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Thursday, 27 June 1946

Sir EARLE PAGE (Cowper) . - -Before following- previous speakers in their discussion of the war, I wish to make some comment upon the provisions of the bill. It is most extraordinary that, at a time when Australia is the most highly tuxer! country in the world, a bill should be brought down to transfer to loan funds £20,000,000 collected in taxes. If the proposal were the opposite of that it might bo excused, because, to some degree at least, it would be following the post-war credits system that has been adopted in Great Britain; but to transfer £20,000,000 from revenue to loan when the country is staggering under terrific taxation is utterly preposterous. This is being proposed at a time when everything possible should be done to increase production. The solution of our present ills, in the view of the Australian Country party, and, as the honorable member for Warringah (Mr. Spender) has just pointed out, is an increase of production. Before Ave can double production, which is necessary, we must halve taxation. That would be a beneficial circle', and it would do 'something to counteract the inflationary trends that are so noticeable in our financial affairs. If the Government would halve taxation it would encourage production. But the policy not being pursued has created a vicious financial circle which is strangling production, causing shortages of every kind on every hand, creating black markets and introducing inflation. It is extraordinary to me that receipts from revenue should be dealt with in this surrepititious fashion, at a time when the Government should he reducing taxation and doing everything possible to encourage an increased output of primaryproducts for export. In spite of the fact that higher prices for butter and wool are being extracted from the Struggling people of Great Britain, our primary producers are worse off to-day than they wore in the first year of the war. A comparison of the total receipts of the farmers of Australia from their three major products, wool, wheat and butter, shows that they received less from the sale of these commodities in 1944-45, the last year of the war, than they received in 1939-40, the first year of the war. This is due partly, of course, to weather conditions, but it has been caused largely by the strangling of industry by strikes, " go-slow " tactics, shortages of equipment, and wastage of the time and energy of the farmers, owing to certain administrative procedures of the Government.- The total amount received for wool in 1939-40, the first year of the war, was £65,246,000. In 1944-45, the last year of the war, the total amount received was £62,512,000, a decline of £2,750,000. Wheat in 1939-40, the first, year of the war, realized for the Australian farmers a total of £31,352,000; For 1944-45, the last year of the war, the total was £7,593,000, a fall of £23,750,000. The total income for the butter industry in 1939-40, the first year of the war, was £27,19S,000; in 1944-45, receipts were £19,000,000, which, combined with the government subsidy of £6,700,000, made a total of £25,750,000, or a decline of roughly £1,300,000. In 1939-40, the first year of the war, Commonwealth and State income tax absorbed £45,000,000 of the taxpayers' money. In 1944-45, the income tax on individuals and companies .totalled £211,000,000, or over four times as much. Revenue taxation, from all sources in the Commonwealth in 1938-39, the year bef ore the war, totalled £74,000,000. In 1944-45, the corresponding amount was more than £300,000,000, or over four times as much. In 191S-19, the last year of World War I., our total taxation amounted roughly to £33,000,000, or twice as much as at the beginning of that war. Prosperity came after the 1 914-18 war by reason of the fact that during the first five years when I. was Treasurer I reduced the income tax rate by 70 per cent. This increased both buoyancy in industry and general prosperity. We never had so many people employed in the factories of Australia as we had at that period, until we had to turn our attention to the production of munitions during this war.

It is abundantly evident that an alteration must be made of the taxation procedure of this Government. As things are, no one in the community knows, nowadays, what the amount of his taxwill be. A taxpayer may submit his returns but he cannot, in any satisfactory way, estimate the amount that he will be obliged to pay.

Before Labour came into power, concessional deductions for a wife, £50 for each dependent child, insurance premiums, union levies, and so on were allowed before the taxation rate was struck. To-day, the taxation rate is struck on the gross amount, then a concessional rebate rs made on these other items, which does not amount to as much as the original deduction, and. is most difficult to estimate. .

Before we agree to the passage of this bill we should extract from the Government an assurance that its methods of taxation will be reviewed, and a procedure adopted which will stimulate industry and encourage people to do their best work. We should apply a system such as that of Great Britain. Quite recently I had shown to me, on the same day, two taxation assessments for the same year of different persons who had earned approximately the' same amount of income. One of them had earned the money in Australia and the other in Great Britain. The latter had just returned to this country after six years abroad. On his arrival he was handed a bulky envelope which rather disturbed him, as he knew it had to do with taxation. On opening it he was surprised and pleased to find that it contained a postwar credit remittance of £75 sterling, which is equivalent to about £100 Austraiian. The money was extremely useful to him as he was about to resume civilian life. The other man was a teacher who had earned approximately £700 during the year. His wife,, for patriotic reasons, had taken a war-time job as a sewing mistress and had earned ' £14, payment of which had been delayed. She received it in circumstances which increased her income to more than £50. The amount was added to her husband's income and resulted in an extra tax of £30 15s. That was the reward of this lady for doing something to help the children of Australia in a time of war! Such a procedure must be altered. The outlook of the people of Australia must be ' changed. We must introduce a method which will encourage production, for only by that means can we solve the problems which face us. If the taxable income could be doubled,- the same amount of revenue could be derived with half the present rate of tax. That is what happened after the last 'war, and the problem has to be tackled in that way to-day. Therefore, I put it to the House that this method of handling surplus revenue should be regarded with grave suspicion also. I am doubtful of its constitutionality.

During the debate, reference has been made, to the attitude of the Dutch to World War II. The honorable member for Parkes (Mr. Haylen) made a quotation in slighting terms from the work of a journalist who had flown over Holland or Java. I had the privilege of sitting with Dutch representatives in the Pacific War Council in London during the most critical period of the war. Nothing could have excelled the manner in which they stood up to their obligations. Their remark in regard to the vessels that their country had in the Indian Ocean was : " Fm heaven's sake, let us put our fleets, and if necessary, lose ship for ship, against the Japanese, and that may bring the Pacific war to an end years sooner, as the British and Americans can build three or four times as rapidly as the ' Japs ". In the early days of 1942, the Dutch fleet covered itself with glory and its ships went down with all hands, as did our gallant units Perth and Sydney. No one can rightly east aspersions on this gallant race which, as the late Mr. Curtin pointed out repeatedly, tried to protect that arc of islands to the north which was the real shield of Australia. When it became obvious that it was impossible to hold those islands, the Dutch representatives agreed that the Australians, British and Americans should leave Java with all their aircraft and equipment and personnel. They said: " We realize that Java cannot be held, and must be evacuated. All that we ask is that Dutchmen may be allowed to fight to the death on their own soil ". That gives the lie to the rotten statements that are made in the book from which the honorable member for Parkes quoted. When the British had lost Prince of Wales and Repulse, the Dutch offered to send 25,000 men to Singapore if they could be of any assistance to the British forces there. Yet when it was proposed to send mercy ships from Australia to the Netherlands East Indies, or to repair a damaged Dutch war vessel which had fought in our defence, it was said that those ships could not be loaded, even though Australian men and women are starving over there. Could anyone conceive of the British

Government remaining idle while British subjects were being subjected to such conditions? The Australian treatment of Dutch ships is a shameful thing to do to a gallant ally. The history of the British race for hundreds of years contains proof of the readiness of the British Government to send armed forces to the relief of its subjects. Yet the Commonwealth Government has behaved in a cowardly fashion because, as .the Prime Minister (Mr. Chifley) has said, if the attempt were made to have these boats loaded there would be a general flare-up on the waterfront. Could there be a more general flare-up than there is in Australia at' the present time? In Queensland, during the currency of the meat strike, 60,000 tons of beef which should have been killed and sent to Britain to feed is starving people has not been shipped, because nothing has been done to end the strike. As the Leader of the Australian Country party (Mr. .Fadden) has pointed out, the State Government has had the courage to bring into operation the provisions of the Public Safety Act, and to de-register the Meat Industry Employees Union; but the Commonwealth Government claims: "It has nothing to do with us; it is a State matter ". The 60.000 tons of beef that I have mentioned will not now be killed, because the cattle have been returned to the stations from which they were brought. They have lost condition, and the Tailing season has passed. We read every day in the press, reports of starving people in Britain whose meat ration has been reduced in order to help the people of other countries. Several things will have to be done in this country. First, the unions will have to submit to discipline, and we shall have to make certain that our arbitration laws will " run ". Mr. Lang was- dismissed from the office of Premier of New South Wales by the Governor of that State because he broke 'State and Commonwealth laws. .The present Commonwealth Government is practically allowing the arbitration law of this country, which is held in the highest respect in every other country, to be broken with impunity. Secondly, we shall have to en-sure decent treatment of our women and children.

Four or five months ago, when electricity was rationed in Sydney, one of the first steps taken was to discharge from the hospitals all the people who could walk. They were told : " You will consume less gas and electricity in your homes ". The Commonwealth 'Government did not do anything to relieve the position. We have to make certain that coal will be won and that the waters of this country will be harnessed so that production- may be increased. What can be done in any country which has not coal and power? We have heard an extraordinary story about an increase of coal production. It is the most peculiar increase of which I have heard - from 15,000,000 tons annually to 12,000,000 tons ! A production of 14,000,000 was achieved by 15,000 men, yet only 12,000,000 tons could be produced by 17,500 men. Throughout the world it is being realized that the aftermath of the war and the terrific waste caused by it can be counteracted only by increasing individual output, and by combined effort. Psychologically, the outlook of the people can be improved by reducing taxation as quickly as possible. This would give them an incentive to work harder.

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