Senate
28 September 1944

17th Parliament · 2nd Session

  1. Senate
  2. 17th Parliament
  3. 1944

The President (Senator the Hon. Gordon Brown) took the chair at 2 p.m., and read prayers.

page 1645

COMMONWEALTH GRANTS COMMISSION

Personnel - Report

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– by leave - The Government has given consideration to the future composition of the Commonwealth Grants Commission in view of the approaching termination of the period of appointment of its members. It has been decided to re-appoint Professor R. C. Mills to be chairman of the commission as from the 5 th November, 1944, and Professor G. L. Wood to he a member as from the 1st January, 1945. The Honorable James Joseph Kenneally, of Western Australia, will be appointed a member of the commission as from the 1st January, 1945, vice the Right Honorable Sir George Pearce, whose appointment expires on the 31st December next. The appointments in each case are for a period of three years. An expression of the Government’s thanks has been conveyed to Sir George Pearce for the invaluable work which he has rendered while a member of the commission.

Senator COLLETT:
WESTERN AUSTRALIA

– As it is understood that the Senate will, at a later hour to-day, be asked to consider a bill to grant financial assistance to certain, States, can the Minister representing the Treasurer say why a copy of the latest report of the Commonwealth Grants Commission has not been made available to honorable senators ?

Senator KEANE:

– The bill referred to will be before the Senate either to-day or this evening. I have the report mentioned by the honorable senator, and shall see that honorable senators are supplied with copies immediately.

Later :

Senator KEANE:
ALP

– I lay on the table the following paper : -

Commonwealth Grants Commission Act - Eleventh Report of the Commonwealth Grants Commission on the applications made by the States of South Australia,

Western Australia and Tasmania for Financial Assistance in 1944-45 from the Commonwealth under Section 96 of the Constitution.

page 1645

ALLIED WORKS COUNCIL

Pictorial Display at Parliament House.

Senator COLLINGS:
Minister for the Interior · QueenslandMinister for the Interior · ALP

– by leave - As honorable senators are no doubt aware, in the basement of this building there is an exhibition of paintings and photographs which give a slight indication of the work which has been done by the Allied Works Council, of which I am the ministerial head. I am aware that in the House of Representatives some adverse comments regarding some of the exhibits were made, and also that the gentlemen who made those comments are entitled to a great deal of respect because of their undoubted capacity to pass judgment on works of art. I thought that it would interest honorable senators to know that the exhibit will be leaving Canberra towards the end of the week, and will he shown in the National Art Gallery, Sydney, after which it will go to Tasmania, where the galleries there have been made available for a similar purpose. It will be seen that persons who are highly qualified to discuss art do not always agree. Although some honorable members of the House of Representatives commented adversely on a few of the exhibits, there are others in the community who regard them as worthy of a place in the nation’s art galleries.

page 1645

QUESTION

NEW BUSINESS AFTER 10.30 P.M

Motion (by Senator Keane) put -

That Standing Order68 be suspended up to and including Friday, the 29th September next, to enable new business to be commenced after 10.30 p.m.

The PRESIDENT:

– There being an absolute majority of the whole number of senators present, and no dissentient voice, I declare the question resolved in the affirmative.

page 1645

QUESTION

ROCKLEA MUNITIONS WORKS

Senator COOPER:
QUEENSLAND

asked the Minister for Aircraft Production, upon notice -

  1. Has the Minister seen the article in this week’s Smith’s Weekly stating that up tothis week, 1,000 workers were still reporting for work at Rocklea Munitions Works, Queensland, and spending their time making aeroplane brooches?
  2. Is it a fact, as alleged, that many employees clock on in the morning, then go to town for the day, and return in time to clock off, while others spend their time playing cards?
  3. Will the Minister confer with the Prime Minister with a view to having the whole of the activities of the Rocklea works, and the expenditure connected therewith, referred to the War Expenditure Committee for investigation?
Senator CAMERON:
Minister for Aircraft Production · VICTORIA · ALP

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

  1. Yes.
  2. The great majority of the personnel at present engaged at the Rocklea factory are employed by the contractors to the Maintenance Division of the Department of Aircraft Production. No employees other than those of the administrative or clerical staffs are allowed to leave the factory during working hours, except with a pass. Time lost is deducted from the employee’s wages. There is no foundation whatever for the suggestion that large numbers of employees are idle for long periods at a time. All work is under the supervision of a trained staff of executives, who have had years of experience in factory operation and control. Inaddition, there are employed at the Rocklea area members of the constructional staff of the Allied Works Council and administrators and. the pool room staff of my department. A programme of staff reductions has been drawn up and is now effective, to ensure that the staff employed is sufficient only to handle the work on hand. There is ample work in the factory to keep the whole of the present staff fully employed.
  3. See answer to question 2.

page 1646

QUESTION

AUSTRALIAN ARMY

Generals

Senator AYLETT:
TASMANIA

asked the Minister representing the Minister for the Army upon notice-

How many (a) Generals; (b) LieutenantsGeneral; and (c) Majors-General are there at present in the Australian Army?

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

  1. General, one; (b) Lieutenants-General, ten (five actually employed with the Australian Military Forces, one in process of being retired, one in Washington as head of the Australian Military Mission to Washington, one in London as head of the Australian Military Mission to London, one seconded in a civil capacity, as High Commissioner for Australia in India, one seconded in a civil capacity in Australia) ; (c) Majors-General, 28 (23 actively employed with the Australian Military Forces, one in London as Director of Tactical

Investigation, War Office, London, four on supernumerary list and not actively employed with the Australian Military Forces).

page 1646

QUESTION

RELEASE OF ALIEN INTERNEES

Senator FRASER:
WESTERN AUSTRALIA · ALP

– On the 14th September, Senator Cooper askedthe Minister representing the Minister for the Army, upon notice -

  1. Further to the question asked by Senator Cooper on the 30th August, will he state whether it is a fact that the Queensland United Council of Ex-servicemen has lodged a protest with the Government against the reported intention to release in Australia alien internees sent here from other countries?
  2. If so, will he have inquiries made and make a full statement to the Senate on the subject ?

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

  1. No protest from the Queeusland United Council of Ex-servicemen against the reported intention to release in Australia alien internees sent here from other countries has so far come to the knowledge of the Department of the Army.
  2. It has been the policy of the Government for some time to release in Australia internees from the United Kingdom and the Straits Settlements who volunteer for military service or other work of national importance in Australia, or who are precluded from volunteering by reason of age, sex or medical unfitness, provided that there is no security objection in individual cases, and provided that the internee on release can be suitably employed or otherwise suitably maintained.
  3. In March, 1944, the Government extended this approval to cover all internees from overseas who may now be released provided that there is no individual security objection, and provided that on release the internees can be suitably employed or otherwise suitably supported.
  4. Those internees whose release is considered are of many nationalities, but are predominantly Italians and refugees from Germany and Austria. No Japanese will bo included amongst those considered for release.
  5. The governments on whose behalf these internees are held will be responsible for their repatriation at the end of the war, but Cabinet approval has been given for the Minister for the Interior to consider, on their individual merits, applications for permission to remain, permanently in Australia by any white internees from the United Kingdom or other British Territory who have been released in Australia, and to grant approval in cases where - (a) the applicant has been classified as a “ refugee alien “ ; (b ) nothing detrimental is known against him; (c) the Minister is satisfied that the applicant is likely to make a desirable citizen if permitted to remain here.

page 1647

QUESTION

CONSTITUTION ALTERATION REFERENDUM

Expenditure

Senator KEANE:
ALP

– On the 13th September, Senator Allan MacDonald asked the Minister representing “the Treasurer the following question : -

Will the Minister have a statement prepared showing the total expenditure in each of the States in respect of the disbursement of public moneys by the authority of the Government or its agents in connexion with the “ Yes “ campaign at the referendum?

The answer to the honorable senator’s question is as follows: -

The approximate expenditure in connexion with the referendum campaign is as follows: -

page 1647

APPROPRIATION (WORKS AND BUILDINGS) BILL 1944-45

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator KEANE:
Minister for Trade and ‘Customs · Victoria · ALP

– I move -

That the bill bo now read a second time.

The’ Estimates for 19414-45 provide for an amount of £6,277,000 for Additions, New Works and Buildings. The following is a summary of the proposed appropriations -

Details of the proposed expenditure will be found on pages 296 to 306 of the printed Estimates. In view of the prior claims of war-time demands on manpower and materials, expenditure on civil works is restricted to the minimum necessary to meet essential and urgent requirements.

The estimate of £1,20S,000 for civil aviation works covers electrical and other equipment, buildings and works at civil aerodromes. These facilities are used extensively by the Allied Forces. The amount of £3,500,000 for postal works is also mainly dictated by war conditions and the urgent demands of the service departments and war industries. The total expenditure on postal works for 1943-44 was £2,933,268.

An amount of £300,000 is included for hospitals and other institutions required by the Repatriation Department towards a total programme, estimated to cost £499,000. The cost of military hospitals is charged to Army votes. An amount of £200,000 is included for War Service Homes.

Man-power difficulties have necessitated a considerable curtailment of expenditure on civil works in the Territories of the Commonwealth. The amount included for the Northern Territory provides mainly for essential works which are now mostly used for military purposes, and £50,000 has been included for such developmental purposes as the construction of stock routes and the provision of water supplies.

It is .pleasing to note that it has been found possible to make provision in the Estimates of the Australian Capital Territory for the construction of 100 cottages. Funds are also included for a new hostel, the erection of which was recently approved by Parliament.

Works for Defence and War Services are provided in War Votes and hence the proposed appropriation of £6,277,000 does not cover these services. Any details required regarding specific works will he supplied to honorable senators at the committee stage of the bill.

Question’ resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 (Issue and application of £6,277,000).

Senator HERBERT HAYS:
Tasmania

, - If the committee agreed to this clause, it would approve the total expenditure set out in the schedule. I therefore suggest the postponement of the clause.

Clause postponed.

Clause 4 agreed to.

Schedule.

Senator FOLL:
Queensland

.- I notice that £200,000 is proposed to be voted this year for expenditure under the War Service Homes Act for payment to the credit of the War Service Homes Trust Account. Does the increased expenditure contemplated indicate that the machinery of the War Service Homes Commission will be utilized immediately in connexion with some of the outstanding applications for the construction of homes for ex-servicemen? During the last few days honorable senators have received a circular letter from the secretary of the Association of Cooperative Building Societies Limited which states -

I have been instructed by my board to bring under your notice the anomalous position that exists in connexion with building materials and permits to build, granted ‘by the Department of War .Organization of Industry. It is well known that that department grants a permit to build only in cases where the living conditions of the applicants call for immediate remedy. When the builder for these unfortunate people attempts to obtain materials he finds it practically impossible to do so, because no arrangements are made as between the Department of War Organization of Industry and the Department of Supply for the issue of a priority in these cases. It is pointed out that the Government instrumentalities, which aTe not building cottages to relieve specific cases of hardship, are accorded a B priority, and my board asks that you urge the Government to instruct that a similar priority should be issued to all applicants whose permit to build has been granted by the Department of War Organization of Industry, as with taxation on building materials this also is a matter that should be adjusted without delay.

Senator Keane:

– Does that letter refer particularly to war service homes?

Senator FOLL:

– No, it relates to the building trade generally. Some people are gravely concerned about the large amount of sales tax imposed on building materials. I stated during the budget debate that the Government had begun to reduce sales tax on those materials, and I hope that further relief will be given. If an extensive programme for the construction of war service homes is resumed the cost of the homes will impose a heavy burden on the builders, and we should try to make that burden as light as possible. I recognize that sales tax was imposed at a time when additional revenue was urgently necessary; but, in view of the buoyancy of the revenue at present, and the need for many more homes at prices within the reach of the occupants, so that they may quickly obtain an equity in their properties, building should be made as cheap as possible.

Senator HERBERT HAYS:
Tasmania

– Some years ago the foundations of the permanent administrative block in Canberra were laid at a cost, as far as my memory serves me, of about £70,000. Has consideration been given to the utilization of those foundations, which, if built at present, would cost about £100,000? Is the cost of that work to be written off as a dead loss?

Senator COLLINGS:
Minister for the Interior · Queensland · ALP

– The Government has made all necessary inquiries to enable it to be sure that its policy with regard to that work is correct, but as the erection of the building is a post-war reconstruction job it is not likely to be undertaken at an early date.

Senator Gibson:

– Have the foundations been lost?

Senator COLLINGS:

– No. We know where they are, and they have been tested.

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- The materials required for the construction of war service homes necessarily have a priority, and the urgency is great. At present, there are 2,100 applications in hand for war service homes, and others are being received at the rate of 200 a -month. In order to conserve resources of building material and manpower required for the war effort, the provision on these Estimates has been restricted to the sum necessary for the erection of 142 of these homes throughout the Common-wealth. General home building is, after all, the objective of all of us, but, for the present, building operations cannot be carried out on a large scale. The shortage of manpower is about 45,000. Materials for the building pool will not he obtainable for a long while, and the general housing position in Australia is appalling. Existing homes, of course, are riot improving with age; and during the last five years very little maintenance work has been done. However, sufficient manpower and material is not available to enable the Department of War Organization of Industry to authorize maintenance work in respect of even onethird of present requirements. The Government is constantly watching the position with a view to seizing the first possible opportunity to afford relief. The shortage of materials, including tiles, bricks and timber, is serious. Ample timber is available in Victoria, of course, but this has to be kiln-dried. Recently, the Government had to import a large quantity of timber from Canada to meet urgent service requirements. I can give no cause for optimism in this matter. In view of our man-power position, despite various combings out, it will be a considerable time before we can make a start in the direction suggested by honorable senators opposite.

Senator McLEAY:
South AustraliaLeader of the Opposition

– A sum of £22,200 is being provided in respect of the item “Australian Minister in United States of America - Equipment and extension of Legation”. Can the Minister give details of that proposed expenditure?

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– Legation premises were purchased by the Commonwealth in Washington in 1941, but owing to increased war-time functions the present office accommodation is inadequate. The Australian Minister in Washington has advised that the house next to the Australian Legation is for sale. The Minister for External Affairs (Dr. Evatt) inspected that property on his last visit to Washington, arid recommended its purchase if it came on to the market. The acquisition of that property will provide accommodation for all Australian agencies at the one centre; and negotiations for its purchase are now in train.

Senator COLLETT:
Western Australia

– I am of opinion that the accommodation provided for the Trade and Customs Department in Perth and Fremantle is far below the requisite standard. I am informed that a piece of land has been reserved in Perth for the erection of a permanent building for the department. I should lake to know whether it is the intention of the department to proceed with the .erection of such a building.

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- No provision is made in these Estimates for the purpose mentioned by the honorable senator. On my recent visit to Western Australia I inspected the head-quarters of the department at Fremantle and formed the impression that they were reasonably satisfactory. As the honorable senator says, a piece of land has been reserved in Perth for the erection of a permanent building. I shall give the matter early attention.

Senator SHEEHAN:
Victoria

– Provision is made for the Department of Civil Aviation in respect of works under the control of the Department of the Interior for the purchase of buildings, -works and sites, &c. I should like to know whether the proposed expenditure for this purpose has reference to the acquisition of land adjacent to the Essendon Aerodrome. According to press reports this matter has been under consideration for some time ; and it has been suggested that certain difficulties have arisen in respect of the compensation paid to owners of land in that area. Many of these people in their letters to me have made heart-broken appeals for fairer treatment. Can the Minister for the Interior (Senator Collings) say whether there has been any change in the attitude adopted by the department on this matter with a view to dealing more fairly with persons whose land has been acquired for aerodrome purposes?

Senator COLLINGS:
QueenslandMinister for the Interior · ALP

– The Department of the Interior is concerned with the item referred to by the honorable senator only as the constructing authority for the Department of Civil Aviation. However, I am able to inform him that every effort is made to deal justly with owners of land which is acquired for departmental purposes.

Senator LECKIE:
Victoria

.- With reference to the proposed votes under the Department of Civil Aviation, I should like an explanation of the distinction between the “ Australian section “ and the “ Trans-Tasman section “ in respect of the proposed appropriations of £5,000 and £1,000 respectively for buildings, works and sites, including shore bases and marine facilities, fittings and furniture, in those sections.

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- The Australian section refers only to the inland flying service, and the transTasman section is distinct from that service. The equipment in each case is being made in Australia.

Senator GIBSON:
Victoria

.- A sum of £1,595,000 is being provided in respect of telephone exchange services. I take it that this item includes rural automatic telephones which to some degree I regard as “ my baby “ because, when I was Postmaster-General, I had much to do with the inauguration of those facilities. The rural automatic telephone service has proved a great boon in country areas to many people who could not otherwise have obtained such facilities. I understand that over 100 of these services are now in operation. It should not be difficult to extend these facilities rapidly, because each service consists of from 25 to 50 units, and can be installed in centres within 10 miles of electric services. Residents in the country are just as much entitled as city residents to automatic telephone services.

Senator ASHLEY:
Postmaster-General · New South Wales · ALP

– The number of automatic telephone exchanges now in operation is 122, and the department intends to expand these facilities as rapidly as possible. I agree with Senator Gibson that country residents are just as much entitled as city residents to these facilities. Indeed, they have a prior claim in the provision of such services. The advantages which continuous service facilities afford to country residents cannot be too highly stressed, and it is proposed as early as practicable to undertake a comprehensive review of the existing conditions relating to the matter of hours of service with a view to modifying and improving the present arrangements. In the .initial post-war programme, provision has been made for the installation of over 400 automatic exchanges in small rural districts in order that people living in remote country centres will enjoy facilities equal to those available to people residing in the large centres of population.

Provision is also included in the programme for the erection of many new trunk lines in country districts and the replacement by standard construction of existing single wire and other trunk lines which do not, under existing conditions, provide an entirely satisfactory service from the standpoint of quality of ‘transmission. Experiment are proceeding with a view to determining the extent to which radio-telephone facilities can be provided in remote localities where, owing to cost, it is impracticable to provide the ordinary land line facilities. From the progress which has been achieved it is fully anticipated that the use of radio-telephone services will play an important part in the provision of telephone and telegraph facilities to people living in the outback areas.

As an illustration of the class of service contemplated in this regard a base transmitting and receiving station would be established at, say, a place such as Broken Hill or other suitable centres connecting to the main trunk. Transreceivers would be installed at all offices’ within a range of approximately 150 miles not connected to the trunk line network. Through the medium of these facilities , tue public would be provided with access to the whole telephone system of the Commonwealth.

The advantages of speedy interstate telephonic and telegraphic communication are fully appreciated and it is intended as early as possible to install additional carrier wave systems on the main interstate trunk routes. By the use of this special equipment it is practicable to conduct simultaneously several .telephone conversations as well as transmit telegrams over the one pair of wires. It is also intended to install similar facilities on all important trunk routes serving country centres. The plans which have been formulated contemplate a greater use .of underground cables in place of aerial systems on long trunk line routes. Long distance trunk cables are used extensively in other parts of the world and have been found eminently successful as these routes are free from the hazards to which open wire construction is subjected.

Senator HERBERT HAYS (Tasmania) 2.47]. - I understand that there has been a” change of policy with regard to charging for the extension of telephone lines in country districts. Years ago my experience was that the applicant paid for the construction from the road-side to his own home, partly in cash and partly in the form of a guarantee that he would use the telephone service for a certain period of years, so as to liquidate a substantial part of the capital cost. What is the general policy of the department now regarding the construction of telephones in isolated districts? Does the applicant or group of applicants have to pay for the total cost of constructing the line from the nearest point in the existing system, or does the department bear part of the cost? If the total cost is large, why not allow the applicant to pay the excess over a certain amount, and hold it as security that he will continue to use the service until what he pays in rental liquidates the debt? If the financial burden on the applicant is heavy, it is a discouragement to people in country districts where the telephone is a necessity. I understand that the applicants have to pay for the wire, the erection of the poles along the road, and for the cost of construction across their own properties. Why must they put up the whole capital cost in cash before the telephone is erected?

Senator ASHLEY:
Postmaster-General · New South Wales · ALP

– What the honorable senator says about paying in cash is not quite correct. The amount that has to be paid depends on the circumstances and on the nature of the work involved. A case in New South Wales was brought to my notice a few months ago by a member of this Parliament. It concerned some primary producers, and the cost of the service asked for was in excess of the £50 limit imposed by the department. It was pointed out to me that the applicants needed their ready cash for production purposes, and I agreed that they should pay a deposit and the balance over a number of years. A little while ago I made a recommendation to the Acting Director-General of Posts and Telegraphs for a review of the whole system of country telegraphic and telephonic communication, with a view to giving a much better service at a reduced price to people living in outlying parts of the States. A committee of departmental experts is now examining the whole position, and I hope before long to be able to make an announcement of the result of its decisions.

Senator GIBSON:
Victoria

.- In my district hundreds of miles of both trunk and private telephone lines were burnt in last year’s bush fires. The Postal Department immediately took action to put the telephone into the homes of all persons affected, even if they were living in sheds. It gave telephonic communication as soon as possible so that not many people were cut off for more than a week. In some instances the department erected lines for as much as S or 9 miles. The department did a good job for the benefit of all those country people.

Senator HERBERT HAYS:
Tasmania

– Do I understand from the PostmasterGeneral (Senator Ashley) that the system has been altered and that the cost in future will be borne by the department? The case I had in. mind was the erection of a new line involving the construction of approximately half a mile of line for the applicant, who was asked to provide and erect the posts and pay for the wire.

Senator Ashley:

– The policy is governed by the cost. If it is over £50, the applicant pays the excess amount.

Senator HERBERT HAYS:

– In this case, the telephone line had to be erected along the roadside beyond the existing terminal point. The applicant was asked to provide the posts and pay for the erection of the line and for the wire. I understand from the Acting Deputy”

Director of Posts and Telegraphs at the time that that was the policy of the department. I am not complaining about it, but I understood that the policy had been altered. If not, it does not give much encouragement to people to go outback. In that case the applicant was asked to pay from £15 to £20 over and above the £6 10s. rental.

Senator ASHLEY:
Postrnaster-General · New South Wales · ALP

– The policy is for the applicant to meet any cost in excess of £50. The distance does not come into the matter. It might be possible to run a line 4 miles for £50, but in timbered country requiring clearing, it might cost £50 for half a mile.

Senator HERBERT HAYS:
Tasmania

– In the case to which I refer, no cost was incurred by the department. All I ask is that if the applicant has to meet the cost he should be allowed to pay off an amount with his rent over a period of three or four years.

Senator Ashley:

– The department already allows that.

Senator GIBSON:
Victoria

.- Senator Herbert Hays and the PostmasterGeneral (Senator Ashley) appear to be at cross-purposes. The Postal Department cannot be expected to pay for erecting a line for 9 or 10 miles, and also for carrying it for, say, another 6 miles to the applicant’s place. When I was Postmaster-General the department erected the line for the applicant and charged so much a mile for the use of the wire and for the posts.

Senator Ashley:

– That is done now.

Senator GIBSON:

– The department is very liberal in providing the service to people outback. Some people think that they can link up anywhere along a telephone service, but they cannot, unless the line can be connected right to a post office. If a person erected his own line right to the post office, the practice in my time was to let him pay £1 a year rental instead of £6 10s.

Senator LECKIE:
Victoria

.- I should like an explanation from the Minister for the Interior (Senator Collings) of the proposed expenditure in the Australian Capital Territory. This includes £332,100 for “Architectural services, fittings and furniture”; £137,600 for “ Engineering services “. Do these sums provide for the actual construction work?

Senator COLLINGS:
QueenslandMinister for the Interior · ALP

– The proposed expenditure mentioned by the honorable senator provides for the . construction of new buildings, new roads, &c, for the architectural and engineering services associated with these new buildings and roads, such as the preparation of plans &c. The description of this expenditure is different in the case of the Department of the Interior from what it is in the case of other departments, because the Department of the Interior itself is carrying out the entire work, whereas for the other departments, it is merely the constructing authority. This vote includes £18,000 for the erection of fourteen houses at Griffith, £1S,000 for eleven houses at Turner, £27,000 for the completion of the Melbourne Buildings, Civic Centre, £162,000 for the erection of a further 100 cottages, and £90,000 for the erection of a hostel.

Schedule agreed to.

Postponed clause 3 agreed to. .

Preamble and Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1652

INCOME TAX ASSESSMENT BILL (No. 2) 1944

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

Bil] (on motion by Senator Keane) read a first time.

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– I move -

That the bill be now read a second time.

The purpose of this bill is to implement the proposals of the Government regarding alterations of the income tax law as indicated in the budget speech. The bill does not impose upon taxpayers any additional liability. However, it does extend the range of concessional allowances by a new concession for dental expenses and allowances in respect of children between the ages of sixteen and eighteen years who are receiving full-time education. The concessional allowance for medical expenses is also being liberalized. In view of the improvement in the war situation, the opportunity has been taken to include in the bill several important provisions designed to assist the rehabilitation of business and industry in the immediate post-war period. These provisions include the deduction of the estimated cost of deferred maintenance of incomeproducing property, of the expenditure incurred in converting plant used for war purposes, and the cost of demolishing and removing structures erected as a means of protection against enemy raids.

Under the present law, no allowance is made in respect of dental expenses incurred by a taxpayer. From time to time, representations have .been made to this and previous Government that there should be no distinction between dental expenses and medical expenses for the purposes of the taxation concession. It has been claimed, and with justification, that the imposition of a tax upon income which has actually been spent by a taxpayer in providing dental treatment for himself or his dependants adds unduly to the financial difficulties of the taxpayer with family responsibilities. It will be agreed, I am sure, that there is considerable merit in this contention. This bill accordingly provides for the allowance of a concessional rebate in respect of dental expenses, incurred by a taxpayer on his own behalf and on behalf of his wife and each of his children under 21 years of age. The dental expenditure on which the concession is allowable is limited, however, to £10 for each member of the family.

At present £50 is the maximum amount on which the concession in respect of medical expenses may be allowed. This limit applies to the total medical expenses of the taxpayer and his wife and children under 21 years. It is recognized that the limit operates unfairly against the taxpayer with family responsibilities. Provisions are embodied in the bill to correct this position. Under the new provisions, the concession will apply to the aggregate medical expenses of the taxpayer and his wife and children under 21 years of age, so that medical expenses up to £50 for each member of the family will be subject to the concession.

The bill introduces a new provision into the law by granting a concessional allowance based on expenditure incurred in connexion with artificial limbs and eyes. The Government considers that this measure of taxation relief should be afforded to taxpayers who are labouring under physical disabilities in comparison with their more fortunate fellow citizens. It may be noted that the amount of the expenditure on which the rebate is to be based is not limited, as in the case of medical and dental expenses.

Under the law as it now stands, the concessional allowance in respect of a child, other than an invalid child, ceases when the child reaches sixteen years of age. It is recognized, however, that the present burden of taxation weighs heavily on those parents who are providing for their children the advantage of education beyond the age of sixteen years. Substantial relief for these parents is afforded by a provision in the bill for a concessional allowance in respect of children between the ages of sixteen and eighteen years who are receiving full-time education at a school or university. The full concession is not allowable, however, in those cases where the Commonwealth or a State provides assistance in connexion with the education of a child. The Government proposes that in these circumstances, the assistance provided should be taken into account in fixing the amount on which the concessional rebate is based. If this were not done, taxpayers as a whole would, in effect, be making a double contribution towards the education of the child. Accordingly, the bill provides that the rebate in respect of each child between sixteen and eighteen years of age shall be based upon £75, less the amount of assistance provided by the Commonwealth or a State in connexion with the education of that child.

The bill contains a series of new provisions designed to meet the position which arises owing to the inability of many taxpayers, through no fault of their own, to effect normal repairs and maintenance to income-producing property. This position has arisen during the last three years owing to the extreme shortages of man-power and materials, and it is unlikely that the position will be alleviated to any appreciable extent before the cessation of hostilities. Representations have been made to the Government from time to time, by those engaged in both primary and secondary industries, that it is inequitable to impose tax upon income which, were it not for the exceptional conditions prevailing, would have been utilized in carrying out repair and maintenance work. Sad that been done the expenditure would have been allowed as a deduction in arriving at the income subject to tax. This has resulted in these taxpayers being required to pay tax upon income in excess of their true income. Owing to the high war-time rates of tax, reserves set aside by taxpayers to meet the accumulation of repairs and maintenance in, the post-war years have been largely absorbed by taxation. The Government has given very careful consideration to the problem, and I consider the proposal embodied in the bill will provide an equitable means of meeting the situation. Under the proposed plan taxpayers may estimate, during the present financial year ending on the 30th June, 1945, the cost of deferred maintenance, and deposit with the Commissioner of Taxation an amount equal to the estimated cost. This amount will then be allowed as a deduction for income tax purposes. When it becomes possible to effect the repairs and maintenance, the deposit will be repaid to the taxpayer to provide funds to meet the cost of the work. The amount repaid will be included in the assessable income of the year in which it is repaid but will be offset by the deduction of the actual expenditure incurred by the taxpayer in effecting the repairs and maintenance.

Under the law as it now stands the cost of altering plant for war purposes, and its subsequent reconversion to normal peace-time uses, is not an allowable deduction as it represents capital expenditure. The Government realizes, however, that nothing is really added to the value of the plant by this expenditure. The expenditure was abnormal and was incurred only to meet a war-time emergency. In these circumstances, it ‘is proposed to permit the deduction of this expenditure, in the year in, which it is actually incurred, provided the alterations to the plant were made for purposes connected with the war.

With the recent improvement in the war, situation, it has been possible to permit the demolition of structures erected to protect persons and property against enemy raids. The act was amended some time ago to authorize the deduction of the cost of these structures where they were erected to protect business premises and other income-producing property. The Government considers it is appropriate to admit as a deduction the corresponding expense of removal and demolition of these structures. Accordingly, provisions to give effect to this proposal are embodied in the bill.

The opportunity has been taken to include in the bill a number of other amendments. These, however, are relatively unimportant, and I suggest that they can be more appropriately dealt with at a later stage. Explanations of these amendments, as well as those I have mentioned, will be found in the information which has been circulated.

Debate (on motion by Senator Leckie) adjourned.

page 1654

INCOME TAX BILL 1944

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– I move -

That the bill be now read a second time.

This bill deals with the rates of income tax to be imposed for the current financial year 1944-45 on individuals and companies. It should be clearly understood that no alterations of the rates of income tax are proposed this year. The rates provided in this bill, therefore, are the same as were in operation for the last financial year. As regards individuals, incomes up to £104 per annum are exempt, as honorable senators are aware. On the lowest incomes which are subject to tax, the rate is 6d. in the £1 on the first £100, and a higher graduated rate on the balance of the income. The rate of tax progressively increases as the taxable income rises, until the maximum rate of 18s. 6d. is payable on every £1 of taxable income in excess of £5,000. There is no differentiation in the rates of tax as between income from personal exertion and income from property, where the taxable income does not exceed £200. On incomes over that amount the property rate exceeds the personal exertion rate. At £1,000 this excess is about 25 per cent., which is the greatest margin of difference provided for in the schedules. On higher incomes the difference is less marked : for example, the tax on £5,000 income from property is approximately 9 per cent. higher than that on a similar income from personal exertion. The general rate of tax payable by companies is 6s. in the £1. In the case of a mutual life assurance company which is wholly mutual, the rate is 5s. in the £1 whilst a life assurance company which is not wholly mutual is required to pay tax at the rate of 5s. in the £1 on its mutual income and 6s. in the £l on the remainder of its income. In addition to ordinary income tax, a public company is required to pay tax on its undistributed profits at the rate of 2s. in the £1 and a super tax at the rate of ls. in the £1 on the amount of its taxable income in excess of £5,000. As honorable senators are aware the current financial year is the inaugural year for the operation of the system of pay-as-you-earn taxation agreed to by the Parliament a few months ago. Under the previous method of collecting income tax, the tax payable for any financial year was assessed on the income of the previous year. The basic principle of the present system is that tax becomes payable during the financial year on the income of that year. For taxpayers other than companies or those to whom the pay-as-you-earn system does not apply - the year of income is now the year of tax. Owing to the transition from the old system to pay-as-you-earn, the income of two years will be taken into account in assessments for the financial year 1944-45, namely, the years of income ended the 30th June, 1944, and the 30th June, 1945, respectively. Only 25 per cent. of the full tax on the income of the year ended the 30th June, 1944, will be payable, however, as 75 per cent. thereof will be allowed as a rebate. It will be found that, in the case of most salary and wage earners, the instalments deducted by their employers on each pay-day from the 1st April, 1944, to the 30th June, 1944, will be sufficient to meet this 25 per cent. tax, the assessments for which will be issued by the department in due course. In cases in which taxpayers are not in receipt of salary or wages, the 25 per cent. tax will be payable in equal instalments over a period of three years. The bill contains a special provision to enable assessments to be made of the tax payable on income derived by a taxpayer during the year ended the 30th June, 1944. A feature of the pay-as-you-earn system is the payment of provisional tax on income from sources other than salary or wages. Honorable senators are familiar with the method of determining the amount of provisional tax laid down in the Income Tax Assessment Act. It will be recalled that a taxpayer cannot be required to pay provisional tax unless the act declaring the rates of tax payable for the financial year provides that provisional tax shall be payable in accordance with the provisions of the Income Tax Assessment Act. It has been necessary, therefore, to incorporate in this hill a clause providing that provisional tax shall be payable in respect of the financial year ending the 30th June, 1945.

Senator McLEAY:
Leader of the Opposition · South Australia

– I have had an opportunity to consider the merits of these proposals as set out in the budget papers which have been before the Senate for some time. As I understand that the Leader of the Senate (Senator Keane) will not agree to any amendment, and as the Government has a majority in this chamber, it would be only a waste of time to suggest even the most reasonable amendment. I shall not, therefore, discuss the billin detail.

Question resolved in the affirmative.

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

page 1656

WAR-TIME (COMPANY) TAX ASSESSMENT BILL 1944

Bil] received from the House of Representatives.

Standing and Sessional Orders suspended.

Bill fon motion by Senator Keane) read a first time.

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– J move- -

That the bill be now read a second time.

The bill now before honorable senators provides for an amendment to section 24 of the War-time (Company) Tax Assessment Act, which sets out the method of ascertaining the amount of capital employed by a company. The amendment is consequential on an amendment of the Income Tax Assessment Act providing for the allowance of a deduction for deferred maintenance in assessments of income tax. Owing to war-time restrictions, many taxpayers have been unable to effect normal repairs and maintenance to their buildings, plant and machinery. As a result of the amendment to the Income Tax Assessment Act, a taxpayer will be entitled to a deduction of the estimated cost of the deferred maintenance, provided that he deposits with the Commissioner of Taxation a sum equal to the amount claimed as a deduction. The taxpayer may, after’ the expiration of six months from the date of deposit, apply for repayment of the sum deposited. The amount repaid will be included in the assessable income of the year in which repayment is made. Any sum actually expended on maintenance will be allowed as a deduction. The basis for determining taxable profit on which war-time company tax is payable is the taxable income as assessed for income tax purposes. Any deduction allowed in the income tax assessment is, therefore; automatically allowed in the assessment of war-time company tax. Had war-time conditions not precluded a company from effecting normal maintenance and repairs, the amount expended in any year would not have been included in the capital employed in the next year. Unless provision to the contrary be made, the amount deposited with the Commissioner must be included as part of the capital employed, because it will remain the property of the company. Thus, the company would receive a double benefit; first, in the allowance of the full amount of deferred maintenance, and, secondly, by the allowance of the statutory exemption of 5 per cent, of the amount included in the capital employed. The amendment contained in the bill now under consideration is intended to prevent a company from receiving this double benefit. The bill, therefore, provides for the exclusion from the capital employed of any amounts allowed as deductions in respect of deferred maintenance. The measure also provides that when the deposit is repaid to the company, in whole or in part, the sum so repaid shall be included in the capital employed and thus offset the deduction made in respect of deferred maintenance allowed. In most instances the allowance in respect of deferred maintenance will be made in assessments of income derived during the year ending the 30th June, 1945. In certain circumstances, however, which are more particularly explained in the amending Income Tax Assessment Bill, power is vested in the Commissioner to allow deductions for deferred maintenance, or to include repayments of deposits, as the case may be, in assessments for the three preceding financial years. To meet any such cases, the bill is made to apply to assessments for the financial year 1943-44 and all subsequent years. I commend the bill to honorable senators.

Question resolved in the affirmative.

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

page 1656

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1944

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- I move -

That the bill be now read a second time.

The main purpose of this hill is to restore the former sales tax exemption of building materials. Honorable senators are well aware of the present acute position with regard to housing accommodation throughout the Commonwealth. This condition is an inevitable result of the diversion of the nation’s resources in money, materials and man-power to the prosecution of the war, and of the resultant restrictions upon building operations. The Government is fully seised of the importance of the problem and of the need for strong remedial measures as soon as circumstances permit. Home building is, therefore, to rank very highly in the programme of work planned for the immediate post-war period.

Although the way is not yet clear for the removal of building restrictions generally, the Government is anxious to take all possible preliminary steps to facilitate the execution of the contemplated building programme when the appropriate time arrives. One of these steps is the removal of the sales tax on building materials. Prior to the introduction of this bill, the rate of tax on building materials was 12-J per cent. It is thought that the removal of this tax will assist materially in keeping the cost of home building within reasonable bounds. It is proposed, therefore, to restore the exemption of building materials which was withdrawn on the 22nd November, 1940.

The classes of goods to be covered by the proposed exemptions are specified in paragraphs a to e of clause 3 of the bill. They form the great bulk of building materials, and include bricks, stone, cement, lime, plaster and plaster products, concrete, metal reinforcements, tiles, slates, sheet iron, glass, timber, joinery and pipes. The exemption will apply to those goods which were covered by the former exemptions up to the 22nd November, 1940. The bill provides that the restored exemptions shall operate on and from the Sth September, that is, the day immediately following the introduction of the bill into Parliament. The reason for this is to avoid any dislocation of trade in the relevant goods.

The proposed exemptions are not limited to building materials for home building, but will apply to the specified goods in whatever circumstances they may be used. It is estimated that the exemptions will involve a loss of revenue in the current financial year of approximately £500,000.

The bill also contains a provision to authorize exemption from sales tax in respect of tools and apparatus for teaching woodwork, metalwork, and similar manual trade courses in schools not conducted for the profit of individuals. This arises out of the Government’s policy to encourage to the fullest degree possible the training of tradesmen to meet the demands of the post-war period, particularly in relation to the building trades. The sales tax law already authorizes exemption of goods for use by certain technical schools, but this exemption is specifically limited to government and government-subsidized technical schools. The proposed exemption, which is contained in paragraph d of clause 3, will remove this limitation. Only slight loss of revenue is involved in this exemption.

Senator FOLL (Queensland) [3.35 J. - The bill provides for a step in the right direction, because it will remove part of the burden now imposed on the homebuilder. I am glad to notice that the sales tax is to be lifted with regard to tools used for the training of tradesmen. For many years a shortage of skilled personnel has been experienced in some of the trades associated with building operations. I should like an outline of the Government’s policy regarding post-war housing plans. The Minister stated in his second-reading speech that home building is to rank very highly in the programme of work planned for the immediate post-war period. Does that relate to a government home building scheme, or does it indicate that men who have spent their lives in the building trade will be able to go ahead with private building operations?

Senator Keane:

– The answer to the latter portion of the inquiry is in the affirmative.

Senator FOLL:

– I am glad to hear that. The Minister also referred to priorities with regard to building materials. I am glad that the Government proposals apparently provide that existing building organizations, many of which are most effective, are to remain the avenues through which the construction of houses is to be carried out after the war. Practically the whole of the homes built in Australia have been erected by master builders, many of whom have effective organizations and are able to build houses more cheaply, and with a narrower margin of profit, than if they were erected by the Government. The success of government building schemes, particularly that relating to war service homes, has been due to the fact that finance has been made available at low rates of interest to enable people to build their own homes. We do not wish to witness a repetition of what happened after the last war, when the Government purchased large quantities of building materials for the purpose of carrying out a home building programme of its own, with the result that before long the whole of the materials had to be sacrificed, including sawmills, because governments generally have not so good a knowledge of the building trade as those who have spent their lives in its study. I know many master builders who have been associated during the war with the shipbuilding industry, whilst others have carried out various jobs for the Allied Works Council. I am glad that the Ministry proposes to utilize the present building organizations to the fullest degree, and does not intend to venture on house construction as a government enterprise.

Question resolved in the affirmative.

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

page 1658

INCOME TAX (WAR-TIME ARRANGEMENTS) BILL 1944

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– I move -

That the bill be now read a second time.

By this measure it is proposed to provide that officers who were transferred from the State income tax staffs to the Commonwealth under the Income Tax (Wartime Arrangements) Act will receive payment for long service leave at their Commonwealth rates of salary where those rates are greater than the State rates. The bill is also designed to preserve to certain temporary officers of the State services, who have been transferred to the Commonwealth, their right to contribute to a State Superannuation Fund. The existing legislation provides that transferred officers who are re-transferred to a State on retirement, and are granted long service leave, receive payment for that leave at their State salaries at the date of transfer to the Commonwealth, plus any increments to which they have become entitled as State officers. Representations have been made - that transferred officers should receive payment for long service leave at the rates of salary actually received at the date of retirement.

The Government recognizes that transferred officers who retire may suffer a monetary disadvantage by being paid for long service leave at State rates. A number of transferred officers have been, or will be, promoted to positions to which it might reasonably be assumed they would have been promoted had they remained with a State service. State salaries, however, are not advanced as a result of those promotions. As already explained, the officers would, but for the provisions of this bill, be paid for long service leave at State rates. As time goes on the number of officers affected will increase because of promotions received. Payment for long-service leave is apportioned between the State concerned and the Commonwealth according to the length of the officer’s service with each. This bill provides, however, that any additional payment made to a transferred officer as a result of the measure will be borne wholly by the Commonwealth. The additional liability imposed upon the Commonwealth is not expected to be considerable.

The bill also seeks to preserve to transferred temporary officers the right they would have had to contribute to a State Superannuation Fund, had they remained in a State service. Although the provisions of the act are sufficiently wide to protect the superannuation rights of permanent officers of a State, the rights of temporary officers who have been transferred to the Commonwealth have, in some circumstances, been prejudiced in this respect.

In the State of New South Wales, temporary officers had the right of electing to convert their salaries to. an annual rate. On making the election they became eligible, subject to certain conditions imposed by the State, to contribute to the State Superannuation Fund. Advice has been received from the Crown Law authorities that the provisions of the Income Tax (War-time Arrangements) Act are not sufficiently wide to enable temporary officers to elect to convert their salaries to an annual rate. They are thus denied the right to contribute to the State Superannuation Fund. A similar position may arise in States other than New South Wales where temporary officers are or become eligible to contribute to State superannuation funds. The proposed amendment ensures that a transferred officer who was a temporary officer of a State service shall have preserved to him any rights which he would have had concerning eligibility to contribute to a State superannuation fund.

The bill also contains a minor drafting amendment which was omitted when the act was amended last year. The measure will be more fully explained at the committee stage, should any senator require further explanation. Its effect shortlyis to prevent the Commonwealth becoming directly liable for payments when it has contributed its share to a State fund in respect of the rights concerned.

I commend the hill to honorable senators.

Question resolved in the affirmative.

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

page 1659

COMMONWEALTH EMPLOYEES’ FURLOUGH BILL 1944

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- I move -

That the bill be now read a second time.

Furlough to temporary officers with twenty years’ continuous service was granted by the Commonwealth Employees’ Furlough Bill passed in March, 1943. Provision is also made for payment in lieu of leave to such officers on retirement or resignation and to dependants of deceased officers ofa sum equivalent to the salary that would have been granted had the furlough been taken prior to retirement, resignation or death. The principal act also provides, on a pro rata basis, for leave or pay in lieu to temporary officers with less than twenty years’ service who die, retire after attaining 60 years of age or are retired on account of ill health, not being due to misconduct or causes within their own control, before attaining the age of 60 years.

Continuity of service is essential to obtain the privileges of the act. Such service is deemed to have been broken by any absences which exceed in the’ aggregate one-seventh of the working days in any period of fourteen months. This limitation has been found to operate harshly in the case of employees who have had more than twenty years’ service in which there has been a single break of some months and also in cases of those employees who, during the depression, were not employed for a continuous period. To meet these cases, the restriction of absences to oneseventh of the working days is being retained, tout it is proposed to apply it to the whole period of service, provided that employment has not been broken for more than twelve months at any one time. Under the principal act, prior State service continuous with Commonwealth service counts in the period for which furlough is granted. An amendment has been included in the hill to limit to some extent the Commonwealth’s liability in those cases where an employee has lengthy State service for which furlough has not been granted by the State. Other amendments which have been included in the bill to facilitate the administration of the act do not depart from its general principles.

Question resolved in the affirmative.

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

Sitting suspended from3.54 to4.17 p.m.

page 1660

STATES GRANTS BILL 1944

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- I move -

That thebill be now read a second time.

The purpose of the bill is to implement the recommendations contained in the eleventh report of the Commonwealth Grants Commission that special grants totalling £2,846,000 he paid to the States of South Australia, Western Australia and Tasmania during the current financial year. The grants recommended for payment this year compare with those paid last year as follows: -

Since the budget estimates of the States would provide an unreliable basis upon which to determine special grants, the commission bases its assessments on the actual budget results obtained by the States in the latest year for which complete information is available. Thus the assessments for the current year 1944-45 are based on the States’ budget results for 1942-43. The commission recognizes, however, that the financial needs of the claimant States in the year in which the grants are payable may be different from those of the year upon which the grants are based, owing to an improvement or deterioration in their budgets in the interim. To meet this position, the commission may recommend either that payment of part of the assessed grant be deferred or that an advance payment be made which will be adjusted when determining the grant for a later year. As an advance payment is a payment over and above the payment indicated for a claimant State according to certain common standards of budget operation selected by the commission as reasonable, it is necessary to make an adjustment for it in a later year in order to preserve relativity in the grants assessed from year to year and to ensure equity as between the claimant States in the grants they receive. Thus, in addition to the assessed grants, amounting to £408,000 for South Australia, £629,000 for Western Australia and £677,000 for Tasmania, the payments set out above include an advance payment of £542,000 to South Australia which will be deducted from the grant for a later year, while payment of £225,000 of the grant assessed for Western Australia has been deferred until next year. On the other hand, the payments to be made this year include amounts of £250,000, £500,000 and £65,000 the payment of which to South Australia, Western Australia and Tasmania respectively had been deferred last year.

As in past years, the commission considers that the principle justifying a special grant should be the financial needs of a State and that a special grant should he such as to enable a claimant State to achieve a reasonable standard of budget stability. Until three years ago, the commission derived this standard by averaging the budget surpluses or deficits of the non-claimant States.

Since 1940-41 however, the non-claimant States have enjoyed budget surpluses mainly as a result of Commonwealth war expenditure. In the circumstances the commission has adopted a balanced budget standard in the last three years on the grounds that a surplus budget standard could have resulted in the claimant States enjoying surpluses at the expense of the Commonwealth. The Government endorses the commission’s attitude in this matter. In assessing the special grants for the current year on the financial results of the States for the year 1942-43, the commission has made some modifications in its usual methods of calculation, the most important of which relates to the commission’s comparison of the relative severity of taxation of the claimant with that of the non-claimant States. In, 1942-43 the States had ceased levying income taxation and the commission’s calculation of the ‘relative severity of taxation imposed by the claimant States is therefore now confined to those taxes remaining under State control. Prior to the introduction of uniform federal income taxation, the commission’s investigations showed that the claimant States were levying more severe taxation, particularly income taxation, than the non-claimant or standard States. The commission therefore included in the special grants for the claimant States a favorable adjustment for their relatively high severity of taxation, in order that the revenues received from the greater effort they were making, in this way should not operate to reduce their special grants below the amounts which they would otherwise be. With the introduction of uniform income taxation, however, the citizens of the claimant States pay the same income taxation as the citizens of the non-claimant States. As a result there was this year a considerable reduction in the adjustment for the claimant States on account of the relative severity of their taxation. The reduction in this adjustment, however, does not imply that the financial needs of the claimant States are no longer adequately met, since the commission has based its assessments on the amount required to give to each claimant State a balanced budget provided their revenues and expenditures are maintained at satisfactory levels.

I shall now refer briefly to the grants recommended for payment this year to each State. The grant for South Australia was assessed this year at £408,000 as compared with £480,000 last year. After considering South Australia’s probable requirements for the current year the commission decided that, in addition to the payment of £250,000 deferred from last year, an advance payment of £542,000 should be made this year. An advance payment was recommended because the evidence .indicated that South Australia’s finances will suffer a considerable retrogression during the current year owing mainly to an expected fall of railway revenues accompanied by unavoidable increases in costs. The total grant recommended for payment to South Australia this year is therefore £1,200,000. For Western Australia the grant assessed for the present year is £629,000 as compared with £1,1S0,000 last year. After including the payment of £500,000 deferred from last year, the commission considers that the total grant of £1,129,000 may not be required to meet the revenue needs of Western Australia during the current year. Accordingly, the commission recommends that payment of £225,000 of this grant be deferred until next year. The grant finally recommended for Western Australia is therefore £904,000. The grant assessed for Tasmania by the commission for this year is £677,000 compared with £785,000 last year. Adding the payment of £65,000 which was deferred from last year, the total grant paya’ble to Tasmania in the current year is £742,000. In arriving at the grants which it has recommended for the current year, the commission has adhered to the same general principles which have been found satisfactory in previous years. The commission, however, has found it necessary to modify some of its calculations to take account of the effects of uniform income taxation and other changes. The Government has considered the commission’s report and has decided to .recommend the adoption of the grants proposed by the commission to meet the financial needs of South Australia, Western Australia and Tasmania during the .present financial year.

Senator McLEAY:
.South AustraliaLeader of the Opposition

– I appreciate the action of the ‘Government in endorsing the recommendations of the Commonwealth Grants Commission. The commission’s latest report is its eleventh. The personnel of the commission has changed from time to time, but I .think that it is generally accepted that all those who have been members of it have done exceptionally good work. It is interesting to note that all its recommendations have been endorsed by the various governments which have been in office at the time that they were made. From that point of view, I .think that the States have received better treatment than otherwise might have been the case. As a representative of one of the claimant States, I take this opportunity to say that, in keeping with the generally friendly criticism that takes place as between the States, it is pleasing to note that, during the whole period in which the grants have been made, the representatives of New South Wales, Victoria and Queensland in this Parliament have very generously supported the payment by the Commonwealth to the claimant States of the substantial sums recommended, in order to enable them to enjoy a standard comparable with that of the non-claimant States. I express appreciation of the work which all the members of the commission have done. I notice, with regret, that Sir George Pearce proposes to retire. I know how well he has performed the very useful work that he has undertaken whilst a member of the commission. His long experience of public life, and his clear and analytical mind, have been of great practical help, to the other members1 of the commission. I also express my appreciation- of the action of the Government in implementing the recommendations, and of the commission itself for the splendid work that it has done.

Senator COLLETT:
Western Australia

– I shall not attempt to criticize the bill, but I wish to mention the fact that Sir George Pearce, who is terminating his connexion with the Commonwealth Grants Commission, has a unique knowledge of the political and financial structure of Australia, and his contributions to the reports of the commission have been most valuable. We should be very grateful to himfor all that he has done during his years of service. The financial relations between the Commonwealth and the States are not by any means becoming simpler as the years go by. In fact, the trend of the policy of the Government is to leave the States without any finances at all except such as are doled out to them from time to time by the Commonwealth Treasurer. In view of the changing policy of the Commonwealth, and its changing incidence on the finances of Western Australia, some of the representatives of that State prepared themselves to study the report of the commission with a view to making important contributions, to the debate on the bill, but I regret that the bill had been brought down almost before the commission’s report has been placed in the hands of honorable senators. I hope that that will be avoided in the future. The relationship between the Commonwealth and the States is a matter of considerable importance. Before being asked to consider this measure, honorable senators should have been given all the available information in regard to it, so that- they could make an effective contribution to the debate.

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA · UAP

– I am pleased to note that the grants for the current financial year are greater than those for last year. I join with other speakers in expressing regret that the commission has lost the services of Sir George Pearce. I do not think that there is a man in Australia better qualified to serve on the commission than the right honorable gentleman. He had an enviable record in political life, and his knowledge of Western Australia is second to none.

Whilst grants to the claimant States this year have increased, I do not think that they represent full compensation for the loss suffered through the introduction of uniform taxation, and I recommend that this important new factor in State finances be studied more closely by the commission in the future.

Senator HERBERT HAYS:
Tasmania

– In assessing the grants to the various States, the commission, in accordance with past practice, has taken into consideration amongst other things, the standard of social services enjoyed by the people of those States. Tasmania in particular is penalized under this system because its social services, particularly educational facilities, .are somewhat in advance of those of other States. In fact, I can say with justification that Tasmania leads the Commonwealth in education. It has established a system of area schools at heavy cost, and that system seems likely to become the model for the education systems of the other States. Tasmania should not have to suffer a reduction of its grant from the Commonwealth because it has a high standard of social services. I support the bill.

Senator LECKIE (Victoria) [4.36 J.The report of the Commonwealth Grants Commission indicates that the greatest possible care has been taken in considering various aspects of State revenues. The concluding section of the report deals with the handling by the States of revenue from lotteries, and shows that whereas in some instances this money is paid directly into revenue, in others it is paid into trust funds for social services. These factors have been taken into consideration by the commission. Paragraph 236 is significant. It states -

One effect of the method adopted is that a State which distributes a lesser . proportion of its subscriptions in prize money than the standard will obtain an appropriate favorable adjustment. While the method requires each claimant S.tate to conform to a standard distribution of prize-money, it allows fully for the differing levels of administrative expenses in the claimant States. The expense rates in the claimant States arc relatively high. We consider, however, that this is due mainly to unavoidable causes rather than to lack of economy in administration.

It would be of interest to the Senate to have a definition of “unavoidable causes “. Paragraph 237 states -

The favorable adjustments for Western Australia and Tasmania indicate that these States are making an effort above standard in raising revenue from lottery operations. The adjustment for Western Australia is higher than that for Tasmania because of a lower percentage distribution of prize money and the greater volume of subscriptions received from permanent residents.

That paragraph might be construed as an indication to the people of Australia that if they wish to subscribe to lotteries they should do so in States in which the percentage distribution of prize money is greatest. It is indicative of the extraordinary care which is exercised by the commission in analysing the finances of the States. I have quoted those paragraphs so that they will be embodied in Hansard and not lost to the people of this country, because I am sure that the average citizen does not read the reports of the commission.

I welcome the continuance by this Government of the system of making Commonwealth grants to the States’ to compensate for disabilities suffered under federation.

Question resolved in the affirmative.

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

page 1663

INCOME TAX ASSESSMENT BILL (No. 2) 1944

Second Reading

Debate resumed (vide page 1654).

Senator LECKIE:
Victoria

.- When a complicated bill such as this comes before us it is only right that honorable senators should be allowed sufficient time to consider it before being called upon to discuss it. Naturally, I should have liked more time to peruse this measure, but I realize that the Government is hastening towards the conclusion of this sessional period. I do not know whether the haste which is being exhibited has any connexion with the press report that the Leader of the Senate (Senator Keane) is to go overseas. I take this opportunity to wish him success in his mission. He has earned a trip abroad, and I am confident that he will do a good job for A.us tralia.

Obviously, the Government has realized that previous income tax assessment legislation has not .been perfect. When a measure of this kind was .before us previously, the Government gave the impression that it regarded its proposals as almost- incapable of improvement, but events have convinced Ministers that that is not so, and that injustices could arise. To the degree that the Government, having seen the light, is taking steps to remedy defects in existing legislation, it is entitled to commendation, but I do not think that the measure before us goes far enough.

I wish to refer particularly to clause 4 which relates to deferred maintenance and alterations to plant and machinery. Under this clause, money which is required for maintenance may be paid into a trust fund, to be used when the war is over. I fear that the Government has overlooked some vital factors associated with the incomes of primary producers. The clause relates only to sections 51 and 53 of the principal act and ignores expenditure incurred by primary producers under sections 75 and 76 of the principal act. This is an omission which should he remedied. Section 75 reads -

Expenditure incurred in the year of income by a taxpayer engaged in primary production on any land in Australia in -

  1. the eradication or extermination of animal or vegetable pests from the land;
  2. the destruction and removal of timber, scrub or undergrowth indigenous to the land;
  3. the destruction of weed or plant growth detrimental to the land;
  4. the preparation of the land for agriculture;
  5. ploughing and grassing the land for grazing purposes; and
  6. the draining of swamp or low-lying lands where that operation improves the agricultural or grazing value of the land, shall be an allowable deduction.

Section 76 of the principal act relates to expenditure incurred in enclosing property with wire and wire-netting in order to deal with animal pests. Such expenditure is not an allowable deduction under clause 4 of the bill. I hope that the Minister will see the reasonableness of my request, and will permit an amendment to extend the scope of the clause to include the expenditure referred to in sections 75 and 76 of the principal act as well as expenditure covered by sections 51 and 53. The Minister will realize that the items which I have indicated cover expenditure which ordinarily would take place each year and would be allowable as a deduction, but does not take place because of exceptional conditions involving a shortage of labour and material. I emphasize that if my proposal be accepted, the money would be in the hands of the Government until after the war, and that should the taxpayer not expend it on the maintenance referred to in sections 75 and 76, he would not get it back. Clearly the Government is amply safeguarded. Honorable senators will agree that it would he greatly to the benefit of the nation if the work covered by those two sections were undertaken, or that money be available to carry it out when the war is over.

Senator Sheehan:

– What benefit will the taxpayers derive if the honorable senator’s suggestion be agreed to?

Senator LECKIE:

– The point is that, through shortage of labour and material, land-owners are now unable to carry out certain work on their holdings. Ordinarily, such expenditure would bean allowable deduction from their incomes. As things are, they are paying taxes on inflated incomes. The Government has recognized that an injustice exists in respect of expenditure covered by sections 51 and 53 of the principal act, and has made provision accordingly. I want to see that measure of justice extended to cover expenditure referred to in sections 75 and 76 also.

Senator Gibson referred to the compulsory resumption of land for closer settlement purposes, necessitating the sale of breeding stock by the owner or lessee of such land. I understand that the point raised by him has been considered by the Treasurer (Mr. Chifley) and the right honorable member for Yarra (Mr. Scullin), who agree that the matter warrants further investigation. That being so, I shall not move an amendment, but I shall indicate directions in which relief could be given. In the event of the compulsory resumption of land, the holder of such land may have to sell his breeding stock. In such an event, his breeding stock is taken into account at the selling price, which may be in excess of the value of such stock in his books. It may happen that a breeder of stock sells 5,000 sheep which he values at 30s. each, but he is regarded by the taxation authorities as having sold 5,000 sheep worth only 10s. each. The difference is regarded as income, and naturally it places him in a higher taxation group. I have had examples worked out, and I find that a man who thought himself worth, say, £10,000 might actually he out of pocket through the compulsory resumption of his land. The Government has already recognized that an injustice may occur and has promised that this matter will he further considered. In this connexion, I speak on behalf of farmers who breed their stock, as distinct from dealers in stock. A successful farmer breeds his stock and sells only lambs and aged sheep. His income is the proceeds of such sales. Breeding stock should be regarded as capital, and, therefore, I suggest that section 36 of the principal act should be amended by omitting sub-section 2 thereof and inserting in its stead the following subsection : -

  1. Where a taxpayer, after the beginning of the first year to thu assessment of the income of which this act applies, sells the whole or part of a business carried on by him -

    1. for the purpose of putting an end to that business or part of that business; or
    2. in consequence of the acquisition or resumption of land or part of that land, used by him for that business, under the provisions of any act or State act which contains provisions for the compulsory acquisition or resumption of land, the value of any live-stock included in the sale which was, in the opinion of the Commissioner, ordinarily used by him in that business for breeding purposes, shall not bo included in his assessable income, and no deduction shall be allowed to him in respect of any such live-stock, and no such live-stock shall he taken into account in computing his taxable income.

I am confident that once the Treasurer realizes that an injustice is being done he will rake steps to remedy the situation. Neither he or his officers wish to penalizp unduly or ruin any primary producer, or to force him off his holding. Should the land in question be leased, the lessee may have nothing left, although he might have regarded himself as being fairly well off. Something should be done along the lines that I have indicated; otherwise a great injustice will be done to many deserving primary producers.

We were told, when the act was last amended, that under the new system of computing rebates of tax there would be no anomalies, but experience has shown that family men with three or more children are adversely affected.

Senator Courtice:

– The Treasurer says otherwise.

Senator LECKIE:

– I could give examples which show that the Treasurer is not quite correct in that regard. I desire him and his colleagues to consider whether they could arrive at a conclusion in this matter which would prevent injustice being done to any taxpayer. I realize that they are trying to discover the best means of raising the necessary revenue. The small amendment that I have suggested should be accepted, and the other two should be considered. The second proposed amendment regarding rebates of tax relates to a provision which operates harshly on men with large families, and it would be preferable to revert to the old system. No loss of revenue would be involved.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 (Officers to observe secrecy).

Senator LECKIE:
Victoria

.- This would be the appropriate stage at’ which to incorporate the amendment which I have indicated relating to the sale of breeding stock.

Clause agreed to.

Clause 4 -

After section fifty-three of the Principal Act the following sections are inserted: - “ 53a.- (8.) In this section, ‘deferred maintenance’ means the maintenance of property, whether real or personal, in a normal state of repair or upkeep where -

the need for the maintenance first arose in the year of income and prior to the termination of the present war;

the taxpayer was unable to undertake the maintenance by reason of circumstances attributable to the present war; and

the expenditure upon that maintenance would have been an allowable deduction under section fiftyone or fifty-three of this Act if it had been actually incurred by the taxpayer.”.

Senator LECKIE:
Victoria

.- I move -

That proposed sub-section (8.) be left out, with a view to insert in lieu thereof the following sub-section - “ (8.) In this section, ‘deferred maintenancemeans the maintenance of property, whether real or personal, in a normal state of repair or upkeep, including any improvement of the kind specified in section seventyfive or seventy -six of this Act, where -

the need for the maintenance or the improvement first arose in the year of income and prior to the termination of the present war;

the taxpayer was unable to undertake the maintenance or improvement by reason of circumstances attributable to the present war; and

the expenditure upon that maintenance or improvement would have been an allowable deduction under sections fifty-one, fifty-three, seventy -fi ve or seventy-six of this Act if it hadbeen actually incurred by the taxpayer.”.

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- The proposed amendment has been examined, and I cannot accept it. The deferred maintenance provisions of the bill will allow a deduction of the estimated cost of deferred repair and maintenance work, such as the repair or maintenance of premises, plant, machinery, implements, rolling-stock or other assets held, occupied or used by the taxpayer for income-producing purposes. Primary producers will also be permitted to deduct the estimated cost of top-dressing and fertilizing, of eradication of noxious weeds and animals, &c, provided the actual expenditure on such items would normally have been allowable deductions under section 51 or section 53 of the act. “Where, therefore, a primary producer normally is faced with recurring expenditure in keeping down rabbits, weeds, ferns, scrub, &c, he willbe allowed to deduct the estimated amount he would be required to spend on such activities in order to restore his property to its normal state of upkeep. Sections 75 and 76 of the act allow primary producers a deduction of capital expenditure on improvements. In addition to expenditure on the eradication of animal and vegetable pests, on scrub-cutting and weed destruction, the act allows a deduction of the cost of clearing, timberfelling and removing, preparation of land for agriculture, ploughing and grazing land for grazing purposes, draining of swamplands, and wire-netting. Such capital items are not brought within the scope of the deferred maintenance provisions.

Senator LECKIE:
Victoria

.- The reply of the Minister is not quite fair. If the taxpayer carries out repair and maintenance work during the year of income he is permitted to deduct the cost, but if he cannot obtain the necessary labour, materials and machinery to do it he is not allowed to place the money into a trust fund to be used after the war. That is the extraordinary anomaly that arises under this bill. A similar position arises with regard to sections 75 and 76 of the act, which allow primary producers a deduction of capital expenditure on improvements, and I fail to see why the ‘Government should accept a principle in one case but not in another. It is apparent that the higher the producing values of properties are the better it willbe for Australia The Minister has apparently not given the matter sufficient consideration.

Senator Keane:

– It has had a great deal of thought.

Senator LECKIE:

– I am sure that the people of Australia expect the Parliament to do what is fair to the primary producers, who are now experiencing a worse time than they haveever previously had. The small amount of relief which my amendment would provide should be granted to them.

Amendment negatived.

Clause agreed to.

Clauses 5 to 12 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

Sitting suspended from 5.16 to 8 p.m..

page 1666

WAR PENSIONS APPROPRIATION BILL 1944

Bill received from the House of* Representatives.

Standing and Sessional Orders suspended.

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

Second Heading.

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– I move -

That the bill be now read a second time.

The purpose of this measure is to provide £12,000,000 out of the Consolidated Revenue Fund for the payment of war pensions. The hill is similar to that periodically submitted to Parliament for the purpose of appropriating, an amount from the Consolidated Revenue Fund for payment into a trust account to enable pensions to be paid at rates already approved by Parliament. The balance of appropriation now remaining is sufficient only to meet pension payments during the present month.

Expenditure on war pensions during the present year is estimated at £11,900,000. The expenditure last year was £11,004,000. The additional expenditure is due to the increase in the number’ of pensioners arising out of the present war. Although Parliament is being asked to approve the appropriation of £12,000,000, which is approximately a year’s expenditure, this sum will not be withdrawn from revenue immediately. Revenue is drawn upon only for payment to the trust account as required to enable pension payments to be made as they become due. This measure has no relation whatsoever to the rates or conditions under which war pensions are paid, but merely authorizes the provision of funds for the purpose.

Question resolved in the affirmative.

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

page 1667

LOAN BILL (No. 2) 1944

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– I move -

That the bill be now read a second time.

The purpose of this measure is to obtain a loan appropriation of £150,000,000 for war expenditure. It will also grant authority to raise, as required, by way of public loans, war savings certificates, &c, the necessary amount of loan moneys to finance war expenditure in the current year. War finance and our anticipated expenditure for the present year having been dealt with at length in the budget speech, it is not necessary for me to deal with the subject at any length. War expenditure for 1944-45 is estimated in the budget at £505,000,000. It is anticipated that approximately £177,000,000 of that amount will be met from revenue, leaving a balance of £328,000,000 to be provided from loan. The balance of loan appropriation available at the 30th June, 1944, was £206,000,000. This amount, together with the provision in this bill and from revenue, will provide sufficient parliamentary appropriation to meet our requirements for the present financial year.

Question resolved in the affirmative.

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

Sitting suspended from 8.9 to 9.5 p.m.

page 1667

TRACTOR BOUNTY BILL 1944

Bill received from the House of Representatives.

Standing and .Sessional Orders suspended.

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

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– I move -

That the bill be now read a second time.

The purpose of the bill is to authorize an ex-tension of the bounty on the production of tractors of the internal combustion engine type for three years at the same rates as provided in the Tractor Bounty Acts 1939, viz. : -

These rates of bounty will be paid if not less than 90 per cent, of the materials and parts used in tractors is of Australian origin. Where Australian materials and parts are less than 90 per cent., the bounty will be reduced in exact proportion thereto, but no bounty will be paid at all unless at least 60 per cent, of the materials and parts is Australian. The rates of bounty will also be reduced concurrently with any increase that may occur in the customs duties after the commencement of the proposed act, on the types of tractors subject to bounty or on parts of such tractors except pneumatic tyres and tubes. Any such reduction of bounty will, of course, be equivalent to the value of the increase of customs duty.

The bounty on Australian tractors was initiated in 1922 under the Iron and Steel Products Bounty Act, the object being to encourage Australian production without imposing any direct cost burden on users, most of whom are farmers. Imported tractors have, therefore, remained unaffected by protective customs duties, the rates being free under the British preferential tariff, and 10 per cent, for crawler-type tractors or 12-^ per cent, for other types under the general tariff. Under the bounties paid prior to the war local production of tractors gradually increased, reaching a peak output of 455 in 1937-38, while during the period - 1923-24 to 1937-38- imports of tractors also increased very substantially, the peak quantity of 11,026 occurring in 1937-38. The industry has been seriously disturbed by war conditions and local production of tractors has fallen rapidly, due to manufacturers being engaged on defence work. With the easing of demands for defence priorities more attention is being devoted to the manufacture of tractors.

The bill appropriates for bounty payments each financial year the sum of £100,000. At present Australian tractors supply only a very small percentage of the demands, and it is obviously desirable that Australia should be less dependent on overseas sources of supply for a product which is so essential to economical farming methods. As the Tariff Board has pointed out, the average rate of bounty under the existing Tractor Bounty Act is £50 for each tractor and the maximum aggregate amount that can be paid in any one year is £35,000. This means that the bounty is payable only on an average yearly production of 700 tractors. The present limit would discourage expansion, and it is desirable that £100,000 be provided annually, which would enable full payment of bounty on 2,000 tractors in any one year. However, under the principal act any unpaid balance in one year could be paid in the subsequent year. This bill provides for the elimination of that provision in consequence of the increase of the amount now proposed to be allocated. The principal act provides for payment of bounty for five years ending on the 23rd October, 1944, but it is clearly desirable that any assistance now offered should be available only until it becomes possible to consider the requirements of the industry with greater knowledge of post-war conditions. The bill, therefore, seeks to extend the bounty for a further three years. In support of their claims for bounty, manufacturers are required under the principal act to submit their balance-sheets, profit and loss accounts, &c, each half-year. This practice has been found to be of very little real value to the department, and entails considerable work and expense for bounty claimants. Under this measure manufacturers will be required to submit their accounts- each financial year. Other provision in the principal act contain the usual conditions and powers which experience has proved are essential to the efficient administration of the bounty and the safeguarding of ‘Commonwealth funds. The industry is worthy of encouragement and is of considerable present and potential value to the Commonwealth. It should provide considerable employment. Progress in manufacturing efficiency is reflected in the fact that the rates of bounty are 20 per cent, less than ‘those provided in the original Iron and Steel Products Bounty Act of 1922. The bill merits favorable consideration.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 3 agreed to.

Clause 4 (Specification of bounty).

Senator HERBERT HAYS:
Tasmania

– Is the Minister in a position to say how many tractors have been made under the bounty system, and can he state the maximum and minimum horsepower of the tractors on which bounty has been paid? Further, can he say whether the tractors in question are driven by petrol, kerosene, or are equipped with diesel engines, and whether they have rubber or steel tyres?

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- The following table gives the , brake horsepower of the engines in the tractors in respect of which bounty has been paid -

Any class of fuel may be used in a tractor for which bounty is paid. The peak output of tractors took place in 1937-38 when the production totalled 455 machines. Between 1923-24 and 1937-38, the importation of tractors increased considerably, reaching its peak in 1937-38, when 11,026 tractors were imported. As honorable senators know, there is a world shortage of rubber, and I fear the position will . not improve greatly for some time. However, the position of tractors in this respect is not worse than is the case with ordinary cars or trucks.

Clause agreed to.

Clauses 5 and 6 agreed to.

Preamble and Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1669

SULPHUR BOUNTY BILL 1944

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- I move -

That the bill be now read a second time.

The purpose of this measure is to authorize an extension of the bounty on the production of sulphur. This bounty is based on a sliding scale adjusted to a basic rate of £1 7s. a ton, which rate is payable when the average cost of imported crude brimstone for any quarter ending March, June, September or December is £6 a ton. As the average cost of imported crude brimstone in any quarter rises or falls from £6 a ton in stages of ls., the actual bounty payable will fall or rise from £1 7s. by ls. a ton, with the proviso that the maximum rate of bounty in any circumstances will be £1 16s. a ton. Owing to the war, overseas prices have risen and importing costs have increased. Consequently no bounty has been paid on sulphur since 1940. The renewal of the provision for bounty is therefore unlikely to cause expenditure of Commonwealth funds for some time. In the principal act the cost of imported sulphur is .based on “ all sulphur “, but this bill amends the definition to base the imported cost on “ crude brimstone “.

Bounty will be payable on Australian elemental sulphur, or on the sulphur equivalent of sulphuric acid produced from any Australian material. In accordance with similar provisions in other bounty acts, the bounty on sulphur, after the commencement of this act, will be reduced, at any time new or increased customs duties may be imposed on imported sulphur, by amounts equivalent to those duties.

Under the principal act an amount of £110,000 a year has been appropriated for the purpose of bounty payments, with a proviso that any unexpended balances could be carried over to succeeding years. It is proposed by this bill to increase the annual appropriation to £180,000 and to eliminate the provision regarding unexpended balances. The reason for the increase is to provide for the payment of the bounty on 100,000 tons of sulphur a year, which is the present capacity of the plant in Australia, and which is not likely to be exceeded, at least for a considerable time. At the maximum bounty, of £1 16s. a ton, this would require £180,000.

The principal act limits the operation of the bounty for a period of five years ending on the 23rd October, 1944. The bill does not impose a time limit for the reason that, if and when bounty again becomes payable, the Government intends to have the nature and extent of assistance required by the industry again investigated by the Tariff Board. Postwar conditions cannot be predicted with any degree of certainty, and the bill merely provides a safeguard for the industry, pending a further investigation, should overseas prices fall and import costs decrease.

It is proposed to amend sub-section 2 of section 12 of the principal act, which requires bounty claimants to furnish a balance-sheet and profit and loss account, &c, each half-year. The object of requiring this information “was to have available an indication as to profit prospects for the year in order to ensure that excess bounty -would not be paid. In practice it has been found, however, that this entails considerable extra -work by the bounty claimants and does not afford the department any great assistance, as, generally speaking, the preparation of the balance-sheets, &c, takes considerable time and consequently are supplied to the department too late to be of any real value. It is proposed, therefore, to require bounty claimants to submit their balance-sheets, &a.y only in respect of each financial year. All other provisions in the principal act convey the usual conditions and powers which experience has proved are essential to the efficient administration of the bounty and the safeguarding of Commonwealth funds.

I do not think that it is necessary to recapitulate the history of the assistance given to the production of sulphur in Australia, which commenced in 1922. as full details were given when the Sulphur Bounty Bill of 1939 was introduced. In 1922 it was realized that serious economic waste was involved in the nonutilization of the sulphuric acid available in large quantities in certain materials and ores. Prior to 1922 this acid content could not be utilized, as it was not a commercial proposition to extract it. The establishment of “ sulphuric acid production has provided a much needed local source of supply of sulphur, thus safeguarding the fertilizer and chemical industries. It is also of importance from the defence aspect. Since the commencement of the present war the cost of importing sulphur has greatly increased, and it is estimated that the saving effected on the quantity . produced locally has been much greater than the total bounty paid. The sulphuric acid industry has increased its efficiency from time to time. The present bounty of fi 7s. a ton is 40 per cent, less than the original bounty of £2 5s. a ton.

Senator LECKIE:
Victoria

.- I shall not oppose the bill, for it merely provides for an extension of a principle adopted by the Opposition when it was in office. I am glad that the Government and its advisers have realized that the continual production of balance-sheets by manufacturers and others is not of great value, and that the number of returns required should be reduced to a minimum. Manufacturers consider that too much expenditure is involved in the provision of a large number of returns, many of which serve no useful purpose.

Senator GIBSON:
Victoria

.- Will the Minister for Trade and Customs (Senator Keane), inform the Senate whether the bounty will offset the duty, so that Australian manufacturers can make sulphur in competition with the imported article?

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

– in reply - The local manufacturers are amply protected, because, as I have already said, the bounty will be reduced by amounts equal to those duties, if at any time new or increased customs duties are imposed on imported sulphur.

Question resolved in the affirmative.

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

page 1670

WIRE NETTING BOUNTY BILL 1944

Bill received from the House of Representatives.

Standing and Sessional Orders suspended.

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

Second Reading

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- I move -

That the bill be now read a second time.

This bill seeks to authorize the extension of the bounty on wire netting for three years at the same rates as are provided in the Wire Netting Bounty Act 1939-1940, namely, 9s. 7d. a ton. The provisions in the principal act conveying the usual conditions and powers, which experience has proved are essential to the efficient administration of the bounty and the safeguarding of Commonwealth funds, remain unaltered with the following exceptions: -

  1. The principal act provided that any bounty appropriation unexpended in one year could be carried over to a subsequent year. This provision has been eliminated as the amount appropriated each year, namely, £5,000, is sufficient to pay in any year all valid claims. The amendment is desirable also in order that the principal act can he brought into conformity with other proposed bounty legislation.
  2. Under the principal act bounty claimants are required to submit their balance-sheets, profit and loss accounts, &c, half-yearly. This has been found to be of little real value to the department, and entails considerable work and expense for bounty claimants. The bill proposes to require manufacturers merely to submit their accounts each financial year.

A bounty on the production of wire netting was first provided in 1922 as an alternative to customs duties, in order to relieve users of wire netting, who are largely primary producers, of the burden of maintaining the wire netting industry. Under the bounty system, the industry has made good progress and gives considerable employment. In the Tariff Board’s report of the 15th September, 1944, the opinion was expressed that the bounty could now be withdrawn. This opinion is undoubtedly correct as regards most of the output, which is produced by two long-established manufacturers in New South Wales, who are earning satisfactory profits, and thereby are not eligible for bounty.

However, the position of a manufacturer in Western Australia is not on so satisfactory a level. This manufacturer, whose profit is less than the 6 per cent. specified in the principal act, is concerned with his future in the post-war era, as he is working under some obvious disabilities compared with the manufacturers in New South Wales. The Tariff Board has admitted that the Western Australian manufacturer has aided the food-production programme at a critical time during the war. and that his establishment in Western Australia assists the decentralization of industry. Therefore, the Government has decided that there is justification for continuing the bounty for a further period of three years.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Clause 2 (Commencement).

Senator COLLETT:
Western Australia

– On behalf of the industry in Western Australia I express appreciation of the Government’s recognition of the special difficulties which confront the industry in that State. The action of the Government, I am sure, will be greatly appreciated.

Clause agreed to.

Clause 3 agreed to.

Clause 4 (Specification of bounty).

Senator ARNOLD:
New South Wales

– What is the effect of this clause which reads -

Section seven of the Principal Actis amendedby omitting the word “ five “ and inserting the word “ eight “

Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- The period of the bounty is extended for a further period of three years as from the 24th October, 1944. “Eight” is shown because this measure is an amendment of the principal act, which has already been in operation for five years.

Clause agreed to.

Clause 5 agreed to.

Preamble and Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1672

QUESTION

BROADCASTING

Station 5KA Adelaide.

Senator ASHLEY:
New South “WalesPostmasterGeneral · ALP

– by leave - I draw attention to what appears to me to be an inaccuracy in the Hansard record of an interjection by Senator Leckie when I was referring to the transfer of the assets of certain broadcasting companies in South Australia. I understood Senator Leckie to interject: “Did the Minister know that the Labour party had ‘ free time ‘ ? “, to which I replied that I had no such knowledge. In my uncorrected proof, Senator Leckie’s interjection to refer to “ free time “, as is that the Labour party had one-fifth of the shares?” I understood his interjection to refer to “ free time “ as is shown by my further statement that had I had such knowledge it would not have affected my decision to issue a broadcasting licence, if the relevant conditions were complied with. That is almost an exactrepetition of a reply which I gave to a question asked by the Leader of the Opposition (Senator McLeay), without notice, on Tuesday of this week, when he asked whether I had any knowledge of “free time “ being made available to the Australian Labour party. I have consulted with Senator Leckie, advising him that I understood that his interjection referred to “ free time “. Subject to his approval, I propose to ask the Principal Parliamentary Reporter to amend the report accordingly.

page 1672

HOUR OF MEETING

Motion (by Senator Keane) agreed to-

That the Senate, at its rising, adjourn to to-morrow, at 10 a.m.

page 1672

ADJOURNMENT

Broadcasting: Station 5KA Adelaide.

Motion (by Senator Keane) proposed -

That the Senate do now adjourn.

Senator LECKIE:
Victoria

.- “With reference to the statement just made by the Postmaster-General (Senator Ashley), and his intimation that he proposes to ask the Principal Parliamentary Reporter to alter an interjection which I made during the course of his remarks last night when he was dealing with the re-issue of a broadcasting licence to station 5KA Adelaide, I do not think that the alteration he suggests is fair to me. The fact that the explanation just given by the Postmaster-General will also appear in Hansard should meet the case and satisfy both of us. The alteration suggested by the Postmaster-General, if made, would misrepresent what I said, because the interjection attributed to me in the uncorrected proof is accurate. That is what I actually said. Therefore, it should remain as recorded in the proof.

Question resolved in the affirmative.

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PAPERS

The following papers were pre sented : -

Arbitration (Public Service) Act - Determination by the Arbitrator, &c. -

No. 25 of 1944 - Postal Telecommunication Technicians’ Association (Australia) ; and Postal Electricians Supervisors and Foremen’s Association, Postmaster-General’s Department, Commonwealth of Australia.

Coal Production (War-time) Act - Order - Cognizance of disputes - Exception of certain members of Federation (dated 12th September, 1944).

Commonwealth Public Service Act - Regulations - Statutory Rules 1944, No. 143.

Dried Fruits Export Control Act - Twentieth Annual Report of the Dried Fruits Control Board, for year 1943-44, together with Statement by Minister regarding the operation of the Act.

National Security Act -

National Security (General) Regulation - Defence Impressment Order - Registration of outboard motors.

National Security (Shipping Coordination) Regulations - Orders - Nos. 69, 70.

River Murray Waters Act - River Murray Commission - Report for year 1943-44.

Senate adjourned at 10.43 p.m.

Cite as: Australia, Senate, Debates, 28 September 1944, viewed 22 October 2017, <http://historichansard.net/senate/1944/19440928_senate_17_180/>.

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