Senate
20 April 1961

23^rd Parliament · 3^rd Session

QUESTION
- SOCIAL SERVICES
QUESTION
- POLITICAL PARTIES
QUESTION
- TIMBER INDUSTRY
QUESTION
- ROADS
QUESTION
- WAR SERVICE HOMES
QUESTION
- POLITICAL PARTIES
QUESTION
- FOOD PRESERVATION
QUESTION
- REPATRIATION
QUESTION
- TAXATION
QUESTION
- TELEPHONE DIRECTORIES
QUESTION
- NEWSPAPER REPORTS
QUESTION
- ATOMIC ENERGY
QUESTION
- RIVER MURRAY WATERS
QUESTION
- BROADCASTING
QUESTION
- MEDICAL RESEARCH
QUESTION
- TELEPHONE DIRECTORIES
QUESTION
- POLITICAL PARTIES
QUESTION
- NEWSPAPER REPORTS
QUESTION
- TARIFF BOARD
QUESTION
- PARLIAMENT HOUSE BOOKLET
QUESTION
- URANIUM
QUESTION
- COMMONWEALTH ASSISTANCE FOR STATE WORKS
QUESTION
- OVERSEAS BALANCES
QUESTION
- GOVERNMENT CONTRACTS
QUESTION
- INDUSTRIAL UNREST
QUESTION
- GOVERNMENT CONTRACTS
QUESTION
- TARIFF BOARD
QUESTION
- BEEF
QUESTION
- MEAT
CHEMICAL PHYSICS LABORATORY, CLAYTON, VICTORIA
- Report of Public Works Committee
SPECIAL ADJOURNMENT
EXPORT PAYMENTS INSURANCE CORPORATION BELL 1961
- Second Reading
DEFENCE FORCES RETIREMENT BENEFITS BILL 1961
- Second Reading
NATIONAL HEALTH BILL 1961
- Second Reading
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1961
- Second Reading
- Second Reading

page 621

QUESTION

TAXATION

Senator TANGNEY:
WESTERN AUSTRALIA

– By way of preface to a question directed to the Minister representing the Treasurer, I should like to say that some time ago I asked a question similar to the one I am about to ask, but, to my way of thinking, the answer which I received was not very satisfactory. I ask: In order to assist State education authorities in their efforts to recruit teacher trainees, as one step towards reaching a solution of the present crisis in education in Australia, will the Government reconsider the position and not tax the living allowances paid to teachers-in-training and thus place them in the same category as Commonwealth university scholarship allowances, which are tax free?

Senator PALTRIDGE:
LP

– I remember that the honorable senator’s previous question was placed on the notice-paper, and I remember also the answer that was provided. I must say that it appeared to me to be a very commonsense answer to her question. Senator Tangney is requesting that education should be assisted in the way she now suggests. In reply I can only tell her that education falls fairly and squarely within the administration of the States.

Senator Tangney:

– Taxation is a Commonwealth matter.

Senator PALTRIDGE:

– I am speaking of education and the honorable senator’s question no doubt relates to education. Indeed, I have always understood that that was her particular interest. If her question does, in fact, fall within the ambit of taxation, and only of taxation, as she now says it does, then I suggest to the honorable senator that she has already been answered. The difference between the two types of grants was clearly drawn by the Treasurer in his previous reply. He showed beyond dispute that the grant in one case was in fact part of an income and that the grant in the other case was not.

page 622

QUESTION

TELEPHONE DIRECTORIES

Senator BUTTFIELD:
SOUTH AUSTRALIA

– My question is directed to the Minister representing the Postmaster-General. A few weeks ago, I asked the Minister some simple questions concerning the current telephone directory and the complications arising from the extended local service call system. I put forward a few simple suggestions for unravelling those complications.

Evidently he is having difficulty in prising an answer from those responsible for the compilation of this book, so I now ask him: Will the Postmaster-General offer the sug gestion to his officers that they call upon the women members of this Parliament to help in this matter? The result would no doubt be something filled with feminine logic and understandable by even the simplest of men’s minds.

Senator WADE:
Minister for Air · VICTORIA · LP

– I readily acknowledge that there has been some delay in furnishing the honorable senator with a reply, but I point out that the question she poses is a very difficult one. To make constructive suggestions for the improvement of the telephone directory entails a good deal of research. That is going on, and I hope to have an answer for the honorable senator ere long. Her suggestion that the department use her services and those of other lady senators makes no appeal to me, for the very good reason that these ladies are blessed with such natural charm that I believe the concentration of the officers would be impaired if they intruded into this field.

page 622

QUESTION

NEWSPAPER REPORTS

Senator KENNELLY:
VICTORIA

Dridan’s statement. I know Mr. Dridan, and I am quite certain that whatever he said is correct. He is a very experienced and capable officer. The present situation is that the River Murray Commission is investigating the constructional aspects of the dam - that is, the building of the dam, its site and that sort of thing - and is inquiring into the use of the water. This is not an easy matter to resolve. It involves not only the storing of waters in a particular dam but how they can be interchanged and stored in alternative conditions.

My recollection is that at the meeting of the heads of government which I attended it was decided to refer the matter to the River Murray Commission and ask it to let us know what could be done in varying circumstances, such as whether the dam should be built solely for South Australia or to service New South Wales, Victoria and South Australia. The matter would then be the subject of further discussion. I should think that whatever happens, an alteration of the River Murray Waters Agreement will be required.

To my knowledge, no assistance is being provided by the Snowy Mountains authority. There are very efficient water conservation and irrigation officers in each of the three States. I am quite sure, however, that the Snowy Mountains authority would be willing, and indeed eager, to lend a helping hand. Of course, the authority would provide that assistance only if the States requested it.

page 624

QUESTION

BROADCASTING

Senator COOKE:
WESTERN AUSTRALIA

– My question is directed to the Minister representing the Postmaster-General. Does the honorable gentleman recollect that over the past two years honorable senators on both sides of the chamber have placed before the PostmasterGeneral questions about the poor radio reception in areas such as Kalgoorlie, Noresman, Coolgardie and the northern areas of Western Australia? I ask the Minister whether he is aware that after giving quite a number of evasive answers the Postmaster-General received correspondence to which he replied that the Australian Broadcasting Control Board had sent an engineer to Western Australia to investigate reception conditions; that the engineer considered that reception was bad; and that the board had approved the following projects: -

The establishment of a national regional station with a power of 10 kilowatts near Dalwallinu.
The establishment of a national regional station with a power of 200 watts at Carnarvon.
The modernization of the radiating system of national regional station 6GF Kalgoorlie.
The increase in the power of the high frequency - short wave - stations, VLX from 10 kilowatts to 50 kilowatts, and VLW from 2 kilowatts to 10 kilowatts.

When the Postmaster-General gave that answer, which was more than twelve months ago–

The PRESIDENT:

– Order! The honorable senator seems to be giving rather a lot of information.

Senator COOKE:

– I ask the Minister: Was the Postmaster-General serious when he gave that reply to me? Has the preliminary work on the projects that were being examined at that time yet been completed or is the work still proceeding? Will the Minister make further inquiries to ascertain why reception in the areas to which. I have referred is particularly bad? If at all possible will the Minister give consider tion to providing people in those areas with a reasonable return for the amount expended on broadcast listeners’ licences?

Senator WADE:
LP

– I am quite sure that the Postmaster-General was serious when he gave to Senator Cooke and to the people concerned the undertakings to which Senator Cooke has referred. I think we are sometimes prone to forget that Australia is a huge and very sparsely settled continent. Its development creates tremendous communications problems. Indeed, I have heard the Postmaster-General say on more than one occasion, when being pressed to extend television services, that his department has obligations that must be fulfilled to people who are not getting good radio reception. I know that that thought is uppermost in the Postmaster-General’s mind and I know that he is determined to fulfil those obligations. I will again bring the matters raised by Senator Cooke to the notice of the Postmaster-General so that I may be able to furnish the honorable Senator with a report of what is being done in the areas to which he referred.

page 624

QUESTION

MEDICAL RESEARCH

Senator HANNAFORD:
SOUTH AUSTRALIA

– Is the Minister representing the Minister for Health aware of a report emanating from. Adelaide that a United States organization has made a grant of 80,000 dollars - that is, approximately £35,700 - to enable basic heart research to be continued in Adelaide for another five years? The grant is from the National Institute of Health, which is a body financed by the United States Government, and has been made to Professor G. Maxwell, Professor of Child Health, University of Adelaide. If the Minister is aware of that grant, does he agree that it is further evidence of the unselfishness of the United States in making large sums of money available to other countries for medical research which is regarded as worth while? I also ask the Minister whether the Commonwealth Government has made any financial contribution to the National Heart Campaign. If so, how much has been contributed?

Senator HENTY:
Minister for Customs and Excise · TASMANIA · LP

– The honorable senator is quite correct in saying that the United States of America has poured a great deal of her treasure into many parts of the world for research in many fields. I am sure that the countries that have benefited from those grants appreciate what the United States has done. I am not aware whether the Commonwealth Government has yet made a contribution to the National Heart Campaign. If the honorable senator will place h is question on the notice-paper I will obtain an answer for him.

page 625

QUESTION

page 628

QUESTION

GOVERNMENT CONTRACTS

Senator WILLESEE:
WESTERN AUSTRALIA

– I direct a question to the Minister representing the Minister for the Interior. I understand that the Department of the Interior uses two methods of calling for tenders for work to be done on its behalf. There is the straightout form of calling for tenders and also, I understand, an invitation to individuals or organizations to register as tenderers. Has the department a set policy which determines the works or services in respect of which individuals or organizations are invited to tender? If so, what is that policy? Why is that form of tendering used instead of the open tender system?

Senator WADE:
LP

– The honorable senator has raised a valid point. The department invites people or organizations to tender in certain circumstances. In the main, this method of calling for tenders is confined to cases in which the range of persons or organizations that would be interested in tendering is a narrow one, so that if tenders were called in the ordinary way, little interest would be shown except by the few people who were in a position to offer their services or their goods. The department has therefore developed a system whereby, within fairly well-defined channels, invitations are issued to three individuals or firms - if there are three in the particular field - to tender for a specific work. This should not be construed as a general principle. As I have said, this form of calling for tenders is confined to the few organizations or individuals which could supply the special goods or services required.

page 628

QUESTION

INDUSTRIAL UNREST

Senator BRANSON:
WESTERN AUSTRALIA

– In addressing a question to the Minister representing the Minister for Labour and National Service, I remind the Senate that recently on the Fremantle waterfront a strike concerning the newly formed Foremen Stevedores Union occurred, and that the strike cost the State of Western Australia a substantial amount of money. Because the Commonwealth Government came in for a great deal of unjustified criticism, and because conditions in Western Australia appear to be leading to another waterfront strike, will the Minister explain to the Senate and the people of Australia, particularly those of Western Australia, the powers that the Commonwealth has in respect of industrial activity of this kind within the States?

Senator GORTON:
Minister for the Navy · VICTORIA · LP

– I understand that there was, on the Fremantle wharfs, a demarkation dispute between the unions concerned, and that the dispute had nothing to do with working conditions, pay, or anything of that nature. I take it that the Waterside Workers Federation of Australia engaged in the dispute because it objected to the formation of a foremen stevedores union. It appears that a campaign is being conducted by the Waterside Workers Federation in Western Australia to involve a number of other unions, such as the transport unions, in some kind of a general federation, with the object of gaining power on the wharfs in that State. No doubt that is being done with the assistance of that eminent Labour leader, Mr. Chamberlain, who last week was denying that any Labour man had stood with a Communist on a unity ticket, at precisely the same time as Mr. Calwell was saying that he wished Labour men would not stand with Communists on unity tickets.

Senator Willesee:

– Why do you not say that outside?

Senator GORTON:

– Of course I will say it outside. However, let me first complete my answer to the original question, which related to the powers of the Commonwealth in regard to this unhappy situation. The answer is that since the dispute is one which does not extend beyond the boundaries of one State, the State Government has the power and the ability to solve the difficulty, if it can be solved, and to make public all the facts concerning it.

Such a dispute is not the responsibility of the Commonwealth Parliament unless and until it extends beyond the boundaries of one State. In reply to what I might regard as a supplementary question from Senator Willesee, suggesting that I would not say outside the Parliament that Mr. Chamberlain denied that any member of the Australian Labour Party stood with a Communist on a unity ticket, I shall be happy to say it outside the Parliament in two minutes’ time.

page 629

QUESTION

GOVERNMENT CONTRACTS

Senator WILLESEE:

– As the Minister representing the Minister for the Interior rather misinterpreted my earlier question, I shall repeat it. I preface it by saying that, as I understand the position, there are three types of tenders. The first is the open tender. The second is the tender upon invitation, which the Minister adequately described. The third, which is the type in which I am interested, results when the department publicly requests tenderers to register for a particular job. This type of tender falls between the other two, the open tender and the tender upon invitation. My question is: For what type of jobs are people invited to register as tenderers? What is the purpose of asking people to be registered as tenderers rather than calling open tenders?

Senator WADE:
LP

– The department has devoted a great deal of time to a study of the United Kingdom system, whereby most public works are done through what are known as trade lists. People in the United Kingdom who have goods or services to supply are registered as suppliers of those requirements. A department in need of those goods or services examines the trade lists and makes an inquiry as to price of those who are in a position to supply. We in Australia have recently had a look at that system. Because of the specialized and confined areas in which departments in this country are obliged to seek their requirements, as compared with departments in the United Kingdom, some consideration has been given to the operation of trade lists. I do not know what stage the examination has reached, but I shall ask my colleague to supply the honorable senator with the specific information that he requires.

page 629

QUESTION

TARIFF BOARD

Protection for Australian Gramophone

Equipment Industry

Senator HANNAN:
VICTORIA

asked the Minister for Customs and Excise, upon notice -

Relative to the list of goods recently referred for advice to the Tariff Advisory Committee, has any evidence been received from either Australian importers or Australian manufacturers in respect of Tariff Item 319(b)(5) which relates to- (i) Heads, pick-up, for sound producing equipment; (ii) Tone arms for gramophones, phonographs or other talking machines; (iii) Motor mechanisms including motors for gramophones and phonographs, and, when imported with and for use therewith, mounting plates, turntables, pick-up arms and heads, and volume controls; and (iv) Turntables other than those known as 12-inch for gramophones, phonographs or other talking machines?
If such evidence has been received from either branch of the industry, is the Minister in a position to advise the Senate what action, if any, is to be taken in regard thereto?

Senator HENTY:
LP

– I now furnish the following answer to the honorable senator’s questions: -

The Tariff Advisory Committee has recently considered the question of the appropriateness of the level of duties, following removal from Customs by-laws, on pick-up heads, tone arms, motor mechanisms and turntables for gramophones and has made certain recommendations. Before taking any further action I will want to discuss the position with my colleague, the Minister for Trade.

page 629

QUESTION

BEEF

Senator HENDRICKSON:

asked the Minister representing the Minister for Primary Industry, upon notice -

As the price of beef is important to Australian consumers and beyond the means of the Australian worker, what is likely to be the attitude of the Australian Government representatives to the questions involved in relation to the minimum prices which the United Kingdom will guarantee for Australian beef during the next three years?
Does the Government subscribe to the view of departmental officers that prices for Australian beef in the United States of America will fall this year?

Senator WADE:
LP

– The Minister for Primary Industry has supplied the following answers: -

Minimum prices under the fifteen years meat agreement have already been fixed for beef for the period 1961 to 1964 but negotiations will be held later this year to determine the minimum prices to operate for the period 1964 to 1967. They will be fixed in accordance with the provisions laid down in the agreement and with regard to current market prices operating in the United Kingdom.
The departmental assessment was made in February last and the conclusions drawn related to the present cattle cycle in the United States based on cattle population figure of 101,500,000 head as at 1st January, 1960. This figure has subsequently been revised by the United States Department of Agriculture involving a downward adjustment of 5,000,000 head. United States prices for beef imports from Australia are at present firm.

page 630

QUESTION

MEAT

Senator PEARSON:

asked the Minister representing the Minister for Primary Industry, upon notice -

What steps are being taken, or are likely to be taken, by the Australian Meat Board to encourage the producers of meat in this country to cater for the requirements of the North American Trade, following on the report of Sir Douglas Copland, on his return from leading the Government-sponsored trade delegation to North America late in 1960?

Senator WADE:
LP

– The Minister for Primary Industry has supplied the following answer: -

With the development of the Australian export trade in boneless meat to the United States in October, 1958, action was taken from the outset by both the Department of Primary Industry and the Australian Meat Board with the object of ensuring that Australian meat exporters were in the position to take full advantage of this important market outlet. Initially, the Commonwealth Chief Veterinary Officer was sent over to look at the position. In order to meet the American requirements, the Commonwealth veterinary and meat inspection staff was increased, hygiene requirements were intensified at meat export establishments and, in general, export meat inspection was tightened to the maximum physically possible. The Chief Veterinary Officer will again be visiting the United States next month to examine current problems associated with the sale of Australian meat and to bring himself up to date with American requirements. In addition, the Australian Meat Board has sent a number of delegations to the United States to examine the position, and early in 1959 the board appointed its own representative in North America to study and report on the market. A number of personal visits have also been made by Australian meat exporters to study at first hand distribution, market requirements, promotional methods, &c. The end of all these activities is that Australian exporters have been shipping to the American market with considerable effect since October, 1958.

page 630

CHEMICAL PHYSICS LABORATORY, CLAYTON, VICTORIA

Report of Public Works Committee

SenatorO’BYRNE. - I present the report of the Public Works Committee on the following subject: -

Erection of a Chemical Physics Laboratory at Clayton, Victoria.

I direct the attention of honorable senators to the important and valuable research that is being undertaken by the Division of Chemical Physics of the Commonwealth Scientific and Industrial Research Organization. The division was established in 1944. It is doing valuable work in the promotion of technical efficiency in established industries, in stimulating the establishment of new industries, in encouraging the use of raw materials of Australian origin, in seeking substitutes for imported materials, in finding uses for by-products not utilized, and in studying national problems to which the research staff can contribute by way of their experience in other fields.

The committee found that the existing accommodation incorporated virtually none of the facilities desirable for the type of research work being undertaken, and it directs attention to the fact that the staff is at present accommodated in a sprawling group of buildings on a site at Fishermen’s Bend which is shared with the Aeronautical Research Laboratories of the Department of Supply. The space occupied by the division comprises part of one floor of a permanent laboratory block, two makeshift factory bays with temporary mezzanine floors, two buildings constructed from disposal Army huts shortly after the war, and one small hut. We found that there was overcrowding and that there was an urgent need for a new laboratory. The site of the proposed building adjoins the Monash University. It is ideally located. The C.S.I.R.O. authorities believe that proximity to the university will encourage young scientists studying there to take a closer interest in this type of work.

The building which is proposed, and which the committee recommends, will meet requirements for approximately ten years. We are finding, in our investigation of many of these very important projects, that even longer planning is necessary. The building will be fully air conditioned. Extra air conditioning will cost £34,000. The committee believes that the expenditure of that additional amount is justified because of the intricate nature of the research. Special assurances were given that the vibration problems associated with the work to be conducted in the building have been met in the design. The estimated cost of the proposed building is £415,000. With the addition of extra air conditioning, which is recommended by the committee, the erection will cost a total of £449,000.

On behalf of the committee, I should like to pay tribute to the great work that is being done by scientists and research workers in the Division of Chemical Physics of the C.S.I.R.O. We hope that the erection of the proposed building will be expedited so that these officers can get on with the magnificent work that they are doing.

page 631

SPECIAL ADJOURNMENT

Motion (by Senator Spooner) agreed to -

That the Senate, at its rising, adjourn till Tuesday, 2nd May, next.

page 631

EXPORT PAYMENTS INSURANCE CORPORATION BELL 1961

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator SPOONER:
New South WalesVicePresident of the Executive Council and Minister for National Development · LP

– I move -

That the bill be now read a second time.

This bill will put into effect one of the measures recently announced by the Government designed to encourage Australian exporters. These measures will strengthen both the immediate and longer-term export earning capacity of our primary and secondary industries.

The Export Payments Insurance Corporation itself is a relatively new authority, having been established in 1956. Although it has been in operation for less than four years its worth has been increasingly appreciated by Australian exporters. It has already issued policies with a face value of over £75,000,000, and the number of policies involved has increased year by year. The corporation’s business has included a wide range of Australian primary and secondary exports to over 100 countries. At the present time it has current policies which amount in value to over £24,000,000.

I remind the Senate that the corporation is not in competition with the commercial insurance companies for this business - export payments is a field in which these companies do not operate because of the magnitude and nature of the risks involved.

At present the corporation is charged under the act to conduct its operations on a no profit-no loss basis. This means that over a period of years the corporation must secure sufficient revenue to meet all expenses properly chargeable to revenue. To carry out this policy effectively, the commissioner is obliged to observe orthodox insurance principles where these are applicable. One of these is an acceptable spread of risks between markets. Another is that the payment term involved in a transaction must be such that the risk can be assessed with some confidence.

The purpose of the bill is to enable export payments insurance cover to be extended to transactions which the Corporation would not, or could not, ordinarily cover. Under the bill the Government would be empowered to authorize cover in such cases where it considered that it would be in the “ national interest “ to take such action. Quite deliberately the Government has made no attempt to define what would consitute “ national interest “ in this connexion. However, later I will indicate some broad considerations which could influence the Government’s decision as to whether particular transactions should be offered cover in the national interest.

The bill provides that the commissioner would refer to the Minister for Trade proposals which the corporation would not normally cover but which could merit consideration as “ national interest “ propositions. The responsibility for referring cases to the Government will therefore rest with the corporation. Every case so referred will be considered on its merits by Cabinet Ministers, including, naturally, the Treasurer (Mr. Harold Holt) and the Minister for Trade (Mr. McEwen). It will be for Ministers to approve or otherwise each and every individual proposal referred to them.

The corporation, as I have indicated, must observe orthodox insurance principles in the conduct of its business where these are applicable. However, the Commonwealth, when considering whether cover should be granted on “national interest” grounds could take into account considerations which are wider than those with which the corporation is concerned in the daytoday operations of its business. Examples of such considerations may be stated as follows: -

Whether the proposition holds promise of opening up worthwhile new export markets for Australian products;
Whether an industry with high export potential would be stimulated;
Whether the transaction was important for a particular Australian area of industry from the point of view of development; and
Whether the transaction would confer some obvious and significant benefits for our trade relations with the country concerned.

The corporation will in effect act as the agent of the Government in matters such as the issuing of contracts, collection of premiums and payment of claims where cover is granted in the national interest.

Business written under the “ national interest “ clause will be treated entirely separately from the normal operations of the corporation. Separate accounts will be maintained and presented annually to the Parliament. Such business will not be included within the ceiling on the corporation’s outstanding liabilities, which is at present fixed in the legislation at £50,000,000. It is envisaged that the premiums payable under the national interest provision will vary with the assessment of the risks involved in each case.

In reaching its decision to amend the act the Government was influenced by the fact that similar provisions have operated successfully in countries such as the United Kingdom and Canada. In both cases the claims experience has been satisfactory. In fact, Canada has yet to pay a claim, although business of over 300,000,000 dollars has been written. The United Kingdomis also showing a substantial surplus on its “ national interest “ operations since their inception some ten years ago. During the year ended 31st March, 1960, the United Kingdom wrote business of an approximate value of £47,000,000 sterling under this provision.

I would like to point out to the Senate that export payments insurance cover, because it gives to the exporter a guarantee of payment, can be of considerable assistance to him in arranging finance. This fact has been emphasized by the Australian trading banks. This benefit will, of course, apply equally to transactions insured under the “ national interest “ provision. In examining this matter the Government had before it the recommendations of the Consultative Council of the Export Payments Insurance Corporation and the Export Development Council. Both of these councils are composed of prominent businessmen. They considered that the Commonwealth should insert a “national interest” clause in the legislation. Support for this action also came from the Associated Chambers of Manufactures of Australia, and the Railway Rolling Stock Manufacturers’ Association.

This measure is further proof of the Government’s determination to keep abreast of exporters’ requirements in this increasingly important field of export payments insurance. I commend the bill to the Senate.

Debate (on motion by Senator Kennelly) adjourned.

page 632

DEFENCE FORCES RETIREMENT BENEFITS BILL 1961

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– I move -

That the bill be now read a second time.

This bill proposes several amendments to the Defence Forces Retirement Benefits Act 1959, which provided a comprehensive revision of the retiring benefits for members of the Defence Forces. Honorable senators will recall that in 1957 the Government decided to establish a committee, under the chairmanship of Sir John Allison, to review the pay and retirement benefit conditions of members of the services. The act, which commenced on 14th December, 1959, provided new rates of pensions and other retiring benefits which were substantially in excess of the benefits previously payable. The act also provided for amended rates of contributions for the increased benefits. It was necessary to make special provisions to cover members of the forces who were serving at the date of commencement of the act and who had been contributing for the previous benefits.

Two of the proposed amendments provide a further period of time within which members may exercise a right of election granted by the 1959 act, and a third amendment deals with the gratuity entitlement of a limited number of serving officers. These three amendments have been recommended by the Defence Forces Retirement Benefits Board, and the remaining amendments are the product of experience in the administration of the act.

Members of the defence forces who were contributing to the fund at the date of commencement of that act could elect within four months not to contribute for all or part of the additional pension provided by the act. A number of members made an electron but had second thoughts and requested approval to wtihdraw that election and to contribute for an increased pension. This bill grants a further period of two months during which members who elected not to contribute for all or part of the additional pension may revoke that election and become contributors for additional pension.

The 1959 act also provides that a member who had elected in 1948 not to become a contributor to the fund may revoke that election and elect to become a contributor for full benefits as from 2nd July, 1948. Under the act, such a revocation and election had to be made before 14th April, 1960, but because of the large number of men involved it was not possible to complete all administrative action by that date. The bill extends to 1st August, 1960, the period during which an election may be made and will thus permit the Defence Forces Retirement Benefits Board to deal with elections received up to that date.

The bill also preserves the rate of gratuity payable on retirement to officers who were serving at 14th December, 1959.

Previously, the entitlement was at the rate of one and one-half times the amount of their contributions, and the 1959 act provides gratuity at a fixed amount for each year of service. This fixed amount proved, in some cases, to be less than the previous entitlement, and this bill will continue, in those cases, the one and one-half times formula in respect of contributions being paid at 13th December, 1959. It also provides, for officers who were serving as “ other rank” members on 14th December, 1959, the continuation of the one and one-half formula in respect of their service in the ranks if the formula provides a greater benefit than the fixed amount.

A member who is prematurely retired and who is contributing for additional pension for his rank at 14th December, 1959, will not have paid to the fund sufficient to pay for his share of the additional pension. In these circumstances, the 1959 act provides for a lesser pension, or full entitlement on payment of a lump sum. The bill applies this provision to a member who is contributing for additional widow’s pension or for the additional pension due as a result of a promotion.

The 1959 act provides that the reduced pension andthe lump sum payment shall be determined by the board on the advice of the Commonwealth Actuary, and that the board in making a determination and the Commonwealth Actuary in advising the board shall have regard to certain factors. Since it is the actuary who makes the calculation, the bill provides that he only shall have regard to these factors.

Other provisions of the bill are minor drafting amendments, or are consequential to the provisions I have outlined. I commend the bill to honorable senators.

Debate (on motion by Senator Kennelly) adjourned.

page 633

NATIONAL HEALTH BILL 1961

Bill received from the House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to introduce a number of amendments to the National Health Act. The amendments do not affect the basic principles of the act, but are in the nature of machinery amendments to enable certain aspects of the schemes to operate more smoothly.

The first of the matters dealt with in the bill is the definition of “ contributor “ for medical benefit purposes. The new definition in clause 3 substantially restates the existing definition and adds a further provision to the effect that the eligibility of a person who was a “ contributor “, as previously defined, shall continue unchanged. The effect will be that persons who become contributors after 1st July next will be eligible for Commonwealth benefits provided they contribute for fund benefits equal in range and amounts to the benefits in the First Schedule to the National Health Act. All contributors who are at present eligible for Commonwealth benefits will continue to be eligible provided they continue their present membership of a registered fund.

A further amendment will have the effect of easing a limitation on the payment, of hospital benefits from special accounts. At present special account hospital benefits are limited to the “ gross fees “ charged by the hospital for the accommodation and nursing care of the patient. Hospitals in some cases charge extra amounts by way of theatre fees, drugs, dressings, special nursing and laundry. The amendment effected by clauses 6 and 7 of this bill will allow these extra charges to be covered by benefits paid from the special account in cases where the patients’ insurance coverage is high enough to meet the extra charges as well as the “ gross fees “.

The bill also provides for an amendment of the constitution of the Pharmaceutical Benefits Advisory Committee. This is the expert committee which advises tha Government on what drugs and medicines are to be listed as pharmaceutical benefits. The committee has done valuable work for the Government in a difficult field. The work of the committee has become extremely onerous, more particularly since the range of pharmaceutical benefits was considerably widened a year or so ago. With a view to strengthening the committee, it is proposed to increase by two the representation of medical practitioners nominated by the

Federal Council of the British Medical Association. The panel of names to be submitted by the association for this purpose is proposed to be increased from six to ten.

The remaining clauses of the bill are merely machinery provisions, and I will be pleased to supply any further information desired by honorable senators at the committee stage. I commend the bill to honorable senators.

Debate (on motion by Senator Kennelly) adjourned.

page 634

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1961

Second Reading

Debate resumed from 19th April (vide page 615), on motion by Senator Paltridge -

That the bill be now read a second time.

Senator McMANUS:
Victoria

.- Before the debate was interrupted last night I had made it clear that the Australian Democratic Labour Party would support the proposal to reduce the rate of sales tax on motor cars from 40 per cent, to 30 per cent. I had also made it clear that we would support an amendment that will be moved at the committee stage and which will be designed to seek a refund of the additional amount of tax paid by persons who bought cars during the period for which the increase operated. Having said that, I was proceeding to make what I described as a plea for the poor motorist. I was pointing out the extent to which the Treasury officials and Ministers are imposing taxes upon the motorist - a practice which proceeds, apparently, from a belief that in these days a motor car is, as it was 40 years ago, a luxury which can be afforded or should be used only by a very small section of the community.

To-day a motor car is a necessity. It is regrettable that governments, both Federal and State, which are in need of finance continually adopt the attitude that they can go to the motorist and take money from him. There is a good deal of truth in a statement that was made at the 1961 annual general meeting of the National Automobile Dealers Association of the United States of America, when the president of the International Office for Motor Trade and

Repairs, Mr. Permeke, made comments which 1 think apply to most countries. This is what he said -

The motor vehicle is overburdened with taxation in every country in the world. The products, including gasoline, trucks, automobiles, motor cycles, and other automotive supplies, draw taxation like a magnet draws iron shavings. Government bureaucrats, seeking a place to tax, seek out our industry like flies swarm to molasses

In some countries one-half of what the customer pays for a new automobile is taxation in some form or another. In your great country-

He was referring to America - at least one-third of every automotive dollar goes to some form of taxation.

I should like to know the amount that is levied by way of taxes in this country. I should say that we are not far behind the practice abroad.

– I believe that television has an educational value; but when I look at the programmes that are to be seen night after night and which emphasize violence to a degree that demands the taking of some action, I start to wonder whether the educational influence is good or bad and whether it will cause trouble in the years to come. I do not think that the increase of tax was necessary. The Government adopted other measures at the time it increased sales tax on motor cars and it was found that those measures have produced the required result. The increase of the sales tax proved to be a failure. I am glad that the Government has had the courage to admit that it acted wrongly and has introduced this legislation to restore the rate of tax to what it was previously.

Senator Robertson:

– Figures prove that the increase of sales tax had a salutary effect.

Senator McMANUS:

– Figures may be produced to prove whatever you want to prove. I have no doubt that in this connexion statistics have shown a decrease over the relevant period in the number of motor car registrations, but I think that the Government could have achieved the desired effect in other ways. To increase sales tax to such a savage extent was entirely unjustified.

Dealing with the submission that the increase of tax should be refunded to those people who bought cars during the relevant period, I have had correspondence from a number of people who were caught by the increase. Within the last few days I received a letter from a Church of England minister who was caught, and caught badly. He is a man who does not receive a very considerable stipend and the increase of tax was a serious matter for him. Other people have been caught. I sympathize with some of them and with others I do not sympathize as much. Dealers have been referred to. I do not have much sympathy for the big dealers who advertise every twelve months that they have made profits of up to 45 per cent, on the capital invested in their firms. It is amazing to me why such firms, which seek sympathy in the community, should advertise that they make profits of 40 and 45 per cent, on their capital investment. Surely they realize that such statements lead people to the conclusion that they are charging extortionate prices for the cars that they sell. The people for whom I have some sympathy are the small dealers - the men in small garages who have not had a very good time in recent years. Many honorable senators know of such people who run small businesses and they know that those people are having a pretty tough time. Many of them were caught by the increase of sales tax because they had bought cars and had them in their showrooms prior to the increase. The Government has declined to do anything to help those people. I remind the Government that those small dealers who held cars just prior to the increase of sales tax were unable to take advantage of the increase. The sales tax legislation prohibits dealers from making a profit on the tax. Very rightly dealers are not allowed to make a profit on the sales tax, but it seems only fair that they should be given some consideration when the tax is reduced and when they are left with cars in their showrooms on which tax was paid at the higher rate. I know that some people will say that motor car dealers do pretty well. Well, a few of the big dealers may do well, but I know that many small dealers are not doing well and I think they are entitled to some consideration.

My leader and I will vote for the second reading of the bill and we will support the amendment.

Senator WOOD:
Queensland

.- I have, much pleasure in supporting this bill, which abolishes the increased sales tax on motor cars and restores the rate to 30 .per cent. Honorable senators will remember that during the closing stages of the last session the legislation to increase the sales tax on motor cars was strongly debated in this Senate and very strong feelings were expressed about the proposal. It is hardly necessary for me to remind honorable senators that on that occasion I strongly opposed the increase of tax. I congratulate the Government on introducing this legislation to reduce the tax to 30 per cent., not that I think that such a rate is a low one. However, the sales tax position is now as it was prior to the legislation introduced late last year.

When the legislation to increase the tax was before the Senate last year I made certain statements which, I am happy to say, have now borne fruit. It is clear from the statement made by the Prime Minister (Mr. Menzies) when announcing that the rate of tax would be restored to 30 per cent, that the Government is of the, opinion that a mistake was made. It is useless for the Government or anybody else to try to cover up the facts and say that the increase of tax served its purpose. I am gratified that the Government has been big enough to recognize that it made a mistake and has decided to abolish the increase that was applied late last year. It is good not only for individuals but also for governments to acknowledge their mistakes. A government increases its stature in the eyes of the public by admitting its mistakes more than it does by quibbling and trying to cover up.

Senator Scott:

– Did the Government recognize that it made a mistake?

Senator WOOD:

– The Prime Minister clearly stated that psychological effects had been created and that they had gone further than the Government had anticipated. I do not gloat over what has happened. I am now stating the facts just as calmly as I stated my attitude last year. The sales tax on motor cars is now back to 30 per cent, and we should be happy about that. I congratulate the Government on having the courage to retrace its steps and restore the tax at 30 per cent.

The Opposition has foreshadowed that it will move that the extra 10 per cent, sales tax be refunded to people who bought cars during the relevant period.

Senator Hannaford:

– Were you not reported as having advocated that step?

Senator WOOD:

– Yes. I do not quibble over what I said. I stated publicly that I thought the Government should refund the additional tax. If the Government had taken that step it would have been to its credit and possibly to its benefit. I admit frankly that I made a statement advocating a refund of the additional tax. That was possibly the first statement made to that effect. The Government, which is in charge of the finances of the country, has made clear that it is not prepared to refund that tax. In the House of Representatives the Opposition moved an amendment similar to the one that has been foreshadowed in this chamber. In the other place the amendment was soundly defeated, indicating that the Government had no intention of refunding the additional tax. I take the, view that if this chamber passes an amendment to the effect that the extra tax should be refunded, the House of Representatives no doubt will reject the amendment. Therefore I see no good purpose in pursuing this matter further. I do not retract one word of my earlier statements - I have not changed my opinion on this matter - but it would be foolish to think that the Opposition’s proposed amendment would be acceptable to the Government. A very clear decision was given in the other place that it is not acceptable. I have not changed my views on this matter but I take the commonsense approach. In the circumstances I am not prepared to support the proposed amendment.

However, if the Government is not prepared to refund the additional tax to all people who bought cars during the relevant period there is one matter that it should consider. Senator McManus has pointed out that the increase of sales tax inflicted hardship and injustice on some people, though not on all those who purchased motor cars during the relevant period. Probably there were many others who bought cars although they did not need them as urgently as they have suggested they did. Consider the case of the small motor retailer who does not conduct his business in the capital cities or close to the sources of supply. Dealers in the capital cities have a great advantage. They may draw their supplies as they make their sales. They probably would not have paid sales tax on motor cars that were in their showrooms. But that is not the case with dealers in the far flung areas of the Commonwealth. I have in mind particularly dealers in Queensland. They have been at a very great disadvantage. I have copies of a couple of letters that were sent to the Deputy Commissioner of Taxation by firms in the city of Cairns. I will read them in order to let the Senate hear the thoughts of those firms. A letter from F. R. Ireland and Company, of Cairns, reads -

We are retail motor dealers, and for some months prior to February 1st, 1961, we had adopted the practice of purchasing our stock of new vehicles for cash, using our own resources plus bank accommodation, instead of using Hire Purchase companies’ facilities for this purpose.

When the sales tax was increased on November 15th, from 30 per cent, to 40 per cent, on passenger vehicles, any vehicles which we had in stock at that time, and on which we had paid the lower rate, had, rightly, to be sold at the lower rate.

When, a few weeks later, the sales tax was reduced on February 22nd, from 40 per cent, to 30 per cent., we had on hand sixteen new passenger vehicles on which we had paid the 40 per cent, sales tax, and which, of course, we will now have to sell at the 30 per cent. rate.

This letter was written on 28th February. It continues -

This will mean a very considerable loss to us of £1,033 10s. 4d., which we feel is very unfair, and a loss which no business should be expected to bear.

Our method of purchase was the simplest and most accepted method known - that is cash on delivery - and yet we are faced with this tremendous loss through absolutely no fault of our own. There is no possible way in which we could have protected ourselves, and no compensating circumstance was available to us when this tax rate was increased from 30 per cent, to 40 per cent, a few weeks previously.

When the very acceptable reduction in the tax rate was announced after such a short period, we feel sure that it was never envisaged by the Government that firms such as ourselves would be put to such a serious loss.

Sitting suspended from 12.48 to 2.15 p.m.

Senator WOOD:

– I also have a letter, Mr. Deputy President, from McDonald Motor Agencies Proprietary Limited, of Cairns, which indicates that that company is in a similar position to that of the company mentioned by me before the suspension of the sitting. It is stated that the total loss to the company, because of the reduction of sales tax on motor cars from 40 per cent, to 30 per cent., is £398 18s. 5d. A man connected with a Mackay motor company has told me that his firm is in a similar position because of the tax which it had to pay on cars that it had on its showroom floor.

The motor dealers in the areas that I have mentioned are in a different position from that of dealers in the capital cities. As I stated earlier, it is possible for dealers in capital cities to draw their supplies of motor cars direct from the motor manufacturers, but dealers in country towns on the coast of Queensland and in other parts of Australia away from the capital cities, are at a disadvantage in that respect. An increase of sales tax, or the removal of an increase, also places such dealers at a disadvantage. I do not think it is the desire of anybody that people in areas that are remote from the capital cities should be in a less advantageous position than are people in the cities. For that reason, I ask the Government to consider this matter.

I suggest that instead of dealers having to pay sales tax on receipt of cars, the basis of the payment of tax might be that it be paid at the time of sale to the customer. The customer would then pay the tax, instead of the position being as it is at the present time. I believe that my plea in this respect has a lot of merit in it. I understand that the Government is not prepared to refund to the 60,000 individuals who purchased cars during the time that the tax operated, the amount of additional tax that they paid. However, I am of opinion that motor dealers in country areas are in a different category. It may be said that some people will gain and some will lose when sales tax is either increased or reduced, but I point out that in the circumstances to which I have referred, the motor dealers have had to sell cars at the old rate of tax and have received no advantage.

I know that the amounts involved, such as the £1,000 for F. R. Ireland & Company, and the £398 for McDonald Motor Agencies Proprietary Limited, may not be large from the point of view of the big business people in the capital cities, but nevertheless they are considerable sums for relatively small dealers. I make an earnest plea to the Government to consider the position of such motor dealers because I believe that they have a special case which warrants earnest and sympathetic consideration. I support the bill. I am not prepared to support the proposed Opposition amendment for the reasons I have stated.

Senator TOOHEY:
South Australia

– 1 shall support the amendment to be moved by the Opposition, calling on the Government to refund to people who purchased motor cars during the currency of the increased rate of sales tax, the additional amount that they were obliged to pay because of the Government’s action. In this debate, Mr. President, a tremendous amount of extraneous matter has been introduced. I am wondering whether you will permit me also to step out of line, and perhaps even to do so to the extent that you permitted ‘Senator Scott. I have read the honorable senator’s speech. The thing that struck me about it was that although he spoke for 32 minutes, he devoted only about six minutes to the subject of sales tax. The remaining period of 26 minutes was devoted to dealing with unity tickets, unemployment in 1949, and a coal strike in that year. Generally speaking, he ignored the subject of sales tax.

Senator Hannaford:

– I hope that the honorable senator will make a similar analysis of the speech of his deputy leader.

Senator TOOHEY:

– I did not notice that the Deputy Leader of the Opposition had trangressed to the extent that Senator Scott did. Had he done so, or had he departed so obviously from the subject before the Senate, I have no doubt that alert honorable senators on the Government side would have taken a point of order and asked that he be brought back to the subject before the chair.

I do not know whether you will permit me, Mr. President, to reply to some of the statements that were made by Senator Scott. Perhaps you will be tolerant. All that 1 wish to do in that regard is to refute again the oft-repeated lie which honorable senators on the Government side like to associate with employment conditions in 1949.. They speak of a certain percentage of unemployment during that year and refuse to face the truth of the matter, which is that the unemployment position to which they refer was created artificially and not as a result of action on the part of the then Labour Government. The position was created artificially as the result of a coal strike which practically paralysed industry in New South Wales. For three months before that eventuality there had been a condition of full employment, under a Labour government, and there was again such a condition three months afterwards. I think that I am entitled to depart from the subject-matter of the debate to that extent, in order to reply to Senator Scott and to point out just how fallacious, unreasonable and untrue was the statement he made in regard to unemployment in 1949.

Returning to the subject of sales tax, Mr. President, we on this side of the chamber have been charged with irresponsibility because we ask that the revenue from the collection of tax at the increased rate should be refunded to persons who purchased cars during the time that the increased rate applied. It is said that such a refund would be without precedent in the legislative history of this country. Apparently, the request must be rejected simply because there is no precedent. I do not think that any honorable senator on the Government side has argued that it would be wrong in principle or unjust to refund the tax. The argument of the Government has been directed to the lack of precedent. It is said that we cannot establish such a precedent.

Without going deeply into the question of the Government taking arbitrary action against the people, action which circumstances subsequently have proved to be wrong, I point out that there are certain judicial bodies which have forced governments to accept responsibility in such matters. Other people have been able to wring justice from governments by using the judicial means at their disposal, and the people who purchased motor cars during the three months’ currency of the increased rate of sales tax have a similar just cause against the Australian Government. It is interesting to go to the very kernel of the matter and to restate the reasons given in another place by the Prime Minister when he first made reference to the increase from 30 per cent, to 40 per cent, of the sales tax on motor vehicles. He dealt with the machinery of the matter, said what the percentage would be, and then continued -

We are doing this, firstly, to cut back the rate of buying of these vehicles, which has become higher than the current condition of our economy can reasonably be expected to support.

That was the reason he gave for the imposition of the additional sales tax. He said, in effect, that it was a matter not so much of cutting back on credit as of pruning the motor body building industry because, in the opinion of the Government - which I think was wrong - the production of motor vehicles was having a serious effect upon the economy. He went on to talk about the possibility of review. This matter becomes important when we remember that the increase had a currency of only three months. Referring to the Government, the Prime Minister said -

It holds itself ready to review the sales tax rate when it feels the situation of the industry and-

This is the important part. the state of the economy looked at together appear to warrant some adjustment.

I say that this removal of the 10 per cent, increase does not fit in with the Prime Minister’s assurance that those two matters should be looked at together. There was no relaxation of the credit squeeze at the time when the Prime Minister, just prior to leaving for overseas, announced out of the blue and obviously without any warning to the rank and file members of the Government parties and possibly - I say advisedly - without any warning to Cabinet, that the increase of 10 per cent, would be rescinded and that the sales tax on motor vehicles would revert to, the 30 per cent, rate applicable before November of last year. When the Prime Minister made that statement, just prior to going abroad, he did not say that the decision had been arrived at against the background of the other measures to which he referred when he originally mentioned the possibility of the increase being removed at some future time.

The Government has shown a high degree of confusion in all its thinking on this matter. The Prime Minister assured the Parliament that the removal of this increase would be effected against a background of the general economic situation of the country. Although the credit squeeze still applies and although industries are being forced, because of the present economic position, to lay off men in such large numbers that chambers of manufactures, in Victoria in particular and. throughout Australia in general, are showing evidence of grave disquiet and fears about the country’s industrial welfare, there is no indication whatever that the Government intends to make credit available to the extent to which it was available when the sales tax was increased last year. Therefore, the Prime Minister has failed to honour the assurance he gave to the Australian people when the increase was imposed - that its removal would be effected against the background of the general economic situation..

I return now to the question: Is it wrong to ask the Government to refund to the people who were unfortunate enough to purchase motor vehicles in those three months the amount of tax that they were in effect fined? I think that we can liken the additional tax to a penalty or fine imposed on one section of the Australian community chosen at random. That section consists of the people who happened to purchase motor vehicles within the three months’ currency of the higher sales tax. In effect, this was a severe penalty inflicted upon a section of the Australian community. Senator Scott sought to justify it by saying that the action resulted in a loss to the Government of £1,000,000 in revenue because of the decrease in the number of new motor vehicles registered when the sales tax was increased I think that that is a pretty poor way of looking at a moral question. All that Senator Scott was concerned about was the fact that the Government had lost £1,000,000 out of the thousands of millions of pounds - that is not an exaggeration - which the Government gathers in taxes in any year. To suggest that the loss of £1,000,000 would worry the Government in any way is absurd. However, the £100 penalty that the Government inflicted on Tom Jones in New South Wales and his counterparts in other States caused far greater hardship and was a much more severe penalty than the loss of a meagre £1,000,000 to the Government. Senator Scott sought to surround the Government with a halo because it was prepared to lose £1,000,000 while at the. same time inflicting hardship on many people.

Senator McManus made a valid point in his contribution to the debate when he said that the Australian motorist was being soaked repeatedly, as a result not only of the Commonwealth Government’s actions but also of the actions of State instrumentalities. When one considers the. multitude of taxes that weigh heavily upon the. Australian motoring community, one wonders sometimes at the hardihood of people who continue to look forward to owning a motor car. It is not a question only of the sales tax. That increases the cost of a vehicle and, as one senator on the Government side has said on more than one occasion, causes a rise in the cost structure. The addition of £300 or £400 to the cost of a motor car is bad enough in itself. It is a heavy burden to be carried by the motorist, but it is only one of his burdens. He has to carry the burden of registration fees, which are about £12 a year for an ordinary vehicle. He has to pay driving licence fees and he has to pay a very high price for the petrol to run his vehicle, because all our petrol is imported from overseas. His running costs are probably two or three times as high as those of a car owner in the United States of America or any other country where petrol is produced. Surely the Australian motorists receive enough kicks in the face from various Commonwealth and State instrumentalities without there being any necessity for those who purchased motor vehicles between November and February last to accept a penalty of about £100 because the situation got out of hand as a result of the whims and vagaries of the Government and its advisers.

Senator Scott said that the value of imports had increased in twelve months from £152,000,000 to £200,000,000 largely because of the activities of the motor body building industry. When such statements are made by Government supporters, it is important that they be related to the situation that is actually under discussion. That is what happened during the three months when the higher sales tax was in force. Then the additional 10 per cent, was dramatically removed by the Prime Minister in a statement just before he left Australia. I think it is encumbent upon those people who make grandiose statements about what the motor body building industry is costing this country in overseas funds to prove what effect the imposition of the additional 10 per cent, sales tax had during the three months on the overseas balances. The Government informed us on 1st December last that in the September quarter of 1960 imports of petroleum products and other items clearly attributable to the motor industry and motor transportation were running at an annual rate of £200,000,000 compared with a rate of £152,000,000 in the corresponding period in 1959. I do not think that the imposition of the increased rate of sales tax had any relation to the position of overseas funds. I suggest that figures of that kind are thrown in by honorable senators only to confuse the situation. The difference between £152,000,000 and £200,000,000 is microscopic compared with the effect of the increase on the purchasers of motor cars during the period under review. Mention of those figures is designed only to cloud the actual position.

So we return to the basic question of whether the increase was just or unjust to the people of Australia. Without seeking to gain any advantage in debate, I think that it can be fairly said that a number of honorable senators on the Government side were just as doubtful as honorable senators on this side of the chamber of the wisdom of this increase of 10 per cent. A number of honorable senators on the Government side had the gravest doubt about the wisdom, or indeed the justice, of the proposal. I do not raise this matter with any desire whatsoever to gain a debating point; I am dealing merely with statements of fact. I do not think that any of those members on the Government side, in this and another place, have changed their minds just because the Prime Minister decided to remove the tax, without any argument whatever, some little time ago. However, they have reviewed their attitude and state now that they believe it was just for the Government to do what it has done notwithstanding that at the time the tax was imposed they were definitely convinced that its imposition was completely wrong and completely unjust.

I do not know what sum would be involved if the people who bought a car during those three months were to have the tax refunded to them, but as a result of a statement made by a Minister in the Senate I understand that the amount involved would be in the vicinity of £3,500,000. I submit, Mr. Deputy President, that if that is all that is involved it is a microscopic amount when measured against doing the decent and fair thing to people who are already overburdened by taxation. I think too, that whatever our views might have been, and whatever ideas we expressed when we were determining whether this tax should have been imposed, it is obvious to anybody who has studied the situation of the motor body building industry that the increase in sales tax had little or nothing to do with the present state of the industry. Irrespective of wrong impressions that any of us might have had when we were debating the matter originally, I think we are all agreed now that the increase of sales tax did nothing but inflict a penalty on one section of the community. The thing which really brought the motor body building industry to its heels, if I might use that term, was the credit squeeze - the fact that people could not obtain credit to purchase new or second-hand cars. I think it will be generally agreed that the increase in sales tax had no effect whatever and that the credit squeeze did the job of depressing the industry more effectively and will continue to reduce the activities of the motor body building industry as long as this Government continues its restrictive credit policy.

I wish to refer briefly to the position of the motor body building industry generally.

I shall restate something I said at the time we debated this issue three months ago. A claim was made by the Government that terrific inroads were being made into overseas reserves by the motor body building industry. I do not think it can be gainsaid that the expansion of the industry must of necessity make some inroads into our overseas reserves in respect of the purchase of petroleum products and rubber. However, I join issue with those who talk about the depredations of the motor body building industry in relation to the importation of steel. Wild statements have been made about the alleged tonnage of steel that is imported to supply the activities of the motor body building industry, but those statements are not related to fact or reason. It seems to me to be highly significant that although General Motors-Holden’s Limited and its brother organization, Chrysler Australia Limited, have built cars almost completely of Australian materials, they have been attacked and accused1 of creating a crisis in this country as the result of the importation of steel. No reference whatever has been made to fly-by-night organizations that have something to do with the motor body building industry in this country. Those bodies bring manufactured steel pressings and other products into this country and with a skeleton organization put their products together in Australia and then sell them. Nobody has mentioned the damage that those people are doing to the economy. It is significant that the attack was directed against Australian organizations where Australians are employed and whose products are almost completely made of Australian materials.

I think the Government ought to have given consideration to these matters and that some explanation should have been made of the difference that exists between the various companies in this country. Whether they are financially controlled from overseas does not concern me so much. Sometimes I disagree with my colleagues on the investment by overseas companies in Australia. I am not so much concerned with what goes out of Australia as I am concerned with what remains in it. I think that is the important matter and one to which we ought to pay some regard. We should encourage to whatever extent we can those organizations which have spent millions of pounds in what is known as the tooling processes required to produce an entirely Australian car. The Government has said that it is attempting to dampen down these industrial organizations, although I think the better word to use would be curtail. I repeat that organizations in Australia which have striven to manufacture wholly Australian products should be encouraged. Their activities should not be dampened1 down, as the Government says it wishes to dampen them down, using that term in an effort to disguise its real intention.

This matter was debated and thrashed out very fully some three months ago. Most of the things that have been said in this debate were said when the Government brought in the measure to increase the sales tax and other measures to deal with the economic situation. We do not want unnecessarily to indulge in a repetition of arguments that were raised at that time. The Opposition, of course, does not disagree with this measure which is designed to reduce the sales tax on motor vehicles to what it was prior to November of last year. I agree with Senator McManus that that occasion might have been an opportunity for the Government, if it wanted to give some relief to the motoring public of Australia, to say, “ We will reduce the rate to 16* per cent.”. That would have given a greater measure of justice to the motoring community of Australia, but apparently that is not the Government’s intention. However, as I have said, we do not disagree with the principle of a bill which is designed to bring the rate of the sales tax back to what it was in November of last year. The only disagreement we have with the Government on this matter is based on the fact that we think that the Government should refund to the people concerned the additional sales tax that was collected from them.

I am not looking at this matter in terms of scoring debating points off the Government. I said that earlier in the piece, and I still say it. I believe that the Government will be acting wrongly if it does not at least explore whatever avenues may be at its disposal to ascertain the number of people who have been affected by the increased sales tax and to see whether they could be treated, not in any way in a privileged manner, not in any way which would give them an advantage over the rest of the motoring com munity, but merely on the same basis and in the same way as people who purchased cars in August of last year and people who are purchasing cars now.

Senator WRIGHT:
Tasmania

.- This bill for the repeal of the sales tax surcharge of 10 per cent, on motor vehicles, which was imposed by legislation last November, cannot but evoke from me an expression of my great satisfaction that a very short experience of that ill-advised measure convinced the Government that ii was unnecessary and, in the terms of thu announcement by the Prime Minister (Mr. Menzies), of bad effect and undesirable. In my opinion, it was also unwise.

I do not propose to debate an issue which this bill concludes - legislation that was unnecessary, undesirable and unwise. However, the Parliament should not be satisfied with a reduction of the sales tax only to the rate of 30 per cent. In 1956 the sales tax on motor cars and station wagons was increased from 16$ per cent, to 30 per cent. That was declared to be a temporary increase, made in order to adjust the economy at that time, but subsequent experience has shown that it has come to be what can only be called a surcharge which is dangerously inflating the cost structure of this country. I am not saying that this is the time to reduce the sales tax to 161 per cent. The trade is absorbing the sales tax at present and if a reduction of the rate to 161 per cent, were made at this time, that reduction would be a stimulus that would be strangely out of keeping with what I consider to be a well-justified restraint on credit in order to maintain balance in the economy. I am taking this opportunity to remind the Senate that it should require faith to be kept with the undertaking that the increase of the sales tax from 161 per cent, to 30 per cent, would be merely a temporary economic measure, and that it should insist the surcharge be removed at a very early date. When I speak of a very early date, I am speaking in terms of nine months or ten months from now.

This talk by the Treasury to the effect that an increase of prices does not inflate the cost structure is, to me, just stupid. All sorts of terms are used by Treasury officials these days. They say, for example, that to abstain from a field of tax would cost the Treasury so much. Those are words that simply belie the situation. But I must not be drawn into that field, because when we look at the English budget we see how the Chancellor of the Exchequer, in his new proposals, has made the term “pay-roll tax” almost a term of art. Suffice it for us to deal with the Australian scene.

Mr. Acting Deputy President, I am asking the Ministers to underline a claim by the Parliament that the sales tax on cars should be restored to a reasonable level - which never should exceed 16$ per cent. - at the earliest possible moment, and so keep faith with the understanding upon which the Parliament passed the sales tax legislation of 1956. Resentment against non-compliance with that undertaking was one of the strong motivating forces of the resistance that was offered to the increase that was made last November.

The only other thing I want to say concerns a parliamentary matter. There is not in the sales tax legislation any authority for any officer of this country to exact sales tax merely upon the statement of a Minister, nor is there in that legislation any authority for an officer to fail to collect sales tax merely on the statement of a Minister. The suspension power of Ministers went out three centuries ago. Of course, it would have been completely contrary to my view of what is proper in public administration if the granting of relief from this increased tax had to await the assembly of the Parliament even though the Government were convinced that the increase had been ill-advised and was having adverse effects on the community. When adjustments of customs duties became necessary from time to time, the Parliament moulded appropriate provisions authorizing new rates of duties to be applied as from the day when the appropriate Minister made the proposals in the Parliament. It seems to me that if the sales tax is to be used as an economic weapon, the matter should come before the Parliament, which could authorize the imposition of new rates as from the time of the Minister’s announcement and also authorize the officers to abstain from doing their statutory duty, in this case, from 16th or 26th February up to this time. During that period the law has required the payment of the sales tax on motor cars at the rate of 40 per cent, but the tax has been collected at the rate of 30 per cent. That leads the Taxation Branch to a disrespect of the law.

I claim that consideration ought to be given to including in the sales tax legislation proper provisions to enable a more flexible adjustment to be made both upwards and downwards, according to announcements by the Government from time to time. I hope, of course, that if such legislation is introduced we all will be jealous of seeing that proper safeguards are included. The present situation erodes the confidence of those who administer the law of the country. I believe that from 21st February up to the present time an officer of the Taxation Branch would have been in a most invidious position in having to ignore the law. That attitude, creeping through the federal administration, is a weakness that has not been cured during the twelve years that this Government has been in office.

The only other matter to which I wish to advert is the amendment that has been foreshadowed and which will call for a refund of the increase. I shall be interested to hear the reasons that will be advanced to justify such action. My own view is that such action would be anomalous and most unusual. I cannot see any basis for the claim that this tax should be refunded. The tax has been levied by law and has been paid voluntarily by each purchaser of a motor car, and there is no element of mistake in the transaction. Furthermore, I believe that the complexity of the sales tax in its application to all the units of the motor trade is such that you would never do final justice if you refunded the money merely to the individual taxpayer. There are so many purchasers of second-hand cars, so many persons who have traded in cars, and so many agents whose commission has been made to relate to the current rate of tax, that an attempt to refund the money would simply confuse the administration of an important public matter.

Senator COOKE:
Western Australia

– The Government, by its actions, has conceded that the imposition of a 10 per cent, increase of sales tax as a temporary measure was ill-conceived, that it did not achieve the objective desired by the Government and that it brought in its train very many disabilities which affected the industry, the workers and the financial structure of the country. The amendment that has been foreshadowed by the Opposition is quite justified. Its purpose is to erase entirely the Government’s mistake. The Government says that there would be a lot of complications in refunding to the people who have been unjustly taxed the moneys that have been collected, which amount to £3,800,000.- Of course, the Government did not consider the complications that were caused by the severe and swift introduction, against the best possible advice, of the increase. Nor was any consideration given to the complications that were caused when the tax was restored to the former rate by ministerial dictate and without reference to the Parliament. The damaging effect of the Government’s action has been so widespread that it can be clearly seen. No doubt it was clearly seen by the Ministry when it acted swiftly to correct its mistake.

The motor industry was thrown into confusion when it was passing through a period of difficulty. That applies particularly to the workers in the industry. Automation was being introduced, with a consequent change of workers and, in many instances, a reduction of staff. Then the credit squeeze was applied. That alone was adequate to achieve the objective that the Government desired to achieve. When the Government introduced legislation to increase the rate of tax, it was quite obvious that there was decided dissatisfaction on the Government side of the Senate. Two honorable senators made it quite clear that they strongly opposed the measure. One was so sincere and honest that he voted against it. The other honorable senator, in a very good speech delivered to-day, has shown that he disagrees with the Government’s legislation, even though it remains to be seen whether he is prepared to vote against what he believes to be unjust.

The increase of 10 per cent, in the rate of tax severely affected persons who had contracted to buy cars but who were unable to take delivery of them. Persons who had contracted to acquire a car which attracted tax at the rate of 30 per cent., who probably had disposed of their original vehicle on a lower market, but who had not taken delivery of a new vehicle, suddenly discovered, when the Government dropped the chopper, that they were obliged to pay an extra £100 or more for their new vehicle. The Government’s action has affected also a number of small dealers who brought cars while the higher rate of tax was in operation but who were forced to sell them later when the rate of tax was reduced.

– If the person to whom I have referred had not been the victim of the vagaries of shipping, his car would not have reached Australia until March. He was not able to use his car between the time it arrived here and the time that he himself arrived here. Nevertheless, he was charged the additional sales tax.

I am not making a plea for individuals but I am asking the Government to be reasonable. The Government should grant some right of appeal in cases in which anomalies occur. The Government should be honest and admit that it made a mistake. It should agree to refund the increase of tax wherever possible. The measure that imposed the tax was ill-conceived and did not achieve its objective.

Senator Scott said that the increase of sales tax yielded £3,800,000 and implied that the Government had lost about £1,000,000 as a result of the application of the increase. If the Government has lost about £1,000,000 it may be safely said that the people of Australia have lost considerably more than that. People who bought cars during the relevant period and who use those cars in their business will be able to pass on the cost of the increased tax. The increase must manifest itself somewhere in the cost system. The decision to increase the tax was a mistake and the only w£.y to rectify the mistake is to accept the amendment proposed by the Opposition.

Some honorable senators opposite have claimed that the Government actually lost revenue during the period of the increase, but now that the rate of tax is back to 30 per cent, all those people who deferred buying a car when the rate was 40 per cent, and who felt that the increase was temporary only will buy a car. Obviously, anybody who needs a car will buy one now and whatever revenue the Government lost during the time that the increase applied, will now be recouped by it. The Government has imposed two increases of sales tax in recent years, each of which has been claimed to be temporary. The increase from I6i per cent, to 30 per cent, was said to be a temporary increase, just as last year’s increase from 30 per cent, to 40 per cent, was claimed to be temporary. The Government vacillates in respect of its policies. The effect of the last increase should be removed by accepting the Opposition’s amendment. The Government should admit that it made a mistake - a mistake that has adversely affected motorists, dealers and skilled tradesmen in particular, many of whom have suffered severely as a result of the Government’s action. The amendment proposed by the Opposition has a good deal of merit and should be carried. J appeal to the Minister to make some provision to correct anomalies that have arisen in the application of this unpalatable temporary measure. An appeal should be open to people who have suffered hardship as a result of this increase of tax. Although the increase has been withdrawn quickly, many people have been treated unjustly.

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– I wish to traverse one or two points only in relation to this matter, because I made my position clear when this matter was before the Senate late last year. I am convinced, after a good deal of experience and investigation, that the real reason for the effectiveness of the increase of sales tax was the belief held through the length and breadth of Australia that it was a temporary tax only. When the bill to increase sales tax was before the Senate last year a suggestion was made that the increase should apply for a period! of six months only. At that time Senator Wood pointed out that if you really wanted to deal a death blow to the motor industry you would suggest that the tax was temporary. He pointed out that if the tax was declared to be temporary nobody would buy a car because he would know that the tax would be reduced in six months’ time. Yet through the length and breadth of the land a great many dealers and other people associated with the motor industry were convinced by statements made in this Parliament and in the press that the increase was temporary only. Consequently, there was a drop in the purchase of cars until a stage was reached where monthly sales had fallen by 16,000. This showed that the increase of tax had done the job for which it was designed. By removing the increase when sales had declined to a certain figure the Government honoured the undertaking that it gave when it imposed the increase. The widely held belief that this was a temporary tax made it 100 times more effective than would otherwise have been the case. The lesson to be learned from what has happened is this: If after deep and earnest consideration you believe that for the welfare of this land you must impose a tax, then stand up and impose it. Do not try to hide behind any suggestion that it will be of a temporary nature.

I come now to the proposed amendment about which we have heard so much from honorable senators opposite. If I know anything I know something about the practical application of sales tax. I have lived under sales tax for 40 years - but I have been on the wrong end-

Senator Wright:

– Not quite 40 years.

Senator HENTY:

Santor Tangney. - Do you think they would?

Senator HENTY:

– Suppose they got together and said, “ There will be no refunds. This is a £3,800,000 bonus given to us by the Labour Party. Let us stick to our guns.” What could be done about it?

Senator Tangney:

– We trust people.

Senator HENTY:

– Out of the mouths of babes and sucklings! I completely oppose giving a bonus of £3,800,000 to the wholesale motor car dealers by returning the collections from the additional sales tax, and 1 refuse to support the amendment.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator KENNELLY:
Victoria

.- In the few words that I said in the second.reading debate, I advised the Senate that an amendment would be moved in committee on behalf of the Labour Party. I take it that that amendment has been circulated. I refer to clause 2, which reads -

This Act shall be deemed to have come into operation on the twenty-second day of February, One thousand nine hundred and sixty-one. and’ move -

Leave out the words “ the twenty-second day of February, One thousand nine hundred and sixty-one “, insert “ the sixteenth day of November, One thousand nine hundred and sixty “.

Irrespective of what members of the Government have said, we believe that they recognize that they made a mistake. Senator Scott said that this was not a revenueproducing measure at all. Even if that be so, all we are seeking by this amendment is that the additional sales tax be repaid to the people who suffered. It is true, as the

Minister for Customs and Excise (Senator Henty) said, that this amendment alone will not require that the money be refunded to those people. Every one has understood that. There would need to be a further amendment. If that is the only reason- the Minister has for opposing the amendment, I can assure him that he can disabuse his mind of the idea that the Labour Party is concerned only to hand the money back to a very limited number of people who sold the cars. We know full well that if this amendment is carried, it will have to be followed by another amendment. We propose to take the appropriate action.

Senator Henty:

– Just out of the hat?

Senator KENNELLY:

– No. If you like, 1 will show it to you. The matter occurs in a speech made by the Leader of the Opposition in another place. I did not foreshadow the consequential amendment last night because I knew that the argument advanced by the Minister would be one of the arguments used against the first amendment. So I thought to myself, “ It may be wise to let people just tumble into that argument “, and the Minister did.

Another argument that has been advanced is that moneys collected by way of sales tax have never been refunded before. Last night the Minister questioned me when I stated that sales tax was refunded to an airline company under legislation passed in 1954 and applied retrospectively to 1946. He asked why the government of the day did not collect the money in 1946. I thought I would let him have his say. Of course, he has not read what the AuditorGeneral said in his report in 1954. Under the heading “ Sales Tax on Aircraft “, the Auditor-General stated -

Recent inquiries revealed that sales tax of approximately £393,750 had not been paid by an airline company on aircraft imported since February, 1946. An investigation by taxation officers disclosed that, in addition to £143,750 payable on two aircraft imported at the end of 1953, for which extension of time to pay had been granted, the company concerned had not paid sales tax of approximately £250,000 on fifteen other aircraft imported in earlier years.

The company secured entry of the aircraft into Australia by quoting the number of his certificate of registration under the Sales Tax Assessment Act but failed to declare when the aircraft were placed in commission and to pay the sales tax involved. The total amount of such tax was still owing to the Commonwealth- on 30th June, 1954, but does not appear in the statement of outstanding taxes hereunder because it had not been assessed by the Commissioner of Taxation at that date. lt is noted that, in the Sales Tax (Exemptions and Classifications) Bill submitted to the Parliament on 18th August, 1954, provision is made that sales tax be not payable upon aeroplanes retrospectively to 1st January, 1946.

On 19th October, 1954, the present Leader of the Government (Senator Spooner), in discussing the bill that had been introduced to validate the non-payment of tax, stated -

During the examination of this question, it was revealed that some aeroplanes had been imported and put into operation without payment of sales tax. This was brought about by an irregular but inadvertent use of registered taxpayers’ certificates, in the belief that the same freedom from sales tax as applied to government airlines would apply also to other commercial transport organizations.

The Government says, in effect, that there are two major airlines and that it wants to place them on an equal footing. But of course it does not do that.

Senator Paltridge:

– No?

Senator KENNELLY:

– No, you do not. The Minister for Civil Aviation knows quite well that the Government will not allow Trans-Australia Airlines to operate intrastate in New South Wales. Of course, the refusual to do so confers a great advantage on the competitor of T.A.A. It is of no use for the Minister to thump his chest and say, “ We believe in free enterprise and competition “. The Government simply does not put that belief into practice.

The TEMPORARY CHAIRMAN (Senator Anderson:
NEW SOUTH WALES

– Order! I remind the honorable senator that the committee is dealing with a bill which relates to sales tax.

Senator KENNELLY:

In a further attempt to find a precedent, the honorable senator, if my memory serves me correctly, went back to about 1952 and referred to the remission of customs duty on timber. The situation was that the Tariff Board had examined the timber industry and had recommended that oregon, I think, should be admitted under the bylaw procedure. At the time, there was in Australia a considerable amount of oregon that had been admitted on payment of customs duty. Had the by-law procedure been allowed in respect of oregon that was imported after that date, there would have been in Australia Oregon in two price categories. There would have been some on which customs duty had been paid and some on which customs duty had not been paid. In his wisdom, the Minister at the time, Senator Sir Neil O’sullivan, said that it was far better to make a remission of customs duty for three months so that all the timber could be sold at a reduced rate.

Senator Kennelly:

– Was it?

Senator PALTRIDGE:

– True it is that it was administratively quite impossible to refund customs duty to the purchasers of the higher-priced timber, but the effect of the action taken was to lower the price of all Oregon subsequently sold in Australia, which brought a common relief to the building industry and1 to timber purchasers generally. But that is not all the story. Remission of customs duty, as was revealed in the debate in the House of Representatives on a motion by Mr. Calwell, had occurred not once but a dozen times before. Case after case where this had occurred was quoted, the Minister responsible being none other than Senator Courtice. I regret that he is not in the chamber at the moment. Is it not significant that this motion was moved, not in this chamber, where the responsible Minister sat, but in the House of Representatives?

There are two cases upon which the Deputy Leader of the Opposition tried to justify his claims. On examination both cases fail completely to line up with the case under review. I mention these things merely because the Deputy Leader of the Opposition appeared to set so much store upon them. I take the opportunity to tell him that there is no comparison- with what was done in those cases and what he asks the Government to do by this amendment. He is asking the Government to initiate a practice which has never been resorted to before and which, if accepted, would be a precedent for continual claims when sales tax rates were varied. It would be administratively hopeless, and as stated a dozen times already, the amendment is not acceptable to the Government.

Senator McKENNA:
Leader of the Opposition · Tasmania

– The issue before the committee is the amendment that has been proposed by the Deputy Leader of the Opposition (Senator Kennelly) to alter the operation of the cutting down of sales tax, in the case of non-commercial motor vehicles, from 40 per cent, to 30 per cent, and in the case of motor scooters and motor cycles from 25 per cent, to 161 per cent. The Opposition supports the reduction in sales tax. The bill provides for the reduction to operate from 22nd February, but the Opposition amendment proposes that it should operate as from the date of imposition, namely, 16th November.

One of the main arguments pressed by the Government against the Opposition’s proposal is that it would create a precedent. We of the Opposition completely deny that contention, even in the field of sales tax itself. I am not dealing with any other point. The plain fact is that there is the clearest precedent for a remission of sales tax, firstly where there has been a failure to collect the tax and, secondly, by way of actual repayment where it has been collected. Nothing could be. clearer than that.

The matter to which I refer arose out of a report of the Attorney-General in 1953. I understand that Senator Kennelly read a passage from that report a moment ago. A tax was imposed, and paid, by some small operators of helicopters and other aircraft used for crop-spraying activities and other services of that type. A major airline was also involved. The major airline recognized its liability when it imported aircraft upon which sales tax had been imposed by quoting a registration certificate number, but failed to notify the Taxation Branch, as it was bound to do by law, that the aircraft had been commissioned and were in operation and that it was under an obligation to pay the tax. Everybody in the branch overlooked the. matter and the company did not pay. The Auditor-General directed attention to the matter. Then the Government, for reasons which the Minister for Civil Aviation (Senator Paltridge) has dealt with - they have nothing to do with the points that we are contesting - decided to introduce legislation. The Minister dealt at length with matters concerning TransAustralia Airlines and Australian National Airways, but that has nothing to do with the present issue. The Opposition is pressing the, point that there is a precedent for repaying sales tax. That is the one point that is at issue.

On the occasion to which J have referred the Government introduced the Sales Tax (Exemptions and Classifications) Bill 1954, one provision of which wiped out sales tax in this connexion for an eight-year period. It reads -

Notwithstanding anything contained in any Sales Tax Assessment Act, sales tax is not payable, and shall be deemed not to have been payable, upon the sale value under any Sales Tax Assessment Act of an aeroplane, including a flying boat, seaplane or helicopter if the transaction, act or operation in relation to which the sale value arose was effected or done on or after the first day of January, One thousand nine hundred and forty-six, and before the commencement of this Act.

In other words sales tax, whether paid by the taxpayers liable or whether not paid, was wiped out retrospectively over a period of eight years - a far more significant operation than the Opposition’s proposal that the present tax be wiped out over a period of three months.

If there is any doubt about that position one has to refer only to the second-reading speech of the Minister when the bill I have just mentioned was introduced in 1954. Speaking of the remission of the tax the Minister said -

This was brought about by an irregular but inadvertent use of registered taxpayers’ certificates, in the belief that the same freedom from sales tax as applied to the Government airlines would apply also to other commercial transport organizations.

The Minister continued -

The back dating of the exemption may necessitate certain refunds -

I ask that that point be noted - but these will be comparatively small, and they will be payable mainly to small airline operators and aero clubs.

There is the clearest intention to remit sales tax and to forgive a company liable to pay sales tax. The amendment of the Opposition accordingly creates no precedent, and the argument that the Minister and the Government rest upon is completely baseless. I do not worry about timber or about air charges. I am dealing merely with the argument of the Minister that to accept the Opposition’s amendment would create a precedent. It would do nothing of the kind. In all respects, excepting the total amount involved, it would be completely in line with what the Government did in 1954.

The Minister for Customs and Excise (Senator Henty) contended that there would be untold trouble in refunding the amount to the ultimate purchasers. The Opposition disagrees with that contention entirely. £very dealer would have a complete record of the purchaser of a new vehicle - his name, address, the details of the transaction, the sale price and the amount of sales tax paid. I disagree with Senator Henty when he says that a dealer treats the price as an overall price. I do not know any dealer who does not record the sale price on his sales docket. He records at very plainly in accordance with business practice to-day. Some dealers themselves carried the additional sales tax during the three months period between November and February, and did not pass it on. In that case they would retain the amount of the tax if it were repaid to them. In all other cases dealers would have the work of passing the refund on to the purchasers. I completely reject the argument that refunds could not be made or would be surrounded with impossible difficulties.

Senator Gorton:

– There would be no compulsion on a dealer to pass on a refund.

Senator McKENNA:

– As the amendment stands at the moment, that is so. If the Government accepts this amendment the Opposition will very promptly move a further amendment to ensure that the refund is passed on to the purchaser. That can be very easily implemented. In order to ensure that the ultimate purchaser gets the benefit of the remitted sales tax we have only to give the purchaser the right to sue the dealer or the person from whom he bought the car to recover the whole or the moiety of the additional sales tax he paid. We can, leave it to the purchaser to take his own course to get the money back. The buyers would have no difficulty in obtaining the money from the dealers. There would be no difficulty in ensuring by a proper amendment that the money went back to the buyers. That is basic to the intention of the amendment we have moved. We take the view that there is no difficulty about its implementation.

Let me pass to the merits of the case that the Opposition puts. Everybody in this country, apart from the members- of the Government, acknowledges that the Government made a mistake. In his public statement on 22nd March, a part of which was read by Senator Ridley last night, the Prime Minister indicated that this was an undesirable impost, that the psychological reaction to it was bad, and that, having regard to other restraints, it was unnecessary. To-day, Senator Wright, a supporter of the Government, told us that in addition to being undesirable and unnecessary, it was unwise. In short, it was a mistake. If it were a mistake, surely it is proper and just for the Government to rectify the mistake.

This mistake was brought about by the Government itself, through two initial mistakes. First, in February, 1960, by completely abolishing import controls - the abolition was effective as regards cars some time in August - the Government opened the door to all imports. The second mistake was that although the Government imposed bank restrictions through the central bank in February, 1960, it failed to ensure that the restrictions were obeyed. We had the spectacle in November of the Government telling us that between February and August, despite the instruction by the central bank to cut down advances, the trading banks had increased their advances by £150,000,000. So the Government itself precipitated the trouble.

If it is said that the increase of the sales tax was not a mistake, I invite the committee to look at the question of achieving a national purpose at the expense of an unfortunate handful of taxpayers. If a rapid cutting down of the expansion of the motor industry was in the national interest, why should the financial burden, the payment of an additional 10 per cent, tax, fall upon the unhappy people who, in the period while the additional tax operated, either were obliged to or decided to buy a motor car? Surely if there is to be any financial burden, it should be spread equitably over the whole community. That can be done quite well by repaying the additional amount of £3,800,000 that was collected.

Another of the Government’s mistakes was that it imposed too heavy a burden on the motor car industry. This it has acknowledged. My own view is that the restriction of bank credit and - perhaps this is more important - the move to restrict hire-purchase activities tended to cut down production and activity in the motor industry far more than did the additional sales tax. So the Government, without admitting it made a mistake, admits all the circumstances that constitute a mistake.

Even if this were not a mistake, why should the 50,000 or 60,000 persons who bought cars during a period of three months be compelled to bear the financial burden of a control that the Government claims was initiated for the benefit of the whole of the Australian community? Surely that is a consideration that ought to weigh with the Government. I invite the Government to consider what will be the position when presently it eases the other restraints, having indicated that they are temporary. Is it not to be expected that there will be an immediate flooding back of men to the motor industry from the uncongenial and inconvenient employment into which many of them / were forced when they were dismissed from the motor industry? Is it not to be expected that the motor industry will quickly gather impetus again, that it will seek to get ahead with its schedules, and that the men who were dismissed from the industry will flood back to their previous places of employment - places near where they established their homes? Is not that to be expected?

Senator Kendall:

– No.

Senator McKENNA:

– I suggest that it is. It is quite certain that the motor industry will continue to run downhill for a period even when all controls are lifted, but there will be a turning point and within a relatively short period it will be going full blast again. What does the Government propose to do about that? In the early part of 1959 the Government knew that the capacity of the motor industry was 375,000 cars per annum. That appears plainly in a report from the Department of Trade.

The TEMPORARY CHAIRMAN:

– Order! The honorable senator’s time has expired.

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

– There were one or two points made by the Leader of the Opposition (Senator McKenna) that call for some comment. I noted with interest that he said it was not the issue that Trans-Australia Airlines and Australian National Airlines Proprietary Limited should have been equated. It was the issue at that time because a part of the plan of the Labour Party was to create a government monopoly and force private enterprise out of the air. That is proved by the fact that the previous Labour Government exempted the government airlines from the payment of sales tax, not only on aircraft, but on all the supplies they bought. This was a part of the socialist plan to drive private enterprise out of the air and to have a government airline monopoly. Thank heaven, the people of Australia had more commonsense than to accept that proposition. They turfed Labour out of office twelve years ago. If Labour places the same proposition before the people again at the end of this year, it will be rejected again. The people of Australia will not stand for that type of discrimination between a government airline and a private airline. The issue when Labour was in office was whether T.A.A. and A.N.A. should be equated. This Government saw that they were equated.

The TEMPORARY CHAIRMAN:

–

Senator McKENNA:

– It is not difficult to cover that situation. It is quite within the Government’s competence, when it pays out money, to say to whom it shall be directed and in what circumstances. It is pathetic to find the Government, in distress as it is, not willing to acknowledge a mistake and resorting to every subterfuge to obscure the real issue, which is this: Is it fair to leave the financial burden on the people who bought cars in a very limited period, when that burden should be spread over the whole community? It may be so spread by making a refund of the £3,800,000.

The honorable senator developed an argument about equity and the remission of sales tax in other circumstances, but what was done was provoked by the equity of the circumstances. He will not find a better situation than the present one in which equity demands that there should be a refund. How can the Minister justify the achievement of a national purpose at the expense of the buyers of cars for a period of three months? How does he justify that inequity, particularly when the remedy is in the Government’s own hands? It could spread the burden over all the taxpayers of Australia. That is where the burden of a situation like this should lie - not on the few unfortunate people who were caught by the Government’s mistake or, if I abandon that position, were unfairly made the instrument of Government policy simply because they bought cars in a particular period. Let us test the position. Let the Government accept this amendment because the Minister knows the difficulty associated with moving amendments in connexion with the’ Sales Tax Bills (Nos. 1 to 9). The clause under discussion deals with date of operation of the bill. It would not be appropriate to move an amendment to that clause providing for the appropria tion of money and the terms of its repayment. We would be in the same difficulty if we sought to move for the insertion of a new clause at this stage. If it so desired, the Government could claim that there was no such provision in the bill. The Government is well aware of the procedural position in the Senate. It knows what our argument is. I deplore the weakness of the Government’s position which forces it to march out on a diversionary track in the hope that it will obscure the real issue. Was the measure providing for the increase of sales tax a proper one? The answer is that it was not. Was it a fair measure? Once again the answer is that it was not. I ask the Government to face the position squarely and1 admit that it made a mistake. If it is not prepared to do that, why does it pursue a course that does not react fairly to all taxpayers? Is the Government prepared to do the right thing? That is the issue.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– The participation in this debate of the Leader of the Opposition (Senator McKenna) has resulted in him doing little service to the amendment proposed by the Deputy Leader of the Opposition (Senator Kennelly). If ever the committee wanted conviction as to the impossibility of this amendment, the Leader of the Opposition has now provided it. He has suggested that an administrative system could be designed under an amendment that has not yet seen the light of day. That system would provide for repayments of this tax to reach purchasers through the tortuous, course of hire-purchase operators and the like. How would the Leader of the Opposition straighten out a situation in which the original purchaser of a car had, during the three months in question, sold it, and the car had been sold a third time? How would he divide the rebate between the cardistributor and the purchaser in the case where the distributor, in order to secure the sale, had allowed a more than liberal tradein? Those are important aspects of the matter to which the Leader of the Opposition has not addressed himself. He has. come here to support a glib political amendment. The Leader of the Opposition proceeds from that point to a further astonishing point. He suggests that the £3,800,000* involved should be spread over the whole- community. He suggests that the wageearner should pay the tax for the person who has purchased a car. That is a proposition that I never thought I would hear emanate from the Opposition, particularly from its leader. I trust that he will not mind if I use his argument against him at any appropriate opportunity.

Senator COOKE:
Western Australia

– I am surprised to hear the Minister for Civil Aviation say that he is concerned to see that the taxpayers of Australia should not bear the burden of errors committed by this Government. The Government did not display any feelings for the welfare of the taxpayers when, it steepened the inflationary spiral by imposing heavier indirect taxes, thus forcing up costs in every section of the economy. These indirect taxes have affected every taxpayer in Australia. The Government has cited hypothetical cases, but I do not suppose that it could produce any evidence-

Senator Henty:

– Yes, I can.

Senator COOKE:

– Evidence of a car having been sold three times in three months? The number of such cases would be very few and appropriate adjustments could easily be made. The Government has claimed that it did not need the revenue derived from the increased sales tax and that the increase was applied merely to correct a worsening economic situation. The Minister’s argument is very weak.

Senator McKENNA:
Leader of the Opposition · Tasmania

– In reply to the Minister for Civil Aviation, I submit that the difficulties associated with paying the rebate to the individual purchaser are not as great as he suggests. We are concerned about the original purchaser. We do not propose to carry the rebate beyond the transactions into which he enters. We have referred only to the original purchaser. Once again, the Minister has raised a false issue. We are dealing with people who have been compelled to pay additional tax.

Senator Henty:

– May I ask you a question?

Senator McKENNA:

– Let me finish my remarks first; I will then answer your question if I am able to do so. The Minister for Civil Aviation developed an argument about dealers who had given more than liberal trade-in allowances. The fact remains that when any dealer carried any portion of the additional sales tax himself he made a very clear virtue of that between himself and the purchaser and he would record that aspect very emphatically in the transaction. There can be no doubt about that. The Minister has directed weak arguments on this matter.

Finally, the Minister distorted an argument of mine. He said that I was asking the workers of Australia to bear a community burden. I asked that the burden be spread over all taxpayers in accordance with their income.

Question put -

That the words proposed to be left out (Senator Kennelly’s amendment) be left out.

The committee divided. (The Chairman - Senator the Hon. A. D. Reid.)

AYES: 26

NOES: 29

Majority , . . . 3

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

SALES TAX BILLS (Nos. 1 to 9) 1961.

Second Reading

Debate resumed from 11th April (vide page 412), on motion by Senator Paltridge -

That the bills be now read a second time.

Senator KENNELLY:
Victoria

– I do not intend to discuss the bills at this juncture as it was understood that the debate on all the sales tax measures would take place on the bill which the Senate has just passed. However, in committee I intend to move an amendment along the lines of the amendment submitted on the previous bill.

Question resolved in the affirmative.

Bills read a second time.

In committee:

The bills.

Senator KENNELLY:
Victoria

I move -

That the House of Representatives be requested to make the following amendment in each bill: -

In clause 2, leave out the words “ the twentysecond day of February, One thousand nine hundred and sixty one “, insert “ the sixteenth day of November, One thousand nine hundred and sixty “.

All the arguments on this matter were advanced on the previous hill and I have no desire to repeat them now.

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

– The Government does not accept the request for the amendments for the reasons stated in the discussion on the previous bill.

Question put -

That the House of Representatives be requested to leave out the words proposed to be left out.

The committee divided. (The Chairman - Senator the Hon. A. D. Reid.)

AYES: 26

NOES: 29

Majority . . . . 3

AYES

NOES

Question so resolved in the negative.

Request negatived.

Bills agreed to.

Bills reported without requests; report adopted.

Bills read a third time.

Senate adjourned at 4.40 p.m.

Cite as: Australia, Senate, Debates, 20 April 1961, viewed 22 October 2017, <http://historichansard.net/senate/1961/19610420_senate_23_s19/>.

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Senate20 April 1961

QUESTION

SOCIAL SERVICES

Senator HENDRICKSON:VICTORIA

Senator SPOONER:Minister for National Development · NEW SOUTH WALES · LP

QUESTION

POLITICAL PARTIES

Senator REID:NEW SOUTH WALES

Senator SPOONER:LP

QUESTION

TIMBER INDUSTRY

Senator BENN:QUEENSLAND

Senator PALTRIDGE:Minister for Civil Aviation · WESTERN AUSTRALIA · LP

QUESTION

ROADS

Senator SCOTT:WESTERN AUSTRALIA

Senator SPOONER:LP

QUESTION

WAR SERVICE HOMES

Senator SANDFORD:VICTORIA

Senator SPOONER:LP

QUESTION

POLITICAL PARTIES

Senator ANDERSON:NEW SOUTH WALES

Senator SPOONER:LP

QUESTION

FOOD PRESERVATION

Senator POKE:TASMANIA

Senator SPOONER:LP

QUESTION

REPATRIATION

Senator PALTRIDGE:LP

QUESTION

TAXATION

Senator TANGNEY:WESTERN AUSTRALIA

Senator PALTRIDGE:LP

Senator Tangney:

Senator PALTRIDGE:

QUESTION

TELEPHONE DIRECTORIES

Senator BUTTFIELD:SOUTH AUSTRALIA

Senator WADE:Minister for Air · VICTORIA · LP

QUESTION

NEWSPAPER REPORTS

Senator KENNELLY:VICTORIA

Senator SPOONER:LP

Senator McCALLUM:NEW SOUTH WALES

Senator SPOONER:

QUESTION

ATOMIC ENERGY

Senator BROWN:QUEENSLAND

Senator SPOONER:LP

QUESTION

RIVER MURRAY WATERS

Senator PEARSON:SOUTH AUSTRALIA

Senator SPOONER:LP

QUESTION

BROADCASTING

Senator COOKE:WESTERN AUSTRALIA

The PRESIDENT:

Senator COOKE:

Senator WADE:LP

QUESTION

MEDICAL RESEARCH

Senator HANNAFORD:SOUTH AUSTRALIA

Senator HENTY:Minister for Customs and Excise · TASMANIA · LP

QUESTION

TELEPHONE DIRECTORIES

Senator TANGNEY:

Senator WADE:LP

QUESTION

POLITICAL PARTIES

Senator MARRIOTT:TASMANIA

Senator SPOONER:LP

QUESTION

NEWSPAPER REPORTS

Senator BROWN:

Senator SPOONER:LP

QUESTION

TARIFF BOARD

Senate
20 April 1961

Senator HENDRICKSON:
VICTORIA

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

Senator REID:
NEW SOUTH WALES

Senator SPOONER:
LP

Senator BENN:
QUEENSLAND

Senator PALTRIDGE:
Minister for Civil Aviation · WESTERN AUSTRALIA · LP

Senator SCOTT:
WESTERN AUSTRALIA

Senator SPOONER:
LP

Senator SANDFORD:
VICTORIA

Senator SPOONER:
LP

Senator ANDERSON:
NEW SOUTH WALES

Senator SPOONER:
LP

Senator POKE:
TASMANIA

Senator SPOONER:
LP

Senator PALTRIDGE:
LP

Senator TANGNEY:
WESTERN AUSTRALIA

Senator PALTRIDGE:
LP

Senator BUTTFIELD:
SOUTH AUSTRALIA

Senator WADE:
Minister for Air · VICTORIA · LP

Senator KENNELLY:
VICTORIA

Senator SPOONER:
LP

Senator McCALLUM:
NEW SOUTH WALES

Senator BROWN:
QUEENSLAND

Senator SPOONER:
LP

Senator PEARSON:
SOUTH AUSTRALIA

Senator SPOONER:
LP

Senator COOKE:
WESTERN AUSTRALIA

Senator WADE:
LP

Senator HANNAFORD:
SOUTH AUSTRALIA

Senator HENTY:
Minister for Customs and Excise · TASMANIA · LP

Senator WADE:
LP

Senator MARRIOTT:
TASMANIA

Senator SPOONER:
LP

Senator SPOONER:
LP

Senator McKELLAR:
NEW SOUTH WALES

Senator SPOONER:
LP

Senator SPOONER:
LP

Senator WRIGHT:
TASMANIA

Senator SPOONER:
LP

Senator PALTRIDGE:
LP

Senator WILLESEE:
WESTERN AUSTRALIA

Senator WADE:
LP

Senator BRANSON:
WESTERN AUSTRALIA

Senator GORTON:
Minister for the Navy · VICTORIA · LP

Senator WADE:
LP

Senator HANNAN:
VICTORIA

Senator HENTY:
LP

Senator WADE:
LP

Senator WADE:
LP

Senator SPOONER:
New South WalesVicePresident of the Executive Council and Minister for National Development · LP

Senator PALTRIDGE:
Minister for Civil Aviation · Western Australia · LP

Senator HENTY:
Minister for Customs and Excise · Tasmania · LP

Senator McMANUS:
Victoria

Senator WOOD:
Queensland