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Wednesday, 11 August 1926

Senator CHAPMAN (South Australia) . -Every honorable senator must realize the necessity for a national roads policy; but there is a good deal of difference of opinion as to the methods that should be adopted, and more particularly the manner in which the money should be raised. We all realize the way in which other countries are progressing. If our producers are to hold their own in competition with the world, they must be placed on an equal footing with the producers of other countries. Although I am in agreement with the roads policy of the Government. I confess that at the election I did not understand that so much of the money whichwas needed to carry out that policy would have to be raised by special taxation. We had experienced a number of prosperous years, and the coffers of the Treasury were overflowing to such an extent that the Government was able to give substantial financial assistance in quite a number of directions.

Senator Hays - And reduce taxation.

Senator CHAPMAN - It also reduced taxation. It was hoped that a great deal of the money required for the roads scheme would be taken from the ordinary revenue of the Commonwealth. But when the financial position was fully explained in the budget, I could not fail to realize that it was impossible for revenue account to furnish the whole of the money required. Senator Needham argued that it should be taken from the general revenue. No honorable senator has shown how that can be done. If we are to embark upon such an advanced roads policy, we must be prepared to raise some of the money by taxation. Had the Government adhered to its original proposals, I could not have supported it. I fought those proposals with some Ministers, my objection being that it was a. class tax upon motorists who already provided £3,500,000 in taxation through the Customs Department. I am pleased that the representations which were made led the Government to modify its proposals. There are three principles which we should recognize in raising money for the making of roads. The first is that the land-holders, who benefit, should pay a certain amount. That principle is recognized by district councils, who impose a direct tax upon land. The users of the roads also benefit, and they should bear a fair proportion of the taxation. Quite apart from those two aspects, however, roads are a national necessity; the community generally benefits, and should provide part of the sum that is required. That principle is recognized in South Australia, where a large part of the money required is provided from the general revenue. The general community should contribute something towards the cost.

Senator Payne - Motor-owners are also taxed as members of the community.

Senator CHAPMAN - I realize that. Although Parliament has for some time been imposing higher and still higher protective. duties, an additional petrol duty is now being collected to meet the cost of a comprehensive roads policy. Our financial position is becoming serious, and I would not support this proposal if the object was not such a worthy one. If, however, any further proposals are made to impose additional taxation in order to assist the States I shall oppose them.

Senator Duncan - This is a first instalment, and the honorable senator is supporting the principle.

Senator CHAPMAN - Yes, for the reason I have given. It may be difficult to raise further Customs revenue, and if the proposed adjustment of the financial arrangements between the Commonwealth and the States is carried out, we shall have to seriously consider our financial position. The annual report of the Tariff Board, which has recently been made available, contains some remarkable statements.

Senator Duncan - Has the honorable senator seen the board's report on this proposal ?

Senator CHAPMAN - I am referring to the imposition of duties generally, and their effect upon Arbitration Court awards. A portion of the report, which has an important bearing on the petrol duties, reads -

Particular reference is made to the disastrous policy of industrial unions in claiming wages increases immediately after increases in the tariff. This, the board considers, can result only in industrial paralysis and economic disaster.

Senator Thompson - The Tariff Board was not the first to give that warning.

Senator CHAPMAN - No; but I intend to carry the matter still further. It is rather strange that' the Tariff Board should criticize the Arbitration Court.

Senator Reid - It is not criticizing the court, but merely stating facts.

Senator CHAPMAN - I shall quote further from the report to . show the honorable senator that the comments of the board closely approach criticism. The report continues -

A suggestion was advanced that the recommendation for tariff increases should he granted only on condition that assurances were obtained from the various industrial unions connected with the industry that no further demand would be made for wage increases, or any other action taken which would have the result of defeatingthe effect of any increase in duties recommended.

That is all right as far as it goes. Some manufacturers may not increase prices, but others may do so, with the result that the cost of living is increased, and the workers are compelled to approach the Arbitration Court for higher wages.

The PRESIDENT (Senator the Hon J Newlands - The honorable senator is entitled to make only a passing reference to the Arbitration Court in discussing this bill.

Senator CHAPMAN - I was merely endeavouring to show the effect of high Customs duties upon the cost of living. On a number of occasions, the representatives of unions have appeared before the Tariff Board and have assisted manufacturers in receiving the benefits of higher duties. The Tariff Board further reports -

In this way, a precedent was created for passing back and forth between the Federal Arbitration Court and the Tariff Board for increments in wages and duties. . . .

I do not know whether the Tariff Board inadvertently used the words "and duties " - which can only result in an ever-increasing wage rate and an ever-ascending tariff. This course must ultimately defeat itself, and by continuously raising the cost of living, bring about an industrial paralysis.

That is a remarkable statement. Honorable senators should carefully consider the almost intolerable situation in which our primary producers in particular are placed. Many settlers on poor land are in a most precarious position, owing to the ever-increasing cost of production, and as one-fourth of the wheat produced in Australia is grown on poor land, many are showing only a small margin of profit. If the cost of production is to be further increased by the imposition of higher duties, we shall reach a stage when financial collapse will be inevitable. In concluding, I wish to again stress the point that, as the Government has practically only one important avenue of taxation available, it should carefully consider the whole position before embarking upon any other schemes of this nature.

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