fine gesture of appreciation on the part of this Parliament. We should tell those people that we admire their attitude, and are prepared to continue the bounty for a reasonable period so that the industry may have an opportunity to become rehabilitated.

Question - That the words proposed to be added be so added (Senator Sir Hal Colebatch’s amendment) - put. The committee divided. (Chairman - Senator the Hon. Herbert Hays.)

AYES: 13

NOES: 12

Majority . . 1

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Clause, as amended, agreed to.

Title agreed to.

Bill reported with an amendment; report adopted.

page 982

PRINTING COMMITTEE

Report (No. 2) presented by Senator J. B. Hayes and adopted.

Sitting suspended from 8.43 a.m. to10 a.m.

page 982

STATE GRANTS BILLS

Simultaneous Discussion.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I suggest that to facilitate the business of the Senate permission should be granted to honorable senators, while debating the second reading of the South Australia Grant Bill, to engage in a general debate on the three measures, the South Australia Grant Bill, the Western Australia Grant Bill, and the Tasmania Grant Bill.

The PRESIDENT (Senator the Hon. P. J. Lynch). - Is it the desire of honorable senators that the three bills should be dealt with simultaneously upon the second reading of the South Australia Grant Bill?

Honorable Senators. - Hear, hear !

page 982

SOUTH AUSTRALIA GRANT BILL 1932

Second Reading

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I move -

That the bill be now read a second time.

During the last two years the granting of financial assistance to the States by the Commonwealth has assumed special importance because of the additional burdens involved in the Commonwealth budget. It is also of great importance to the States concerned, because of the deficits with which they have been confronted in recent years by reason of the prevailing depression, and to the other States which are making the main contributions to these grants.

Until 1929 special grants by the Commonwealth had been limited to the two States with the smallest populationsWestern Australia and Tasmania. In 1923-24 the payments to those two States combined amounted to approximately £200,000. In 1928-29 the payments had grown to £520,000. In 1929-30 a special grant was made to South Australia for the first time, and since then the total charge on the budget for State grants has increased substantially, as may be gathered from the following figures: -

For 1932-33 the proposed payments amount to £1,830,000. the largest amount by £110,000 that the Commonwealth Government has contributed in this way. The increase in the last two years has been caused by the depression, which has resulted in the States concerned having to face extraordinary difficulties. The total charge has reached such proportions as to be a matter of special concern not only to the States which receive the grants, but also to those upon which the burden really falls, Queensland, New South Wales and Victoria.

Tn the last ten years the practice has grown of certain States making frequent request’s for assistance. Several times the Commonwealth Government . of the day has referred tho”se requests either to royal commissions or to the Public Accounts Committee for inquiry and report. Unfortunately, despite lengthy and exhaustive investigations, those independent bodies have been unable to devise any formula or any uniform basis upon which the amount of assistance granted could be calculated with justice to the State concerned, and to all the other States. In each instance the grant recommended appears to have been arrived at in an arbitrary fashion. It may be that .no such formula or basis can be determined, but the Government does not propose toleave the matter where it is. It feels that some effort should be made to decide upon a more definite or reliable basis for the making of grants to States. The special grants paid to States last year were as follow : -

Each of these States submitted requests to the Commonwealth for greatly increased grants for the current year, South Australia asking for £2,000,000 a year; Western Australia for £1,000,000 a year for an indefinite period, or, alternatively, the right to impose its own customs and excise tariffs; and Tasmania £440,000 a year, making a total of £3,440,000 for the period.

After carefully reviewing the claims, the Government proposes that the following grants shall be made this year ; South

Australia, £1,000,000, which is the same as last year, Western Australia, £500,000, or an increase of £200,000; and Tasmania, £330,000, an increase of £80,000, making a total of £1,830,000. The Government seeks to be as liberal as possible in the circumstances. Since the Premiers plan was entered into, the States have regularly supplied the Commonwealth with particulars of their financial position, so that it is familiar with the situation. The circumstances of Tasmania have become peculiarly difficult owing to the fact that for some years past that State has relied to a great extent upon its taxation receipts from the operation of Tattersalls sweep. Because of the establishment of the Golden Casket in Queensland, and, later the State Lottery in New South Wales, those receipts have very materially reduced, and the Tasmanian revenue has .suffered severely.

Senator Barnes:

– The bill indicates that a sum of only £80,000 is to be made available to Tasmania.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– -That is because there is at present’ an act on the statute-book which provides that for another two years Tasmania shall receive an annual grant of £250,000. The additional £80,000 provided by the Tasmanian Grant Bill 1932 makes the amount £330,000.

As compared with last year, these proposals involve an increased burden on the budget of £280,000. The Government considers that these large grants are justified only because of the different and special circumstances now existing, and that grants of such magnitude cannot be taken as a basis for permanent or longterm relief. The Government considers that it is undesirable that annual application should be necessary from the States for Commonwealth assistance, and it is convinced that as soon as normal conditions return some definite plan must be adopted for determining what grants shall be made to the States over a period of years.

The following particulars regarding the special financial assistance granted to South Australia should be of interest to honorable senators. In 1928, that State asked for a grant of £750,000 on account of federal disabilities.- In 1929, a royal commission, which investigated the claim, recommended a grant of £500,000 a year for two years. In December of that year, Parliament approved of the payment of £1,000,000 spread over three years. In 1930-31, because of the extraordinary budget difficulties of South Australia further special assistance of £850,000 was arranged in co-operation wilh the other States, which gave up their rights to certain money from the Commonwealth, so that the total assistance to South Australia in, that year was £1,170,000. Late in 1930, South Australia submitted a request for £1,950,000 a year for an indefinite period, and the Public Accounts Committee, which inquired into the request, recommended £1,000,000 for one year only, namely, 1931-32. That was approved by Parliament after a recommendation by the Scullin Government. En submitting tho proposal to Parliament, the following statement was made : -

In milking this recommendation, the Government puts forward the view that such assistance should he regarded as of a temporary nature designed to help Smith Australia towards a re-adjustment of her financial difficulties.

This year, South Australia has asked for t’2,000,000, and the Government’ proposes to grant £1,000,000 only for this year. The following statement shows the deficits and grants of South Australia in recent years : -

With regard to the proposed grant to Western Australia, I shall not traverse the ground already covered in my remarks on the South Australia Grant Bill, but I would remind honorable senators of the following facts respecting special grants to Western Australia. In 1926, Parliament approved of a grant of £300,000 for five years, which expired in 1930-31. In 1931, Western Australia asked for £450,000 a year, but claimed that it was entitled to £1,000,000. For 1931-32, it was arranged that the grant of £300,000 should be continued. This year, Western Australia has asked for £1,000,000 a year for an indefinite period, or, alternatively, the right of tariff autonomy. The Commonwealth Government proposes to make a grant of £500,000 for this year only. The grants to Western Australia and budget results during recent years were -

With regard to Tasmania, as honorable senators are probably aware, that State has, since 1912, recei ved special assistance from the Commonwealth. I have already stated that the Government proposes to make a grant of £330,000 to Tasmania for the current year. Parliament has already approved of a grant of £250,000 to that State for this year, and the present bill, therefore, provides for an amount of £80,000 only. Grants to Tasmania and budget results during recent years were -

I have no further useful information to give to honorable senators.

Senator O’HALLORAN:
South Australia

– I agree with the “Minister that it is desirable that these measures should be considered simultaneously, and I am pleased that the Senate has’ adopted that course. The principle underlying each of the bills, and the justification for the grants, are substantially the same in each instance. I do not claim to bc familiar with, the circumstances of all the States, but I do claim to know a good deal about the conditions in Tasmania, aud particularly in South Australia, because 1 represent that State in this chamber and, for- a considerable period, waa a member of the State legislature. As a member of the Commonwealth Public Accounts Committee, I was one of those charged with the task of investigating the disabilities of South Australia at the request of the previous Government. Also, as a member of that committee, I participated in a complete investigation of the finances of Tasmania. I agree that the measure of relief which it is now proposed to afford to those States is absolutely justified. As the Minister has indicated, South Australia first became an applicant for a. special grant from the Commonwealth in 1927. The reason for the application was that the pastoral areas of that State were suffering from one of the most disastrous droughts experienced in the history of the white settlement. The drought had also affected some of the agricultural lands of that State, and from 1927 onwards it became intensified in both the pastoral and the agricultural areas. It cau be truly said that the drought did not break until 1931. That disaster, together with the general depression, imposed almost insuperable difficulties on the Treasury and the Parliament of South Australia. It made anything approaching budget equilibrium practically beyond achievement. Had it not been for the consideration given to that State by this Parliament during the past three years, in making to it special grants totalling £2,500,000, I shudder to think what the consequences might have been. The difficulties of South Australia have been accentuated by the high cost of. rural development. South Australia is one of the most unfortunate States in the Commonwealth so far as its natural resources are concerned. * It has no coal supplies. It has but one main river, and even that is not conveniently situated. It grows little timber, and is lacking in most of those natural resources which are so necessary to tho proper development of primary and secondary industries. South Australia has to depend almost entirely upon primary production for its national income. The cost of making lands available for primary production has in recent years increased materially. The provision of water in dry areas, the construction of head works at reservoirs, and the laying of -pipe lines for reticulation purposes have involved that State in enormous expenditure. Developmental railways have also had to be constructed. In both instances it is impossible to levy a charge to meet the full cost of those works. I have no doubt, that when the development of that State is complete, and it is producing to its full capacity, its financial position will be materially improved, but in the meantime* the developmental works are a considerable burden upon the taxpayers of the State. The Minister referred to various inquiries which had been conducted into the disabilities of the three States concerned, and to the difficulty that had been experienced in arriving at some formula for the determination from year to year of the assistance to which these States were entitled from the Commonwealth. The Public Accounts Committee was requested by the previous Government to recommend such a formula. That committee sought material which would justify a recommendation iu that direction, but found that to be an impossible task under the then prevailing conditions. The most important factor was, the general uncertainty of the financial position of Australia. The committee experienced difficulty in respect of the various systems of bookkeeping operating in the States, and its recommendation in that direction, will, I trust, be given favorable consideration by this Government, and placed before the Premiers conferences which are held from time to time, when the important subjects which are now occupying the attention of Commonwealth and State governments have been disposed of. The committee did arrive at what it considered was a fair basis of estimating the approximate amount of grant for the States in view of the circumstances from year to year, and in that respect the thanks of this Parliament are due to Professor Giblin, because it is owing to his efforts that the present formula has been adopted. It provides that States seeking special grants from the Commonwealth, under section 96 of the Constitution, should conform to certain, conditions. The formula is expressed in these words -

The State should be taxing its people with considerably greater severity than the Australian average. It should not be attempting social provisions on a more generous scale than the average. Its cost of administration should be well below the average, and it should, for some years at least, have shown moderation and caution in loan expenditure.

I venture to say that each of the States that will benefit under this bill conforms with those conditions, and, therefore, is entitled to special assistance.

For a long period South Australia has been faced with large and growing deficits. The estimated deficit for this financial year, according to a forecast which I have seen of the budget speech of the South Australian Treasurer, is £1,200,000, which is the figure mentioned by the Minister in charge of the bill. I point out, however, that the deficit has been reduced to that sum only by means of a -reduction of the necessary provision for depreciation in connexion with State railways and waterworks capital expenditure. This policy cannot be continued for many years without imposing an increased burden on the taxpayers, because the amount required for depreciation is accumulating. In the reports of the Public Accounts Committee, which I have before me, are some illuminating figures relating to the position of South Australia; and no doubt honorable senators have made themselves familiar with them. I also have in my hand a valuable table in a document prepared by the State Committee* in South Australia, which drew up the case for that State for presentation to the Federal Government this year. The committee brought up to date the figures which had been dealt with by the Public Accounts Committee, and the report shows the relative severity of the burden of taxation per head of the population that would have been imposed on the various States if all budgets had been balanced last year. The taxation in South Australia would have been £13 8s. per head, while the average for the six States would have been £7 ls. per head. Those figures show the financial position of South Australia in proper perspective. That State would have been compelled to impose on its people nearly twice as much taxation as the average for the six States. In Tasmania the position is almost as bad. The amount required there would have been £12 9s. per head, and Western Australia shows a figure above the Australian average. We must also consider the taxable capacity of the people of the various States. In Tasmania this figure is the lowest in the Commonwealth. The taxable capacity of South Australia is the second lowest, and it is not very much greater than that of Tasmania. The position in Western Australia in this respect is a little better; but it is not so good as the average of the States as a whole. This, of course, furnishes an additional argument in favour of making special grants to those States.

I’ repudiate any suggestion that the proposed grants are in the nature of a charitable dole. The present financial position in the States concerned is largely due to difficulties caused by the constitutional machinery under which the people of Australia are governed. For many years prior to federation, there were six sovereign States in Australia, each pursuing its work of development in its own way. On the establishment of federation, it was impossible to bring the States together on such a basis that the benefits and disadvantages of federal legislation would be equitably distributed among them. For that reason, provision was made in section 96 of the Constitution for the Commonwealth to grant financial assistance to the States. Apart altogether from the severity of State taxation, and the taxable capacity of States, the proposed grants are necessary to place South Australia, Tasmania, and Western Australia on the same basis as the other States. The impression has been created in the eastern part of Australia that South Australia has prospered wonderfully under the Premiers plan;’ but, as a matter of fact, that plan has had no marked influence on South Australia’s financial position, except that it has detrimentally affected the State’s revenues by reducing the number of its taxpayers, owing to the reduction of incomes, salaries, and wages. Of course, many of these reductions were due to drought conditions and other difficulties experienced before the plan was devised. The seriousness of the position this year, compared with last year, is shown by the fact that the number of income taxpayers in South Australia has been reduced by 38,000. The general exemption figure in my State is £100, less £30 for a wife, and £30 for each child under the age of fourteen years, and it would be harmful to lower the exemption, because it is already altogether too low. The State Treasurer has been hard pushed to make up the revenue deficiency due to this fact alone. I regard these bills as abundantly justified, and I hope that the Senate will pass them without delay.

Senator DUNN:
New South Wales

– In approaching this subject, I recognize that the representatives of all the States have every right to express their opinions on every bill submitted to the Senate. There are times when one considers that the smaller States should be assisted so far as the national finances will permit; but, at the present time, an unprecedented situation must be faced. I have no desire to convey the impression that I am a “ Staterighter,” and that I consider that if New South Wales does not get all it expected to receive under federation, it should raise the fiery flag of secession. The States of South Australia, Western Australia, and Tasmania have been treated very well. No special grants to the other States are proposed; but, having regard to the fact that New South Wales has two-fifths of the population of Australia and yields about 40 per cent. of the total Commonwealth revenue, it, too, is entitled to assistance, in itsfinancial difficulties. No doubt the representatives of Victoria and Queensland could make out a good claim for those States also. I propose to show that the money now proposed to be granted to three States of the Commonwealth could be put to better use. The Premiers of the three States to be benefited have contended that federation has imposed disabilities upon them; Western Australia particularly has circulated the fiery cross of secession, and is demanding at the present time independence in respect of customs and excise taxation for a period of 25 years. I submit that any disabilities suffered by the indigent States are due, not to Com monwealth policy, but to the abnormal depression throughout the world. In the last annual report of the Commonwealth Bank, Sir Robert Gibson, as chairman, states -

The seasonal outlook at present may be regarded as generally satisfactory. . . . Again, of course, the crucial period which finally determines harvesting results is still ahead of us. We can only, therefore, trust that present prospects will continue to operate. . . world’s prices for our exports remain a matter of speculation.

If that is the considered opinion of Sir Robert Gibson and his co-directors, we may expect South Australia, Western Australia, and Tasmania to return capinhand before long for further grants from the Commonwealth Treasury. Sir Robert Gibson continued -

Taking the long-range view, one’s thought turns to the reactions possible from the Lausanne Conference, the Ottawa Conference, and the possibilities of an International Economic Conference to follow.

No doubt that gentleman had in mind the possibility of increased trade within the Empire in accordance with the agreements at Ottawa, but the newspapers inform us that the British Cabinet has been practically wrecked as a result of the bargaining at that gathering. A large section of public opinion in the United Kingdom still believes in a free breakfast table, and no doubt the attitude of British politicians towards the Ottawa agreement is influenced by the international ramifications of British investments. Approximately £200,000,000 of British capital has been invested in the Argentine, and the British Government has guaranteed credits extended to Soviet Russia for the promotion of trade.

Senator Sir George Pearce:

– On a point of order, I suggest that British trade relations with Argentina and Soviet Russia are not relevant to these bills.

The PRESIDENT:

– The honorable senator is certainly wandering from the subject-matter of the bills.

Senator DUNN:

– Apparently, my remarks are unpalatable to the Leader of the Senate. Wo have been told that probably as trade improves the financial position of the indigent States will be eased, and, in consequence, they will not require the same amount of assistance from the Commonwealth in future years.

They arc primary-producing States, dependent to a large extent on the export trade, and I submit that I am entitled to examine the prospects of improved trade with other parts of the Empire. However, I bow to the ruling of the Chair.

Sir Robert Gibson has referred also to the Premiers plan. Sir James Mitchell, Mr. Hill, and Mr. McPhee, the Premiers of Western Australia, South Australia, and Tasmania respectively, have frequently urged that their strict adherence t.o the Premiers plan is an additional reason why the grants to their States should bc increased. This Parliament had no hand in the formulation of that plan ; it, was hatched at secret sessions of Commonwealth and State Ministers in Melbourne, and it. is clear that even those States which claim to be implementing it in all its details are not out of their difficulties. Prior to the recent general election in New South Wales, Mr. Hill was the guest of the Millions Club in Sydney - that delightful collection of brick-and-mortar Arcadians who meet for back-scratching and mutual admiration, and seek to bring about the rehabilitation of Australia at the expense of the working class. Mr. Hill boasted of the completeness with which South Australia has observed the Premiers plan, but we know the hardships which his policy has imposed upon the citizens of that State.

Senator DUNCAN-HUGHES:
SOUTH AUSTRALIA · UAP

-hughes. - An improvement was noticed in South Australian public affairs earlier’ than in other States.

Senator DUNN:

– I do not admit that. Mr. Hill was elected to control tho political destinies of South Australia as a Labour man, but one of his first actions was to reject the Labour party and the political platform upon which he had been returned. Mr. Hill declared that his State had turned the corner, and prosperity was near at hand. He added that, if New South Wales would only do what South Australia had done, the position in that State would be all that could be desired, and was at great pains to eulogize those concerned in New South Wales who were endeavouring to enforce the conditions of the Premiers plan on the people of that State. At the time of Mr. Hill’s visit, the Sydney Morning Herald reported that South Australia showed definite signs of revival. About the same time, in a letter addressed to the Prime Minister (Mr. Lyons), Mr. Hill stated -

All governments in Australia in June, 1931, agreed to adopt the Premiers plan, which was designed to bring about gradual recovery in Australian government finance. South Australia has faithfully carried out its obligations under the Premiers plan, and its percentage reductions in adjustable expenditure are greater than those effected by any other government in Australia. Net loan expenditure in South Australia has been reduced practically to zero, and South Australia’s record in this respect is eclipsed by only one other State, Queensland.

At that time Mr. Moore was Premier of Queensland. Luckily for that State, the people were given an opportunity to express their opinion on the subject, and they promptly sent Mr. Moore about his business. Mr. Hill continued -

Taxation in South Australia has been increased to such a degree that, with federal taxation superimposed, the burden placed upon the citizens of South Australia is almost insupportable. The tremendous fall in the oversea prices of our exportable products has meant a serious fall in our national income, aud lias reduced to an alarming extent our taxable field. On the other hand, the reduction in national income has meant a large reduction in the volume of ordinary business, which has caused a large increase in unemployment, and also in government outlay for sustenance, an obligation which must be met.

We realize that the people of South Aus tralia had a very rough time, indeed. I recollect that the conditions prevailing at Kadina, the lowest in that State, were accepted as a basis for the South Australian basic wage. When Mr. Hill asked for this huge sum of money, he must have realized that, if paid, it would be at the expense of New South Wales, Vic- , toria, Queensland, and Tasmania.

When the Scullin Government was in office, and the then Prime Minister was overseas, Mr. Lyons, the Acting Treasurer and Postmaster-General, stated that, if Australia could convert £28,000,000 of its indebtedness from 5$ to 4 per cent., everything in the garden would be lovely, and prosperity assured. The conversion was made, but the promise has not materialized. During this debate Senator Duncan-Hughes interjected that conditions in South Australia are better now than they have been for years. I have no desire to contradict the honorable senator, but I remind him that, if there is any improvement, it has been brought about at the expense of the workers, by destroying the reasonable standards of living previously enjoyed by them. I am sorry that such reactionary legislation should have been introduced by a socalled Labour Premier and his Government.

Senator Duncan-Hughes:

– The honorable senator is not correct.

Senator DUNN:

– That is my opinion. Perhaps, the explanation is that Mr. Hill, his Ministry, and many of his rank and file really belong to another political stable.

I shall quote some interesting figures dealing with unemployment, taken from the Quarterly Summary of Commonwealth Statistics. Although Professor Giblin and his staff are unable to obtain reliable figures from the different State governments, they are able to turn to a very accurate source for information - the trade union secretaries of Australia. Following are the unemployment figures for the second quarter of 1931: -

Honorable senators will recollect that, during the last federal election, the propaganda of the United Australia Party promised that, if that party were returned and had power in both Houses, Australia would quickly regain prosperity, and jobs would be available for all. We shall see what the figures disclose. For the second quarter of 1932 they were -

New South Wales ….61,137

The PRESIDENT:

– What bearing has that upon the measure?

Senator DUNN:

– It concerns an amendment which I desire to move. In order to bring my remarks within the ambit of debate, I move -

That all the words after “That” be left out with a view to insert in lieu thereof the words “ the bill be withdrawn and redrafted to provide that financial assistance shall be for the sole purpose of relief of unemployment”.

That should make my remarks relevant. The unemployment figures for the remaining States for the second quarter of 1932 are-

Obviously there has not been the promised decrease in unemployment.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– Then the Government has not drawn sufficient attention to that grant. It budgeted for only £250,000 for the relief of unemployment. There is plenty of opportunity for putting works in hand in every State. Men in Victoria who have been receiving only a couple of days’ work weekly, at less than award rates, will be greatly cheered to know that £500,000 has been made available in that State for relief works.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator Sir George Pearce:

– Is the honorable senator in order in debating the development of Queensland, and the employment of kanakas in that State?

The PRESIDENT:

– I have patiently waited for the honorable senator to connect his remarks with the bill, and now specifically ask him to do so.

Senator MacDONALD:

– I shall do so, Mr. President. Queensland is attacked periodically by the very people who now ask for these grants, for which my State will be liable to the extent of between £300,000 and £400,000. Threats have been made that the sugar embargo will be lifted. Constant harping on that is exasperating, and, if it persists, my colleagues and I will seriously consider voting against grants to the States which indulge in such tactics. Queensland sugar-growers are in a sad plight, only 13 per cent. being in position to pay income tax. There is, therefore, not the field for the squeeze which many people would like to see put into operation. I have pointed out the tremendous advantages gained by southern manufacturers by trade with my State.

Senator Daly:

– New South Wales and Victoria could well afford to pay the amount granted to South Australia.

SenatorM acDONALD.- It may be said that New South Wales and Victoria are paying for the grants to South Australia and Western Australia, while Queensland is accounting for that to Tasmania. It is necessary to regard these matters from a. national and not a parochial view-point, as do so many southerners. Queensland is not in a prosperous position. Largely as a result of the rule of the Moore Government, property is unsaleable in that State, and tens of thousands are unemployed, many of the middle-classes being reduced to poverty. I hope that the people of the southern States will temper their criticism, and in return for the advantages they derive from Queensland be prepared to extend at least rational treatment to that State.

Senator COLLINGS:
Queensland

– I rise to speak upon these bills mainly because of the amendment moved by Senator Dunn. I know what happened in another place. I know, too, that there is such a thing as political tactics. I am also aware that Senator Dunn knows perfectly well that honorable senators sitting on this side of the chamber will not be caught by the ill-concealed subtlety of his amendment. Equity demands that we should give a vote on the bills now being considered, on their merits. The States of South Australia, Western Australia and Tasmania are either entitled, or they are not entitled, to these grants. We know that their . claims have been fully considered by royal commissions and committees of inquiries appointed for the purpose, also that a somewhat unseemly battle has been fought in another place on the issue. Therefore, I want Senator Dunn to understand that honorable senators on this side will vote for the bills, believing that that is the right course, and that to support his amendment would be wrong.

As it has been determined that these States are entitled to grants, we have no right to impose conditions as to the way in which the money should be expended. That is a job for the States concerned, and I believe that they will do it in the best interests of their people.

I shall deal briefly with Senator MacDonald’s reference to the Queensland sugar industry. I am aware that on another occasion we shall have a greater opportunity to speak on the subject. 1 feel sure that every honorable senator on this side sympathizes with the remarks of Senator MacDonald.

Senator Sir George Pearce:

– On a point of order, I submit that the honorable senator is almost showing contempt for your ruling, sir, in deliberately stating that he intends to follow Senator MacDonald in discussing the sugar industry when you have ruled that Senator MacDonald was out of order in so doing.

The PRESIDENT:

– I must request the honorable senator to confine his remarks to the subject before the Chair.

Senator COLLINGS:

– I was not aware that you, sir, had ruled the remarks of Senator MacDonald out of order, otherwise I should not have been the willing victim of your displeasure by repeating the offence. All that . 1 intend to say is that when Queensland senators display a proper spirit of magnanimity and comradeship towards other States who need assistance, we expect to obtain something in return. We do not expect Queensland to be treated as the Cinderalla of the Commonwealth. Only recently I was astounded at the attitude of two Western Australian senators who voted against the granting to Queensland of assistance to which that State was rightly entitled.

Senator RAE:
New South Wales

– I support the amendment of Senator Dunn. The previous speaker remarked that the States concerned either deserved or did not deserve these grants. That is a cheap kind of logic which cannot be applied indefinitely. Sometimes a question which has to be decided in either the affirmative or the negative is subject to qualification. The fact that this Parliament can reject these bills is clear evidence that we are not legally bound to provide these grants.

We are legally permitted under the Constitution, to make such grants, but it is within the power of this Parliament to decide, not only whether it is fit and proper to do so, but also what amount shall be granted. The right of saying “Yea” or “Nay” to the request for a grant also implies the right to lay down conditions under which such a grant may be made. The self-laudatory remarks of honorable senators as to the admirable manner in which these States expend their revenues cannot be accepted as a matter of course, because on that matter there is a difference of opinion. Self praise is no recommendation, and we must take any remarks of honorable senators in praise of their own State with a grain of salt. It is only reasonable that the States which, between them, provide the money for these grants, should have a voice in deciding how it shall be expended. When I was on a recent visit to Adelaide a South Australian drew my attention to the Central Railway Station as an example of wasteful expenditure out of all proportion to the service rendered to the community.

Senator Foll:

– I have heard similar statements made in this chamber.

Senator RAE:

– Just so. I am not saying that South Australia should be marked out for any special disapprobation on that account, because all the States have at times, and sometimes continuously, engaged in the lavish expenditure of borrowed money. If New South Wales were asking for assistance, I should not feel offended’ if Parliament, in granting that assistance, stipulated that it should lay down the conditions under which the money was to be expended. There should be some conditions attached to any grant of money. Every honorable senator agrees that our most pressing necessity is the provision of work for the unemployed. The Commowealth Government has recognized that need, because the Leader of the Government said only a few minutes ago that ‘some millions of pounds had been set aside for the relief of unemployment. That money is being parcelled out to the States under certain conditions. It is just as logical and proper for the Commonwealth to make these’ special grants on the con~ dition that they are used for a similar purpose. If there is any one section of thepeople more than another which requires specific work to be found for it, it is the vast number of unemployed throughout the Commonwealth. It is petty-minded jealousy on the part of Senator Collings which causes him to endeavour to make out that there is a subtle move behind this amendment. We have moral and reasonable grounds for the proposal embodied in the amendmentThere is desperate need for finding work for the unemployed. Could any one who professes to be a Labour man trust the present Premier of South Australia to find work for the unemployed? I would sooner trust any member of the United Australia Party, or any hide-bound Tory. It is obviously right that those who give money shall lay down the conditions under which it shall be expended. It has been . said that the bigger States, those which have secondary industries, like New South Wales and Victoria, are robbing the other States, and that they should therefore hand back a portion of their ill-gotten gains. That is not the idea embodied in federalism, nor is it an evidence of that fraternal spirit without which no nationality can really exist. The necessity for using every penny at. our disposal for the relief of the unemployed cannot be challenged. We have now an opportunity to concentrate on that urgent necessity. Unemployment is the greatest evil in the community, and we should take steps to relieve it by putting in hand relief works which when completed will be useful assets to this country.

Something has been said in this debate about the robbing of the primary producers. Prom my own experience on the land, I can say that all primary producers are more or less robbed, because of a system which allows private financiers to benefit more from primary production than the real producers. Strangely enough, the victims of this pernicious system assist to perpetuate it, and show no desire to end it. As a primary producer on a small scale, I know what it is to work long hours for a small return. I was brought up on the land, and I have shared all the trials of the primary producer. Though the farmer is generally shrewd in his private affairs, he is often misled by agitators who attempt to show that the lot of the man on the land would be improved if the number of States into which Australia is now divided were increased. The majority of the primary producers have been bulldozed and fooled by the parasites who live on them. These conditions have obtained for generations, and they seem likely to continue for a considerable time.

Question - That the amendment (Senator Dunn’s) be agreed to - put. The Senate divided. (President - Senator the Hon. P. J. Lynch.)

AYES: 2

NOES: 27

Majority . .. . 25

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 996

WESTERN AUSTRALIA AND TASMANIA GRANT BILLS

Bills read a second time, and passed through their remaining stages without amendment or debate.

Sitting suspended from12.47 to 2.15 p.m.

page 996

FINANCIAL EMERGENCY BILL 1932

Bill read a third time.

page 996

SALES TAX ASSESSMENT

Bills received from the House of Representatives.

Motion (by Senator Sir George Pearce) agreed to by an absolute majority of the senators present -

That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages for the passage through the Senate of all or several of the Sales Tax Assessment Bills, Nos. 1-9, being put in one motion at each stage, and the consideration of all or several of such bills together in committee of the whole.

Standing and Sessional Orders suspended, and (on motion by Senator Greene), bills read a first time.

Second Reading

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I move -

That the bills be now read a second time.

The objects of these bills are, first, to give effect to the exemptions, in aid of primary production, which were announced in detail in the budget speech, and to additional similar exemptions which have been decided upon since the speech was delivered - honorable senators will find the list on pages 6 to 9, clause 8, of Bill No. 1, and the corresponding clauses of the other bills - secondly, to provide for several other exemptions and abatements, principally with the object of bringing the operation of the sales tax into line on certain matters of principle with the operation of customs and primage duties; and, thirdly, to remove certain anomalies, remedy certain technical defects, grant certain concessions, and provide for clarifying amendments for certain matters of doubt and difficulty which have arisen in the administration of the law.

The budget speech contained a specification of various classes of aids to primary production which would be regarded as exempt from sales tax. Since the delivery of that speech, it has been decided also to provide for the exemption of certain additional items which were submitted for consideration. . The attention of honorable senators is invited to a pamphlet which was circulated in another place setting out all the various classes of goods affected, together with explanations of other amendments. Copies of those pamphlets have been made available to honorable senators for their information. These bills include in clause 8 of Bill No. 1 and corresponding clauses of the other bills, provisions for the exemption of the goods specified in those pamphlets and, in addition, the following goods : -

Bee-keepers’ equipment, but not including articles ordinarily used for any other purpose.

Blow-fly traps.

Explosives sold to or imported by a person engaged in the mining industry for use in that industry.

F ertilizer spreaders.

Fire rakes and fire ploughs.

Fumigators for extermination of rabbits.

Machines for planting seedlings.

Mutton birds,

Nets and netting for fishing and cotton for repair thereof.

The exemption of windmills, tanks, &c., for farming, pastoral and mining activities has been extended to cover such accessories as pump rods, pump rod joints and tank stands.

The exemption of preparations for use in the checking of noxious weeds, plant and seed insect pests and diseases has been extended to such materials as hessian used as a covering for bananas to protect them from the attacks of thrip.

It has also been decided, with the object of aiding primary producers -

to extend the existing exemption of flotation re-agents to chemicals sold to or imported by a person engaged in the mining industry in the recovery of gold, silver or base metals by cyaniding, electrolytic or similar processes ; provision for this is made in paragraph d of clause 8 of Bill No. 1, and in corresponding clauses in other bills.

The other exemptions refer only to gold ; this extends it to base metals.

to apply the exemption of imported chaff bags, which at present operates as from the 11th July, 1931, retrospectively as from the 1st August, 1930, upon the condition that where tax has been paid in respect of such bags, refund of the tax so paid will be made only if the Commissioner is satisfied that the person who paid the tax passed it on to the user of the bags, and has given a refund of the tax to the user. - Clause 8, Bill No. 1, paragraph d, and in corresponding clauses of the other bills.

The original intention was to exempt chaff bags as a container, but the law did not so provide, and consequently, they were taxable for a short period. A tremendous amount of trouble was caused to the department. The method proposed is considered the easiest way out of the difficulty which has been created, first, by believing that chaff bags were exempt, and, later, by the law of last year having exempted them altogether.

The other exemptions and abatements provided for in the bills are the following : -

Small cakes -

The department has experienced great difficulties in administering the exemption of pastry as distinct from cake. It is proposed to remove those difficulties by providing for exemption of small cakes, which will be in line with the general principle of exempting common or basic foodstuffs. - Clause 8, paragraphl, Bill No. 1.

Newspaper blocks -

This exemption is considered desirable in view of the existing exemption of newspapers. - Clause 8, paragraph k, Bill No. 1.

British films -

These were intended to be exempted, together with foreign films, by last year’s amending acts, but through an oversight, the exemption was limited, in effect, to non-British films, which was the last thing the Government intended to do. - Clause 4, Bill No. 5, paragraph e.

Exchange publications consigned to international exchange centres in Australia and publications donated to a Commonwealth or State government department, or to an institution or society, and not intended to bo sold by the donee -

Although unable, in view of the sacrifice of income involved, to accede to the representations for the exemption of all imported books and journals, the Government has agreed to exempt importations of the publications described, in view of their non-commercial character. - Clause 4, Bill No. 5, paragraph d.

Re-imported goods -

It was intended by last year’s amending acts to exempt re-imported goods admitted free of customs duty under Tariff Item 401, but, by an oversight, goods covered by paragraph b of that item were not included in the exemption. - Clause 4, Bill No. 5, paragraph i, fourth item.

Posters and other printed advertising matter issued by overseas tourist bureaus, railway authorities or steamship companies advertising places beyond the Commonwealth -

This exemption, which involves very little loss of revenue, and which has already been granted in respect of customs and primage duties, is the outcome of representations made on behalf of Canadian railway authorities. - Clause 4, Bill No. 5, paragraph i, first item.

This exemption is granted out of a compliment to Canada. In some way the sister dominion reciprocates with respect to Australian publications.

Drawback of sales tax -

By this provision, drawback of sales tax paid on the importation of any goods, will be allowed wherever drawback of customs duty on those goods is allowed. This will provide a much needed relief from tax in the class of case in which sales tax is paid on the importation of any goods which the importer is obliged to export because he finds them defective or unsuitable. - Clause 3, Bill No. 5.

The position is that an importer sometimes imports goods, clears them through the customs and pays sales tax on them, only to find that in some way they are not satisfactory, and have to be re-exported. He, at present, receives a refund of customs duties in such cases, and this provision entitles him to a refund of sales tax as well.

Fish, smoked or dried, and lobsters and other Crustacea boiled, for the pur pose of being marketed in a wholesome condition -

Australian primary products are exempt from sales tax but only in their natural state, i.e., before any process or treatment takes place which alters their form, nature, or condition.

A large section of those engaged in the fishing industry has been deprived of the benefit of the general exemption of primary products, because it is frequently impossible to market fish in a wholesome condition without submitting them to some process such as boiling, smoking or drying.-Clause 5, paragraph b, Bill No. 1.

Fish is a primary product, but because lobsters have to be boiled and other fish smoked to enable them to be marketed, they were not technically primary products.

This unexpected hardship will be removed by these bills.

Goods produced by the Commonwealth Bank of Australia -

Technically, the Commonwealth Bank is liable to pay sales tax, as a manufacturer, in respect of the printing of cheque books, Commonwealth bonds and other goods.

It is considered undesirable and unnecessary that the Commonwealth should involve itself in the expenditure and administrative difficulties associated with the collection of a tax on what, in effect, are the products of a Commonwealth activity. - Clause 5, paragraph a, Bill No. 1.

Tram cars built by tramway boards and trusts -

This exemption will apply to all tram cars manufactured by or for any public tramway authority to be used solely by that authority for the purposes of passenger transport.

It is considered undesirable that tax should be charged in respect of such cars. - Clause 5, paragraph a, Bill No. 1.

We didnot intend to do that, and this is simply to rectify an anomaly.

The proposed amendments, which have as their object the removal of defects and anomalies and the clarification of the law, may be briefly stated and explained as follows : -

Extension of the definition of “ manufacture “ -

In consequence of a decision of tbe High Court, some doubt exists as to whether a person who imports or purchases fabricated parts, and combines them into a distinct commercial article, can be treated as a manufacturer.

It is essential that the law should be clarified for the purpose of ensuring that the tax should fall, as intended, on the sale value of the completed article, and that the person who both fabricates and combines the parts of any commercial article should not be at a disadvantage in competition with persons who produce a similar article by a combination of purchased or imported parts. - Clause 2, paragraph a, Bill No. 1.

A definition of “ wholesale sale “ -

Many difficulties have been experienced in determining what sales may be classified as wholesale sales. No guidance has been available by way of decisions of the court on this point, but it is necessary to protect the revenue by expressing in the law certain principles to be followed in this connexion. - Clause 2, paragraph c, Bill No. 1.

A provision to enable sales tax to be levied on manufacturers who dispose of their products to other persons otherwise than by sale -

Many manufacturers dispose of the whole or the greater part of their products in the course of contracts for work and labour, for example, contracts for the installation of lifts by a lift manufacturer. In such cases the goods manufactured escape tax because they are not sold. This was not intended, and it is proposed to remove thisanomaly by providing that goods disposed of in such circumstances shall be deemed to have been sold. - Clause 2, paragraph e, Bill No. 1.

A provision for the effective collection of sales tax from trustees, receivers and like persons who assume control of the businesses of registered persons -

Where a trustee or receiver assumes coutrol of the business of a manufacturer or wholesale merchant, and proceeds to wind up that business, it is not possible under the existing law to require him to be registered. The consequence is that goods which have been obtained free of tax by the wholesaler or manufacturer whose business is being wound up entirely escape tax. It is necessary to cure this anomaly. - Clause 2, paragraph d, Bill No. 1.

A provision to enable registration and lodgment of security to be enforced in the case of persons who failed to comply with their obligation to renew registration and security prior to the commencement of last year’s amending acts. - Clause 3, paragraph a, Bill No. 1.

As this clause is retrospective in character, I shall explain to the Senate the reason for its retrospectivity. When the original sales tax legislation was passed in 1930, it was provided that registered persons should re-register every year. When the bill was amended last year, it was thought unnecessary to put the registered person to the necessity of reregistering every year, and provision was made that all persons registered up to the 30th June should ipso facto be registered under the new law, and the registration continued. It happened that there were a few persons who had not renewed their registration, although liable, and who at the time were understood to have done so. There was no power under the law to deal with persons who had not reregistered as between the 30th June and the day upon which the amending bill became law. It was obviously an oversight, and it is now being found necessary to make the measure retrospective to the date on which they were liable to register.

A provision to ensure that where a registered person who has furnished security enters into a deed of arrangement under Part XII. of the Bankruptcy Act, the Commissioner’s assent to that deed shall not release the surety from his obligations under the security -

The practice of the department is not to assent to such deeds, but to submit a proof of debt for the tax due. The necessity for the amendment arises from implications, arising from a recent judicial decision, that proof of debt in such cases is tantamount to assent to the deed of arrangement. - Clause 3, paragraph b, Bill No. 1.

An amendment to simplify the ascertainment of the sale value of goods, in the case of manufactures, where the required sale value is not the actual sale price of the goods -

Under the existing law, the burden is placed on the department of establishing a wholesale or market value of goods in such eases. Almost insuperable difficulties have arisen in administration of the law in this connexion.

To remove these difficulties, it has been decided to prescribe for all such cases that the sale value of the goods shall be the price for which the manufacturer concerned could have purchased those goods from other manufacturers. This will also remove the undesirable implication, in the present form of the law, that the tax applies only to goods of a class which the taxpayer manufactures for sale. - Clause 4, paragraph a, Bill No. 1.

A provision to make fully effective the exemption from sales tax of goods sold to or imported by Commonwealth and State governments, departments, and authorities in certain circumstances -

Sales to and importations by government departments are, in certain prescribed circumstances, exempt from tax. Where, however, tax has been paid on any goods before they are sold to a government department, the exemption is nullified because the vendor must recoup himself for the sales tax previously paid in respect of the goods. The typical case is that of the retailer who obtains government contracts, and whose goods have all borne tax at the time of their purchase by him. The effect of the amendment will be to enable a refund to be made to the retailer of the tax passed on to him where he can show that he has sold the goods to the government department at a tax-exclusive price. -Clause 6, Bill No. 1.

A provision for the imposition of a penalty by way of additional tax in cer tain cases in which misleading returns are furnished -

A penalty cannot at present be imposed on taxpayers who include taxable sales under non-taxable heads because it cannot be said that they have omitted any taxable transactions from their returns. Such omissions, however, can only be discovered by an audit of a taxpayer’s accounts, and are, therefore, just as prejudicial to the revenue as the complete omission of taxable sales from the returns. -Clause 7, Bill No. 1.

The inclusion of machinery in the relevant acts to impose the same liability for tax upon persons who have failed to comply with their obligations to become registered as that which is imposed on registered persons. - Clause 2, Bill No. 2.
A provision to extend the benefit of certain rebates granted last year to certain classes of wholesale merchants to trustees and beneficiaries upon whom the estates of such merchants devolve by will, statute, or operation of the law -

This provision is necessary to effectuate the full intention of last year’s amendment of the law in this connexion. - Clause 3, Bill No. 2.

A provision for the purpose of imposing tax on goods which a registered person imports tax-free by quotation of certificate and which are subsequently applied by that person to his own use -

This provision will remedy an oversight in the original sales tax regulations, by placing, on the same basis, all importers who apply goods imported by them to their own use. - Various clauses, Bill No. 6.

A provision to cause sales tax to be paid on the same basis in all cases in which registered persons purchase or import goods, and apply them to their use -

At present a registered person who refrains, as required by law, from quoting his certificate, when purchasing or importing goods to be applied to his own use, has to bear tax on the purchase price of those goods. On the other hand, a registered person who, whether erroneously or otherwise, obtains goods tax free by quotation of certificate, and subsequently applies them to his own use, is taxable on what would be the fair market value of those goods if sold by him in the ordinary course of trade.

The ascertainment of the fair market value in the latter class of case gives rise to considerable difficulty, and constitutes, moreover, a differentiation which has no justification in principle. - Clause 2, Bill No. 4; clause 2, Bill No. 8.

A provision to prevent evasion of tax by persons who make goods out of materials supplied by others -

Under the existing law, where an individual takes his own suiting materials to a tailor, who merely takes measurements and sends the customer’s materials to a manufacturing tailor to be made up, liability to sales tax is avoided, because neither the retail tailor nor the tailor who makes up the suit falls within the strict terms of the definition of “ manufacturer “ as set out in the existing law. To obviate unjustifiable loss of revenue in such cases, it is proposed that the manufacturing tailor shall be deemed to be the manufacturer of the suit, and he will be deemed to have sold goods so made up at the price charged by him for the making up and for any materials used by him in making up the goods. - Clause 2, paragraph b; clause 4, paragraph b, Bill No. 1.

A provision to ensure that tax shall apply uniformly to imported ships and ships constructed in Australia -

So far as ships built in Australia are concerned, the existing exemption is limited to “ ships and power-drawn vessels of over 1,000 tons gross register.”

Regarding imported ships, the present law allows an unqualified exemption of “ vessels,” regardless of size. It is proposed to place the same limitation on the exemption of imported ships as applies to ships built in Australia. - Clause 4, paragraph i, Bill No. 5.

As this is a measure which can be more effectively dealt with in committee, I trust that the Senate will facilitate the debate on the second reading.

Senator BARNES:
Victoria

.- It is not my intention to occupy much time in discussing these bills. I must, however, express my strong disapproval of the proposal of the Government to remit taxation at a time when it is assiduously searching for means to meet its financial responsibilities. I do not think that any one believes that the Government is justified in remitting taxation, and at the same time reducing invalid and old-age pensions. I understand that, if these bills are passed, the government will lose about £350,000 a year in revenue. There is no justification for removing the sales tax on the various commodities mentioned in bills Nos. 6 and 8. I regard this as a particularly nauseous proposal. The title of the bill is a misnomer. A more appropriate one would be “ Bargain Sales Tax Assessment Bill.” Nearly the whole of the articles enumerated, upon which taxation is to be remitted, concern the man on the land. While I have no objection to assisting him, realizing as I do that it is extremely difficult for him to make ends meet with prices at their present level, I do not think that he will be particularly grateful to the Government for affording him this relief at the expense of a much more helpless section of the community. Apparently, in this matter, a bargain was struck between the Country party and the United Australia Party. When the present Ministry was being selected, Dr. Earle Page, the leader of the former, was considered to have an excellent chance of inclusion in it; but it would appear that he has been able to render more effective service to his party outside it.

Senator SAMPSON:
Tasmania

– I understand that sales tax is paid on rifles that are purchased by the Defence Department, and that it in turn passes the tax on to rifle clubs.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– That matter has been adjusted.

Senator DUNCAN-HUGHES:
South Australia

– The success achieved by Senator Sampson is so pleasing that others may be encouraged to try their luck. It was my intention to support his solicitations with respect to the sales tax on rifles.

It would be a great pity if these bills were passed without a protest being voiced against, the taxation that is levied on imported books, and therefore on learning. I know that the Government has already taken action in connexion with books that are required by public and university libraries. I contend, however, that it would be a short-sighted policy to continue the tax for a day longer than is absolutely essential on books that are needed for the education of the younger generation of Australians.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I promise the honorable senator that books will have our first consideration when we next deal with the matter.

Senator DUNCAN-HUGHES:

– I am satisfied with that assurance.

Senator PAYNE:
Tasmania

– It is necessary at this juncture for one again to urge on the Government the necessity for giving the closest consideration to the abolition of the sales tax in its present form, and the substitution of another method of taxation by which the Government may obtain an equal amount of revenue in a much simpler way.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– If the honorable senator wishes, he may become a member of a committee that is inquiring into the matter, and give the whole of his attention to it. I am willing to adopt an improved scheme if one can be suggested.

Senator PAYNE:

– There has never been in Australia, or possibly in any other country, a tax that has caused so much irritation and annoyance, or one that has been responsible for such an enormous amount of unnecessary expense to those who are liable to pay it. I know of cases in which business men have been put to expense equal to four times the amount of the tax paid, in order to satisfy the department in regard to their transactions. Surely it is time that action was taken to abolish this system and a more simple method introduced.

I am very pleased that the Government intends to afford a certain measure of relief to those who, probably more than any other section of the community, are in need of it. I feel, however, that it has not given to the details as close attention as might have been given. To a considerable extent it has ignored one section upon whom we have to depend for the development of this country. I refer to pioneers who go into our forests and reclaim from the wilderness land that may be utilized in the support of a considerableportion of our population. It is not proposed to remit the taxation that has to be paid on the implements that are essential to that class of pioneering, although relief is to be given to those who are in occupation of either partially or highly improved agricultural and pastoral properties. I hope that the Government will support in committee a proposal to include in the list of exempted articles those to which I have referred.

Senator CARROLL:
Western Australia

– Milk and cream cans, which are tools of trade of a most deserving section of our people, who, as a rule, do not make fortunes out of their occupation, are still to be subject to the sales tax. The Tariff Board, a few years ago, said that if the dairymen of Australia had to pay wages, none of them would be able to make a profit.

Senator Daly:

-What ordinarily is the life of a milk can?

Senator CARROLL:

– That depends entirely upon the person who handles it. Some may last for ten years; but I have seen others knocked to pieces inside twelve months. I hope that this matter will be given the Minister’s careful consideration.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The Government has given careful consideration to the points raised by Senators Payne and Carroll. We have gone a long way to help our primary producers in this time of great difficulty. The articles mentioned by Senator Payne are used by persons other than pioneers.

Senator Payne:

– But they are used mainly for purposes of production.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The Government feels that, if they are added to the list of exempted goods, the loss of revenue will be considerable. The same remark applies to cream cans, to which Senator Carroll referred. The list of exemptions is a long one, and aswe do not know how we shall come out at the end of the year, I hope that the honorable senators will not press their requests.

Question resolved in the affirmative.

Bills read a second time.

page 1003

SALES TAX ASSESSMENT BILL (No. 1) 1932

In committee:

Clauses 1-3 agreed to.

Clause 4 -

Section18 of the Principal Act is amended -

by omitting from sub-section (1) all the words after the word “ applies “ and inserting in their stead the words “ which are sold by the manufacturer to an unregistered person or to a registered person who has not quoted his certificate in respect of that sale shall be

where the goods are sold by retail - the amount for which those goods would have been purchased by the taxpayer from another manufacturer if that other manufacturer had manufactured those goods in the ordinary course of his business for sale to the taxpayer :”

Section proposed to be amended -

– (1.) For the purposes of this act, the sale value of goods, not being goods to which the next succeeding sub-section applies, which are sold on or after the first day of August One thousand nine hundred and thirty, shall be the amount for which those goods are sold to an unregistered person, or to a registered person who has not quoted his certificate in respect of that sale:

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I move -

That paragraph (b) be left out with a view to insert in lieu thereof, the following paragraph : - “(b) where the goods are sold by retail -

if the goods are of a class which the manufacturer himself sells by wholesale - the amount for which the goods would be sold by the manufacturer if sold by wholesale; and

in any other case - the amount for which those goods would have been purchased by the taxpayer from another manufacturer if that other manufacturer had manufactured those goods in the ordinary course of his business for sale to the taxpayer:”;

This amendment is necessary to bring the amendment inserted by this paragraph into line with amendments in paragraphs c and d of this clause which were inserted in another place. The object of the amendments to the three clauses is to provide for the class of case in which a manufacturer, who is taxable in respect of any goods on some value other than the actual sale price, ordinarily sells similar goods by wholesale. It is desirable that the sale value in all such cases shall be the price for which such similar goods are sold by wholesale. All that the amendment does is to ensure that the value upon which the sales tax is charged is the wholesale value instead of the retail value.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 5 -

Section 20 of the principal act is amended -

by inserting after sub-section (1) the following sub-section : - (1a) For the purposes of paragraph (g) of sub-section (1) of this section, the form, nature or condition of crustacean marine animals shall be deemed not to have been altered by boiling, and the form, nature or condition of fish shall be deemed not to have been altered by smoking or drying, if the commissioner is satisfied that the boiling, smoking or drying was necessary to enable those products to be transported from the place where they were originally derived to another place for sale in a wholesome condition by the person who so derived them or by a person who purchased them from that person.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I move-

That all the words after “ drying “ first occurring, proposed new sub-section1a, be left out.

It has been pointed out that, if the clause were left as originally drawn, it would give rise to unfair competition between the States so far as the fishing industry is concerned, and it is considered that the exemption of fish subjected to the processes of boiling, smoking or drying, before being marketed should be unqualified.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 6 and7 agreed to.

Clause 8 (Amendment of first schedule).

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I move-

That the following item be inserted: - “ Lime for use in farming pursuits.”

Hitherto claims for the exemption of agricultural lime have been refused for the reason that lime has a multitude of uses, and there is no class “ of lime which is used exclusively for agricultural purposes and that, as a consequence, the exemption of lime used for agricultural purposes would involve the department in considerable difficulty in identifying sales of lime for such uses. In view, however, of the fact that the Government has decided upon the exemption of numerous aids to primary production upon condition that such aids are used for agricultural purposes, it is considered that the exemption of agricultural lime can no longer be refused for the above stated reasons.

Amendment agreed to.

Senator PAYNE:
Tasmania

.- I feel that it is my duty to make another appeal to the Minister to insert in the exempted list tools of trade, such as axes, mattocks, and slashers used by our pioneers in the development of their land. Unless these implements are placed in the exempted list there will be a feeling that discrimination has been shown in the preparation of the items to be added to the exempted list. If the Minister can assureme that the exempted list will be reviewed at an early date with the view to the inclusion of these articles, I shall be perfectly satisfied.It is also desirable that the material known as Graftex, which is largely used in horticultural operations, should be included. This article is manufactured in Great Britain. It disappears altogether after it has been used for two months, consequently there is no risk of damage to the bud or grafted branch of a tree. I hope that the Minister will be able to give me an assurance that these items will be added to the exempted list. Itis an invaluable adjunct to the horticultural industry. When I approached the department with a view to obtaining an exemption from the sales tax, I was told that it could not be arranged. Senator Duncan-Hughes referred to the sales tax on education books. I understand that this matter will be considered by the Government.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– That is so, as will also the other matter which the honorable senator mentioned. At the moment, the Government feels that it cannot grant further exemptions because of the loss of revenue involved.

Senator PAYNE:

– I know that revenue is essential; but other things are equally essential. I have here a letter from a student in the Tasmanian University which puts the matter clearly. For the information of honorable senators I shall read a portion of it -

As a student of the Tasmanian University I wish to enter a protest against the exorbitant tariff on all literature in general and on technical books in particular.

As a result of these prohibitive duties, a large majority of the students have been unable to supply themselves with all, or even half, the text books prescribed for their separate courses, and arc thus enormously handicapped in their pursuit of knowledge. The prices of nearly all educational books have been increased quite50 per cent. in the last few years.” It seems grossly unfair that that quite small section of the community consisting of students should be penalized to this extent, especially as a great number of them are endeavouring to educate themselves under considerable financial difficulties. It is in a great degree to the graduates of our Universities that we look for the scientific development of the country, and who knows but that this overpowering burden is not helping to suppress some young scientist who may otherwise in the future be responsible for some scientific discovery which would be worth more to the country than ten times the amount at present reported as being collected as revenue from books.

The writer of the letter also sent a list of books essential to students which he says are now much more expensive than formerly. He mentioned that certain books which previously cost 8s. now cost 12s., while others, which before the imposition of the sales tax were sold at 19s., 19s. and 16s., respectively, now cost 25s., 27s. 6d., and 25s., respectively.

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– The difference is more than 6 per cent.

Senator PAYNE:

– It covers both customs duties and sales tax. I hope that the Government will give this matter earnest and prompt consideration, particularly as many of the students in our schools and universities are the sons of working people.

Item -

Water pipes (galvanized) not exceeding 3 inches in diameter, and galvanized pipe fittings therefor; windmills and towers, pumps, pump jacks, power pumping heads, pump valves, pump rods, pump rod joints, tank stands, tanks and troughing for use in farming, pastoral or mining activities ; “ ; and

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– I have already told the Senate of the promise of the Prime Minister (Mr. Lyons) that books will be one of the first things that the Government will endeavour to exempt from sales tax and primage duties when the finances permit. Tools of trade have been mentioned. These constitute a big item, on which the sales tax amounts to a considerable sum. The Government would like to exempt them from this tax, but at present it cannot do so. It hopes, however, to be able to do so later. I move -

That after the word “ troughing “the words “and water sprinklers” be inserted.

Amendment agreed to.

Senator PAYNE:
Tasmania

. -I should like some information regarding the item “ engines for use in farming or pastoral pursuits.” Does that include an ordinary farm engine?

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

– It covers every kind of engine used on a farm.

Clause, as amended, agreed to.

Clause 9 and title agreed to.

Bill reported with amendments.

page 1005

SALES TAX ASSESSMENT BILLS

(No. 2 to 8) 1932.

Bills reported from committee with consequentialamendments.

page 1005

SALES TAX ASSESSMENT BILL (No. 9) 1932

Bill reported from committee without amendment.

page 1005

SALES TAX ASSESSMENT BILLS

(Nos. 1 to 9) 1932.

Reports from committee adopted.

Bills read a third time.

page 1005

PERSONAL EXPLANATION

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[3.47]. - by leave - In to-day’s Sydney Morning Herald, and possibly also in some other newspapers, there is an alleged report of a speech that I made on the Financial Emergency Bill, which reads as follows : -

Sir George Pearce deplored the use of extravagant language in criticism of the bill. He said the majority of old-age pensioners had only themselves to blame for their present position, because they had neglected in their youth to provide against their old age.

That is a condensation of a speech that, I think, lasted a quarter of an hour. It is absolutely incorrect. I made no such statement as that the majority of oldage pensioners had only themselves to blame. What I said was that some oldage pensioners had neglected to provide for their old age, and by their thriftlessness had brought themselves within the range of the old-age pension. Had I said what I am reported to have said, I should have been guilty of the use of the extravagant language that I condemned in others.

page 1005

PAPERS

The following papers were presented: -

Bankruptcy Act - Fourth Annual Report, by the Attorney-General, for period 1st August,1931, to 31st July, 1932.

Wheat Bounty Act - Statement by the Acting Minister for Commerce regarding the operation of the Wheat Bounty Act, dated 29th September,1932.

Wine Overseas Marketing Act - Fourth Annual Report of the Wine Overseas Marketing Board, year ended 30th June, 1932, together with Statement by the Minister for Commerce regarding the operation of the Act.

page 1005

DISARMAMENT CONFERENCE

Report of Australian Delegation

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[3.48].- I lay on the table of the Senate, report by the Hon. J. G. Latham on the Disarmament Conference, held at Geneva, 1932, covering the period February-July, and move -

That the paper be printed.

In view of the experience through which honorable senators have passed during the last few hours, I ask leave to continue my remarks.

Leave granted ; debate adjourned.

page 1005

LEAVE OF ABSENCE

Motion (by Senator Sir George Pearce) - by leave - agreed to -

That leave of absence be granted to every member of the Senate from the determination of the sitting this day to the day on which the Senate next meets.

page 1005

SPECIAL ADJOURNMENT

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[3.52].- I move-

That the Senate, at its rising, adjourn till a day and hour to be fixed by the President, which time of meeting shall be notified to each senator by telegram or letter.

I am informed by the Assistant Treasurer (Senator Greene) that it is almost certain that honorable senators will need to be called together about the first week in November, because the Supply that has been granted expires early in that month.

Senator E B JOHNSTON:
Western Australia

– I wish to repeat to you, Mr. President, and to the Leader of the Senate (Senator Pearce) a request that I have made on previous occasions. From every mainland capital with the exception of Perth there is a daily train service to the Federal Capital. Those who come here direct from Perth can arrive only on a Thursday or a Sunday. Following an adjournment, it is customary for the Senate to re-assemble on a Wednesday, and those honorable senators who represent Western Australia must either arrive on the previous Sunday or be a day late. The almost invariable practice has been for the Senate not to sit after tea on the first day, and to adjourn on the Thursday. If the business in the first week is not sufficient to occupy our attention for more than two or three hours, surely the Government, and you, sir, might consider the desirability of arranging that we shall meet for the first time on the Thursday instead of the Wednesday. This request has been made previously, but has not been acceded to. Some consideration ought to be given to those who have to travel by far the greatest distance to attend the sittings of the Federal Parliament.

Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [3.55]. - The honorable senator mentioned this matter to me. From his tone it would appear that he assumes that his suggestion was received in a hostile spirit. I assure him that it has had a most friendly reception. On this occasion, an effort will be made to meet the convenience of honorable senators from Western Australia, of whom I happen to be one.

Senator E B Johnston:

– By way of personal explanation, may I be permitted to say that if there was any irritation in my tone, it was probably the result of having sat here continuously from eleven o’clock yesterday morning. I regret that the Leader of the Senate thought that I made my request in other than the most courteous and friendly manner. That was not my intention, because, already, I had been assured of his sympathy.

Question resolved in the affirmative.

page 1006

SALES TAX BILL (No. 6) 1932

Bill received from the House of Representatives.

Standing and Sessional Orders suspended and bill (on motion by Senator Sir George Pearce) read a first time.

Second Reading

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[3.58].- I move-

That thebill be now read a second time.

The Sales Tax Act, No. 6, 1930-1931, provides for the imposition of sales tax upon the sale value of goods imported into Australia, and sold by the importer.

A bill that has been introduced to amend the Sales Tax Assessment Act, No. 6, 1930-1931, contains a provision requiring payment of tax on goods which a registered person imports free of tax by quotation of certificate, and which are subsequently applied by that person to his own use. The scope of the act is thus to be extended beyond the existing requirement of payment of tax. only in respect of goods imported into Australia, and sold by the importer. It is necessary to make consequential amendments in the corresponding taxing act, namely, the Sales Tax Act, No. 6, in order to bring that act into line with the amendments of the assessment act.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without requests or debate.

Sitting suspended from 4.1 to4.47 p.m.

page 1006

FINANCIAL EMERGENCY BILL 1932

Bill returned from the House of Representatives with a message intimating that for the following reason it disagreed to the amendment made by the Senate, and asked that it be reconsidered -

That the amendment increases a proposed charge or burden on the people, and accordingly is an infringement of section 53 of the Constitution.

In committee (Consideration of House ofRepresentatives’ message) :

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[4.50]. -I move -

That the amendment be not insisted upon.

The message from the House of Representatives gives its reasons for disagree ing to the amendment made in this bill by the Senate, but as this will be a matter tobe dealt with in the Senate, I intend, when the resolution is adopted, to submit a motion with reference to it.

Senator E B JOHNSTON:
Western Australia

– It appears that those who supported the amendment must bow to the inevitable at this late stage in our sittings. It is, however, pleasing to know that a majority of the Senate declared, in a most unequivocable manner, that the ten years’ agreement with the gold-mining industry should be honoured.Whilst exchange is at the present high rate the matter is not of great urgency, but I am sure that the people engaged in the industry will be very disappointed that the will of the Senate has been defeated on a technical and constitutional point. I have no doubt that when exchange comes back to a point atwhich the bounty should again be payable, steps will be taken to give effectto the decision of the Senate. This chamberhas good reason to be proud of its action in determining to honour the ten years’ contract.

Motion agreed to.

Resolution reported ; report adopted.

Senator Sir GEORGE PEARCE (Western Australia - Minister for Defence) [4.55]. - I move-

That the following message be sent to the Houseof Representatives: - “ The Senate returns tq the House of Representatives the bill intituled a bill for an act to amend the Financial Emergency Acts 1931 and for other purposes, and acquaints the House that, whilst in the opinion of the Senate it is not clear the amendment would have the effect ot increasing the charge or burden upon the people, the Senate refrainsat this stage from any determination of its rights under the Constitution, and does not insist on its amendment disagreed to by the House of Representatives.

This message, I would point out, does not in any way admit the contention of the House of Representatives that the amendment to the bill made by the

Senate would increase the charge or burden on the people, and at the same time it does not raise the question whether, assuming that it did increase the burden on the people, the Senate would have to proceed by way of request or amendment in such contingency. It is open to doubt whether the amendment would increase the charge or burden on the people, but it would be better, whenever that question arises, to have some case which is quite clear. I, therefore, suggest that in sending this message to the House of Representatives, the Senate is not conceding anything, and that it cannot at any future time be used against it in any difference between the two Houses. I trust that, in this matter, honorable senators will disregard party ties and agree to the motion unanimously, because, as I have shown, it affects the constitutional position of the two Houses of Parliament.

Senator BARNES:
Victoria

.- I second the motion. While the House of Representatives may be right in its attitude towards tho amendment, it is desirable that the Senate should guard jealously its constitutional rights. For this reason I endorse the remarks of the Leader of the Senate (Senator Pearce) and agree with him that the motion should be carried unanimously.

Question resolved in the affirmative.

page 1007

SALES TAX ASSESSMENT BILLS

(Nos. 1 to 8) 1932.

Message received from the House of Representatives intimating that it had agreed to the amendments made by the Senate in these bills.

page 1007

ADJOURNMENT

Workof the Senate: Aviation Report.

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

[5.1]. - I move -

That the Senate do now adjourn.

I wish to express the Government’s deep appreciation of the way in which honorable senators, at much personal discomfort, have stood by and assisted in carrying the various measures which have been dealt with, thus enabling us to close the business before the Senate this week.I thank all honorable senators on both sides of the chamber for their co-operation.

Senator O’Halloranhas asked me whether the Minister has received the report of the committee which inquired into aviation. The report hasnot yet been received, but I understand that it will be ready for submission to the Minister on the 12th October.

The honorable senator also asked whether the Governmenthad reached any decision on the subject-matter of such report. That, of course, has not been possible, since it has not yet seen the report. In reply to his further question as to when this decision, or any information relating thereto, will be made public, I have to say that after the receipt of the report the Minister will bring the matter before Cabinet for consideration.

Question resolved in the affirmative.

Senate adjourned at 5.3 p.m., Friday, till a day and hour to be fixedby the President.

Cite as: Australia, Senate, Debates, 29 September 1932, viewed 22 October 2017, <http://historichansard.net/senate/1932/19320929_senate_13_135/>.

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Senate29 September 1932

PERSONAL EXPLANATION

Senator GREENE:Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator Sir George Pearce:

QUESTION

SALES TAX

Senator GREENE:Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

QUESTION

SHEET GLASS

Senator GREENE:Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

QUESTION

WHEAT BOUNTY

Senator E B JOHNSTON:WESTERN AUSTRALIA

Senator GREENE:Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

QUESTION

WIRELESS BROADCASTING IN WESTERN AUSTRALIA

Senator E B JOHNSTON:

Senator Sir GEORGE PEARCE:

Senator E B JOHNSTON:

Senator Sir GEORGE PEARCE:

Senator E B JOHNSTON:

Senator Sir GEORGE PEARCE:

QUESTION

UNIFORM CUSTOMS DUTIES

Senator PAYNE:through Senator Sampson

Senator GREENE:Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

QUESTION

TARIFF BOARD’S REPORT

Senator O’HALLORAN:SOUTH AUSTRALIA

Senator GREENE:Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

BILLS FROM THE HOUSE OF REPRESENTATIVES

FINANCIAL EMERGENCY BILL 1932

Second Reading

Senator E B JOHNSTON:Western Australia

Senator DUNN:NEW SOUTH WALES

Senator E B JOHNSTON:

Senator Foll:

Senator E B JOHNSTON:

Senator GREENE:Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator E B JOHNSTON:

Senator Brown:

Senator E B JOHNSTON:

Senator Dunn:

Senator E B JOHNSTON:

Senator Payne:

Senator E B JOHNSTON:

Senator Rae:

Senator E B JOHNSTON:

Senator GREENE:Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator E B JOHNSTON:

Senator GREENE:Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator E B JOHNSTON:

Senator GREENE:Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator E B JOHNSTON:

Senator E B JOHNSTON:

Senator GREENE:Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator E B JOHNSTON:

Senator Foll:

Senator E B JOHNSTON:

Senator Sampson:

Senator E B JOHNSTON:

Senator Sir GEORGE PEARCE:Minister for Defence · Western Australia · UAP

Senator Sampson:

Senator Collings:

Senator Sir GEORGE PEARCE:

Senator Collings:

Senator E B Johnston:

Senator Sir GEORGE PEARCE:

Senator Sir Hal Colebatch:

Senator Sir GEORGE PEARCE:

GOLD BONUS

London, 27th September

Senator DUNCAN-HUGHES:South Australia

Senator DUNCAN-HUGHES:

Senator Daly:

Senator DUNCAN-HUGHES:

Senator Daly:

Senator DUNCAN-HUGHES:

Senator Daly:

Senator DUNCAN-HUGHES:

Senate
29 September 1932

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator E B JOHNSTON:
WESTERN AUSTRALIA

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator PAYNE:
through Senator Sampson

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator O’HALLORAN:
SOUTH AUSTRALIA

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator E B JOHNSTON:
Western Australia

Senator DUNN:
NEW SOUTH WALES

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator GREENE:
Assistant Minister (Treasury) · NEW SOUTH WALES · NAT

Senator Sir GEORGE PEARCE:
Minister for Defence · Western Australia · UAP

Senator DUNCAN-HUGHES:
South Australia

Senator BROWN:
Queeusland

Senator RAE:
New South Wales

Senator Sir HAL COLEBATCH:
WESTERN AUSTRALIA · NAT