Senate
13 December 1940

16th Parliament · 1st Session

  1. Senate
  2. 16th Parliament
  3. 1940

The President (Senator the Hon. J. B. Hayes) took the chair at 10.30 a.m., and read prayers.

page 1122

QUESTION

HOTEL CANBERRA

Senator GIBSON:
VICTORIA

– Will the Minister for the Interior give consideration to the practicability of converting the Hotel Canberra, . which is a building owned by the Government, into offices, and to the construction of a modern hotel to replace the Hotel Canberra?

SenatorFOLL: - The suggestionhas a good deal to commend it. I think that it is generally recognized that the layout of the Hotel Canberra is not conducive to economical management; but I do not think that the Governmentwould be prepared to undertake the construction of a” new hotel.

Senator Gibson:

– I did not suggest that. I meant that the work should be undertakenby private enterprise.

Senator FOLL:
Minister for the Interior · QUEENSLAND · UAP

– I shall give the matter consideration. The present lessee of the Hotel Canberra has a fairly long lease of the building.

page 1123

QUESTION

INCOME TAX

Payment by Instalments.

Senator UPPILL:
SOUTH AUSTRALIA

– I ask the Minister representing the Treasurer whether the instalments of income tax which the Government proposes to collect between the 1st January and the 30th June, 1941, relate to the financial year 1939-40. or to the year 1940-41?

Senator McBRIDE:
Minister for Munitions · SOUTH AUSTRALIA · UAP

– The instalments relate to assessments for 1940-41, which are based on income earned during the 1939-40 period.

page 1123

INCOME TAX ASSESSMENT BILL (No. 2) 1940

Second Reading

Debate resumed from the 12th December (vide page 973), on motion by Senator McBride -

That the bill be now read a second time.

Senator COLLINGS:
QUEENSLAND · FLP; ALP from 1937

– I do not propose to attempt to make anything approaching a second-reading speech on this measure. I realize how difficult it is to regulate the proceedings of Parliament in order that the last-minute rush at the conclusion of a session or period of a. session may be avoided, but I protest, as I have done on many previous occasions, against these complicated taxation measures being brought before this chamber in this way, which prevents honorable senators from examining them. It maybe said that if members of the Opposition in the House of Representatives did not talk so much the Senate would get these measures earlier; but all we of the Opposition can do in this Parliament is talk; the Government is the only authority with power to act. The practice of rushing legislation through Parliament is improper, but I realize (hat even should we decide to sit next week, we should, in the concluding stages, still have insufficient time to discuss it. Parliament should have assembled a. month earlier, and got on with its job. There is no reason why the income tax proposals should not have been tabled weeks ago. I realize that the Opposition in the House of Representatives took certain action which resulted in improvements being in serted in some bills for which Ave are grateful. I think that I can claim to be no less capable than the least brilliant of honorable senators opposite. I have not had an opportunity to examine the full purport of these measures. I have read again this morning the second-reading speeches delivered by the Minister, but I am not now in a better position to speak intelligently on these proposals than I was yesterday. This measure and those to follow are highly complicated, and I do not think that even the Minister understands them. He is not expected to; he must rely on the advice of experts in the Taxation Department who understand them. As this period of the session will terminate to-day we cannot give these measures the intelligent consideration they deserve. We are being paid to do a job on behalf of the people, but I feel that in the circumstances I am forced to do that job more or less indifferently.

Like my colleague, Senator Brown, and others, I believe that income tax is the fairest method to obtain revenue. I do not agree with the contention held by some that income taxation is never popular; it is a direct- tax and we know what we have to pay. As citizens of the Commonwealth, we should be prepared to do our best in the difficult times through which we are now passing, and we should pay our taxes cheerfully, especially when they are levied directly. I do, however, object to indirect taxation, such as the sales tax, because it gives traders an opportunity to impose upon the people, and will cause unemployment. In order to arrive at the income tax rates to be imposed, the Government must first ascertain the amount of revenue required; then the taxation experts are asked to submit what they consider to be the best method by which the revenue can be obtained. The Government should consider, not only the amount to be collected from taxpayers, but also the amount they will have left; that is what really matters if equality of sacrifice is to be achieved. It is not an act of heroism for a wealthy man to sit down and write a cheque for the Taxation Commissioner for a large sum of money. If his income be £6,000 a. year a tax of £3,000 would not affect him.

It must be borne in mind that in the imposition of taxes there is a limit beyond which the Government cannot go. Nearly all taxes tend, in the final analysis, to bear most harshly on those members of the community who have the lowest incomes. We should realize that taxes, almost without exception, are passed on. Even members of parliament indirectly pass their taxes on to others. On account of the heavy financial burden to be borne by us, we shall have to practise certain economies by doing without some of the things to which we have become accustomed. The final effect of the economies to be practised by me and other legislators may be that some shop assistant will be dismissed from his employment, or that some factory will go out of business or partially close down. There is no process by which Australia can starve its way to prosperity.

The original proposal to reduce the income tax exemption figure from £250 to £150 was cruel and drastic. I am delighted that, as the result of collaboration and the display of a spirit of sweet reasonableness, it was possible, through the Advisory War Council, to have the proposal reconsidered. Although the Opposition did not obtain all that it desired, it realizes that what it did secure will be of great value to persons on the lower ranges of income. Members of my party would have preferred the statutory exemption to have been left at £250. The Government would not have been seriously embarrassed had it allowed the exemption to remain as it was, because the consequent shortage of revenue could Iia ve been made up readily by a slight increase of tax on the higher incomes.

This budget undoubtedly affects the lower and middle classes more severely than it does persons in receipt of the larger incomes. The taxes being imposed in Australia are not nearly so drastic as those in operation in other parts of the Empire. In Great Britain, for instance, there was no hesitation in taking the whole of the war-time profits. No argument is heard in the British Parliament as to whether a tax of 15s. or 17s. 6d. in the £1 is too drastic. In the event of an increase of profits beyond those obtained on a certain date, the tax is 100 per cent.

The Opposition is grateful that the Government saw fit to alter the definition of a single man, so that a man with a dependent mother will now be able to obtain a concession which he could not get previously. I, in common with other members of the Opposition, realize that the demand for a huge war expenditure is imperative, and, in no circumstances, shall we deny the Government any revenue it needs to carry on the war effort. We may criticize the incidence of taxation, or we may claim that certain expenditure is not wise, but, in -view of the urgent problems confronting the Government, we shall help it to raise the requisite revenue.

Senator AMOUR:
nonCommunist · New South WalesLeader of the Australian Labour party

1 10:55]. - I am not in agreement with everything that the Leader of the Opposition (Senator Collings) has said. I claim that the Government should have acceded to the request made to it to leave the statutory exemption at. £250. The raising of the amount from £150 to £200 was due to representations made by supporters of the Government, who forced the Prime Minister (Mr. Menzies) to descend from his high horse and make a concession. Under the Government’s proposals, undue hardship will be placed on the members of the community who are on the lower rungs of the social ladder, whilst it will be found that there are sufficient loopholes in the income tax legislation to enable the wealthy .to escape some of the tax. The workers in industry should have been shown greater consideration than they have received. The potential parents, who are trying to save sufficient money to enable them to purchase homes, or who have taken up shares in co-operative building societies, should not- be taxed so heavily as they will be under the Government’s proposals. The members of the working class are giving their all in the war effort and will put their last ounce of strength into it. They have done it before, and they will do it again. Many who have obtained jobs as the result of war expenditure are now to be called upon to make a substantial contribution to the revenue of the Commonwealth. A more equitable scheme than has been propounded by the Government should have been introduced. The Government should have kept the statutory exemption at £250. I am not inclined to imagine that the working classes will be particularly pleased that the Government has been given credit for having generously raised the exemption from £150 to £200. It did not do so; instead, it reduced the statutory exemption from £250 to £150. The people will mot appreciate that action. The Government may consider that it has done a good, job, but thousands of taxpayers believe that it lias taxed them to the limit, both directly and indirectly, in order to place them in the position in which it wishes to keep them.

Senator DARCEY:
Tasmania

– This bill would not have been necessary had the Government accepted the advice which I have given to it on numerous occasions. I claim to have proved ‘beyond all doubt that the war could be fought without increasing taxation, or materially adding to the national debt. I ‘have supplied incontrovertible evidence that that could ,be done. For my pains I have been .both praised and condemned. Some honorable senators w>ho have not been convinced by my arguments have credited me with having at least honesty of purpose. My leader has pointed out that every increase of taxation lowers the standard of living. A friend has written to me saying that this increased taxation will mean that he will be unable to buy a suit this Christmas. The worker whose wages will be commandeered each week will not have enough left to buy a new suit. I have shown that wars ‘have been run on credit. A royal commission appointed by the Commonwealth Government reported that that could be done in Australia. The great American, Lincoln, defied the bankers and issued his own currency. I have yet to find a Government supporter who is willing to controvert my arguments.

Senator Abbott:

– Did the royal commission say that it ought to be done?

Senator DARCEY:

– It was not the duty of the commission to tell the Government what it ought to do. The commission showed what could be done, and left the decision to the Government. Senator A. J, McLachlan told us a few days ago about a Chinese, named Wang, who adopted unorthodox methods in his day. But Wang came to a tragic end. Evidently, even in 56 B.C. there were some unorthodox people. Lincoln, who financed a war by defying the bankers, came to an untimely end, and, it is generally believed that the financiers were responsible for his death. I am afraid that some day I shall be found with a hole in my head. I realize that I am up against the conservative mind. I had some hopes that Senator Spicer, our newest colleague in this chamber, would have a refilling influence on men who have sat in this cham’ber for many years. I gave to him a pamphlet entitled Victory without Debt which, on a previous occasion was referred to as Victory without Death. The conservative mind is always upset when new ideas are advanced. I had hoped to return to my home for -Christmas consoled by the thought that I had influenced some members of this Parliament; but I have no evidence that I have converted any one. I assure the Minister for the Interior (Senator Foll) that if he charges £1 16s. a week to residents of Barton House, he will add to his troubles.

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– The honora’ble senator’s currency would not be accepted as payment.

Senator DARCEY:

– The trouble is that that currency is not in circulation. When it is in circulation, a man will find it easy to pay his board. If the Government continues to tax the people’s money, the landlords will have to go short. Recently the Minister for the Interior said : “I do not know what Senator Darcey would have done without the Commonwealth Bank? “ I replied, “It is a pity that this Government does not realize what can be done with the Commonwealth Bank”. Yesterday, I asked whether the Commonwealth Bank had charged interest on the £750,000 which it had lent to the Government, and I was informed that it had charged interest at 3J per cent. When will the Government learn sense in regard to finance? The Commonwealth Bank belongs to the people, and its profits go to the nation. That being so, why charge interest which goes back to the nation in the form of profits?

Why should I borrow £1 on Monday and repay myself 25s. on Friday? That is what the Government is doing. There is no need for it. Mr. Graham Towers, of the Canadian Central Bank, was once asked whether a government bank could lend money to a government free of interest, and he replied, “ Yes “. He added that there would be no need to pay back the capital, because the increased prosperity of the nation would mean that the money would be repaid to the government indirectly. Already this country has paid £3,000,000 in interest on money borrowed since the war started. I have commented from time to time on our huge interest bill, which already is about £1,000,000 a week. The people of Great Britain are called upon to pay £200,000,000 a year as interest on money borrowed during the last war. How can Australia, with a population of about 7,000,000 people, carry this huge burden of interest? Unless a different policy be inaugurated there must be repudiation. Why not save that disgrace by utilizing the national credit? I recently produced a balance-sheet which proved1 that we have to the credit of the nation at least £1,000,000,000 upon -which we could draw to finance the war. That was the first time in the history of Australia that a truly national balance-sheet was presented. The Prime Minister assured us some time ago that he was prepared to use the credit of the nation, but, so far, he has not done so. The reason is that he is here to look after the interests of the private banking institutions.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– McLachlan - That is not fair..

Senator DARCEY:

– Why does not the right honorable gentleman use the credit of the nation, as he promised to do? The reason is that he places the interests of the money-lenders before the interests of the taxpayers. We were told recently that £6,000,000 had immediately been subscribed towards the new loan. On other occasions I have shown how that is done, and also how the money is ultimately held in the banking system. Of the amounts subscribed towards the various loans which have been floated, 80 per cent, is held by the banks. I have already told the Senate how the money subscribed by the Australian Mutual Provident Society is provided; the manager of the society merely instructs his banker to apply for bonds. I register my emphatic protest against the inefficiency of a government which is prepared to pay 3f per cent, for money which could be obtained free of interest through the Commonwealth Bank.

Senator KEANE:
Victoria

.- I have made it a rule that, if I support a decision, I shall stand by it to the end. A compromise has been effected in regard to the budget, the outstanding weakness of which is that the income tax exemption has been lowered. Like every other honorable senator, I am aware that the taxing of low incomes is a calamitous proceeding; but I realize also that this nation is facing the crisis of its life. I could speak at some length to prove that the sale3 tax will ultimately come out of the pockets of the workers. I could show that, notwithstanding the allegedly high wages earned by the workers, many of them are only employed intermittently.

As a member of the Labour party and an Australian I am prepared to pay my share of the cost of this war. Bills are preferable to bombs. No one has greater realization than I of what the winning or losing of .this war will mean to this country. The cost of this war will rise in proportion to its duration. When the time comes for the budget for 1941-42 to be presented to Parliament whoever is then Treasurer will have had to devise means to raise even more revenue than is contemplated in the budget for this year. The capacity of the workers to pay taxes will be reduced by the taxation measures now before Parliament. The only assistance that I can offer is a suggestion that during the next twelve months the Government and its advisers should study closely the financial policy of the Labour party. Some members of this Parliament ask what the people outside are saying about the increased taxes. The electors had the opportunity in 1934, in 1937, and in 1940 to put into power in this Parliament a party which would give effect to at least a part of the policy which Senator Darcey expounds so frequently. Reimbursement of the cost of defence by means of taxes is provided for in Labour’s platform.

I have not had the time to study the details of the Income Tax Bill, except as it affects me. My feelings were not eased by a realization that I shall still have to pay State taxes. The exigencies of war will force the abolition of State Parliaments, or, at least, the concentration of the taxing power in the hands of the Commonwealth Government. The speech on the Income Tax Assessment Bill delivered yesterday in the House of Representatives by the right honorable member for Yarra (Mr. Scullin) is an important chapter in the history of our income tax legislation and I look forward with keen anticipation to the day when the policy enunciated by him will some into operation. When that day arrives the Commonwealth Government will be able to avoid some of the more unpleasant features of its present taxation proposals. In time of war high taxation is inescapable. Twelve months hence the rates of taxes will be even higher than they are in this financial year. As Senator Darcey has often emphasized, in the last years of peace, Australia’s annual interest commitment amounted to £45,000,000 per annum or £180,000 a day. That commitment will rise to £60,000,000 per annum or more before the war ends. I hope that the Government has in mind a solution of the problem of how such a huge commitment can be met. Our export trade in many commodities is already at a standstill; we cannot ship our fruits and wines, and it is only with tremendous difficulty that we can ship part of our surplus stocks of grain. Methods considered to be unorthodox will be forced on the Government. I do not admit the economy of blowing millions of pounds worth of munitions into the air. I could talk even more loudly than Senator Amour about credit, but it would not get me anywhere, because I, like the honorable senator, am a member of a minority party. So long as the people refrain from giving the Labour party control of this Parliament we cannot give effect to our policy. Meanwhile, the job of fighting this war must go on and I refuse to do anything which would hinder the war effort of the Government. The only “fly in the amber” is the reduction of the statutory exemption to £200. Even at this stage I am hopeful that .the Government will relent and restore the exemption to £250. Taxes hit the workers hard, but the man who has £6,000 a year and has to pay £3,000 in tax still lives in luxury. When the loan pool drys tip other means of financing the war will have to be devised. We may discuss that when Parliament reassembles in the new year.

Senator DEIN:
New South’ Wales

– Some honorable senators opposite do not seem to realize the seriousness of our position. We are locked in a death struggle with an enemy who is as powerful as he is unscrupulous. To beat him, as we must, calls for sacrifices from every body. In spite of the speeches of some honorable senators opposite the wealthy do not escape taxation. Senator Keane mentioned salaries in the £6,000 a year group. I point out to the honorable senator that the rate of income tax rises to a maximum of 14s. in the £1. If the whole of the incomes of the wealthy were taken we should still have insufficient money with which to conduct this war. Whether it be much or little that is taken from a man by way of taxes, his standard of living may be reduced, but we are fighting to preserve the standards we now enjoy. It is better to sacrifice a little in order to preserve the remainder than to lose all.

My views concerning the statutory exemption differ from those honorable senators opposite. I have as much consideration as they have for the men on the lowest rung of the social ladder, but I do claim that men and women without dependants with incomes of £200 a year should not be exempt from federal taxes. They are well able to contribute a few shillings a week directly to the Consolidated. Revenue in order to assist not only in the maintenance of their own incomes and living standards but also in the preservation of their lives. The exemptions in respect of wives and families should be greater.

Brief mention has been made of the war-time companies tax. We cannot deal with that tax in this debate, but I am glad that certain amendments have been made. The proposed methods of assessing and collecting that tax are now more in accord with my ideas than were those provided in the bill before the House of Representatives last session.

Honorable senators opposite have taken credit for the improvements that have been made in the budget, hut those improvements were possible only because the representatives of the various parties on the Advisory War Council were able to reach a compromise. If they can do that as members of the Advisory War Council, the principle should be extended to a national government so that members of the Opposition would leave their mark, not merely on the income tax and the companies tax, but also, with beneficial effect, on all other war-time legislation. The Opposition has a duty to the people of Australia not merely to be represented on an advisory council, but also to get right into the Cabinet forgetting if necessary even their own party in order to do the war job as it should be done. If that had been done the budget could have been improved still further.

Senator Ashley:

– The people of New South Wales did not take much notice of the proposal for a. national government.

Senator DEIN:

– Sometimes the electors do foolish things. I believe that the people of New South Wales will regret the decision they made at the ballot-box a few months ago. However, I am not concerned with party alignments. We have a job to do, and we should concentrate on that job to the exclusion of every other consideration. That leads me to emphasize that had the various parties in this Parliament displayed the same spirit of compromise on every issue confronting thom, as was shown in respect of the two or three points on which agreement were reached by the Advisory War Council, we should now be enabled to do a better job. This revenue must be found. It is idle to say that we can fight a war which will involve the expenditure of millions of pounds unless every individual in the community bears at least some portion of the burden. The heaviest portion of that burden, of course, should be placed on the shoulders of those best able to bear it. Senator Darcey would dispense with all of the means by which we intend to raise this revenue. He said that we should extend credit, to what limit neither he nor any other honorable senator knows. When property is destroyed or damaged by war, fire or storm, the damage can be repaired and the loss restored only by sacrifice. In respect of national works of a reproductive character, it is safe to expand credit; but destruction cannot he restored by that method.

Senator Cameron:

– That policy is being followed in the United States of America.

Senator DEIN:

– I do not know that it is. Losses through damage can only be made good by sacrifice; and in this war considerable material wealth will be destroyed. I again express pleasure that the budget has been improved as the result of discussions at the Advisory War Council ; and I repeat that had a greater degree of collaboration and compromise been exercised by the various parties in this Parliament, we should now be considering an even better budget. The budget has been improved only by compromise. Although I shall not remain a member of the Senate for very long, I hope that this Parliament will soon unite and show its ability to guide the destinies of Australia. That will be done only so soon as each party is prepared to compromise, not merely by 50 per cent., but by 100 per cent. If that day arrives before I vacate my seat in this chamber, I shall feel that my departure has, perhaps, contributed to a state of affairs under which all of us, including myself, will be better off.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– I make one plea to the Government. It is obvious, as has been emphasized by the Leader of the Opposition (Senator Collings), that measures of the kind which we are now considering have become so complex that no individual, however humble or wealthy, is capable of grappling with them. Those difficulties react on everyone, from the man with an income of £200, up to the millionaire. Yet matters of this kind should be handled in the simplest form possible. We have brought about a situation in respect of income taxation which can be met only by the employment of specialists. Superimposed on that difficulty, are the complexities of the taxation systems of the respective States. An effort was made by a previous government to bring about uniformity between Commonwealth and State systems, and some progress was achieved in that direction. I ask the Government to press on with that good work in order to relieve industry, and the individual, of a great deal of these troubles, and, at the same time, avoid the waste of money and effort which companies and individuals are now obliged to incur in dealing with their taxation returns and assessments. “We are in a maze. We must simplify our income tax systems. Even a system under which the Commonwealth is obliged to dole out specific sums to the States would be an improvement, on the present complex arrangements, because it would at least rid us of many of the intricacies that cause so much worry to-day.

This budget is indeed a bitter burden; but in the near future we may be called upon to shoulder a heavier burden. It is in that spirit that I accept the bill. It was absolutely essential that the Government should raise the statutory exemption from £150 to £200. One realizes the difficulties which a man with dependants has to meet. Whilst much can be said for the contention advanced by Senator Dein that bachelors with incomes of £200 should be called upon to pay something, I have no doubt that such men will soon be brought within the scope of taxation, unless we have successes against our chief enemy greater than the victories which we are now winning against his junior partner. The adoption bv the Commonwealth of the method now employed by the States of collecting unemployment tax will mean that the Commonwealth will have the free use, as it were, of much of the taxpayers’ money for a considerable period. By that means we should save a considerable amount in interest, and, for that reason, I am sure the collection of income tax by weekly instalments will appeal particularly to my friend, Senator Darcey.

Senator McBRIDE:
SOUTH AUSTRALIA · UAP

– in reply - The Government fully appreciates the difficulties which, as the Leader of the Opposition (Senator Collings) stressed, confront the Senate owing to the circumstances in which bills of this character are placed ‘before this chamber. The present practice, however, is unavoidable. Owing to the character of the Senate, I believe that the House of

Representatives is able to give greater consideration to legislation initiated in the Senate, than we are able to give to legislation which originates in the other branch of the legislature. The Senate, however, is not competent to initiate money bills. Consequently, we commence our sittings whenever such (bills must inevitably be placed before us in (the manner in which we are receiving them to-day. Everyone admits that in these circumstances, it is most difficult for honorable senators to thoroughly examine complex measures.

Very little difference of opinion exists among honorable senators as a whole regarding the principles by which the Government should be actuated in the application of taxes. I do not think that many senators will deny that, on the scales of tax now proposed, the people enjoying higher incomes will contribute substantial sums to revenue. All differences arise mainly in respect of degree. Some say that the higher incomes should be taxed more heavily, and the lower ranges exempt, or more lightly taxed than is proposed under this measure. In these matters we ave guided, of course, to a considerable degree by precedent and practice. In a time of war the Commonwealth is called upon to meet financial burdens which do not concern the States. Consequently, the Commonwealth might reasonably be expected to go further than the States with its taxation measures. However, in spite of the criticism that has been hurled at the Government for proposing originally to reduce the statutory exemption level to £150, the exemptions allowed by the various States suffer by comparison with the concessions allowed by the Commonwealth. The Leader of the Opposition and other honorable senators opposite said that they were opposed to taxing lower incomes; but I would remind them that even in Queensland, where a Labour government has been in power for years, and there is not an upper House, the income tax exemption is £150. In Western Australia and Tasmania, where Labour governments are in power, the exemptions for a single man are £100 and £126 respectively. Therefore, it cannot be argued that even the proposed statutory exemption of £150 was not justified. I appreciate very much the support given to this measure by honorable senators, and I trust it will have a speedy passage.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 5 agreed to.

Clause 6 (Statutory exemption).

Senator KEANE:
Victoria

.- As this is the clause to which our main objection is taken, can the Minister in charge of the bill (Senator McBride) give an assurance that should the financial position improve, even to a slight degree, reconsideration willbe given to the statutory exemption provided in this clause.

Senator McBRIDE:
South AustraliaMinister for Supply and Development · UAP

– I am afraid that the improvement mentionedby Senator Keane is a forlorn hope. In fact, the view of the Government is that, instead of our financial position improving, our difficulties will increase. Consequently, I do not think that there is any likelihood of this matterbeing reviewed for sometime. I shall note Senator Keane’s objection.

Clause agreed to.

Clauses 7 to 15 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1130

INCOME TAX BILL (No. 2) 1940

Second Reading

Debate resumed from the 12th December (vide page 976), on motion by Senator McBride -

That the bill be now read a second time.

Senator COLLINGS:
QueenslandLeader of the Opposition

– I should like to mention one or two points raised by the Minister (Senator McBride) in the course of his secondreading speech. The honorable gentleman commenced by saying -

In introducing this bill. I warn honorable senators at the outset that a heavy increase of rates of income tax is contemplated. The necessity for an increase, and a large increase, is obvious; we are at war with a ruthless enemy whose avowed objects are the destruction of democracy, and the imposition of a form of government utterly repugnant to a free people. We have undertaken our own defence against that menace, and not the least part of the task is to pay for the war.

The Opposition agrees with that statement. We know what the situation is, and we realize that we shall have to pay the price. As Senator Brown said yesterday, it is far better that we should pour our last asset into the common fund than we should lose the liberty and freedom which we now enjoy. In the second paragraph of his speech the Minister said, “ Sound finance is as important as an adequate supply of armaments “. We agree with that also, but we deny that the Government’s financial policy is sound. In fact, we contend that in various important phases it is most unsound. As has been pointed out frequently in this chamber there are three ways to obtain revenue - taxation, loans andbank credit. The borrowing programme must of course come to an end sooner or later; the Government cannot go on piling up the burden.

Senator McBride:

– People have been saying that for a hundred years.

Senator COLLINGS:

– I know that. The interesting point is that the Minister and other honorable senators opposite are never prepared to admit that fact when a demand is made by Labour representatives that a definite attempt should be made to end the war against poverty and its terrors. When such a demand is made we are asked “ Where is the money to come from?”

Senator McBride:

– We do not suggest that money can be obtained for nothing. The people must pay for it.

Senator COLLINGS:

– I do not say that it could be obtained for nothing. I repeat that the Government’s financial methods are most unsound, and unless some change be made, either in the financial policy of the Government, or the Government makes way for some other government with a sound policy, this country, with its 7,000,000 men, women and children, must inevitably face national insolvency. The Government is charged by the people of this country with the responsibility of government, and it must face up to its obligations.

The Minister also said that, under the bill now before the Senate, a greatly increased burden would be placed on the wealthy. The Opposition knows that, hut it claims that that is the proper place to place the burden of taxation. That is where we find the assets which the fighting forces here and abroad have been called upon to defend. The tangible assets of those who have little of this world’s goods are negligible, but I realize that the working classes have the same interest as the wealthy in the intangible asset of liberty which is imperilled by this war. Next year more money will have to be raised to finance the war, and we should realize now that, if the Government continues to dip into the pockets of the people, thesupply will be exhausted, and it will be necessary to adopt the financial policy of the Labour party.

The Minister referred to the severity of the State income tax imposed upon the people of Queensland, and even upon those with the lower incomes. In Queensland the State Government is in absolute control.

Senator McBride:

– The Labour party has not a. permanent right to the occupation of the treasury bench in that State.

Senator COLLINGS:

– With the exception of one period of three years, a Labour government has been in office in Queensland for 25 years. The Minister stated that in Queensland the State Government had descended to a very low point in the scale of income in imposing income tax. That is true, but it is also true that the workers in that State receive in return a tangible asset.

Senator MCBRIDE:
UAP

– The honorable senator is not referring, I presume, to the State butchers’ shops.

Senator COLLINGS:

– No; I am referring to the fact that income tax is collected from those in receipt of low incomes. The Queensland Government has imposed a super-tax on incomes, and there is also a State development tax. Furthermore, a commission investigates the best way to develop the State. No country in the world has so little unemployment as Queensland. Practically every worker is employed at full award rates, and the State is carrying out developmental works that will prove to he permanent assets.

Senator Leckie:

– Did the honorable senator say that there is no unemployment in Queensland?

Senator COLLINGS:

– Unemployment is found only amongst those who are either physically incapable of hard work or are unemployable.

Senator Gibson:

– What would be the percentage of such persons?

Senator COLLINGS:

– It is the lowest in Australia. Queensland has also a lower percentage of juvenile and women workers than is found in any other part of the world. The laws of that State protect home-builders and encourage the raising of families.

The Minister further stated, in his second-reading speech, that the great hulk of the nation’s income is obtained from the tax contributed by those with incomes below the £400 level. If the Minister means that, because of their numbers, the total amount of the income earned by that class is greater than that of any other section of the community, he is telling the truth. If, however, he means that they have the greatest proportion of the national wealth of this country, his statement is inaccurate, and he is merely indulging in a little sophistry, so that persons on the £400 a year mark and below it may be, to a certain extent, comforted by the fact that he states that they have the great bulk of the nation’s income. That is true, but they also have the least of the things that make a nation really great.

Senator McBride:

– I do not agree with that, and I do not think that the honorable senator will be thanked for that statement.

Senator COLLINGS:

– I always keep in mind the words of John Bright, who said that the greatness of a nation does not, consist of the wealth of the few, or in the assets of the landed gentry, but in the happiness, health and contentment in’ the homes of the common people.

Senator DARCEY:
Tasmania

– The last census shows that of 881,926. breadwinners in Victoria, 10 per cent. had no income. The distribution of the income of breadwinners in Victoria’ is to be seen in the following table: -

Those figures show the poverty of the workers in Victoria.

Question resolved in the affirmative.

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

page 1132

WAR-TIME (COMPANY) TAX ASSESSMENT BILL 1940

Second Reading

Debate resumed from the 12th December (vide page 967), on motion by Senator McBride. -

That the bill be now read a second time.

Senator COLLINGS:
QueenslandLeader of the Opposition

– The remarks which I made on the two preceding bills apply with equal force to this measure, and I shall not repeat them. I draw attention to a portion of the Minister’s second-reading speech in which lie said -

Reference has been made on several occasions to a report by the former Commissioner of Taxation in his seventh annual report, on the operation of the War-time Profits Tax Assessment Act. As the present measure represents a distinct departure from the principle of that act, the Commissioner’s report will bear repetition. He said-

He then read from a report of the Commissioner of Taxation the following paragraph : -

The tax is unequal and harsh in its incidence. These features of it are due to its peculiar construction, which, as shown by the figures quoted, permitted escape from the tax of the vast majority of large and oldestablished businesses which have made consistently substantial profits, both in amount and in percentage on capital employed, whilst small and struggling businesses, particularly those which were commenced before or after the outbreak of the recent war. were obliged to pay relatively heavy amounts in tax. Many young businesses, however, find themselves in positions of technical difficult)’, from which there was no relief for them under the law. Some of those businesses had clearly benefited by the war, though it was impossible to ascertain whether their prices had been reasonable or unreasonable. Others of the young businesses had clearly made profits, apart from war conditions, and would probably have made greater profits if the war had not occurred.

Members of the Labour party drew attention to these defects when the original bill was before the House of Representatives. We pointed out then that the proposed taxes, which never operated, would not be paid by the big companies. We realized then that this field of taxation had not been explored, and accordingly we are glad that this bill enters that field, thereby making the taxation proposals of the Government more just. I hope that should the need for additional revenue arise, the revenue from this quarter will show an upward trend.

Senator COURTICE:
Queensland

– I had intended to discuss the financial proposals of the Government, but not to attempt to analyse the budget or the incidence of taxation as outlined in the statement presented to the Senate. Necessity is compelling the Governmentto seek greater efficiency in taxation matters. I refer, not to means whereby more money may be extracted from the people, but to attempts to reach a better understanding with the States. The gravity of the international situation has at last forced the Government to make strenuous efforts for the defence of this country. I should like to see the same energy displayed in planning for the future production of wealth as is now exhibited in taxing the wealth that has been produced. The Government has consistently held the view that the future production of wealth in this country is a matter for the States; it has attempted to divorce the National Parliament from the real problems of the nation. The only way to meet the situation that confronts us is by marshalling the forces of the nation and developing its resources in the interests of the people generally rather than of a privileged few. The Government should confer with the States with a view to planning for the future production of Australia and the wise utilization of its resources. We hear a great deal about a new order in the world. I should welcome a discussion on that subject. The Senate has always been reluctant to face squarely the problem of the wise development of the resources of the country, and the maintenance of the living standard of its people. Under our present system, finance must be obtained from certain sources. I believe that the advice tendered to the Government by its experts has been sound, and I am pleased that the Government has shown a willingness to explore fresh avenues from which revenue might be obtained. The same zeal and energy should be displayed in planning for the future. Instead of setting State against State, and class against class, we should develop a national outlook. The only way to maintain our living standard is to plan for the greatest good for the greatest number. Indeed, that is the only policy which will bring lasting peace to this war-torn world.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 (Definitions).

Senator ASHLEY:
Kew South Wales

– Reference is made in this clause to the Board of Review. Can the Minister indicate the personnel of that body?

Senator McBride:

– The Board of Review consists of Messrs. Gibson, Hannan and Lightband

Senator DARCEY:
Tasmania

– la a bank regarded as a trading company ?

Senator McBride:

– Yes.

Senator DARCEY:

– I wish to direct attention to the growth of bank assets. During the past 25 years, the assets of the Australian trading banks increased a.s follows: -

The CHAIRMAN:

-(Senator James McLachlan) - Order! The honorable senator must confine his remarks to the clause before the committee.

Senator DARCEY:

– The Minister has admitted that banks are trading companies. I am showing how the assets of the banks have increased.

The CHAIRMAN:

– The honorable senator may not deal with that subject at, this stage.

Senator DARCEY:

– I asked a quesion of the Minister.

The CHAIRMAN:

– The. honorable senator was given a. reply* He must now discuss the clause which, deals with definitions.

Senator DARCEY:

– I am glad that the definition of a company covers a trading bank. In the last 25 years the assets of the Australian trading banks-

The CHAIRMAN:

– The honorable senator will resume his seat.

Clause agreed to.

Clauses 4 to 8 agreed to.

Clause 9 (Delegation by the commissioner)

Senator COLLINGS:
Leader of the Opposition · Queensland

– This clause provides, amongst other things, for the delegation of powers by the Commissioner of Taxation to deputy commissioners. I want to know who they are, because on one occasion the Queensland income tax legislation was amended in a way which had no precedent in any part of the British Empire. The amended legislation enabled’ the State Treasurer, or any person whom .he appointed, to require the Commissioner of Taxation to allow such a person to search the income tax records of any taxpayer. I must be assured that there is no such provision as that in this bill.

Senator McBride:

– There have been deputy commissioners of taxation from the inception of the Taxation Department. This clause enables the commissioner to delegate to them powers which they already possess under other acts.

Clause agreed to.

Clauses 10 to 13 agreed to.

Clause 14 (Companies exempt from tax).

Senator McBRIDE:
South AustraliaMinister for Supply and Development · UAP

– I have been asked, by interjection, how a private company is defined under the Income Tax Assessment Act. Under that act, “private company “ means a company which is under the control of not more than seven persons, and which .is not a company in which the public is substantially interested or is a subsidiary of a public company.

Senator ASHLEY:
NEW SOUTH WALES · ALP

– What is the purpose of exempting certain life assurance companies under sub-paragraph ii of paragraph c.

Senator McBRIDE:

– The exemption applies to life assurance companies whose liabilities exceed their assets.

Senator Darcey:

– Are private banks to be exempt?

Senator McBRIDE:
SOUTH AUSTRALIA · UAP

– All private banks whose income exceeds the prescribed rate will come within the scope of the tax.

Clause agreed to.

Clauses 15 to 37 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1134

WAB.-TIME (COMPANY) TAX BILL 1940

Second Reading

Debate resumed from the 12th December (vide page 968), on motion by Senator MCBRIDE -

That the bill be now read a second time.

Senator COLLINGS:
Queensland*Leader of the Opposition

.- The Opposition does not propose to debate this bill.

Question resolved in the affirmative.

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

page 1134

PRINTING COMMITTEE

Report No. 1 of the Printing Committee brought up by Senator Gibson, and - by leave - adopted. Sitting suspended from 12.45 to 2.15 p.m.

page 1134

QUESTION

UNIVERSAL TRAINEES : MILITARY CAMP AT DAPTO

Senator FOLL:
UAP

– To-day, Senator Collings asked the Minister representing the Minister for the Army the following questions, upon notice: -

  1. Is it a fact that universal trainees are inoculated against smallpox?
  2. If the answer is in the affirmative., is such inoculation compulsory?
  3. Is an outbreak of smallpox likely or anticipated in trainee camps?

The Minister for the Army has supplied the following answers : -

  1. Yes.
  2. Yes.
  3. No, but it is necessary to take all reasonable precautions in view of the concentration of troops in cai ups and the possibility of contacts with troops returned from the Middle East.

The honorable senator also asked today, upon notice -

In view of the reply given by the Minister for the Army as to the reasons for the abandonment of the military camp established at Dapto, would the Minister now state what action has been taken, or is contemplated, in respect of those officers on whose advice the site of the camp was determined in the first place?

The Minister for the Army has supplied the following answers: -

No action has been taken, or is contemplated, against such officers, as determination of this camp site was dictated by the circumstances existing at that period having regard to the special role of the unit.

page 1134

TRANSPORT ARRANGEMENTS

Senator COLLINGS:
Leader of the Opposition · Queensland

– by leave - 1 An unusual difficulty seems to have arisen in regard to transport from Canberra to Sydney. Honorable senators who wish to leave for Sydney to-night have been informed that no sleepers are available. We have been told that a. few sleepers from Cooma may be available to us at Queanbeyan. As some of us made our bookings a fortnight ago, and the majority as early as last Wednesday, those berths will be rushed. This development means that most of those honorable senators who contemplated returning to Sydney to-night will now be obliged to travel by the train leaving Canberra at 4.15 p.m. In view of the fact that we made our bookings a fortnight ago this development is most unsatisfactory.

Senator Ashley:

– Is it a fact that all of the sleeper accommodation on the Melbourne train has been booked?

Senator Leckie:

– Apparently.

Senator FOLL:
Minister for the Interior · Queensland · UAP

– by leave - The matter raised by the honorable senator is really one for the State Railways Department and our transport officers. In order to assist honorable senators I have instructed the chief executive of my department to take up the matter immediately with the Commissioner for Railways in Sydney.

Senator AMOUR:
NEW SOUTH WALES · ALP; ALP (N-C) 1941-42

– Can the Minister indicate when he is likely to receive the Commissioner’s reply?

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– The honorable senator would be well advised to join the train leaving Canberra at 4.15 p.m.

page 1135

ASSENT TO BILLS

Assent to the following hills re ported : -

Sales Tax Procedure Bill 1940.

Sales Tax Assessment Bill (No. 1a) 1940.

page 1135

WINE EXPORT BOUNTY BILL 1940

Debate resumed from the 12th December (vide page 977), on motion by Senator Leckie -

That the bill be now read a second time.

Question resolved in the affirmative.

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

page 1135

TREASURY BILLS BILL 1940

Debate resumed from the 12th December (vide 977), on motion by Senator Mcleay -

That the bill be now read a second time.

Senator COLLINGS:
Leader of the Opposition · Queensland

– As the object of this bill was clearly set out by the Postmaster-General (Senator McLeay) in his second-reading speech, the measure does not seem to me to require discussion.

Question resolved in the affirmative.

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

page 1135

OFFICERS’ RIGHTS DECLARATION BILL 1940

Bill received from the House of Represen tatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McLeay) read a first time.

Senator McLEAY (South Australia -

Postmaster-General) [2.24]. - I move -

That the bill be nowread a second time.

The object of this short bill is to preserve the rights of Commonwealth public servants who may be appointed arbitration inspectors under the Conciliation and Arbitration Inspectors Regulations made under the Commonwealth Conciliation and Arbitration Act. No provision exists in that, act for the preservation of the rights of such officers, or for their re-appointment to the Public Service, when they cease to hold their appointments as arbitration inspectors. The Officers’ Rights Declaration Act now preserves the existing and accruing rights of certain officers employed under the acts specified in the schedule thereto, and it is proposed , by clause 5 of the bill, to include the Commonwealth Conciliation and Arbitration Actin that schedule. As arbitration inspectors are appointed under regulations and not under the act itself, consequential amendments to sections 3 and5 of the principal act are also necessary. At the same time an opportunity has been taken to amend subsection 3 of section 6 of the principal act in order to make it clear that the re-appointment of an unattached officer is tobe made by the Public Service Board.

Senator COLLINGS:
QueenslandLeader of the Opposition

.- As the provisions of this bill are necessary, and represent an act of justice to those officers to whom it will apply, the Opposition welcomes its introduction.

Senator AMOUR:
non-Communist · New South WalesLeader of the Australian Labour party

– The object of this measure is to ensure that officers appointed to special positions will not lose the rights to which they are entitled under the Public Service Act. I support the bill.

Question resolved in the affirmative.

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

page 1135

POST AND TELEGRAPH RATES (DEFENCE FORCES) BILL (No. 2) 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator McLeay) read a first time.

Second Reading

Senator McLEAY:
Postmaster-General · South Australia · UAP

– I move -

That the bill be now read a second time.

The purposeof the bill is to extend the benefits of the Post and Telegraph Rates (Defence Forces) Act 1939-40 to representatives of certain organizations which are engaged in providing welfare services to members of the Commonwealth forces in Australia, or on active service overseas. The present act applies only to members of the forces as defined in the act. It is considered that persons attached to the forces and performing duties for these organizations should be entitled to avail themselves of the cheaper mail and telegraph rates provided for in the act. This bill contains a definition of “ representative of an organization “. The organisations are to be such as are authorized by the Minister for Defence Co-ordination bo provide philanthropic, welfare or medical services for members of the forces. For the purposes of the bill it is proposed to authorize organizations such as theRed Cross Society, the Young Men’s Christian Association, the Australian Comforts Fund, and the Salvation Army, to provide the services mentioned.

Senator COLLINGS:
QueenslandLeader of the Opposition

– The Opposition is in entire agreement with the bill. It is only right that the representatives of organizations rendering services to the fighting forces should have the benefit of these concessions.

Senator KEANE:
Victoria

.- Again Iprotest against the practice of rushing large numbers ofbills through the Senate during the concluding stages of a session. I am sure that arrangements could be made to present business in an orderly manner and thus afford honorable senators an opportunity to examine the legislation to be considered.

The Minister read the names of specific organizations covered by this legislation. Can other organizations apply for recognition ?

Senator McLEAY:
Postmaster-General · South Australia · UAP

– in reply - On the approval of the Minister for Defence Co-ordination (Mr. Menzies), the concessions may be extended to other organizations conducting similar services.

Question resolved in the affirmative.

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

page 1136

GOLD TAX COLLECTION BILL (No. 2) 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motionby Senator McBride) read a first time.

Second Reading

Senator McBRIDE:
South AustraliaMinister for Supply and Development · UAP

.- I move-

That the bill be now read a second time.

The amendment embodied in this bill is designed to remove an anomaly which has arisen in relation to gold tax deducted from the proceeds of gold recovered by tributers. In the gold-mining industry, it is a common practice for a mine owner or lessee to let portion of the mine to tributers, who in return for certain royalties, are empowered to search for, win and dispose ofany gold ore recovered. Ore recovered by the tributers is ordinarily disposed of to the owner or lessee of the mine under tribute, and is crushed and treated at the mine battery or treatment plant. Gold recovered from the ore treated is delivered by the mine owner or lessee to the Commonwealth Bank, or its agent, and the proceeds of the gold, less certain deductions, are paid to the tributers. As required by sub-section 2 of section 7 of the Gold Tax Collection Act, the Commonwealth Bank or its agent, in making payment to the mine owner or lessee for the gold delivered, deducts the amount of gold tax payable thereon. Under the existing law, however, a mine owner or lessee in Western Australia in accounting to the tributer for the proceeds of the gold has no legal right to reduce the amount payable by the amount of the tax deducted by the bank. This position exists by reason of the operation of a provision in the Mining Act of Western Australia, enacted prior to the imposition of the gold tax, which limits the deductions which the mineowner or lessee is legally authorized to make to deductions to cover -

  1. service charges payable by the tributer for service prior to the delivery of the ore; (ft) cost of treatment and realization; and
  2. the amount of royalty or tribute payable. lt is clearly anomalous that a section of the gold producers of the Commonwealth should, by the fortuitous operation of a State act, be enabled to escape a tax liability which is borne by all other gold producers in the Commonwealth. The amendment proposed will remove this anomaly.
Senator COLLINGS:
Leader of the Opposition · Queensland

.- This is a short measure framed to eliminate an anomaly. The Opposition will not oppose it.

Question resolved in the affirmative.

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

page 1137

APPROPRIATION BILL 1940-41

Bill received from House of Representatives.

Standing and Sessional Orders suspended.

Motion (by Senator McBride) proposed - flint the bill be now read a first time.

Senator DARCEY:
Tasmania

– It will be recalled that I made a vigorous protest in this ‘chamber against the deJay in the introduction of the budget. I have received the following letter from the Treasurer of Tasmania, which supports what I said regarding the inconvenience caused to the State Governments in this connexion -

I enclose you copy of a press statement 1 niii.de on the federal budget a couple of days ago. The Mercury published a fair portion of it, but, perhaps not unnaturally, suppressed the actual criticisms proffered by myself in connexion with the flimsy nature of the federal financial statement. Certainly, unless federal Treasurers alter their methods, it will be a very long time before the Grants Commission will describe any federal budget as a “ standing budget “ enabling all to see at a glance the truth in reference to federal finance. This is a tribute the Grants Commission repeatedly paid to my methods in compiling the financial statement of Tasmania.

However, this is not the material matter, the important point is that Tasmania (and every other State too) is entitled to know by bow much their burdens’ will be increased by additional federal taxation in 1040-41. All these particulars should be itemized. I hope you will take some steps to ascertain the facts in relation to Tasmania and have them inserted in Hansard and duly published in the press. 1 have had all my experts on this issue and it is quite impossible to winnow out the real facts from. Mr. Fadden’s statement or from his budget papers as published in lfu.iim.rd. and it. is a. monstrous procedure to cloak up the truth from the public at such a critical time as this.

The press statement referred to is ns follows : -

The Treasurer (Mr. Dwyer-Gray) said yesterday that a perusal of the text of Mr. Fadden’s annual financial statement, as Federal Treasurer, as printed in Hansard of the 21st November, with its accompanying budget papers, filled him with amazement tha.t the Federal Parliament could be satisfied with such flimsy, insufficient and confusing expositions of the financial ali:airs of the Commonwealth. He was not blaming Mr. Fadden, who was a very able and most likeable man, and who, in any case only recently assumed the office of Federal Treasurer. In that capacity he had. unfortunately, inherited a very bad federal tradition in these respects. The only budget paper showing “the estimated revenue of the Commonwealth for 1940-41” given in Hansard was not only utterly lacking in proper detail, but was headed “ .Based on Kates of Taxation as Amended in May, 1940”, which made the table utterly out of date and useless. What was plainly required was a detailed table showing the estimated revenue as affected not only by what was decided in May, 1040, but as affected by the Federal Treasurer’s proposals of the 21st November. Cbe budget table of estimated revenue was £81,100,000 short of its proper total, because the Treasurer’s proposals of the 21st November included additional taxation to that amount, which, added to an additional £14,000,000 approved in May, 1940, made a total increased taxation amount of £45,100,000. On the other hand Mr. Fadden indicated that “the increase in estimated total taxation this year, compared with the actual collections last year, waa £36,314,000”. These figures were, no doubt, reconcilable, but they were both confused and confusing, and it would take experts a considerable amount of research to find out what were the actualities. The Federal Treasury must be perfectly well aware, nol only what amount of taxation was really involved, but should be able to give details as to what amount of extra taxation, under what headings, would be involved for each State, and he (the Treasurer) trusted that some Tasmanian representatives would immediately ask for full details as far as the; affected Tasmania, especially in regard to income tax. Every State was entitled to know what increased amount the Federal Government intended to take from its taxpayers and through what sources, and all such details must be known at the Federal Treasury, otherwise bulked estimates would not be possible. One of the most important matters, on which the public should be fully informed, was by how much the Federal Treasury would benefit by lowering the exemption for federal income tax from £250 to £150, and figures for each State should be given, as this particular alteration would probably tell much more against Tasmania than other States. To give calculations showing what would be obtained from “ incomes under £400 “, which the Federal Treasurer had done, without allowing the public to know how much he would receive by lowering the exemption was, in his opinion, the opposite of candid on the part of Treasury officials responsible for the calculations. It might be said that some of these matters had been contracted in Ilansard. If so, he thought they had been very unwisely contracted. As everybody knew, ho (Mr. Dwyer-Gray ) believed in giving the public all possible financial figures and facts. Another issue he desired to raise, in the interests of Tasmania, related to interstate trade figures, which were all-important to Tasmania. About 81 per cent, of Tasmania’s total trade for 1938-39 was interstate. He had made use of the full figures for 1038-30 at the sessions of the Com mon wealth Grants Commission in Hobart in February last, but when the other day, in order to bring the story up-to-date, he asked for the figures for 1939-40, he was informed that no interstate trade statistics were now available or published on account of the war. He could not see how anything could possibly be more stupid than that. Surely all actual or potential foes could learn sufficient from the 1938-39 figures, and those of previous years, about the sea routes involved in Australia’s interstate trade. Uptodate figures could not inform the enemy of anything they did not already know. It was very necessary to have some reliable indicators as to the effect of war conditions upon Tasmanian trade in time, so that some remedy could be taken, if there was a trend towards untoward developments, before it was too late to check the mischief.

Tasmania is suffering a great disability at the present juncture. Its direct shipping service from Sydney to Hobart has been suspended for some months. The large overseas steamers which usually call at Hobart are not visiting Tasmania at the present time, and the return fare between Tasmania and the mainland is now twice what it was when a direct service was provided. The Government should do all that it can to provide the State with at least one steamer for the Christmas traffic.

Another misfortune which Tasmania is suffering is its inability to export fresh and canned fruit to Great Britain, although it has one of the largest canning establishments in Australia. Tasmania was the first State to export apples to Great Britain, and eventually it evolved a system whereby fresh fruit could be landed at Southampton in good condition. Orchardists in the other States have enjoyed the benefits resulting from Tasmanian expenditure and experience. I trust that the Government will do everything possible to provide one or two vessels for the carriage of tourists to Hobart.

I shall be leaving for Hobart this afternoon, in order to cool off under the slopes of Mount Wellington, and I take this opportunity to wish my fellow senators the compliments of the season. We have had some hard debates in this chamber, but we are closing the present sittings in a friendly spirit. The feud between the McLeay clan and the McBride clan has been settled by the elevation of Senator McBride to full ministerial rank. The genial General Brand is of the right brand, and has given valuable information to the Government on military matters. Senator Uppill from South Australia has been engaged in an uphill fight against his natural reticence. Yesterday he gaye us a good speech on wheat. As to Senator Abbott, we all hope that his peace plan will succeed, although centralization of power such as he has suggested is not always a success. Senator James McLachlan and Senator A. J. McLachlan have accorded me a pat on the back for my earnestness of purpose. I miss the genial senator from Western Australia, .Senator E. B. Johnston. He is probably floating about on the Swan River or at any rate is iri the Swan electorate.

There is a monument outside this House, and it is almost completed. For some months I have wondered why it was being erected, and with that thought in my mind I recently fell asleep. . I dreamt that it was a monument erected by the “ social creditors “ of Australia to mark the occasion when the people were induced to turn from unsound and unsafe finance to the sane, sound and sure financial system which I have advocated in this chamber. ‘ I dreamt that the intention of this committee was to put an enormous figure of myself on the top of the monument. My natural modesty prevented me from agreeing to that proposal, but I suggested that the magical figure “504” should be cut into the enduring stone, so that he who runs may read. I believe that I shall live to see my dream come true. When I began to speak in this chamber on the subject of finance, I was described as a voice crying in the wilderness. I stated that, so long as there was a financial wilderness in Canberra, my voice would continue to be heard. One of several names that have been applied to me is “ Richard Coeur de Lion “. One needs the heart of a lion and the enthusiasm of a crusader to carry on the fight for monetary reform. I feel sure that the financial views that I have expressed in this chamber from time to time will eventually bear fruit. I believe that next year we shall have the sound, sane and sure monetary system which I have advocated, and which will save Australia.

Senator AMOUR:
non-Communist · New South WalesLeader of the Australian Labour party

– A new telephone directory may be printed before the Parliament reassembles in the new year. Will the Postmaster-General (Senator McLeay) take steps to see that the new directory is printed in such a manner that it will be readable? It is utterly impossible for many people to discover the telephone numbers they require. I regard the reduction of the size of the print on the score of economy as undesirable.

Senator McLEAY:
Postmaster-General · South Australia · UAP

.- The telephone directory has been reduced in size in order to comply with requests from the Trade and Customs Department to conserve paper. The saving of paper effected totals 300 tons. Money previously sent to non-sterling countries for the purchase of paper has been saved for the purchase of aeroplanes. However, the matter raised by the honorable senator will be considered. As the present issue of directories was printed before I became Postmaster-General, I do not accept responsibility for the action taken in the matter.

Senator COLLINGS:
QueenslandLeader of the Opposition

– A report appeared in the Canberra Times on the 11th December last of remarks by the Minister for the Interior (Senator Poll) in reply to a question asked by Senator Clothier. The Minister was reported to have said -

The Government had no desire to run any more hotels or hostels in Canberra, and for that reason had called for tenders for a ten-years’ lease of Barton House.

It had been impossible, said the Minister, for the Government to make Hotel Kurrajong pay owing to the scale of charges to members of Parliament and other guests not being high enough to meet expenses. It was quite possible, however, that under private management better results might be shown and under private management Barton House would no doubt be made to pay.

As a member of this Parliament, and as a boarder at the Hotel Kurrajong, I enter a protest against that statement. As to the Minister’s remark that the hotel does not pay, owing to the scale of charges to members of Parliament and other guests not being high enough to meet expenses, I point out that members of Parliament pay £2 10s. a week for full board and residence. In the capital city of Queensland I can obtain board and. lodging, and also soft washing, equal to any accommodation available at the Hotel Kurrajong, for 30s. a week. For 35s. a week I could live at a palatial boarding establishment.

Senator McBride:

– Not an hotel.

Senator COLLINGS:

– I am speaking of a private boarding house with 200 rooms. The statement to which I have referred entirely misrepresents the position. The following table of figures taken from official records shows the state of the trust fund relating to hotels in the Australian Capital Territory:-

If no charge had been made to cover a percentage of the overhead costs of the department, the Hotel Kurrajong would never have shown any loss because its receipts have always equalled the expenditure. I do not begrudge the payment of £2 10s. a week to live at the Hotel Kurrajong; it more nearly approximates to a “ home from home “ than any other place in which I have lived. I am reminded of a man who was seeking accommodation, and when he saw outside one boarding house a notice containing the words, “Just like home”, he said, “Who wants to go there? “ The service at the Hotel Kurrajong is excellent, although, perhaps, the Government could exercise more supervision over some of the contractors who supply its requirements. No chef, however, can serve boarders with tender joints if the contractors supply tough meat. I direct the attention of the Minister, whom I compliment on the splendid way he is standing up to his job, to the following extract from page 46 of the financial statement for 1933-34: -

In 1033-34, £1,000 was appropriated for the maintenance and upkeep of hotels, which amount was to be paid to the credit of the Trust Fund Hotels Account. Action” to transfer to the Trust Account was not taken and the appropriation lapsed. Nothing has since been appropriated towards the maintenance and upkeep of the establishments still under government control and no provision has been made in the Estimates for 1040-41.

Obviously the Government is not alarmed at the situation. As honorable senators know, I am an ardent supporter of government control of everything. That is the only way out of the status quo, if we accept as a definition of that term, “ The trouble that we are now in “. Barton House, which appears to me to be well built, is being erected to provide accommodation for public servants receiving small salaries. I understand that the amount which they will have to pay has already been fixed. Why do honorable senators gibe at governmental control? Private enterprise will not build hostels for people who can afford to pay only £1 16s. a week.

Senator McBride:

– Is the establishment in Queensland to which the honorable senator referred controlled by the Government?

Senator COLLINGS:

– No.

Senator McBRIDE:
SOUTH AUSTRALIA · UAP

– Evidently private enterprise was willing to build it.

Senator COLLINGS:

– Brisbane has 300,000 inhabitants, whereas Canberra’s population does not exceed 12,000. The Minister should not lose sight of the fact that when the government hotels in Canberra were handed over to private enterprise, the new landlords retained the services of the managers. Where did the privately-controlled hostels get the women-folk who look after the Hotel Canberra and the other establishments in this city? It is strange that the same management has made a success of those hostels under private enterprise, whereas; according to the Minister, the hostels did not pay when the same persons controlled them for the Government. It is evident that the people behind the scenes who control the Government are not doing their job properly. As an example of the success that can attend governmental control, I direct attention to the trading results of the Postal Department. No one suggests that that department should be placed under private control. Ite administration is so satisfactory that a person can walk into the post office in the humblest bush hamlet and buy a postage stamp and receive other services, notwithstanding that the administration is from Canberra. The Minister knows that private enterprise could not. make such a satisfactory job of the postal business. The records of the insolvency courts are eloquent testimony to the fact that private enterprise is a failure.

Senator McBride:

– Private enterprise cannot rely on the purse of the taxpayers.

Senator COLLINGS:

– Whose pockets provide private enterprise with its profits?

Senator McBride:

– Certainly not the pockets of the taxpayers.

Senator COLLINGS:

– Every customer of private enterprise is a taxpayer. The Canberra Times is usually more reliable in its leaders and news columns than are most other sections of the press. I say that, notwithstanding that I do not always agree with the -views expressed. If the Minister did make the statement attributed to him in. the Canberra Times of the 11th December, I can only say that it is most misleading and unfair. He is at liberty to study the figures which I have cited. Should the lease of Barton House to private enterprise not yet be signed I suggest that the negotiations cease and the Government carry on the hostel under its own control.

Senator ARMSTRONG:
New South Wales

– I cannot understand why the Government has not taken action to pay compensation to members of the militia and universal trainees who are injured or killed during the course of their training. Some months ago the honorable member for Lang (Mr. Mulcahy) directed the attention of the House of Representatives to the case of a member of the Militia who was killed while in camp. The Government refused to accept responsibility, but offered to his parents an ex gratia payment of £50 which, I understand, they have refused to collect. The Minister, in reply, said that the Defence Act did not contain any provision for the payment of compensation in such cases. As honorable senators know, the rights of members of the Australian Imperial Force are safeguarded, as, indeed, they should be. These trainees do not enter camp voluntarily but are compulsorily enlisted, and should the hazardous nature of the work that they are sometimes called upon to perform lead to injury or death, provision for payment of compensation to their dependants should be made. The Minister added that an amendment of the Defence Act would be necessary before payment could be made in such cases. I ask why that act has not already been amended, in order to place these men on the same footing as members of the Australian Imperial Force.

Senator McBRIDE:
South AustraliaMinister for Supply and Development · UAP

– vn. reply - I agree with Senator Darcey that it is most desirable that an effort should bo made to secure greater uniformity between the Commonwealth and the States in taxation matters. Attempts to achieve that end have been made from time to time, with satisfactory results; but there is still a good deal of difference between the methods employed by the Commonwealth and the States. The correspondence from which the honorable gentleman quoted suggested that the Commonwealth should advise the

State governments of its taxation proposals and their possible effect on the State revenues, but I point out that such action would need to be reciprocal. The suggestion has much to commend it, but the States garner in the field of direct taxation before the Commonwealth enters it. The degree to which the States exact money from the people affects the amount which the Comonwealth may obtain from the same source.

I have not yet had an opportunity to study the figures presented by the Leader of the Opposition (Senator Collings), but I understand that they do not include interest and depreciation. A hostel whose accounts do not provide for interest on capital and depreciation may cover working expenses and yet make a loss.

Senator Collings:

– The figures were official.

Senator McBRIDE:

– That may be; but for the reasons that I have mentioned they may still be misleading.

Senator Armstrong referred to the need to provide for payment of compensation to the dependants of universal trainees and members of the Militia who may be injured or killed while on duty. He mentioned an instance concerning which an ex-Minister for the Army had said there was no provison in the Defence Act to cover such cases. I now inform the honorable senator that a committee has been set up to inquire into this matter. Its report is not yet to hand, but I assure him that when it is presented it will be given careful consideration.

Question resolved in the affirmative.

Bill read a first time.

Second Reading

Senator McBRIDE:
Minister for Supply and Development · South Australia · UAP

.- I move- ‘

That tlie bill be now read a second time. This measure provides for the appropriation of revenue for the ordinary services of the various departments. The expenditure proposals of the Government have already been dealt with in the budget, papers, and it is not now proposed to refer to the various items in detail. Any explanation that may be desired by honorable senators will be furnished at the committee stage.

The bill provides for an appropriation of £67,167,800 for the services of the year 1940-41, to which should be added the amounts already granted under Supply Acts Nos. 1, 2 and 3 of 1940, namely ?13,709,200, ?6,732,000 and ?2,S96,000 respectively, making a total of ?90,505,000, which is the estimated expenditure from annual appropriations for ordinary services for the year 1940-41, as set out in detail in the second schedule to the bill.

In order to conserve paper supplies, the major portion of the second schedule has been omitted from copies of the bill circulated among honorable senators. That schedule is merely a reprint of the Estimates for 1940-41, after certain statistical and other information has been abstracted. Any details required by honorable senators may be obtained from the Estimates.

Question resolved in the affirmative.

Bill read a second time.

In committee :

Clauses 1 to 4 agreed to.

First schedule agreed to.

The CHAIRMAN:

-(Senator James McLachlan). - With the concurrence of the committee, I propose taking the second schedule as a whole.

Honor asms Senators. - Hear, hear !

Second schedule.

Senator CLOTHIER:
Western Australia

– Will the PostmasterGeneral (Senator McLeay) tell me what amount of the proposed vote of ?12,829,000 for the Postal Department wall be expended in Western Australia? My object in asking is to ascertain what is to be clone about the provison of a new post office at Inglewood in Western Australia.

Senator McLEAY:
Postmaster-General · South Australia · UAP

.^Offhand, I cannot answer the honorable gentleman’s question, but I shall take a later opportunity to do so.

Senator Amour:

– Will the PostmasterGeneral restore metropolitan telephone directories to the three-column set-up with larger type? Directories containing four columns to a page with the names printed in smaller type are not popular.

Senator McLEAY:

– In view of the financial position, I can give no undertaking on the matter.

Senator Armstrong:

– I think that the department has considerably over estimated the saving of paper that will be effected by reducing the size of telephone directories.

Senator McLEAY:

– According to the department, 300 tons of paper will be saved this year.

Senator CLOTHIER:
Western Australia

– Improved travelling facilities are needed on the East-West railway. The shortage of passenger accommodation is such that people have had to wait for three or four weeks before being able to book berths. The booking was so heavy when I last returned to Western Australia that I was unable to accompany my colleagues, Senator Cunningham and Senator Fraser on the journey. I should have to book now to return to the west in January. As a matter of fact, I think that berths on all trains on the East- West line are fully booked until the end of January.

Senator FOLL:
Minister for the Interior · Queensland · UAP

.- All available rolling stock is in use. New coaches are being built at Port Augusta. It is impossible to replenish rolling stock on the Commonwealth section of the East-West line from State railway services because the Commonwealth rolling stock is of a. standard-gauge of 4 ft. 8? in. whereas the South Australian Railway’s section is of a gauge of 5 ft. 3 in. and in Western Australia the railways are of the 3 ft. 6 in. gauge.

Senator Clothier:

– That is a convincing argument in favour of standardization of railway gauges.

Senator FOLL:

– Yes.

Senator Keane:

– Does the proposed vote of ?937,000 for the Commonwealth Railways include any provision for the construction of locomotives and rolling stock for the East- West railway?

Senator FOLL:

– It provides for additional rolling stock which is urgently needed.

Senator Cameron:

– Does the Minister know whether the Minister for the Army has evolved more satisfactory travel arrangements for members of the Australian Imperial Force to and from their homes when they are on leave?

Senator FOLL:

– I do not know of any complaints having been received by the Minister for the Army (Mr. Spender) about travelling arrangements for troops on leave. The troops are issued with free railway passes in some cases and with concession tickets in others. If the honorable senator thinks that existing arrangements should be varied, any ideas that he cares to submit on the subject will be considered by the Minister for the Army.

Senator KEANE:
Victoria

.- Grave dissatisfaction exists among members of the fighting forces with respect to the travelling facilities offered by the various State railway authorities. There is lack of uniformity between the States. As the soldiers are under the control of the Commonwealth, this Government should take up the matter with the States and endeavour to settle this vexed question.

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– The Minister for the Army is trying to arrange with the State governments a standard system of rail concessions for soldiers.

Senator KEANE:

– Will any provision be made from the proposed vote of £95,000 for the Department of Supply and Development for research into indigenous supplies of metals needed for Avar industries?

Senator McBride:

– Provision for that is made in another vote.

Senator ABBOTT:
New South Wales

– Could provision be made from the proposed vote for the Department of the Army to improve arrangements for dental treatment of soldiers. I have heard of cases of soldiers having to wait, months for dentures after having had their teeth extracted, and meanwhile being compelled to live on army “ hard tack “. It seems wrong that such conditions should exist, especially at military camps near large towns where dentists are. available.

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– I shall ask the Minister for the Army to investigate that matter.

Second schedule agreed to.

Preamble agreed to.

Title agreed to.

Bill reported without requests; report adopted.

Bill read a third time.

page 1143

QUESTION

APPROPRIATION (WORKS AND

Bill received from the House of Representatives.

Standing and Sessional Orders sussuspended.

Bill (on motion by Senator McBride) read a first time.

Second Reading

Senator McBRIDE:
Minister for Supply and Development · South Australia · UAP

– I move- ‘

That the bill be now read a second time.

Following is a summary of the proposed appropriation for additions, new works, buildings, &c. : -

Large works provided for in the bill are -

The expenditure on civil aviation works is occasioned, largely by defence requirements. In addition to the amount of £.1,176,000, which is to be appropriated from revenue for postal works, a further amount of £2,000.000 will be provided from loan fund. The latter amount was the subject of a loan bill. The total .expenditure on postal works in 1939-40 was £3,178,000. The amount, required for territories of the Commonwealth shows an increase of £240^000 over last year’s expenditure. This increase is attributable to large developmental programmes necessitated by the increasing populations of both the Australian Capital Territory and the Northern Territory. In Canberra substantial expenditure is necessary in the provision of cottages and the necessary engineering services. An amount of £75,000 has been included towards the cost of the Canberra hospital. At Darwin also considerable expenditure is required in the provision of a hospital, and electricity and water supplies to meet theneeds of the rapidly-expanding population.

The appropriation of £3,421,000 does not include works constructed out of the Federal Aid Roads grant to the States, which this year is estimated to amount to £3,100,000. It also excludes works for defence and war services, which are being charged to loan fund, and works made possible by the Commonwealth grant of £100,000 a year in aid of interest and sinking fund on public works carried out by local authorities. Although certain works in progress at the 30th June last have been carried on by credits from Treasurer’s Advance, this bill authorizes the commencement of a number of new works which it is highly desirable should be put in hand at the earliest possible moment. I trust, therefore, that honorable senators will facilitate the speedy passage of the bill. Any details required regarding specific works can be supplied during the committee stage.

Question resolved in the affirmative.

Bill read a second time. in committee:

Clauses 1 to 4 agreed to.

Schedule

Part I. - Departments and Services - Other than Business Undertakings and Territories or the Commonwealth.

Proposed votes - Parliament £400 ; Prime Minister’s Department £47,850; Department of External Affairs £9,200; Department of the Treasury £40,650 ; and Attorney-General’s Department £48,000 - agreed to.

Department of the Interior.

Proposed vote, £101,500.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– .Under division 25, relating to the Australian Capital Territory, there is an item “Department of Health - Buildings, Works, Fittings and Furniture “, the amount provided for which is £75,300. The appropriation last year was £24,500, of which only £3,329 was expended. There is a footnote which states that there is an estimated further liability of £79,000. Does that provision relate to the erection of a hospital in Canberra ?

Senator FOLL:
QUEENSLAND · NAT; UAP from 1931

– -Yes, it is for the Canberra hospital.

Proposed vote agreed to.

Proposed vote - War Service Homes Commission, £63,000 - agreed to.

Department of Civil Aviation

Proposed vote, £587,900.

Senator KEANE:
Victoria

.- I should like the Minister (Senator Foll) to furnish me with detailed particulars of the larger items in this proposed vote.

Senator FOLL:
Minister foi- the Interior · Queensland · UAP

– This is largely made up of the increased amount set aside for the construction of additional aerodromes, principally defence aerodromes, but in some cases to serve the combined purpose of civil aviation and defence.

Proposed vote agreed to.

Proposed votes - Department of Trade and Customs £6,900; Department of Health £34,800 ; Department of Repatriation £3S,000; and Department of Commerce £20,800 - agreed to.

Part II. - Business Undertakings.

Proposed vote, £1,326,000.

Senator AYLETT:
Tasmania

– Can the Minister advise me as to whether any portion of the proposed vote for the Postmaster-General’s Department will be expended on the erection of a cable station at King Island, the construction of which, I understand, was undertaken a couple of years ago, and on the erection of an official post office al Flinders Island? On one occasion, the cable between Tasmania and the mainland was cut by the reef which it crosses, and it is likely to break again because it still crosses that reef. Until the station at King Island is ready for use, and the cable can be diverted to another course which will obviate crossing the reef, whenever a breakage occurs the cable will have to be joined.

Senator FOLL:
Minister for the Interior · Queensland · UAP

– ‘Provision is made for a small expenditure on the cable station at King Island.

Proposed vote agreed to.

Part III. - Territories of the Commonwealth.

Proposed vote, £1,096,000.

Senator KEANE:
Victoria

.- Provision is made for an expenditure of £.12,000 on the item “Metalliferous Mining - Construction of Batteries “. Where are these batteries to be constructed? Will the Minister also inform me as to whether complaints concerning high battery charges have been rectified?

Senator FOLL:
Minister for the Interior · Queensland · UAP

– This provision is for the battery at Tennant Creek. Since the honorable senator introduced a deputation of miners from Tennant Creek, there has been a good deal of discussion concerning the matter, and a conference has been held between the mining warden and the people on the field. From that time no further complaints have been received.

Senator A J McLACHLAN:
SOUTH AUSTRALIA · NAT

– An amount of £409,840 is provided for architectural services, fittings and furniture, in the Australian Capital Territory. A little over £500,000 was voted on this account last year, and only £295,467 was expended. What are the main items of this expenditure?

Senator FOLL:
Minister for the Interior · Queensland · UAP

.- The bulk of the expenditure relates to cottage construction and attendant services in Canberra.

Proposed vote agreed to.

Schedule agreed to.

Preamble agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1145

AUSTRALIAN SOLDIERS’ REPATRIATION BILL (No. 2) 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on. motion by Senator Collett) read a first time.

Second Reading

Senator COLLETT:
Minister Assisting the Minister for Repatriation · Western Australia · UAP

– I move -

That the bill be now read a second time.

This bill proposes to amend the Australian Soldiers’ Repatriation Act in respect of service pensions. The maximum rates of pension for members of the forces and their wives will be increased by an amount equal to the proposed increase of invalid and old-age pensions.

Service pensions, which were instituted in January, 1936, are really a scheme of invalid or old-age pensions for members of the forces, on a more liberal basis than that of the invalid and old-age pension scheme for the general community. It is more liberal to a member right from the initial stage when he lodges his application, and is informed as to the grounds on which a pension may be granted. Such a pension may be granted on account of age, being permanently unemployable, or suffering from pulmonary tuberculosis.

On the ground of age, a service pension maybe awarded five years earlier than is possible with the ordinary old-age pension ; male ex-members of the forces can be admitted at 60 years of age, and an Australian Imperial Force ex-nurse, at 55 years of age.

If admitted on either of the two other grounds, not only is he eligible for a pension, but his wife, and children up to four in number, may also be granted pensions, merely on relationship. No such provision exists in respect of pension under the Invalid and Old-age Pension Act. The maximum grant under that act to an invalid would be 20s. a week; under the service pension scheme it would be, in the case instanced, 44s. a week, being 17s. to the member, 17s. to the wife, and 10s. for the children.

As will be seen from the clauses of the bill, the rates of pension for members and wives have been increased by 2s. a fortnight, except where the pensioner, being in a public institution, is paid the rate prescribed under Section 45ao for such a pensioner. At present that rate is 14s. a fortnight, the difference between that amount and the ordinary rate being paid to the institution towards the maintenance of the pensioner. It is intended that, of the increase of 2s. a fortnight,1s. shall go to the pensioner, and1s. shall be made to the institution.

With this increase of the service pension the maximum rate for a wife is now the same as the war pension for the wife of a soldier who is totally incapacitated as the result of war service.

Senator COLLINGS:
Leader of the Opposition · Queensland

– This measure is warmly welcomed by the Opposition, and I am sure I shall not be considered ungracious if I say a word or two about the procedure which resulted in its introduction. It will be recalled that as a result of collaboration between members of the Advisory War Council certain improvements in the Government’s budget proposals were agreed to, one of which was an increase of ls. in invalid and old-age pensions. As a. result of the granting of that increase it was decided that a similar increase should be made in the service pension. That is the whole intention of the bill.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 3 agreed to.

Clause 4 (Service pension in respect of a member permanently unemployable or suffering from pulmonary tuberculosis).

Senator KEANE:
Victoria

.- Will the Assistant Minister (Senator Collett) state whether this clause means that a soldier suffering from a distressing lung complaint will automatically receive a service pension? In common with other honorable senators, I know of many of these men who have been unsuccessful in their applications to the various tribunals, even though they are unemployable.

Senator COLLETT:
Assistant Minister · Western Australia · UAP

– This clause has nothing to do with eligibility; it merely alters the rates.

Clause agreed to.

Clauses 5 and 6 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time: Sitting suspended from to h.80 p.m.

page 1146

INVALID AND OLD-AGE PENSIONS BILL 1940

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill (on motion by Senator Foll) read a first time.

Second Reading

Senator FOLL:
Minister for the Interior · Queensland · UAP

– I move -

That the bill be now read a second time.

The purpose of the bill is twofold - first, to increase the maximum rate of invalid and old-age pensions from £1 to £1 ls. a week, and secondly, to make provision for the maximum rate of pension to be varied automatically in accordance with variation of the cost of living.

The new maximum of £54 12s. per annum, or £1 ls. a week, will be the highest amount to be received by pensioners since the introduction of Commonwealth old-age pensions in 1909. The variations in the pensions rate since that time have been as follows: -

There are at present approximately 333,000 invalid and old-age pensioners, and they will all receive the benefit of the increase of ls. a week provided for in. the bill. The additional cost will be £900,000 per annum, which will bring the total cost of invalid and old-age pensions up to £18,000,000 per annum. The additional expenditure for the remainder of this financial year will be £470,000.

The bill preserves the existing margins of permissible income, namely, £32 10s. per annum, - or 12s. 6d. a week, in the case of pensioners other than .permanently blind persons, and £175 10s. per annum, or £3 7s. 6d. per week, in the case of blind pensioners. Consequently, the limit of income, plus pension, will now become £S7 2s. per annum, or £1 13s. 6d. a week, in the case of pensioners other than, permanently blind persons, and £230 2s. per annum, or £4 8s. 6d. a week, in the ease of blind pensioners.

The second purpose of the bill - the linking of the pension to changes in the cost of living - is not entirely new. This principle was first introduced in October, 1933, in the Financial Relief Act. Provision was then made for the pension rate to rise or fall, within the limits of 17s. 6d. to £1 a week, by 6d. for every variation of 100 units in the retail price index number for food and groceries for the six capital cities of the States, as ascertained by the Commonwealth Statistician for the twelve months ending on the 31st March in each year. The basis of these variations is shown in the following table :-

Under this table, there was a rise of 6d. in the pension in July, 1935, i.e., from 17s. 6d. to 18s. a week.

In September, 1936, under the Financial Relief Act No. 2, a new table of price index numbers was substituted for the previous table. The same index was retained, but the numbers were regrouped and. related to higher rates of pension, within the limits of 18s - instead of 17s. 6d. - and £1 a week. The new table was as follows: -

The immediate result of the new table was an increase of the pension rate from 18s. to 19s. a week, which became operative from the 24th September, 1936.

In September, 1937, the Pensions Act was again amended to give a further increase of the pension from 19s. to £1 a. week, and the provisions relating to cost of living variations were repealed. The pension has since remained at £1 a week.

As already stated, the food and groceries index was previously used as the basis for measuring variations of the cost of living for the purpose of variations of the pension rate. On this occasion, however, it has been decided to adopt the all items index of household expenditure, “ C “ series, as the basis for variations of pension. This series takes account, not only of food and groceries, but also of rent, clothing and miscellaneous items of household expenditure. It is also used by the Commonwealth Arbitration Court in determining the basic wage.

It will be observed that under the bill the new maximum rate of £1 ls. a week will continue while the price index number does not exceed 9S1. The latest available figure is 959. The bill also makes provision for the pension of £1 ls. to rise by 6d. a week for every 23 units, or portion thereof, by which the price index number exceeds 981. Thus, a rise in the price index number to 9S2 will result in a further increase of 6d. a week in the pension. The bill provides that the maximum rate of pension shall not fall below £54 12s. per annum, or £1 ls. a week.

Groups of 23 units have been decided upon with a view to securing variations of the rate of pension proportionate to the variation of the cost of living. In this connexion, it should be noted that the cost of living provisions which operated from 1933 to 1937 required variations of 100 units in the price index number for food and groceries to secure a variation of 6d. in the weekly pension. The effect was that variations of the pension were not by any means proportionate to the variations of the cost, of living. The equivalent of 100 units in the food and groceries index is about 60 units in the all items index. The fact that it has been decided to adopt groups of only 23 units for every variation of 6d. in the pension indicates that the provisions regarding the cost of living variations contained in this bill are much more liberal than those previously in operation.

It is also worthy of note that, in October, 1925, when the all items price index number was 1001, the maximum pension was only £1 a week, whereas under this bill, should the price index number rise to 1001, the rate of pension would be £1 ls. 6d. a week. Should it rise to 1005, the pension would become £1 2s. a week. Furthermore, comparing the purchasing power of the new maximum rate of pension with the maximum rate existing in October, 1925, a pensioner will now be able to buy (with his pension of £1 ls. goods which would have cost £1 ls. lid. in October, 1925, when his pension was only £1 a week. This comparison is based on the comparative price index numbers, all items series, namely, 1001 and 959.

A special feature of the bill 13 that provision is made for a determination of the maximum rate of pension to be made in each quarter, according to the price index number for the quarter immediately preceding such determination. If sufficient variation has occurred iu the price index number, the new maximum rate of pension will become operative from the first instalment payable in the next succeeding quarter. Thus, the variations of the rate of pension will, so fac as practicable, keep pace with the variations of the cost of living. The previous legislation of this nature, which was in force from 1933 to 1937, provided only for annual determination of the pension rate based on the index number for the twelve months ending on the 31st March in each year. The effect was that the variations of pension lagged behind the variations of the cost of living. The present bill is thus a definite improvement on the former legislation in that respect.

The retention of the existing margins of permissible income in connexion with the present increase from £1 to £1 ls. a week has already been referred to. These margins, namely, l’2s. 6d. a week in the case of pensioners other than permanently bind persons, and £3 7s. 6d. a week in the case of blind persons, will also be preserved with every variation of the pension on the changes in price index numbers.

Provision i3 made in the bill for pensioner inmates of benevolent asylums and hospitals to receive an increase of 6d. a week in the amount of 6s. a week which they at present receive as institutional pension. Possibly it will be contended that the full increase of ls. a week, which pensioners outside institutions are now to receive, should also be paid to those who are in institutions. It will be recognized, however, that the payments made to pensioners in institutions are scarcely in the same category as the pension payments made to persons outside, who have to provide from the pension money the full cost of their maintenance. In the case of inmates of institutions, the cost of maintenance is borne almost entirely by the institution, and the pension payment made to the inmate is practically in the nature of pocket money, which enables him to purchase tobacco and other comforts which may not always be provided by the institution.

In this connexion, it will be of interest to mention the changes in the amounts paid to inmates of institutions since these payments were commenced in 1916. They are as follows : -

It will be noted that, in 1920, the institutional pension of 2s. a week represented only 13 per cent, of the full pension, which was then 15s. a week, whereas the present institutional pension of 6s. a week represents 30 per cent, of the full pension of 20s. a week. The new rate of 6s. 6d. a week represents 31 per cent, of the new maximum pension rate of 21s. a week.

Furthermore, pensioner inmates of hospitals are given a special privilege in that the pension for the first 28 days of the period in hospital is preserved intact for the pensioner, and paid to him in full on his discharge. For this period the hospital receives nothing from the Commonwealth. After 28 days, the hospital is paid 14s. a week, i.e., the balance of the pension over the amount of 6s. a week paid to the pensioner. Similar payments are made to benevolent asylums in respect of pensioners admitted, but in these cases the payments of 6s. a week to the pensioner and 14s. a week to the institution, commence from the first pension pay-day after the date of admission.

After careful consideration of all aspects of this matter, the Government has decided that pensioner inmates of institutions will be very fairly treated if given up to half the amount of any increase paid to pensioners outside. The bill, therefore, provides for the pensioner inmates of institutions to receive half the present increase of ls. a week and, within the discretion of the Minister, up to half of any further general increase which may result from a rise in the price index number. This discretionary power operates conversely, so that, in the event of a decrease of the ordinary pension following a. fall of the price index number, the Minister may, in his discretion, decide that the pensioner inmate shall not be required to bear any portion of the decrease.

The amendments effected by the bill are to apply to the fortnightly instalment of pensions due on the 26th December, but pensioners will actually receive the increased ‘payments on the 19th December, owing to the special arrangements for payment a week earlier on account of the Christmas holidays.

Senator COLLINGS:
QueenslandLeader of the Opposition

– Honorable senators on both sides of the chamber will agree, I think, that this bill is more welcome than most of those with which wc have had to deal in the last few days. I notice with some pride that the Minister (Senator Foll), in the second-reading speech which he has just concluded, was able to say that the pension to be paid to invalid and old-age pensioners will now be higher than at any other time since its inception. We are all glad of that. So far as the Opposition is concerned - and I believe I may also say it of honorable senators opposite - there is a tinge of regret that it was not possible to make the pension somewhat higher. However, I trust that it will be recorded to the credit of the three parties which took part in the negotiations, that the rate of pension has been increased. Honorable senators will agree that it would have been very gratifying to us all if, before we adjourned for the Christmas recess, we could have sent forth the glad tidings to the pensioners that the increase was a little more than ls. a week. However, that cannot be done; we must accept the position as it is and be glad that wc are now able to say that the pension will be higher than ever before. I am delighted that provision has been made in the bill that as the cost of living rises the pension will rise proportionately by 6d. a week in accordance with the formula explained by the Minister. It is gratifying to know that we have also been able to safeguard the interests of the pensioners to the extent that the amount of their pension will not, in any circumstances, fall below 21s. a week. I support the bill.

Senator KEANE:
Victoria

.- The one sad feature about the budget is that we have not been able to induce the Government to increase by more than ls. a week the pension paid to invalid and aged persons. The platform of the Labour party is clear on the point that their pension should not be less than £1 a week. That amount represents about one-third of what many spend each week in pocket money. Out of their meagre pittance the pensioners have to provide for rent, food, and clothing, and all the medical attention which their increasing years render necessary. When we hear the Minister (Senator Foll) say that the granting of this concession will cost the Government £900,000 pei1 annum, we are reminded that other and better organized sections of the community are able to squeeze both parties and collect millions of pounds from the government in assistance of various kinds. By these means wheatgrowers have received no less than £14,000,000 during the last five years. Only a few days ago the apple and pear acquisition scheme was dropped after incurring a loss of £750,000. Although we have to honour the agreement arrived at between our representatives and the representatives of the Government who dealt with the rate of pension to be paid, I trust that at the very earliest opportunity the position of invalid and old-age pensioners will be reviewed. Some people say that they have no sympathy with the old-age pensioners be cause in their earlier years they were not thrifty and made no provision for their old age. Everyone knows that the wages paid in Australia are sufficient only to provide food and clothing and a place in which to sleep. I hold no brief for any particular section of the community, but the party to which I belong cannot ignore the just demands of the 330,000 pensioners, who, with their relatives, represent a voting strength of 1,000,000. Although I loyally support the compromise agreement arrived at in this matter, in future I shall do my utmost to see that the invalid and old-age pensioners are treated more fairly. I conclude by saying that although the pension rate is to be only £1 ls., it will be higher than the rate paid in any country in the world with the exception of New Zealand, where a man and his wife may each receive a pension of £1 10s. a week even though they own their own home. Such liberality is made possible by the fact that all sections of the community in New Zealand pay a flat tax out of which the cost of social services is met. I visualize the day when this Government, if it remains in power, or the Labour party, if it holds the reins of government, will treat with greater liberality those who have borne the heat and burden of the day and who, through no fault of his own, are compelled to apply for a pension.

Senator AYLETT:
Tasmania

– I welcome the bill. My only regret is that the pension is not to be increased to £1 5s. a week. Honorable senators on this side of the chamber are obliged to support the bill because it provides an increase, even though it is only ls. a week. We have been able to provide huge amounts for the assistance of other sections of the community. Last year, this Parliament voted approximately £11,000,000 for the relief of wheatgrowers which may never be repaid, and £750,000 has been expended in connexion with an apple and pear acquisition scheme which benefited fruit-growers in all States. If we can afford to make such handsome provision for other sections of the community, we should also be able to increase the pension for aged and invalid people to £.1 5s. a week.

Senator CAMERON:
Victoria

– I agree that the Government has improved the position of the invalid and old-age pensioners by the introduction of this bill. Is it an improvement to which they are entitled? The majority of these old-age pensioners helped substantially to create the great wealth of this country, but all that they receive in return, in the shape of pension, provides merely for subsistence. Paradoxical though it may seem, the harder they worked and the more wealth they created - particularly after the introduction of machinery in industry and improved methods of manufacture - the less they received proportionately. In the days of the craftsman the time required for the making of a table, for instance, would be ample to-day for the manufacture, by modern methods, of at least two tables. After they are worn out, having given of their best in the service of commerce and industry, we pay to them the bare cost of the necessaries of life. In the autumn of their lives they probably require more medical services and other necessities than they did in the days when their health and strength was not impaired. The rate of pension should be computed with the basic wage as a minimum; instead it is measured by the lowest amount necessary to sustain life, and the pensioners are expected to be thankful. Some people, who patronize the old-age pensioners, say that we are giving to them something which we are really not entitled to give. The actual truth is that we are giving to them only a negligible quantity of the wealth that they helped to produce. When we point with pride to the progress that has been made in this country, to our palatial buildings, and to our modern public utilities, we should not forget that the oldage pensioners helped to pioneer these achievements.

Senator Keane:

– On 6s. a day !

Senator CAMERON:

– Yes. I can remember when workers were paid no more than that wage. Whatever is given to the pensioners is given grudgingly instead of in a spirit of generosity and appreciation for their labours on behalf of the nation. Men who occupy high positions of political authority base their beliefs on the assumptions and categories which make it impossible for them to understand the outlook of honorable members on this side of the chamber in connexion with pensions. Therefore, I regard it as my duty to point out, whenever possible, that the old-age pensioners have a very much stronger claim to recognition than the Government accords to them. A case I have in mind relates to a Scotsman, 72 years of age, who worked on the wharfs in Melbourne for 35 years, during which time he, and thousands of his fellow workmen, helped to build up enormous fortunes for the shipping companies. Recently he found that it was impossible for him to stand up to the rigours of his work and was obliged reluctantly to apply for a pension. That was due to the fact that, during his long period of service to the shipping companies, his wages had not been sufficient for him to put aside savings which would have made him independent of outside help in his old age. Surely it is not too much to ask of the Government, and others in responsible positions, that they take a more generous view of the position of old-age pensioners. Instead of assessing the rate of pension at the lowest possible amount, they should try to assess it on the basis of the maximum amount which the country can pay. These old people are the human elements behind the wealth with which we are surrounded to-day. This building, the palatial offices in our capital cities, and our shipping and railway services are examples of their achievements. The bill provides for an improvement of the circumstances of invalid and old-age pensioners, but certainly not the improvement to which they are entitled.

Senator CLOTHIER:
Western Australia

– This bill is a step in the right direction, but I would have been very much more pleased than I am had the increase proposed been a little greater. A rate of 22s. 6d. a week would have been reasonable; that would have provided a man and wife in receipt of pensions with a joint income of £2 5s.a week. Taking into consideration the cost of the necessaries of life to-day. the increase of1s. is not very helpful. I know from experience that public subscriptions are often raised in order to assist pensioners whose incomes cannot provide them with the services which they need. Nevertheless, this measure is something of which we should be proud. It is a gift; it is not paid in response to a demand as are the taxes which have been agreed to by Parliament within the last few weeks. I hope that the Government will endeavour to increase the rate of the old-age pension to 22s. 6d. a week or more.

Question resolved in the affirmative.

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

page 1151

MINISTER FOR INFORMATION

Senator McLEAY:
South AustraliaPostmasterGeneral · UAP

– by leave - I have to announce to the Senate that Senator the Honorable H. S. Foll, Minister for the Interior, has been appointed Minister for Information in succession to the Right Honorable R. G. Menzies, resigned.

page 1151

SUPPLEMENTARY FINANCIAL STATEMENT 1940-41

Senator McLEAY:
General · South AustraliaPostalm aster · UAP

– by leave - read a copy of the following paper (vide page 1109):-

The Budget.1940-41 - Supplementary statement and papers.

Ordered to be printed.

page 1151

LEAVE OF ABSENCE

Motion (by Senator McLeay) - ~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 1151

NEXT MEETING OF SENATE

Motion (by Senator McLeay) agreed to-

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.

page 1152

ADJOURNMENT

Valedictory - Alleged Subversive Statements - Army Pay

Senator McLEAY:
Postmaster-General · South Australia · UAP

– In moving

That the Senate do now adjourn.

I take this opportunity to extend, to you, Mr. President, the Leader of the Opposition (Senator Collings), all honorable senators, and officers of the Senate, the compliments of the season and best wishes for the New Year. On this occasion, it is fitting that. I should make special reference to one of our distinguished members in the person of Senator Grant, who has been prevented by illness from attending the sittings of the Senate during this period of the session; and also I pay a special tribute to Senator Wilson, who has left Australia with the Australian Imperial Force. I am sure that I shall meet the wishes of all honorable senators if I communicate with Senator Wilson and extend to him our best wishes.

Honorable Senators. - Hear, hear!

As we are about to disperse for the Christmas recess under the clouds of war, it is natural that our thoughts and prayers should, go out to all members of the Australian and British forces who are risking their lives in our interests. I am sure that we all feel that 1941 will be a difficult year. Evidence is not lacking that our people as a whole, who fully appreciate the sacrifices now being made by the people of Great Britain, are firmly resolved to do all in their power to bring the war to a successful conclusion.

Senator COLLINGS (QueenslandLeader of the Opposition) (5.6]. - I join with the Leader of the Senate (Senator McLeay) in the kind thoughts which he has just expressed, and particularly in his wish for your health and happiness, Mr. President. The Opposition wholeheartedly approves of the Minister’s remarks regarding _ Senator Grant and Senator Wilson. I am proud of the fact that the Opposition has provided a pair for Senator Grant during the whole of the time he has been unable, owing to illness, to attend the sittings of the Senate. Senator Grant has been profuse in his expressions of gratitude to me as Leader of the Opposition for our action in that respect. I am also proud of the fact that when Senator Wilson bade farewell to honorable senators to go on active service, the Opposition unhesitatingly agreed to his request that we provide a pair for him. We shall continue to do so until he returns to our midst.

We know that the coming year will be a most difficult one for the Government. I feel sure that all members of this Parliament, without exception, will endorse the opinion expressed by the Leader of the Senate, that we are determined to do all in our power to bring the war to a successful conclusion. The Opposition extend to you, Mr. President, to all honorable senators, and officers of the Senate its best wishes for the coming year. We also tender seasonal greetings to the members of the Hansard staff, whose duties during the last few days have been unusually strenuous. To them the recess will bring a well-earned respite.

Senator BRAND:
Victoria

.- Appertaining to my remarks on the adjournment of the Senate last night, the Leader of the Opposition (Senator Collings) has assured me that he desired in no way to reflect upon the democratic principles upon which the Returned Sailors and .Soldiers Imperial League of Australia is founded. I am sure that lie recognizes as I do that during the present crisis the league is a bulwark against Fascism or any other disruptive influence. I accept the honorable senator’s assurance in the spirit in which he conveyed it to me.

Senator COOPER:
Queensland

– On behalf of the members of the Country party in this chamber, 3 convey Christmas greetings and every good wish for the new year to you, Mr. President, members of the Ministry, the Leader of the Opposition (Senator Collings) and the other members of the Opposition, the parliamentary officers, the Mansard staff, and the members of other staffs connected with the work of this chamber. All honorable senators realize that this year has been a difficult period for the various staffs associated with the work of Parliament. The mailmatter of members has very largely increased, and, no doubt, the officials have had to cope with a far greater volume of work than ever before. Each of the parliamentary staffs has been of the greatest assistance to honorable senators during the year. The Hansard staff, as usual, has discharged its duties in a most efficient way.

Senator KEANE:
Victoria

.- I congratulate you, Mr. President, on the manner in which you have discharged your duties. We have all received generous treatment from you, and we thank you. We are also highly appreciative of the work of the officers of the Senate and of the Hansard staff. This year has been one of the most momentous in the history of Australia, and certainly in the history of the Labour Movement. During the nation’s greatest crisis we have witnessed a change in the policy of the Labour party. It has entered into an arrangement with the Government, which is formed of parties to which it is politically opposed, and it has closed its own ranks in the interests of the nation. I trust that we shall all experience a happy Christinas, and that, when we return to our duties next year the international outlook will have improved considerably.

Senator Collings:

– May I thank the Leader of the Senate (Senator McLeay) and Senator Cooper for their generous observations concerning me? I also appreciate the kind remarks of Senator Brand.

The PRESIDENT (Senator the Hon. J. B. Hayes). - I thank honorable senators for their good wishes, which I heartily reciprocate. We are indebted to the officers of the Senate for their untiring energy, courtesy aud willingness to help us in every possible way. I also thank the members of the Hansard staff for their loyalty and willing co-operation. I am particularly pleased that the Leader of the Senate (Senator McLeay) and the Leader of the Opposition (Senator Collings) referred to Senators Grant and Wilson, and I shall see that the sentiments expressed by them are conveyed to those honorable senators. I extend my best wishes for a happy Christinas and a prosperous new year to all. I hope that the war will soon be won, and ‘ that we shall meet in the near future under happier auspices.

Senator FOLL:
Minister for the Interior · Queensland · UAP

– On the 10th December, Senator Brand asked the Minister representing the Minister for the Army the following question, upon notice -

  1. What are the daily rates of pay for the private soldier in the British Army, the Australian Imperial Force, the Canadian Expeditionary Force and the New Zealand Expeditionary Force?
  2. What allowances do the wives and children of members of each force receive?

The Minister for the Army has now furnished the following replies to the honorable senator’s question: -

Question resolved in the affirmative.

page 1153

PAPERS

The following papers were presented : -

Report of the Central Wool Committee, for period ended 30th June, 1940. Senate adjourned at 5.15 p.m. till a day and hour to be fixed by the President.

Cite as: Australia, Senate, Debates, 13 December 1940, viewed 22 October 2017, <http://historichansard.net/senate/1940/19401213_senate_16_165/>.

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