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Thursday, 28 May 1942

Mr CONELAN (Griffith) .Divergent views have been expressed on this legislation, not only by the laymen but also by the members of the legal profession in this chamber. We have also been told that conflicting opinions as to its validity have been given by eminent King's Counsel outside. The fine addresses by the honorable member for Bourke (Mr. Blackburn) and the right honorable member for Kooyong (Mr. Menzies), however, convince me that these bills are unconstitutional.

Mr Holt - Was the honorable member not shaken by the speech of the honorable member for Warringah?

Mr CONELAN - The honorable member for Warringah (Mr. Spender) never appeals to me. Apart from that, whatever be the case with regard to the validity or invalidity of this legislation, it is the duty of Parliament to protect the democratic rights of the people, and, if these rights are to be filched from them, what can they hope for? Our young men in the services are supposed to be fighting for democracy against totalitarianism. If there be the slightest doubt as to whether these bills are unconstitutional, the people should be asked to adjudicate by means of a referendum.

Mr James - Why did not the honorable member say that at the party meeting?

Mr CONELAN - I did not have the opportunity to do so.

Mr James - The party agreed to the scheme unanimously.

Mr CONELAN - That is untrue. In any case, the Government could have taken other steps to raise the money it needs to prosecute the war instead of introducing legislation the validity of which is doubtful, and which will ultimately be tested by an appeal to the High Court. We cannot say whether the eminent j'ustices on the High Court Bench will be carried away by the exigencies of war. Whatever be the result of litigation the Commonwealth should not proceed with a proposal which will divide the people of this country. The States have a status equal to that of the Commonwealth, and the Commonwealth should not do anything to cause disunity, especially at a time when the nation is fighting for its very existence. The Commonwealth Government by bringing down this legislation has excited opposition from every State government and I think that so many of the people are opposed to it that if they were asked to vote on the legislation at a referendum it would be rejected. That is probably one of the main reasons why the Government has taken this undemocratic course in order to give effect to its policy. I shall now set out some of the alternatives that the Government could have chosen to raise the money it needs for war purposes. We have been told that throughout Australia salaries and wages are buoyant, and, if our soldiers have to serve for 7s. a day, it is not too much to ask the Government to impose a ceiling on salaries. If all earnings in excess of £1,000 a year were taken by the Commonwealth Government, about £40,000,000 a year would accrue to it. All the Government expects to receive from this proposal is between £12,000,000 and £15,000,000. As the salary limit was lowered, so would the return to the Government be increased. The State governments, as an alternative to this plan, suggested to the Commonwealth Government that it fix its rate of tax, and that, at the same time, the States be allowed to levy a percentage to meet their own needs. The Government of Queensland was prepared to sacrifice a large proportion of its revenue for the right to continue to levy income tax. The third course open to the Government is that contained in the resolution unanimously adopted by the special conference of the Australian Labour party in June, 1940, to impose a tax of 100 per cent, on excess profits. The Treasurer (Mr. Chifley) would have a loyal supporter in me if he took any of the steps towards monetary and financial reform through the Commonwealth Bank which he has advocated for many years.

Mr James - I do not know where the honorable gentleman's loyal support comes in, since he is " ratting " on his party.

Mr CONELAN - The honorable member for Hunter "ratted" on the party in 1931 ; but I am not " rating ".

Mr James - I did not "rat" on the party; the party "ratted" on me.

Mr CONELAN - We have frequently heard the Prime Minister (Mr. Curtin), the Treasurer and many other honorable members refer to the buoyancy of the revenue of the States as the result of war expenditure. For two and a half years while we were in Opposition we made every possible endeavour to induce previous governments to recognize that Queensland is the front door of Australia and that it ought to be defended. It was not until the United States of America came into the war that the defensive requirements of Queensland received any recognition.

Mr Abbott - That is not true.

Mr CONELAN - Reference to Hansard will show how true it is. It is replete with pleas by Queensland Labour members for an improved defence system in that State. I should like to know how far into Queensland the honorable member for New England (Mr. Abbott) has been.

Mr Abbott - I have seen all th» strategic roads and other defence works in Queensland. They were there before the Americans entered the war.

Mr CONELAN - The Premier of Queensland asked time after time at conferences of Commonwealth and State Ministers for the building of a strategic road in northern Queensland.

Mr Abbott - That was built before the Americans came here.

Mr CONELAN - Nothing of the sort! A labour corps is now working on it. It is only recently that we have had anti-aircraft defences in Queensland. The only munitions factory in the State is only partially completed after nearly three years of war. The buoyancy of revenue may be apparent in some States but not in Queensland. Since the outbreak of war, there has been buoyancy of revenue ' in Victoria and South Australia because of the huge munitions undertakings in those States. The result of the concentration of the armaments industry in the southern States is a shortage of man-power on the land, because the rural workers were attracted to the munitions works. Much has been said about the buoyancy of revenue produced in the various States as the result of. Commonwealth expenditure. No such trend was noticeable in Queensland, until a few months ago, and it was practically confined to transport revenue. However, the increased earnings of. the transport services will be offset by extra running and maintenance costs. About a month ago the basic wage in Queensland was increased by 2s. a week. That increase represents an additional cost to the State of £150,000 annually. What will he the State's position if, after this proposal is implemented, the basic wage be increased periodically to meet the rising cost of living? No provision is being made to reimburse the States in respect of such additional commitments. They will be obliged to seek such assistance through the Commonwealth Grants Commission. Sir George Pearce, who is a member of that body, is now over 70 years of age, and is admittedly anti-Labour in his outlook. Victoria has been the most fortunate of the States so far as Commonwealth expenditure is concerned. Whilst it is small in area, it has. a comparatively large population. I admit that at the outbreak of the war, it had available the facilities needed for the immediate production of war material, and, therefore, was entitled to that degree, to Commonwealth expenditure. Western Australia and Queensland have been practically neglected.

Mr Archie Cameron - The Premier of Western Australia would be pleased to hear that.

Mr CONELAN - I understand that attention has now been given to the northern station.. The military advisers of the Commonwealth, which the honor able member supported, decided that no attempt should be made to defend the northern portions of Western Australia and Queensland.

Mr Archie Cameron - No such recommendation was ever made by the military authorities.

Mr CONELAN - In contrast to Victoria, Queensland is a very large State, with a comparatively small population. During the depression, the Government of that State embarked upon a public works programme in order to reduce unemployment. In that work it asked in vain for Commonwealth assistance.

It is proposed that the Commonwealth should be the sole taxing authority for the duration of the 'war; and twelve' months thereafter. Should the war end in the month of July, it will mean that if based on a financial year this, scheme will operate not for twelve months, but for one year and eleven months after the date on which the war ends. Immediately hostilities cease, thousands of soldiers, sailors, members of the Royal. Australian Air Force, and workers in war factories, will be thrown upon the. labour market Obviously, under this proposal, a State like Queensland will be unable to rehabilitate those people. It will be obliged, to approach the Commonwealth as a mendicant for assistance in thai direction. Despite the fact that we are now able to find hundreds of millions for financing the war, I have no doubt that immediately the conflict ends, the same old cry will be raised that no money can be found to rehabilitate our men and women now in the fighting services, and war workers. I can easily imagine how a non-Labour government of a State will fare in any request it might be obliged to make to a non-Labour government in this Parliament. The Commonwealth is also to have power to take over State taxation staffs as well as the accommodation and equipment of those staffs. It has been stated that with one taxing authority, considerable man-power will be released from the staffs now engaged in the State taxation offices. In view of the fact that some States now collect taxes on behalf of the Commonwealth, I fail to see how an appreciable saving of manpower can. be so effected. The complexity of the system of deductions associated with this uniform tax proposal will preclude any appreciable reduction of the existing staffs in taxation offices in the States. Another difficulty will arise from the fact that the retiring age of State public servants in Queensland is 66£ years, whereas for Commonwealth public servants the retiring age is 65 years. What is to happen under this proposal to State public servants on reaching the age of 65 ? Will they be thrown on the scrap-heap?

Mr SPENDER - 'Those problems will iron themselves out.

Mr CONELAN - In Queensland, a State development tax is now in operation, and in 90 per cent, of cases this tax is collected at its source. What will happen to that money when the Commonwealth Government takes control? Are those taxpayers to be reimbursed?

Mr Jolly - It will all come into the income tax, then.

Mr CONELAN - That is not so. These people to whom I refer pay that tax at the source. It i3 all very well for members of Parliament to look at the matter in that way, because they pay their tax once a year, and are protected; but the ordinary worker pays this tax by weekly instalment at the source. Who will reimburse them?

Mr Jolly - It is only a matter of adjustment.

Mr CONELAN - That may be so; but the State has not been given a guarantee that such an adjustment will be made. The Commonwealth also proposes to take over arrears of States taxes, As is well known, many people are obliged to apply for an extension of time in which to pay their tax. I am thinking of the ordinary man who is obliged to battle along on a small wage. Probably, these late payments will total some hundreds of thousands of pounds; but the Commonwealth does not intend to allow the States to retain that money. All of these problems, and many others, must be rectified, because I have no doubt that this measure will be passed.

Much has been said in this debate about the necessity for making a total war effort, and the difficulties which confront the Commonwealth in financing that effort. I do not subscribe to that view. At no time since the outbreak of this war has the Government failed to obtain all the finance it requires to carry on the war effort. It has experienced shortages of material and equipment, but not of finance. The last loan was oversubscribed by £12,000,000. Therefore, it is not correct to say that the Commonwealth Government must have the sole right to levy income tax in order to obtain sufficient revenue to finance our war effort. Honorable members who have spoken against this measure are just as patriotic as those who have supported it. All of my relatives who are eligible to join the fighting services, or directly assist in the war effort, are now doing their share in those capacities. I, personally, offered my services to the Australian Imperial Force several months before the Labour party assumed office.

Some honorable members on this side have spoken about the platform of the Australian Labour party insofar as it urges ^Iterations of the Constitution. Section 128 of the Constitution provides that it cannot be altered without the consent of the people. Amendments must first be proposed by Parliament, but they cannot become law unless they are endorsed at a referendum by a majority of the electors, and also by a majority of voters in a majority of the States. Under the Labour party's platform a Labour government is pledged to submit all proposed alterations of the Constitution to the people. The platform does not bind members of the party to support proposals which merely tinker with the Constitution behind the backs of the people. No one can say that Mr. Fallon, the president of the federal executive of the Australian Labour Party; Mr. Forgan Smith, the Premier of Queensland; Mr. Willcock. the Premier of Western Australia; Mr. McKell, the Premier of New South Wales; and Mr. Cosgrove, the Premier of Tasmania, do not understand -the Labour platform, or are not as loyal to it as any member of this Parliament. The whole wisdom of the Labour party is not to be found in this Parliament. These men, like myself, are pledged to work and vote for the realization of the federal platform. I pledged myself to do my utmost to carry out the principles embodied in that platform, and so did every one else, hut neither I nor any other Labour representative is pledged without consulting the people, to support a measure which will hamstring a State and prevent the government of that State from carrying out a policy which has done so much for the people. I say without fear of contradiction that the Parliament of Queensland is more democratic than this Parliament. The Queensland Parliament can alter its own Constitution as it thinks fit, and is not overridden by the High Court. It is a better instrument of social reform than this Parliament. In fact, this Parliament has not originated any reforms, hut ha3 followed in the steps of Queensland and other States which have blazed the trail with old-age pensions, child endowment, widows' pensions and Unemployment insurance schemes. I should be glad to vote for a uniform taxation scheme if it were submitted to the people of Australia in a constitutional way.

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